Microsoft Corporation (NASDAQ:MSFT), in a widely-expected move, has named its new CEO, company veteran Satya Nadella. What’s more interesting is that Microsoft founder Bill Gates has announced that he will step down as chairman of the board and assume a role as a technology advisor. It’s fair to wonder if Gates’ move is a sign of him relinquishing the reins of the company once and for all, or if instead he is looking to get more directly involved in Microsoft Corporation (NASDAQ:MSFT)’s operations.
Gates to assume role of technology advisor
Reportedly, Nadella has asked Gates to become more directly involved in the company. In recent years, most of Mr. Gates attention has shifted to the Gates Foundation and its philanthropic efforts across the globe. Mr. Gates was reportedly thrilled by the possibility of getting more directly involved with Microsoft.
Mr. Gates will remain on the board, but will assume the role of technology advisor. He plans to dedicate 1/3 or more of his time to meeting with product groups and helping Microsoft design and implement new technologies. His exact duties have not yet been specified, but it appears that Mr. Gates is ready to roll up his sleeves to get more directly involved with the development and implementation of new products.
Given the intense amount of pressure and criticism from outside investors, however, it is fair to wonder if Gates stepping down as chairman may actually be paving the way for a changing of the guard in Microsoft Corporation (NASDAQ:MSFT)’s leadership. Many now believe that Microsoft is failing behind and without an injection of new ideas, the company may be setting itself up for failure.
Mr. Gates, along with former CEO Steve Ballmer and new CEO Satya Nadella, will be on Microsoft’s new board.
Increasing product competitiveness is now essential for survival
Given Microsoft’s abysmal failures in recent years in regards to products, more input from Gates and an overall injection of creativity may now be essential for the technology giant. Only a decade ago, Microsoft had Apple Inc. (NASDAQ:AAPL) on the ropes, but after stunning string of successful product launches, including the iPod, iPhone, and iPad, have allowed Apple to pull far ahead.
Microsoft Corporation (NASDAQ:MSFT) has been late to the party far too many times. For example, the company tried to launch a MP3 player, the well-reviewed Zune, but it came across as too little too late. Microsoft is also trying to build up its presence in the smartphone market, but the several year head start afforded to Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) will be difficult to overcome. The same could be said of the tablet market.
Meanwhile, Microsoft 8 has been rejected by many consumers. While the operating system is widely viewed as a a good OS for tablets, it has proven to be less than perfect for traditional laptops and desktops. Even Microsoft Corporation (NASDAQ:MSFT)’s most successful product launch in recent years, the Xbox, has taken hits in the last few months. Sony Corporation (NYSE:SNE) (TYO:6758)’s PS4 now appears in position to outsell the Xbox One by a wide margin.
If Microsoft is to turn the ship around, it will need to show a more aggressive posture on entering markets, and more emphasis on listening to customers. Since Mr. Gates left the company, Microsoft Corporation (NASDAQ:MSFT) has begun to slip on both marks. Instead of being the aggressive technology leader it once was, Microsoft has become a passive observer watching the world slip by.