Bye Bye Bill

Published: June 25, 2008

by Alex Woodie

Some people call it retirement. Some, like former San Diego Chargers' linebacker Junior Seau, refer to it as "graduation." For Bill Gates, who will cease working as a full-time employee of Microsoft this Friday, the day will mark a "transition." Regardless of what you call it, it marks the end of an era for one of the most profitable companies in history, and the start of a new era, one with a lot of questions.

Microsoft is undoubtedly planning a big send-off for Gates at company headquarters in Redmond, the company he co-founded with Paul Allen back in 1975. The company has put together a video tribute to Gates on its Web site that covers some of the early history of Microsoft, it's legal battles, and what it might do in the future.

Gates' potential was not fully realized by his family growing up in Seattle. His sister, Libby Armintrout, was puzzled when her brother would bring a book to a University of Washington Huskies football game. "I just couldn't understand that," she said. "He was gifted," said Gates' father, William H. Gates Sr., in the video. "But we didn't have any impression there was something world class going on in our living room necessarily."

Gates got his first taste of computers while attending Lakeside High School. The school had a terminal that was connected over a phone line to a GE timesharing computer, according to Gates. Gates started spending most of his free time there along with his future business partner Allen and a dozen other students, who would sometimes sneak into the computer room through doors or windows they would intentionally leave unlocked.

Gradually, Gates and Allen became proficient at programming. At one point, Allen encouraged Gates to work with him to write a BASIC interpreter for a 8080 chip in a kit computer. It took two-and-a-half months to finish it, at which point they called the computer company, which expressed doubt that it would work. When Allen flew to their company headquarters in Albuquerque, New Mexico, to demo the software, it actually worked. "Paul was amazed, because there were so many things that could have gone wrong," Gates said. "They became our first customer, and that's when Microsoft really got started."

By 1980, the company was writing a BASIC compiler for the new IBM PC and the DOS operating system. Gates recalled the first meetings with IBM in Florida, and the licensing agreement with Big Blue that gave Microsoft its first business coup. "We wrote the contracts in such a way that if other companies came along and did similar machines that we had all the licensing rights for the other PC compatible machines," Gates said.

Little did they know, that agreement would give Microsoft a huge edge in the market for operating systems. The company soon launched a slew of office productivity tools (Microsoft Office), but its next big coup was a graphical operating system (Windows). Gates played a huge roll in all of these products. He also had a big influence in the business side of the house, attempting to squash the startup Netscape Navigator by bundling Internet Explorer with Windows 95, which led to the U.S. Department of Justice's antitrust investigation and years of legal turmoil.

Microsoft avoided being broken up by the DOJ, which would have been a huge blow to Gates, and it has enjoyed huge profits every since. However, today the influence of company's cash cows--Windows and Office--are on the wane, and the company is struggling to plot its way forward in the Web 2.0 world.

Gates is leaving the company to spend more time in a philanthropic role with the Bill & Melinda Gates Foundation. Gates' job at Microsoft will be taken by the new chief software architect Ray Ozzie and Craig Mundie, the company's chief research and strategy officer, who will have their hands full finding a way to compete more effectively against Google. Some have speculated that CEO Steve Ballmer could be slated for replacement following his failed bid for Yahoo. In any event, it doesn't change the fact that Microsoft needs to do something to shake up its Web development department, and possibly loosen its grip on the sacred Windows and Office cows.

Gates will remain Microsoft’s chairman and will be involved in select projects, based on direction from Ballmer and others. Considering his passion for computing, it's hard to imagine Gates not having some role at the company.

In the video, Gates expressed optimism on the direction of computing. "The frontier for software to have impact is bigger than ever," he said. "When you get the Internet explosion, it creates the opportunity for these services, and we're just really at the beginning of that services wave. That's the thing that Ray Ozzie has come in and is driving all our products broadly to seize that opportunity."

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