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Home / Business

<i>Anthony Doesburg:</i> Mr Gates is (finally) leaving the building

By Anthony Doesburg
NZ Herald·
27 Jun, 2008 12:00 AM4 mins to read

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KEY POINTS:

From next week, the man who built Microsoft into the world's biggest software company, making himself the richest person on the planet in the process (for a time at least), will start dedicating himself to giving his money away.

That means handing Gates' responsibilities to two executives: Craig
Mundie, who takes charge of advanced strategy and policy; and Ray Ozzie, who gets Gates' old title of chief software architect. Gates remains company chairman.

We've had almost as much advance warning of Gates' intentions - it was signalled in 2006 - as we're used to getting when there's a new version of Windows under development. The motivation is subtly different, though.

Handing over the reins of a US$64 billion ($84 billion) company is obviously no small matter, and to do so without giving people time to get used to the idea could be bad for your stock price.

The practice of talking about new products long before they see the light of day has a slightly different purpose. It's a way of spreading FUD - fear, uncertainty and doubt - and is a time-honoured computer industry marketing technique.

Sow a little FUD as a competitor gets ready to launch a rival product, and you might trick buyers into holding off making a purchase until your product is ready. It only works a certain number of times, though.

That might explain the unusual fate of Windows Vista. It went on sale at the start of last year after more than five years' gestation. Microsoft maintains it's selling well, but Mike Nash, head of "competitive strategy" for Windows, admitted in an interview last month with blogger Ina Fried of News.com that Vista suffers from a "perceptual gap".

Many business buyers of PCs that come with Vista are choosing to "downgrade" to its predecessor, XP, instead. But XP will be much harder to buy after June 30, when Microsoft will stop selling it in shops and it will no longer be available on PCs from large manufacturers.

The trouble with FUD is that any computer vendor can engage in it. IBM is credited with being the pioneer of FUD, but Microsoft learned the technique well and is said to have used it to kill off IBM's OS/2, a potential Windows rival.

Now Apple can be seen on our TV screens attempting (with American actors - couldn't they employ some local talent?) to do the same to Vista.

Gates is undoubtedly thick-skinned enough to not feel a thing. As the personification of Microsoft, he has to be held responsible for the company's aggressive market behaviour that in 1999 saw it declared a monopolist by a US federal judge.

Mundie, who's not unknown in this part of the world, having met Helen Clark on a visit in 2002 and been impressed by her awareness of IT's importance, said last month in a BBC interview that Gates was "an iconic leader of an iconic company" who has unique gifts.

"He's incredibly inquisitive and is a guy who likes to absorb ideas from wherever they come. His genius is the ability to integrate all of these things that sometimes seem very disparate into a continually evolving strategy for what should happen next."

He was prepared to be guided by intuition and invest heavily in technology whose importance other industry heavyweights hadn't woken up to.

Mundie doesn't mention the internet but it's widely held that Gates' intuition let him down there. At a 1994 Microsoft board meeting, Gates is reported to have said, "There's no money to be made there. Why is that an interesting business?"

Plenty of others thought it was, including search engine pioneers Yahoo, Lycos and InfoSeek, and browser developer Netscape. By 1995, Microsoft came up with a cunning internet domination plan that ultimately backfired. By bundling Internet Explorer with Windows, it eventually stole the browser market from Netscape, but also brought the wrath of the Justice Department down on its head.

A decade later, Gates conceded Google had "kicked our [Microsoft's] butts" in internet search prowess. Four years on - and as recently as this week, as efforts to buy Yahoo stagger on - Microsoft is still scrabbling about trying to get its share of the internet billions.

With Gates now leaving the building to go off to run the Bill & Melinda Gates Foundation, Mundie and Ozzie have been left with that small job on their hands.

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