11 January 2014

Bill Gates Resignation from Microsoft

Bill Gates Resignation from Microsoft
Three of Microsoft's biggest investors are petitioning the company's board members, asking for the resignation of Bill Gates as chairman. A Reuters report cited "people familiar with the matter."

The investors, who together hold more than 5% of Microsoft's shares (per Reuters), believe that Gates might circumscribe the power of the next chief executive, preventing him or her from developing new strategies and making "substantial changes." They are also reportedly concerned that Gates, who has spent the last 13 years focused on his own foundation and now only owns about 4.5% of Microsoft's shares, holds too much executive power relative to his holdings.

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Microsoft  Copies  Apple

Earlier this summer, Microsoft announced a reorganization of the company, aiming to orient it around devices and services. The move is somewhat radical, but had been coming for quite a while. A decade ago, Microsoft was strictly a software company, but through the introduction of its Surface tablet and its rollout of dedicated retail stores, Microsoft has been transforming itself into something akin to Apple. 

Apple's long-standing commitment to integrated devices helped the company surpass Microsoft in market cap back in 2010. By building both the hardware and software in-house, Apple is able to offer a superior user experience on its mobile devices. That's resulted in unparalleled consumer loyalty. A survey by Yankee Group back in April revealed that 91% of iPhone users intend to stick with Apple.

There's really no reason to expect an integrated Microsoft platform to successfully compete against Apple. Others (BlackBerry, Palm) have tried and failed. The only company that's found success has been Google, which ironically relied on Microsoft's old model of separating hardware and software to achieve Android's market share dominance.

Android-A Threat to Microsoft

Moreover, the long-term effects of Apple's closed system may not yet have been fully realized. Through its domination of key markets such as China, Android is continuing to grow. While many investors might equate Android handsets to Samsung's Galaxy lineup, Chinese companies like Xiaomi and Lenovo have only begun to produce Android devices and both companies plan to target Western markets in the coming years.

At the same time, it wasn't until earlier this year that Android surpassed iOS in terms of tablet market share. In the second quarter, Android tablets accounted for 62.6% of the market to iOS' 32.5%, according to IDC. In time, Android tablets may account for about 80% of the market, as they do when it comes to smartphones. Should this market share dominance result in developers flocking to Android, iOS would be challenged.

The fact that these investors are lobbying for Gates' resignation underlines a belief that more needs to be done to overhaul Microsoft, whose market capitalization today, at $249 billion, is less than half its 1999 high.As Reuters points out, however, the board is free to ignore the investors' petitioning should it fail to gain further momentum among shareholders

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Ultimately, there's no guarantee that Gates will leave Microsoft. He still owns about 4.5% of the company, making him the single largest shareholder.Yet as long as he's there, Microsoft is in jeopardy.
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7 comments: Leave Your Comments

  1. He built this company, and now they want him gone.. without him there would not be a microsoft.

  2. Sounds like sour apples to me. JMHO.

  3. interesting, let's see what happens to Mr G

  4. Interesting article. So much going on in this company. Wonder if Bill Gates will ever consider leaving.

  5. Isn't this similar to what happened to Jobs?

  6. Really! I love what Gates is doing at Microsoft and wouldn't be happy to see him go