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With word that 22-year Microsoft veteran Satya Nadella is likely the new CEO, attention turns to the leadership of the company's board of directors. It will have two former CEOs, Bill Gates and Steve Ballmer.
So new thinking is unlikely to come from them.
In fact, Gates has a track record of huge strategic errors that have cost the company years of progress in market share. Here's why he should be the one to go:
1. Gates' world was: Go slow. Microsoft needs to change its corporate culture. Today’s tech companies try to move fast and fail. They can fail because they move fast, which means that they can fix a mistake as fast as they create one. Microsoft has a historical culture of moving slow and not failing. That comes from a time when people installed software once very three years. Times have changed. Now companies deliver software via the cloud and can add or roll back new features every day.
2. He almost missed the Internet. The Internet rose during Gates time as CEO, and he actually wasn't an Internet visionary. He entered the browser market long after Netscape, for example. His efforts to catch up and crush Netscape led Microsoft into an epic antitrust judgement and 10 years of oversight by the Department of Justice. Ultimately Microsoft’s Internet products (browsers, web servers, development tools) did well and grabbed lots of market share. But Microsoft and Gates didn’t lead here, they followed, and almost disastrously so.
3. Speaking of the Internet, there’s Bing. Bing is a fine service, but Microsoft will never beat Google by being a me-too search site. New leadership needs to figure that out.
4. Gates not only missed the software open-source revolution, he was its No. 1 enemy. Open source, which is where developers freely share the code they create, has been a major change in the software industry in the past decade. It's almost a religion with young idealistic programmers. Gates (and Ballmer) saw it as a threat and threatened to sue it out of existence. They’ve since softened their stance about some forms of open source. But bad blood still exists. Gates got this one very wrong.
3. Like Ballmer, Gates missed the mobile revolution. By a mile. For years, Microsoft maintained that the PC would be the central device in all personal computing. Now, the PC is just one of many devices that are powered primarily by the cloud. And there are now fewer PCs sold than smartphones and tablets.
4. Gates didn’t spot the cloud early, either. Salesforce.com was founded in 1999, when Gates was still CEO of Microsoft. Once again, Microsoft entered cloud late and is now playing catch up to Amazon with Azure, and to Google with Office 365. Gates is not a cloud visionary.
5. Gates could have nipped the Windows 8 disaster in the bud. There was exhaustive user testing while Windows was being developed indicating that people didn't like Windows 8. Then Windows chief Steven Sinofsky plowed ahead anyway. Gates was chairman during all this. Windows is his legacy. Why didn’t he step up with one of his epic rants and turn that ship around?
6. Gates let Ballmer do the Surface tablet. The Surface, which combines hardware and software, was guaranteed to cause trouble with Microsoft’s biggest hardware partners. And it has. HP, for instance, one of the world's biggest PC makers, has publicly called Microsoft a competitor and run to Google. Then Gates let Ballmer double down on hardware and buy Nokia for $7 billion. Meanwhile, Google has announced plans to sell its own hardware business.
7. Gates let Ballmer buy Skype for $8.5 billion. The grand strategy of that was ... what?
8. The late bloomer thing has got to stop. With Gates at the helm, Microsoft became a company that tried to enter every successful tech market late, and then spent enormous resources catching up. This worked for a while, when the PC really was the center of the world. But now that has changed, and following won't work anymore.
9. Gates is a brilliant philanthropist. In recent years, Gates has found his visionary role solving hard problems like poverty, illness, education, which obviously thrills him.
Having two former CEOs on the board will hinder a new CEO's ability to make the changes Microsoft needs to move forward. So, it's time for Bill Gates to leave Microsoft and concentrate on the philanthropic work that he loves.
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