Bill Gates steps aside as chairman, becomes Nadella's 'consigliere'

Company's long-running chairman relinquishes job to John Thompson, a former Symantec CEO

Microsoft today said that co-founder Bill Gates will step down as chairman of the board to spend his time with the company advising the new CEO, Satya Nadella.

The change is historic. "This is a milestone, an indication of not only a changing of the guard in Microsoft, but also a change in the technology business between the past and the future," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. Gates has been Microsoft's one and only chairman.

"The past means software on PCs, the future is about mobile devices where most of the processing is happening in the cloud, and where the client moves to online app stores," Moorhead explained.

Gates' new title will be "Founder and Technology Advisor," and he will remain on the board of directors, Microsoft said Tuesday. In his place as chairman, Microsoft has selected John Thompson, a former CEO of security firm Symantec and the director who led the CEO-search committee. Thompson joined the board two years ago.

"[Gates] will devote more time to the company, supporting Nadella in shaping technology and product direction," Microsoft said in a statement.

"Gates is key," asserted Ted Schadler, an analyst at Forrester Research. "The two [Nadella and Gates] go together. The timing is not a coincidence."

The move doesn't mean that Gates is returning full-time, but he will be significantly increasing his involvement.

"I'm thrilled that Satya's asked me to step up, substantially increasing the time that I spend with the company," Gates said in a short video Microsoft posted on its website. "I'll have over a third of my time available to meet with product groups. And it will be fun to define this next round of products, working together."

Moorhead applauded the mentor's role that Gates will play.

"It's a really good move," said Moorhead. "It would be a very bad choice to push [Gates] out completely.... He's an icon and a really, really smart person. This is a really good role for him."

Early in the hunt for a new chief executives, some pundits called for Gates' prodigal return to the company, a move Gates repeatedly spurned. In an interview two weeks ago, Gates again said his focus would remain on his philanthropic work with the Bill & Melinda Gates Foundation. "My full-time work will be the foundation for the rest of my life," Gates said then. "I'm not going to change, although I'll help out [at Microsoft] part time."

By assisting Nadella, who was named CEO today, Gates will fulfill that promise.

Gates, 58, has been Microsoft's sole chairman since its birth 39 years ago. He co-founded the company with Paul Allen, who left the firm in 2000, and is now best known as the owner of the Seattle Seahawks. The Seahawks won the Super Bowl on Sunday, beating the Denver Broncos 43-8, for the team's first Vince Lombardi Trophy.

According to reports last year, some of Microsoft's biggest investors had called on the board to boot Gates from the chairman's spot. They worried he would prevent the board from making the drastic changes they believed were necessary and handcuff the new CEO to the in-place strategy.

They got their wish, but not in the order they had hoped.

Bill Gates has stepped down as Microsoft's chairman, but will remain on the board, moves that will let him advise the new CEO, Satya Nadella. (Video: Microsoft.)

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