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Friday, 14 January, 2000, 16:55 GMT
Q&A: Gates steps down



Bill Gates has stepped down as chief executive of Microsoft. So what does it mean? Editor of IT Week Martin Veitch explains all.

What effect will the change have on Microsoft?

I don't think it will be noticeable from the outside. Ballmer has been running day-to-day operations since he took Gates' role as president a year and a half ago so this is more cosmetic than anything else.

Why now?

Perhaps Microsoft felt that Gates standing down as CEO and president at once or in close order would have hurt the stock price. As usual, Microsoft has handled this very smoothly.

Will it mean a change of direction for the firm?

I think that Microsoft is changing direction anyway. With its dominance of the PC desktop so firm it has been forced to look in new directions to grow stockholder value.

It's pretty clear to Microsoft and everybody else that ways of accessing the Internet will change and that is why it is working so hard on developing software and partnerships that will allow it to compete on wireless information devices such as phones and personal digital assistants, as well as set-top boxes, cars and pretty much anywhere elsewhere you can take advantage of computation and communications.

You could argue that Microsoft is at a crossroads and that the world is changing in ways that will reduce the importance of its dominance on PCs.

Does the move have anything to do with the current anti-trust case against Microsoft?

I doubt it, although it was interesting to see the quotes attributed to Ralph Nader's group to the effect that this could help prepare for a breaking-up of the company.

I think that Microsoft is more likely to break itself up in order to manage its sheer size. It has always been a company with the turning circle of a startup - look at the way it responded to the challenge of Netscape and the Internet.

Is Bill Gates giving up his power over the company?

I don't think so. Gates remains the major shareholder I believe and his knowledge of industry patterns must be valuable but they have very strong management anyhow.

Are share markets happy about the move? Why?

Their shares look very steady so Wall Street understands the move. Since Gates stood down as president, the share price has soared.

How will other major software firms react?

Maybe there'll be some mischief making but it will be pretty hollow. The truth is that Microsoft is so big and important that it needs a public face and Gates provides that, while Ballmer provides the operational skills.

What effect will it have on the industry as a whole?

Next to none.

Will Bill Gates himself be able to keep Microsoft at the cutting edge of new technology as he intends?

He has made some bad bets such as pen-based computing and trying to put Windows on non-PC devices but you can't argue with many of the research and development spend.

Microsoft tends not to be a great innovator but it knows how to profit from being second to market. Windows is the classic example.

It is making important investments in blue sky projects such as electronic books, home networks, in-car computer systems, codeless programming and so on and you get the impression that this is the stuff that really excites Gates now. God knows, he's got enough money.

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See also:
13 Jan 00 |  Business
Gates steps down - but the fight goes on
14 Jan 00 |  Business
Profile: Bill Gates
14 Jan 00 |  The Company File
The software superpower
13 Jan 00 |  Business
Microsoft 'facing split'
11 Jan 00 |  Business
Microsoft settles Caldera antitrust case
13 Jan 00 |  Business
Caldera vs Microsoft - the settlement

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