Mundie Speaks Out on Gates Transition, the Future

By eweek  |  Posted 2006-06-16

Mundie Speaks Out on Gates Transition, the Future

On June 15, Bill Gates, Microsoft chairman and chief software architect, began handing over the reigns of power at the Redmond software maker to Craig Mundie, its new chief research and strategy officer, and Ray Ozzie, the chief software architect.

That same day, Mundie took time to talk to eWEEK senior editor Peter Galli about how long these moves have been under consideration, why this was the right time and whether the way the company does business will change significantly as Gates transitions to his foundation.

Can you give me some of the background about the thinking and planning around Bill Gates decision to step aside and hand the day-to-day running of the company to you and Ray Ozzie?

Over the course of a long time, Bill has said that he expected to transition away from Microsoft and towards the work of his foundation. Over the past few years the foundations success, in terms of both its importance and scaling, has been putting increasing pressure on Bill in his own mind to figure out a way for that to happen.

So he began that dialogue more directly with Steve Ballmer [Microsoft CEO] about two years ago. Then, about a year ago, it became a real question, not of whether he wanted to make this happen, but more of the right way to make it happen, and what would the right timing and mechanism be for that.

Click here to read more about Bill Gates decision to spend more time at his foundation.

There was a dialogue between Microsofts senior leadership and Bill and we decided the best way would be to pick an optimal transition point and then have a long and transparent transition process.

So Bill and Steve decided to pick a two-year transition period, that we would be public about and where the essential components were put in place at the beginning. The final decision that now was the right time for us to pull the trigger and make the announcement happened at the board meeting on Tuesday [June 13].

Was there any specific event, or series of events, that made this the optimal time to make the announcement?

What happened that allowed this has been the successful transition, over more than six years, from Bill to Steve as the CEO, and all the attendant structural changes that we put in place under Steves leadership to prepare for the company to scale to its current, more diverse efforts and absolute size.

That in itself has brought forward a new level of leadership in the company in terms of the division presidents and, more recently, with Kevin Turner [formerly the chief executive of Wal-Mart Stores Inc.s Sams Club warehouse stores business], coming in as chief operating officer.

We have also seen the emergence of strong technical product leaders in those divisions, like Steve Sinofsky [the senior vice president of Windows and Windows Live engineering], Bob Muglia [the 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 aimed at helping game developers and publishers overcome the problems they face today and in the future].

So part of what Bill used to do in time immemorial is now more directly the responsibility of those divisions.

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.

Another reason why now is a good time was the arrival of Ray Ozzie through the acquisition of Groove Networks, Inc., because he was someone Bill had high regard for. Very soon after Ray got here, he was pushed into taking on the leadership role for our Live services strategy, which in and of itself drew him into this company cross-coordination role.

It then became clear that Ray would be very good at doing that part of Bills role and he clearly has the stature, inside and outside the company, to take that on.

As to the innovation agenda, I have pretty much partnered with Bill on that for 13 years in terms of starting up new things within the company. I have worked with him on the research agenda, the policy agenda and the outbound engagement around those questions and so I have been a close partner with him in that space for eight years now.

So I am pretty qualified to take on ownership of that. If you think about it, all of the principle parts of Bills job are then either naturally absorbed into something we think the organization does or can be cleanly divided in a complementary split between Ray and me.

Next Page: Will new personalities change how MS runs?

Will New Personalities Change

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There is a lot of early buzz that the way Microsoft operates will change significantly going forward given the difference in personality and focus of Ray and yourself, compared to Bill. Do you see any fundamental shift in the way the company is run and its software is produced, over the next two years and beyond?

I think that the culture of the company is rich and established. After 31 years, Bill has put a fairly indelible imprint on the company. A lot of people have grown up inside this company and we do what we do the way we have grown up doing it to some extent. I dont expect there to be any abrupt change as a function of that.

Clearly, Ray and I are different personalities than Bill, but then again a lot of the interactions among top management have already been between all of us as the company has grown and matured over the past five to six years. Im not expecting it to be very disruptive relative to certainly how the product groups develop their products.

Is the plan to have Bill gradually hand over his responsibilities to you over the next two years until he transitions to his foundation?

We are not trying to do this slowly at all. The two principle parts, effective today, move to Ray and me, and Bill will partner with us for the next twelve months. So we will be doing this together for the next year and that is how we will approach any problems and it will be a partnership.

Is Microsoft ready for Gates transition? Click here to read more.

The second year of the transition we think more and more will be one where Bill will help us when we ask for help but will back away to some extent. He will assume more of an advisory role, and take on more of a special projects orientation that we envision might be the model through which he stays on beyond his role as chairman after 2008.

So, our goal is really to try and make this transition happen as early in the process as possible and then have Bill be able to ensure that it was effective and smooth. We are really front-end loading it and that is why Bill announced the title changes for us and the shift in reporting structures. We have kind of flipped the switch and now we want to make sure it runs smoothly on the right track.

Bill Gates and Steve Ballmer issued memos to try and calm the Microsoft troops. Click here to read more.

Microsoft executives have recently said they are committed to a greater outreach to the open source community and to make Windows software interoperable with that licensed under the GNU General Public License (GPL). Is that a priority of yours and something you plan to move further forward?

I have been one of the principle people architecting the way we are going to step up to this bigger question around interoperability, and that will certainly be a focus of mine going forward, along with Bob Muglia.

Does anything change from a competitive standpoint with this move? Many people will surely question what will happen to a Microsoft without Bill Gates. What is the message to shareholders and Wall Street?

Even in Bills own public remarks, he pointed out that he thought his iconic status and the way that was reported tended to overemphasize his role in the companys innovation and execution.

This is really a transition that has been in the works for a couple of years, with a couple to go before, and we will see the emergence of a lot of great talent that has today been portrayed as all Bill. This is a company with, in many cases, the best people in the world.

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