Ozzie Speaks On Microsoft Transition

In a phone interview with CRN hours after Microsoft went public with the news of its succession plan for founder and chairman Bill Gates, Ozzie seemed unfazed. The company announced Thursday that Gates is starting a two-year transition out of his day-to-day duties and has relinquished his chief software architect title to Ozzie.

Asked if this spotlight brings untoward pressure, Ozzie said: "None at all."

"I think Bill and [Microsoft CEO Steve Ballmer] know that sometimes the gray hair can be advantageous," Ozzie said. "If you've been through positive experiences like launching [Lotus] 1-2-3 and VisiCalc, as well as sobering experiences like being at IBM with [Louis] Gerstner when the desktop business hit the wall at Lotus -- it can be very helpful moving forward," Ozzie said. Ozzie, like Gates is 50 years old.

Under the plan, Gates will remain chairman of the company he co-founded 31 years ago with Paul Allen. But starting in July 2008, he will devote the bulk of his time to The Bill and Melinda Gates Foundation.

Ozzie, who had been a Microsoft CTO, is now chief software architect. Another CTO, Craig Mundie, is now chief research and strategy officer.

Ozzie and Mundie will continue to report to Gates for the time being. At some time during the transition, they will transfer to Ballmer, according to a company statement.

Ozzie said he and Mundie are a good fit. Both are alumni of Data General, the Boston-area minicomputer maker immortalized in the book Soul Of A New Machine.

"Bill's role is really being divided in some sense by two people, Craig Mundie and me and our skills are very complimentary," Ozzie said. "His continuum starts at basic tech and ends at the customer. He really understands semiconductor progress in communications technologies. He understands research, both academic and commercial."

Mundie will determine how to build prototype projects and handle development projects "both applied and research." He will also handle intellectual property issues and policy.

Ozzie's realm will start at advanced development and center on products and product strategy, he said.

Ozzie came to Microsoft about a year ago when the Redmond, Wash.-based company bought Groove Networks, the Beverly, Mass., developer he founded. Even then, many surmised he would play a role in an eventual Gates succession. Gates over the years had repeatedly expressed his admiration for Ozzie, even though the latter worked for the enemy at Lotus Development Corp. Ozzie's Lotus Notes held Microsoft at bay for many years.

"Because of Notes, Ray was the only guy who was able to create something that Bill/Microsoft couldn't dominate and take out," said a former Lotus colleague of Ozzie's.

In the past year, Ozzie has become the front-man for the Microsoft's emerging software-as-a-service game plan. He and Gates held center stage at the Windows Live and Office Live rollout last fall.

Ozzie said that while the SaaS realm unnerves vendors and partners alike -- with the threat of lost account control -- there will be plenty of opportunity for both parties if they are flexible and proactive.

"Whenever there is a change in architecture or a change in how things are deployed, there is opportunity in some way shape or form and anyone in any value chain -- that's Microsoft or any partners really -- should be looking at the environment and hopefully reshaping their business based on the opportunity," he said.

Microsoft itself, he maintained, has been shaped by this services push. Competitors like Salesforce.com have stolen a lead in SaaS, observers say.

The fact that Microsoft's initial service offerings will be "broadly horizontal" means features that many people are used to will be left out, Ozzie noted. That should provide an opportunity to provide capabilities and features atop the platform.

"In terms of hosting enterprise offerings, the full-featured offerings, that will probably be a very significant opportunity for partners, more so than for Microsoft which is trying to focus on horizontal, cost-reduced stuff," he said.

But partners, like Microsoft itself, have to keep their eyes open. "If the value that the partner is adding is purely infrastructural, you have to pay attention to what infrastructure changes are happening," Ozzie said. "In this particular case, Microsoft itself is being impacted by infrastructure changes in terms of moving things to services."

Solution providers mulled the news of Gates planned transition and Ozzie's new role late Thursday.

"Your first reaction, with someone in [Gates'] position -- you think 'is it going to hurt Microsoft?' But then you take a step back and look at the moves [Gates] made by bringing Steve up, and now it makes even more sense why they brought Ray Ozzie on. With his technical leadership and the business leadership from Steve, that's a powerful combination," said Scott Stanfield, CEO of Vertigo Software, a Microsoft consultancy in Point Richmond, CA.

Todd Swank, director of marketing for Nor-Tech, a Burnsville, Minn. partner waxed nostalgic.

"Realistically, I don't think this is going to have that huge of an effect on Microsoft or the channel as a whole. Microsoft has legions of intelligent people working for them. I'm also pretty sure Mr. Gates will stay involved in the areas that are critical ... That being said, it is somewhat sad to see such a legend in the industry announce his time to leave. Makes me feel old!"

Additional reporting by Stacy Cowley and Paula Rooney.