Ozzie Is Key to Microsoft's Success Against Google

The departure of Microsoft's founder and iconic leader Bill Gates comes at a pivotal time in the company's history as it struggles to compete with Google, the architect of the new Web economy and perhaps the company's most formidable foe ever.

With Gates giving up his full-time duties, two very different leaders -- CEO Steve Ballmer and Chief Software Architect Ray Ozzie -- are burdened with the task of transforming Microsoft into a leader in an industry where the Web, not the PC, is driving how people use technology.

As Gates' heir apparent, Ozzie in particular is under an enormous amount of pressure to rise to the occasion. How he performs as chief software architect once Gates leaves the fold is key to Microsoft's ability to take the same dominance it enjoyed in the PC industry for the past 20-some years to the world of Internet advertising and hosted services.

Ozzie has been chief software architect for only two years, and during that time has worked with Gates in preparation for June 27, Gates' last full-time day at Microsoft. While Ballmer has been running Microsoft alongside Gates since he took over as CEO in 2000, Ozzie's ability to be a long-term leader is unproven.

Though Ozzie will have help from the rest of Microsoft's relatively new team of top brass -- Chief Research Officer Chief Mundie and Chief Operating Officer (COO) Kevin Turner among them -- it's his relationship with Ballmer and his ability to steer Microsoft's technology direction in the next five to 10 years that will determine whether the company can beat Google at its own game.

A skillful salesman, Ballmer's style and his way of attacking Microsoft's problem on the Web is by now fairly well-known -- and so far has not really worked.

Microsoft under Ballmer's reign has grown by acquiring technology -- think of the spate of small virtualization vendors the company subsumed in the past several years to bolster that strategy. However, the nature of those acquisitions has started to change, which shows Ballmer is tweaking his own strategy to adapt to an industry that has outgrown Gates' vision for the company, noted Stewart Alsop, cofounder and partner of venture-capital firm Alsop Louie Partners and a longtime industry watcher.

To compete with Google on advertising and the Web, Microsoft is gauging future purchases by how much value they can bring to the company immediately, said Alsop.

"The idea behind Yahoo was to buy revenue -- revenue and traffic," Alsop said. Given the recent breakdown of that deal, this change in strategy -- and Ballmer's ability to execute it -- is still a work in progress, he added.

As technology visionary and Gates' successor, Ozzie must serve as a thoughtful counterbalance to Ballmer's trademark bluster.

As a public figure, he appears more reserved and soft-spoken than Ballmer, and even seems to take himself a bit more seriously than Gates, who was not afraid to poke fun at himself in spoofy company videos.

Ozzie has put forth a more professional demeanor than his predecessor, making keynote presentations in dark suits and button-down, collared shirts as opposed to the more comfortable attire Gates wore on stage. It's likely Ozzie knew he had to present himself seriously from the beginning in order to be taken that way.

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