It's been one of the most carefully orchestrated transitions in corporate history. Microsoft (MSFT) Chairman William H. Gates III announced two years ago he would walk away from his day-to-day duties at the company he co-founded to spend more time working on philanthropy. Since then, Gates and Microsoft Chief Executive Steven A. Ballmer have groomed those who will succeed Gates in developing the technology, strategy, and vision for Microsoft.
But for all the high-profile preparations, Gates isn't leaving completely. While June 27 is his last official day as a Microsoft full-timer, Gates will continue to work there the equivalent of one day a week. Ever the geek, Gates, 52, will keep playing a key role in some of Microsoft's biggest long-term technical bets. "The plaque is off the door, but the office is still partially occupied," says analyst Charles Di Bona of Sanford C. Bernstein.
A week before his last day, Gates is as busy as ever in his office at Microsoft's Redmond (Wash.) headquarters. It's a functional room with a whiteboard on one wall and three oversize computer monitors. Black-and-white photos of his kids stand on a bookshelf. The windows provide a view of the Cascade Mountains.
Gates sits at a table to discuss his new role but has a hard time keeping his seat. He jumps up to point out the opportunities ahead for Microsoft. He hasn't lost any of the enthusiasm for software that he had when he started writing code in prep school more than three decades ago. "I'll actually be more in-depth than I am today," he says of his new role.
Gates has designed his perfect job. He'll dive deep into two or three key businesses, without trying to track dozens of other company initiatives. Later this summer, after taking some time off, Gates will meet with Ballmer and the company's two chief technical officers, Ray Ozzie and Craig Mundie, to map out the areas where he can be most useful. One area already on Gates' list: Web search, where the company continues to trail far behind Google, despite billions spent on acquisitions and development. What's more, Microsoft's failed $47.5 billion bid to acquire Yahoo! (YHOO) pushed that company to partner with Google in a way that seems certain to expand Google's clout.
Gates says his role with the search team will be as an adviser, not decision-maker. But it won't be sporadic. "In search, I'm going to be so involved on an ongoing basis [that] they'll know my opinion," he says. Microsoft is trying to chip away at Google's lead by focusing on narrow search queries, such as shopping tips or medical advice.
Gates is also likely to help with Microsoft's efforts to develop new ways for people to interact with computers that go well beyond the traditional mouse and keyboard. For years, he's been passionate about letting people use speech, touch, and pen technologies, and he lights up as he talks about these so-called natural user interfaces. "Steve may ask me to look in on some particular projects to help spur them on because he knows I love the stuff," Gates says. Already Microsoft has launched Surface, a tabletop computer that responds to the movement of fingers across a screen. Microsoft is baking even more sophisticated touch technology into the next version of Windows, due out in 2010.
Gates began to shed his operational responsibilities in January, 2000, when Ballmer became CEO. Still, he wielded tremendous influence throughout the company. Forrester Research (FORR) CEO George Colony says Microsoft could benefit from Gates' reduced involvement. He thinks Gates cast an enormous shadow that, at times, limited creativity. "The company is used to a god of some sort, blessing or cursing a product," he says. "There were certain absolutes as to how this company is run." Microsofties may now feel free, he says, to rethink the doctrine without violating "the rules of Bill."