Bill Gates, an iconic figure in the PC industry has decided to pare down his work load and become non executive chairman of the company. The company has evolved from being a small player in compilers to a large behemoth in the computer industry. The number of employees has grown to about 61,000 full time employees in the past thirty five years.
Many analysts and industry watchers say that Microsoft is not the Microsoft of old - it has become large and bureaucratic. Microsoft was famous for under promising and over delivering. Of late, the fortunes have reversed with Microsoft over promising and under delivering. The stock price has dropped by nearly 16% after the earnings release till to date.
The departure of Bill Gates may be a welcome sign for this company. Some of the excesses under Bill Gates may be brought under control especially the long delays in the next generation operating system.
From the 10-Q from the company, the income from different divisions of the company are as follows.
Windows Client 2.4 billion
Windows Server and Tools 1 billion
Information Worker 2 billion
MBS (13) million
MSN (26) million
Mobile Devices (14) million
Home and Entertainment (388) million
Four out of the seven business divisions are recording a loss and the money making divisions are the old windows client, server and Microsoft Office divisions. This doesnt bode well for this company - especially that the MSN division turned cash flow negative. Meanwhile the company is stepping up spending in several different divisions without organically growing them.
So, a change of guard at Microsoft is welcome for the shareholders. Hopefully, this will translate to a company that can execute better.