Three of the top 20 Microsoft investors are allegedly calling for Microsoft Cofounder Bill Gates to step down from the company. Gates now serves Microsoft in a part-time role as chairman, but his influence over the firm's strategy is considerable. And given the problems Microsoft now faces, the argument is that the company would be better off without him.
At this point, it's not clear who, if anyone, has actually recommended Bill Gates' departure from Microsoft. Reports of this development are unsourced and vague, and note only that the investors represent about 5 percent of Microsoft's stock.
But the notion that Gates must go, for Microsoft to truly change, is well established. And it's fair to say that Gates has had an outsized influence on the firm's strategy over the past decade despite ending his day-to-day work arrangement with Microsoft several years ago. (Gates stepped down as CEO in 2000 and gave up his daily Microsoft activities in 2008 to focus on his philanthropic activities through the Bill & Melinda Gates Foundation.)
The fear for Microsoft is that it needs to change, and fast, to meet the needs of the rapidly evolving personal technology market, which has migrated away from PCs dominated by Microsoft software to online services and devices that are controlled by companies such as Apple and Google. But Gates and his cadre of directors have spent the past decade preaching patience as they waited for Windows and the PC market to once again win out against emerging rivals. That hasn't happened.
Currently hunting for a new CEO, Microsoft will have trouble attracting talent smart enough to make the difficult decisions the firm needs to thrive in this new world. But it will be especially difficult if that new CEO is constrained by a preordained "devices and services" strategy that is backed by Gates and the Microsoft board, and if that candidate needs to continue acceding to their demands going forward.
Gates currently owns about 4.5 percent of Microsoft's stock, making him the firm's largest individual shareholder. But he is slowly selling off that holding over time and would no longer own a stake in Microsoft by 2018.
In my opinion, Bill Gates must go. His presence will be overwhelming to any new CEO and would stand in the way of the real change Microsoft needs. Furthermore, this new CEO needs the freedom to make drastic changes, including—if needed—abandoning the company's "devices and services" strategy.
Meanwhile, Ford CEO Alan Mulally, whom I've described as the ideal candidate for the Microsoft CEO position, given his outsider status and previous experiences rescuing Boeing and then Ford from similar downturns, has said that he has no plans to join the software giant. "Microsoft is a great company and a great partner," he told USA Today this week. "[But] I love serving Ford and have nothing new to add to (my) plans to continue serving Ford." Mulally currently plans to stick with Ford at least through 2014.