Well he's gone. Bill Gates has left the building. Except he's still the chairman, but you know what I mean.

Gates' (semi) retirement comes at an odd time for Microsoft. Rather like IBM in the 90s, Bill's boys continue to rake in the moolah and generally own the place without actually producing anything outstanding.

All angst about Vista aside, when was the last time Microsoft released a product that was a 100 percent, bona fide, sure-fire winner? Does the Xbox 360 count?

Office 2007 is slick and a massive revenue generator, but it costs £330 at a time when OpenOffice.org is a feasible proposition. And what's that menacing on the horizon? Why, it's Google Docs.

Google is the tech behemoth Microsoft wants to be. Innovative, light on its feet and making pots of money without having to charge punters. And when your revenue streams don't depend on getting users to open their wallets, it's a lot easier to build and retain the sort of brand loyalty that makes ‘Google' both a noun and a verb.

Generations of PC users have only ever used Microsoft products, but increasingly younger tech users are turning to free, online tools. Gates and Microsoft made their gazillions by spotting a need, buying up the right code and ruthlessly commercialising it. But when faced with the threat of software as a service (SaaS), the Redmond response was software, er, ‘and a service'. Not so much a product to suit users' needs, as a half-assed attempt to protect the bank balance in the face of a changing world, lamely disguised as innovation.

None of which means Microsoft is in terminal decline. Last year was an almost ludicrously profitable one, it has thousands of talented people motivated by the perception that Vista is a failure, and market share that borders on ubiquity. So a bit of space at the top may not be the worst thing right now. Exit Mr Gates, to rapturous applause.

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