The two will work side by side at Microsoft over the next two years. Then in July 2008, Gates will relinquish his day-to-day responsibilities to put more effort into the Bill & Melinda Gates Foundation.
Steve Ballmer will remain as CEO, a post he has held for six years. And Gates said he will remain as chairman. "I am not leaving Microsoft. I remain chairman and will spend meaningful time here. Over the next two years, I will be working as hard as I ever have," Gates said. But at the same time, he added, it was necessary to signal clearly to the world that his days as a hands-on manager were numbered.
"With great wealth comes great responsibility. Many years ago I made it clear that almost all my wealth would be returned to society," Gates said in an afternoon press conference in Redmond, Wash.
During the press conference, Gates pointed to a "common thread" between the world of computer technology that ignited his passion as a young man and the research into health and education in developing countries that will soon take up an ever greater chunk of his time. "It's about using technology not just for the privileged few, but for everyone," said Gates. "Just as Microsoft took off in ways I never expected, so has the foundation."
Gates said health and education are at "the crux of global needs" and that he has taken pages from Microsoft's playbook to expand his foundation, hiring extremely bright people and encouraging them to think big.
By plowing more effort into his foundation, Gates will be working alongside his wife, Melinda, a former Microsoft employee, on the medical and public health issues in which the foundation is already heavily invested. "We're already seeing great results in the new medicines, the new ways of delivering health care," he noted. With $29 billion in assets, the foundation has been at the forefront of fighting AIDS and malaria in Africa.
The Big Winners
The big winners in Microsoft's executive suite look to be Ozzie, who gets a promotion to Gates' old title of chief software architect, and Craig Mundie, who becomes chief research and strategy officer. A third CTO, David Vaskevitch, will now report to Ozzie, who Gates said inherits the "central role" in designing Microsoft's products. Mundie will manage Microsoft's research group; Head of Research Rick Rashid will report to him, and Mundie will continue working on technology policy issues as well.
At some point during the next two years, both Mundie and Ozzie will cease reporting to Gates and start reporting to CEO Steve Ballmer.
In an interview after the Gates teleconference, Mundie noted, "A huge part of my work has been outside. I've been [the] most visible speaker on the company's future." Even with Gates stepping back from daily operations, "My job changes less than Ray's does."
Gates gave a vote of confidence to Ballmer, whose leadership has been questioned by Wall Street of late. Microsoft is preparing for big spending increases next year, while continuing to hoard cash at a time when the company's stock hasn't provided significant market returns in years. "Steve is the best CEO for Microsoft I could imagine," said Gates, highlighting Ballmer's track record of increasing company profits, hiring top talent, and managing the company for the long term.
