Bill Gates Begins Last Week at Microsoft

He is the cofounder of Microsoft, a Harvard drop-out, one of the world's richest men, and arguably the greatest philanthropist in history, but this week William H. Gates III--that's Bill Gates to you and I--will step away from full-time employment and enter a new phase of life. He's not retiring completely--Gates will continue advising Microsoft in a part-time capacity and will dedicate more time than ever to the Bill & Melinda Gates Foundation, which seeks to improve healthcare and reduce poverty around the globe.

How important is Bill Gates to Microsoft? Look at it this way: The company has essentially appointed three people to handle the jobs Gates used to fill by himself: Steve Ballmer as CEO, Ray Ozzie as chief software architect, and Craig Mundie as chief research and strategy officer. But none of these otherwise estimable men can really fill Gates' shoes, and its unclear how well Microsoft will perform in the months and years ahead without him.

Gates co-founded "Micro-soft" with Paul Allen in 1975 in order to write BASIC programming software for the first personal computer, the MITS Altair. As with its early BASIC work, Gates and company have gained success over the years largely by improving on and popularizing the ideas of others. Their first OS, XENIX OS, was based on UNIX. Their IBM PC OS, called MS-DOS, was modeled after CP/M--some might less charitably describe it as a direct copy of CP/M--and became the de facto standard on PCs and, later, PC compatibles. The company rode the success of the Mac's GUI with Windows, introduced its own Mac-like computer mouse, aped the application software from other companies with products like Multiplan, Word, and Excel, and copied the office productivity suite concept for Microsoft Office.

By the mid-1990's, Microsoft had begun making inroads in the server market as well, and today the company has a foot in virtually every computer-related market imaginable, including databases, high-performance computing, online services, digital media, smart phones, and tablet computing. Where the company has been unable to compete, it has simply purchased key companies, thanks to its ever-expanding cash hoard.

While Gates and Microsoft haven't really innovated too much, they are at the very least hugely successful. This success can be directly attributed to the business acumen of Bill Gates. Microsoft was not first to market with most of its core products, but it has dominated many markets that were pioneered elsewhere.

Predictably, Microsoft's tough business practices eventually landed it in hot water with antitrust regulators, first in the US and subsequently around the globe. Indeed, the US antitrust action against Microsoft was a low point for Gates, and his sullen appearance in the widely circulated deposition videos from the time shows a recalcitrant and stubborn monopolist unable to cope with his company's sudden downturn. Gates and Microsoft both recovered from this debacle, but by the time Microsoft settled with the US government and several states, its competitors no longer feared the company.

Today, Microsoft is still a dominant industry player, but it no longer looms large over the computing landscape, and several key competitors, such as Apple, Google, Nintendo, and RIM, have successfully cast aside Microsoft's various attempts to duplicate its past successes in new markets. The tables have turned so much, in fact, that even successful Microsoft products, like Windows Vista, which has sold in excess of 150 million licenses, are perceived as unsuccessful thanks to marketing efforts by the competition and anti-Microsoft pundits online. This is a new world for the software giant, and one with which Gates' successors will need to cope.

Ultimately, it was time for Gates to move on and while he struggled temporarily after handing over the CEO reigns to Harvard chum Steve Ballmer in 2000, the two have maintained a tight friendship. More recently, he's begun turning over more responsibility to other executives, such as Mundie and Ozzie, and today Gates is largely a ceremonial figure at the company, though insiders tell me he's still involved in key decision making and strategy.

Gates steps down from his full-time duties at Microsoft this Friday, June 27. After that date, he will remain the chairman of Microsoft's board of directors and the company's largest single shareholder. The Bill & Melinda Gates Foundation is the largest charitable organization in the world with an endowment of almost $35 billion, and Gates will dedicate most of his time going forward to distributing his fortune through philanthropy.

"This whole thing about which operating system somebody uses is a pretty silly thing versus issues involving starvation or death," Gates said this week, putting his previous and upcoming careers in perspective. On that note, I wish the man nothing but the best of luck in his future endeavors. If Gates can have half the impact on world health and education that he had in computing, the world will surely be a better place as a result.

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