Bill Gates steps down as Microsoft CEO

Bill Gates, whose name has been synonymous with Microsoft for the past 25 years, handed over the chief executive reins Thursday to Steve Ballmer, his long-time business partner and the man who's been acting president for 1 1/2 years.

Ballmer becomes CEO and president, while Gates becomes chairman of the board and chief software architect -- effective immediately.

The software giant also announced Thursday it would further unify the company around a forthcoming Next Generation Windows Services (NGWS) platform, which it will officially launch at its Forum2000 strategy day this spring. "I'll spend almost 100 percent of my time on new technologies," said Gates, who announced the executive changes during a live press conference at Microsoft Studios in Washington, Thursday afternoon.

"Over the last 18 months, Ballmer and I have made a number of changes. I made a big change when I made Steve president [in July 1998]. That let me put more of my focus on technology."

Microsoft's announcement of executive and strategy changes comes at the end of a busy week for the company. On Monday, Microsoft settled its four-year antitrust lawsuit with Caldera.

That same day, America Online announced merger plans with Time Warner, creating a multimedia empire whose online and TV access and content efforts completely overshadow those of Microsoft's Consumer Group, headed by Richard Belluzzo.

Microsoft officials throughout the week were quoted saying that the AOL/Time Warner merger offered proof that Microsoft isn't a monopolist.

The moves also come just a day after reports that government lawyers in the US Department of Justice's antitrust case would press for a breakup of Microsoft. Ballmer responded to those reports Thursday, saying a company split would be "the single greatest disservice that anybody could do".

"It would be absolutely reckless and irresponsible for anyone to try and break up this company -- there is no precedent," he said. "It would be reckless beyond belief."

One Microsoft adversary warned not to read too much into the timing of Microsoft's announcements, however. "The biggest issue facing Microsoft today is whether or not to accept an AT&T-type settlement that involves breaking the company up -- or to continue the present litigation," said James Love, director of consumer advocate Ralph Nader's Consumer Project on Technology, in a prepared statement.

"Many people think that the barrier to a breakup is more personal than financial. One interpretation of today's announcement is that Bill Gates is further disengaging from the business, making it easier to consider a breakup of the company. But that may be reading too much into today's news."

Ballmer acknowledged that the company will face big challenges from competitors such as Sun Microsystems, IBM, Oracle, AOL-Time Warner and the various Linux vendors. But he is promising that Microsoft will reinvent itself around a Windows-based software-services platform that will more tightly integrate its current family of point products.

"All of our development teams will take technologies that they've been building and integrate them," Ballmer promised.

He said Microsoft would detail its three-year plan for making software a service in April.

The first deliverables would begin rolling out at Microsoft's Professional Developers Conference this summer. Within calendar year 2000, Microsoft will ship the infrastructure for NGWS, Ballmer said -- namely Windows 2000, Exchange 6.0 (code-named Platinum), SQL Server 7.5 (code-named Shiloh) and its Visual Studio 7.0 development platform.

He did not offer details on how NGWS would fit in with or differ from Microsoft's current Windows development environment, known as Distributed interNetwork Architecture 2000, or DNA 2000.

Microsoft's promise of turning software into a service isn't new or unique.

In the autumn of 1998, Microsoft leaked a 14-page memo written by Gates to selected members of the press. In that memo from Gates to Microsoft's top managers, Gates outlined his ideas for automating software delivery via a service dubbed "Windows Tone" or WinTone. For a monthly or annual fee, users would receive software upgrades and store their data on the network.

Since the time Microsoft made that memo public, the company has done little to deliver on its WinTone commitment.

Microsoft has tested application rental via various application service provider (ASP) pilots in the US and abroad, and made available patches and fixes via the Windows Update Web site. But products like a host-able version of Office 2000 are still not tangibles.

Ballmer told press and analysts on Thursday that for Microsoft to deliver on its software-as-a-service vision, it needs to provide better integration of program logic and information sharing across the network.

"Breakthrough versions of Windows are needed," Ballmer said. "You need to make changes to the programming model, UI [user interface], file system and XML schema."

Ballmer likened the level of change to that required to move DOS/character-based computing to the Windows model.

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