The End of the Gates Era

A PC industry without Bill Gates at the center of it? We have no idea what that's going to be like, because he's been in the thick of things since the moment the PC revolution began. In fact, you can trace the microcomputer software industry's beginning to one specific incident in 1975, when Microsoft co-founder Paul Allen bought a copy of Popular Electronics with MITS' pioneering Altair system on the cover in Harvard Square, and rushed to show it to his buddy Bill Gates.

In the PBS documentary Triumph of the Nerds, Gates remembered his reaction thusly (strictly sic, from the show transcript):

"We realised that things were starting to happen, and just because we'd had a vision for a long time of where this chip could go, what it could mean er, that didn't mean the industry was going to wait for us while I stayed and - and finished my Degree at Harvard."

Whatever you think of Microsoft, it's undeniable that the degree of vision encapsulated in Gates and Allen's founding of the company was staggering. As Gates' quote suggests, they had dreams of becoming software tycoons before there were PCs to run the software. And not only did they fantasize in 1975 of a day when every desk had a PC, and every PC had Microsoft software, they made it happen. (The other visionary act of that era was Steve Jobs and Steve Wozniak creating the Apple II; and with Gates's announcement, Jobs will apparently become the last founding father of the PC industry who's still a key figure.)

Yet Gates announcing he'll give up day-to-day involvement in running Microsoft in 2008 is a different prospect than if he'd done so as recently as three or four years ago. He may be leaving at a time when his company has monopolistic market shares in operating systems, office suites, and other essential software categories. But for all the billions Microsoft continues to make, there are real questions about its long-term relevance. Such as:

Can a company whose expertise involves developing desktop software and shipping it in boxes every few years thrive if applications migrate onto the Web and become continuously-upgraded services? Maybe so, but there's nothing about Microsoft's Web-based services that suggests they'll dominate the way Microsoft packaged software has.

Are we going to see a day when it doesn't much matter what operating system you use, because most of the tools you use live in your browser? Much of Windows' dominance has come from the fact that most of the world's software has required Windows. But the vast majority of the best, most innovative Web services out there wil happily run in whatever OS you use.

Can a company whose windfall profits come from licensing fees survive if tools are increasingly free, either because they're open source or because ads are footing the bill? Possibly, but it's not a given that Windows and Office will rake it in forever. People could fall out of the habit of paying for software, or at least paying anywhere near the amounts that Microsoft products currently command.

Will Microsoft history of making products that are less than secure and reliable finally hurt it where it counts--in the pocketbook? Could be--the rise of Firefox has shown that it's not a given that a Microsoft monopoly will last forever when there's a strong alternative. Problems with Windows and Office haven't resulted in mass exoduses yet, but every report of a Microsoft security hole is an argument in favor of trying something else.

Folks have predicted Microsoft's downfall repeatedly, and they've always been wrong...but if I were a predicting man, I'd guess that we're at the beginning of the end of the Microsoft era. We'll see. And since Gates is stepping aside more than stepping down--he'll remain chairman--we'll also see whether he'll truly leave behind an active role in shaping the company he's synonymous with.

Which leaves me asking more questions, like whether a Microsoft that doesn't have Bill Gates as front man will be a Microsoft the world regards any differently? For decades, Microsoft's visions-of-the-moment have been neatly summed up by Gates keynotes speeches at various trade shows; it's hard to imagine that the planet will pay quite as much attention to those visions if it's someone other than Bill Gates articulating them. And will Microsoft haters hate a Gates-less Microsoft just as passionately?

Meanwhile, the news that he intends to devote more time to his charitable activities is easy to analyze: It's terrific. Bill Gates is one of the greatest, most visionary philanthropists who ever lived, and I think it's possible that the legacy the world remembers will be his good deeds rather than his software.

More Gates ruminations on PCWorld.com: Here's Denny Arar's news story with thoughts from several Microsoft watchers. Nancy Weil has a piece about Gates's successor as Microsoft's software chief, Ray Ozzie. And Anush Yegyazarian rounded up some Gates quotes over the years, including some from early issues of PC World. (Trivia: Among Gates's distinctions is the fact that he remains the only person ever to appear as a centerfold in our magazine, which he did back in the 1980s.)