Gates to leave MSFT — ho hum

by Mathew on June 16, 2006 · 4 comments

“Gates leaving Microsoft” makes for a nice headline, and plenty of speculation and commentary over at techmeme, but it doesn’t really bear any relationship to reality. For one thing, Bill isn’t leaving his “day-to-day role” (whatever that really is) for another two years or so, and in any case he will likely remain chairman of Microsoft until he passes away or is accidentally crushed by a giant bag of money.

For a glimpse of what the announcement actually means in concrete terms, it’s always instructive to look at the share price. What did it do? The square root of you-know-what. Its movement on the news wouldn’t even qualify as a rounding error. In other words, it’s neither good nor bad because nothing much is going to change. Microsoft is still spinning off lots of cash, but seems otherwise “infirm of purpose,” as Lady Macbeth said of her husband.

I was talking about this latest development with Paul Kedrosky — who as some of you may know is no friend of Steve Ballmer’s — and he said that he found the phrasing of the announcement very interesting, in that Ray Ozzie and Craig Mundie were both elevated to higher positions (with Ozzie taking over Bill’s title as “chief software architect”) and Ballmer got nary a mention at all, not even lukewarm praise.

Is that a signal that Bill isn’t too happy with Steve’s stewardship of the great ocean liner known as Microsoft? Perhaps. It’s true that the software giant continues to spin out great gobs of cash flow almost without even trying (which is why I think it should become an income trust) , but it’s also true that Vista keeps slipping, Microsoft seems to be pursuing a shotgun strategy — if any — when it comes to the Web, and MSN continues to be an also-ran.

So what should Bill do? Fire Steve Ballmer and put Ray Ozzie in charge. That would shake things up. Unfortunately, in many ways, Microsoft is too comfortable and too handcuffed by its Crown jewels — Windows and Office — to do anything that interesting.

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