Five ways Microsoft has changed since Gates left

It's been a year since Bill Gates left Microsoft in his official capacity. At the time many speculated his departure would spark a significant shift in Redmond. But has that really happened?
Written by Tim Ferguson, Contributor
It's been a year since Bill Gates left Microsoft in his official capacity. At the time many speculated his departure would spark a significant shift in Redmond.
But how much has really changed during Microsoft's first year without Gates?

Here I chart the major trends in the company's product strategy and leadership style since Gates's departure.

See also: One year after Bill Gates' 'retirement': What's different?

Embracing the cloud
Under the leadership of chief software architect Ray Ozzie, Microsoft has been keen to get more involved with cloud computing. One of the company's most intriguing new products in this area is cloud-based computing platform Windows Azure, which was announced in October 2008.

David Mitchell, analyst with Ovum, says Windows Azure represents a clear break from the Gates days.

He told silicon.com: "With the announcements around Azure that were made at PDC [Microsoft's Professional Developers Conference] last year, Microsoft has embraced the move towards cloud computing with considerable gusto. The extent of their investment in physical infrastructure is enormous but it is the evolution of their software product portfolio that is perhaps most ambitious."

This evolution includes Microsoft's "software plus services" model, which has seen many of its heavily used applications being hosted and distributed online. Mitchell suggested this is likely to accelerate in 2010 with the arrival of Office 14.

Quocirca analyst Bob Tarzey agrees that one of the biggest shifts for Microsoft in recent years is the adoption of software as a service. But he added this may not have been something that Gates would have held back on anyway as it's a significant industry trend that Microsoft needed to address.

Ovum's Mitchell, on the other hand, sees Microsoft's greater acknowledgment of the web as proof of Ray Ozzie's influence.

He said: "Ozzie has been instrumental in driving the company into the software plus services world, a trend that will accelerate in the next two years."

More mature and thorough
Microsoft's product strategy is certainly exhibiting more grown-up characteristics under Ozzie.

The company, according to Mitchell, is sporting a "more mature attitude" towards interoperability with products such as Open XML, ODF translators and support for the Daisy consortium, which is aimed at promoting talking documents for the visually impaired.

Microsoft is showing more care in managing its product portfolio. It halted investment in products that appear to be in terminal decline - such as Microsoft Money or security product OneCare, which is being replaced by Microsoft Security Essentials.

"In the past I don't think that Microsoft was quite as thorough in the management of its portfolio, keeping investments going in some products, even when it was clear that they were not 'economic over-achievers'," Mitchell said.

New tune for Windows
A review of Microsoft's past year would not be complete without a mention of its new desktop operating system, Windows 7, the successor of the poorly received Windows Vista received Windows Vista. Mitchell says the company has shown a new approach in developing Windows 7. He explained: "There has been a very conscious focus on gaining community support, embracing the developer and blogger influencers, and incrementally encouraging adoption."

See also: Special Report: Windows 7 nears the finish line

The way Microsoft has distributed the beta of Windows 7 to a restricted audience, he explained, has meant that those included felt "special" while others felt they were missing out. Microsoft also communicated that it wanted feedback on the product, which it then acted on, showing a greater willingness to listen to users.

Mitchell said: "All this was designed to win the hearts and minds of influential communities - the analyst, blogger and developer communities. This approach to launch and adoption is in marked contrast to the Windows Vista launch."

Leadership runs tight ship
Despite what some expected, Gates' official departure wasn't all that dramatic. CEO Steve Ballmer had been effectively running the company for some time and in the time just before Gates left, he hadn't been hands-on with all decisions.

RedMonk analyst James Governor said: "The simple truth is that Microsoft has not changed as much as we might have expected since Bill Gates stepped down from day to day operations at Microsoft."

"It's important to remember that Ballmer has effectively been in charge for a long time already. I don't think we'll see really major changes in strategy from Microsoft until he moves on," he added.

Bob Tarzey of Quocirca agreed that Steve Ballmer has been leading the business side of the company for several years but added leadership has been running a tight ship over the past year, including staff layoffs and spending cuts. "But these are credit crunch driven business decisions that Ballmer would have been involved with anyway," he said.

Ovum's Mitchell said Ballmer's "greater commercial focus" has been noticeable, particularly in the economic downturn, although again this could well have been something that took place before Gates left.

Room for more change
Some believe the biggest trend for Microsoft since Gates left is that not enough has changed.

RedMonk's Governor explained that Ozzie's influence is yet to be fully felt. He said: "The Ozzie revolution has been somewhat quiet."

Hopes that Gates' departure would lead Microsoft to open up its software to the tech community have not been realised, Governor said. "While we're seeing more and more open source business from Microsoft… this still seems more grassroots-led than top-down," he explained.

Marketing too has stayed the same, he said, with big product launches still appearing to be the preferred way of doing things.

For example, last November's PDC developer conference was all about cramming as much news as possible into a few days - a strategy which goes against the more open approach of having an ongoing dialogue with customers.

Over the last 12 months we've learned one thing: Though Microsoft's products and leadership style are beginning to shift, the Bill Gates effect will probably never wear off completely.

His approach of developing existing technologies and delivering them to the mass market is large part of what made Microsoft the company it is today. Although new approaches will be pursued, it would be foolish to abandon Gates' legacy altogether.

This article was originally published on silicon.com.

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