The Next Generation

By Peter Galli  |  Posted 2006-06-15 Print this article Print

Some analysts, like the Burton Groups Peter OKelly, in Andover, Mass., agree with that assessment. "I dont expect well see major changes in the near-term strategy. In some respects Ray Ozzie and Craig Mundie are simply expanding the scope of their previous roles, so I dont expect the organizational change to be disruptive," OKelly said. The two new leaders are uniquely well-prepared for their respective roles, OKelly said, adding that he would not be surprised to learn that this had been the plan with Ozzie since Microsoft finalized its acquisition of Groove Networks.
In a research note issued late June 15, Citigroup Investment Research said it is only slightly concerned about the impact of these moves, given the two-year transition period and "our belief that Gates has been preparing the organization for this through previous reorganizations and the hiring of Ozzie."
"But, given recent product delays and stock price decline, losing such a thought leader could temper morale in the short term, but will give a new generation of leaders a chance to step out of Bills shadow, evolve new business models like advertising and gaming, and develop the software and services vision of Windows Live," the note said. For his part, Mundie is in complete agreement with this perspective, telling eWEEK that Gates pointed out in his public remarks June 15 that he thought his iconic status and the way that is reported tend to overemphasize his role in the companys innovation and execution. "There has already been a successful transition, over more than six years, from Bill to Steve Ballmer as the CEO. There have been structural changes put in place under Steves leadership to prepare for the company to scale to its current, more diverse efforts and absolute size," Mundie said. That, in itself, has brought forward a new level of leadership in the company and the emergence of strong technical product leaders such as Steve Sinofsky, senior vice president of Windows and Windows Live Engineering; Bob Muglia, senior vice president of Microsofts server and tools business; and Jay Allard, a corporate vice president and Microsofts chief XNA architect. XNA is the tools and technologies Microsoft will offer to help game developers and publishers overcome the problems they face, he said. In March, Microsoft significantly restructured its Platforms & Services Division and appointed Sinofsky to lead the Windows and Windows Live groups. Click here to read more. "So part of what Bill used to do in time immemorial is now more directly the responsibility of those divisions," Mundie said. But others, like Goldman Sachs analyst Rick Sherlund, see Gates transition away from Microsofts daily operations over the next two years as a negative. That said, Sherlund said he expects the two-year transition to be orderly. Even some of Microsofts fiercest competitors and harshest critics, such as Marc Benioff, chairman and CEO of, refrained from making any negative predictions about Microsofts future, choosing instead to praise Gates role in the industry. "The industry has been fortunate to have the technical, business and philanthropic leadership of Bill Gates—he is the Thomas Watson of our generation," Benioff said. Check out eWEEK.coms for Microsoft and Windows news, views and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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