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Monday, June 19, 2006

What Does Gate’s Retirement Mean for Microsoft’s Online Strategy?

Posted by @ 8:19 pm

On June 15, Microsoft announced a two year transition plan that will see founder and chairman Bill Gates cease his full time role at as Chief Software Architect and instead work full time at the Bill & Melinda Gates Foundation, which sponsors global health and education projects.

To kick of the transition period, Chief Technical Officer Ray Ozzie has been promoted to Chief Software Architect, and Chief Technical Officer Craig Mundie will assume the role of Chief Research and Strategy Officer. Ozzie will be responsible for technical architecture and product oversight, while Mundie will be responsible for Microsoft’s research and incubation projects, and also be jointly responsible for intellectual property and technology policy issues.

So who are Ozzie and Mundie, and what will this epochal leadership change mean for the future of Microsoft’s online activities?

Mundie has been with Microsoft since 1992 and ran their Consumer Platforms Division, where he was involved in diverse product development efforts including software for handheld PCs, early telephony products and digital TV.

Ozzie worked on VisiCalc, the first electronic spreadsheet, back in the early 80s and went on to join Lotus and to develop Lotus Notes. In 1997, he founded Groove Networks, which developed the Groove Virtual Office application. Groove Networks was bought by Microsoft in 2005, at which point he became Microsoft’s CTO.

Ozzie’s Groove Networks was an Internet-centric start-up firm, and his appointment to Chief Software Architect could herald a new era of Internet affinity for Microsoft. While the company has reacted to the strategic threat posed by the Internet in the past, Microsoft’s business model has traditionally focused on good old-fashioned software.

With Internet companies like Google trying to encroach on Microsoft’s turf and such companies having the advantage of higher agility and innovativeness, Ozzie’s experience in this field could provide Microsoft with new impulses.

Microsoft has already committed to increase its R&D budget by $2 billion to $6.2 billion over the coming year, with most of the budget being spent on online projects. I would expect that this is only the first sign of things to come at Microsoft – once they set their sights on markets they want to dominate, the going tends to get very tough for incumbents. This should make things pretty interesting for the average Internet user!

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Discussion (1 - comment)

I expect something very interesting as well. What would happen to other web-based innovative products and start-ups for that matter? Will the average Internet users get the benefit or otherwise? Will M$ again stump freedom, creativities and alternatives as it always does?

By Anonymous - June 20, 2006

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