Gates and Microsoft Part i

One of the big news items in the last year was Bill Gates announcing that he was leaving Microsoft. It wasn't really an earth shattering announcement; he is intending to transition out of a direct operational role with the company over a two year period, and will remain Chairman of the Board after the transition.

I'd like to congratulate Mr. Gates on his enormous accomplishments in the technology industry. I would also like to applaud his coming transition to devoting most of his remaining career (which is considerable, since he is on 50 years old), to philanthropic purposes via his foundation. If he is as successful in his charitable pursuits as he has been in industry, the world will likely be a much better place for it. Warren Buffet's recent announcement that he is going to give away the bulk of his fortune through the Gates Foundation, is great endorsement to his promise in that field. I'd love to see him consider supporting my favorite charitable cause, Autism Research, with just a small fraction of that foundation's resources.

There is no doubt that Bill G. will go down in history as one of the pioneers and giants of the computer industry. Currently the richest man in the world, co-founder of the one of the most dominant and influential companies--he will leave the industry with a huge legacy. Not unlike most people of his stature, he is not loved by all--many tech industry folks have mixed love/hate feelings about Gates and his company.

The big question is what does Gates leaving mean for Microsoft as a company, as well as the technology and software industries as a whole?

One can look at this question from many different angles:

THE MICROSOFT CULTURE
Gates has had a major impact on the culture of his company. My own dealings with Microsoft may or may match up with the experience of others, but I'm confident its representative, since I have heard similar stories from other people who have done business (or attempted to!) with the company. What I find in Microsoft Executives is a group of highly intelligent, friendly, committed people who appear to be relatively easy-going, by Tech industry standards. At least this is what you see outwardly. If you look closer, you will also see extreme competitiveness, and I dare say, not just a bit of arrogance. Now these underlying attributes aren't totally unusual at market-leading Tech companies. But I think that at Microsoft, they are at a different level from most everyone else.

As nice as Microsofties are on the surface, I've always kind of felt like I really need to watch my back in business dealings with the company. This isn't based on paranoia, but my own actual experience, as well of the similar stories of many other tech folks that I know. I believe that this extraordinary competitiveness and arrogance are derived from the company's belief that it is the birthright of Microsoft to sell every single line of software code in the world--at least those that are worth selling!

These attitudes are a duel-edged sword for the company, in my opinion. And by the way, I feel that both the outward gentility, and the inward competitiveness, are extensions of Bill Gate's personality. On one hand, this has helped drive Microsoft to a dominant position in the industry. On the other hand, it makes it nearly impossible for third-party software vendors to truly "partner" with MS. Partnerships tend to be really one-sided, in favor of you know who. Sometimes great benefits still accrue to the junior partner, but often this is not the case. Given Microsoft's dominant position, this hasn't been too much of a problem for the company to date. But when it "comes back down to earth" and has to compete in the future on a more even terms, like the rest of us mere mortals--will this institutional smugness come back to haunt them? Microsoft has made a lot of enemies as a company over the years. Many have been vocal about their beliefs on Microsoft's many supposed sins. There is a far greater number that have kept quiet, out of fear, since they are dancing in the elephants footsteps. With Gates gone, will that fear subside?

WILL MICROSOFT CHANGE ITS STYLE?
The biggest issue here is that Gates has driven Microsoft to enormous success using a "fast-follower" mentality. Much of Microsoft's success has come from the acquisition of products/companies that have already started up a new category, or at least have technology to compete in newer, growing category. Very few successes, relatively speaking, have come from real innovations hatched from inside the company.

This has often been a criticism of Gates and Microsoft, but I think that is mostly sour grapes. You can't argue with success, and the company has executed this strategy extremely well. I always say that execution is far more important than strategy in the software business. But what is true is that Microsoft hasn't traditionally been an innovator; in trying to lead and create new markets and categories, it has largely failed. Even today most of the newer divisions within the company are money losers, covered up by the cash cows of Windows and Office. However, another big aspect of Microsoft's style is what I like to call the "Terminator" mentality. Often the first release of a new product from Microsoft is laughable, by the existing standards of that market segment. The second release may be much better, but still is often sub-par. Then in the third or fourth or fifth release--whatever it takes--the Microsoft product pulls away from the pack. This, in truth, is a strategy that would work well in few other places.

So what will happen with new leadership--will the fast-follower style be maintained, or will Microsoft try much harder to get out in front of the pack, from the beginning of the race? There are some innovators near the top of the new corporate structure, specifically Ray Ozzie, so I could be wrong. But frankly, market-making innovation is pretty hard to imagine, in a company that has reached the current size of MS.

About The Author-- Phil Morettini is President of PJM Consulting, Management Consultants to Tech Companies PJM provides assistance in Management, Product Marketing and Biz Dev. More Articles at Tech Management Blog . Contact Phil at Software Management Consulting

Article Source: Articles island - Free article submission and free reprint articles