In an unexpected announcement today, William H Gates III, Chairman and Chief Software Architect, and co-founder of Microsoft, revealed that he was stepping down from the CSA rôle immediately, handing the reins over Ray Ozzie, one of the Chief Technology Officers at Microsoft.

The transition will take two years, with Bill G. stepping away from Microsoft duties in July, 2008 when he becomes plain ol’ Chairman.

To say that this development was unexpected is a titanic understatement. And the fact that the resignee is Bill rather than current CEO Steve Ballmer, must have come as a systemic shock to the Wall Street-types who have been clamoring for Ballmer’s resignation, especially since the announcement of increased CAPEX spending and the subsequent stock slide.

In fact, I had the same conversation a few weeks ago with a client and Microsoft stockholder who wanted to wave Stevie B. bye-bye.

My position, which this resignation validates somewhat, was that Ballmer, and Gates, were doing the right thing in refocusing the company due to the new competitive threat, which was not only Google, per se, but everything built on AJAX, and web-enabled. I mentioned the hiring of Ozzie, and the changes he was bringing to Microsoft by asking for a web-based component of all their products, and, most importantly, the numerous numbers of innovations, most of them under strict NDA, that the Microserfs were trying to bring to market.

Unfortunately, the only innovations we hear about are either the failed ones or their positioning vis-à-vis those of the current media harlot darling, Google.

Well, now the cat is out of the bag.

As expected the media airwaves and blogosphere is abuzz with this news, with everyone and man + dog holding forth their opinions on the subject.

The general reaction has been one of shock; with most shocked that Bill G would retire. As usual, the reaction of the conspiracy theorists in the Hezbollah wing of the open source movement (is there any other wing?) is that this is part of a Grand Design to further Microsoft-ness to the human race.

Since we are charged with bringing you cogent information, we decided to go to the top and ask longtime industry and Microsoft analyst, Mary Jo Foley about what this means.

" I think Microsoft needed to do something to show company watchers that it is preparing itself for the next phase of life for the company. While many folks have been predicting CEO Steve Ballmer would step down, it ended up being Gates who is moving on. I think a Microsoft without Gates is going to be a very different company -- probably more cooperative, less cut-throat and less feared," said Mary Jo Foley, Editor of the Microsoft Watch newsletter and Web site.

True that!

Bill Gates is synonymous with the might of Microsoft and the fear it induces; both in partners and competitors. As a result, there is a feeling that a kindler gentler, Microsoft might emerge with Gates’ resignation.

Indeed, as Michael J. Reyes, CEO of Hardware Geeks informed me, “ Some users on our forums seem to think that Microsoft will be better off without Bill Gates at the helm. But I say, Bill gates did a great job at Microsoft no matter if you liked how he did it or not.”

You do not become the Big Kahuna just by playing nice; you have to fight for success. And if you look closely at Microsoft today, even in the midst of all the generally unfounded negative press, the average Microserf is still as committed and passionate about making a difference as the first Microsoft employee I met over sixteen years ago. Which is impressive.

A different take on Bill’s stepping down can be found in this statement by Larry Richman, Public Relations Officer of both Pro-Networks.org and VistaMaNiA.org, touching on another part of Gates’ character: “ I have wanted him to do this for a long time. His foundation not only is the largest philanthropic organization in the world, but he has given away more money than all the great philanthropists combined. His money does so much to help the poor, hungry, sick, uneducated -- I've wondered why he doesn't put all of his own physical and political energy towards that as well. To me, Microsoft is small beans compared to what he could do if he puts his day-to-day efforts towards what he is now putting his considerable wealth towards. I am thrilled by this decision. I applaud him and wish others would follow his example. Bravo, Bill, bravo.”

Wow!

Actually, double WOW!

Totally lost in today’s news is this facet of Bill Gates: his philanthropy, and Larry is right to point it out.

Chief O. Asuelimen, Chairman and Managing Director of DAGMA/Remix Group Limited, in Nigeria, echoed Larry’s sentiments “ While we have placed, in conjunction with Logikworx a lot of computer systems that utilize Microsoft software, my respect for Bill Gates comes entirely from his foundation. Every time we specify Microsoft software, I can still see, in my mind's eye, photographs of his father visiting the sick and impoverished throughout Africa, and I respect and pray for him a little bit more.”

I will attempt to contact more community leaders, influencers, users, and friends over the next few days in order to get a pulse on this development.

Larry Richman and Michael J. Reyes are also members of The Hive, a community of community leaders.