Gates hands over Microsoft control

Bill Gates is finally stepping down from the management of Microsoft, the software giant he founded 33 years ago.

He will call it a day on 27 June to focus on philanthropy but will continue to work one day a week and serve as board chairman.

The decision puts the company firmly in the hands of chief executive Steve Ballmer, who says he will be around for another 10 years.

Ballmer is confident he can steer the company without Gates. "I'm not going to need him for anything. That's the principle," Ballmer told the Wall Street Journal. "Use him, yes, need him, no."

The long business relationship between the pair has had its ups and downs, including a clash eight years ago after Gates had relinquished the chief executive's role in favour of Ballmer.

Gates was forced to seek help as the company faced new challenges from the internet and lost key employees to web start-ups. Observers say that fight over strategy as Ballmer tried to put his stamp on the company set the wheels in motion for Gates' departure. Gates says it made him realise he needed to change.

Ballmer takes the helm as the company faces the most challenging landscape in its history. Its traditional software business is facing industry trends that see more and more applications based on the internet and rivals such as Google appearing more nimble in new online businesses.

Ballmer is seeking to address these issues with takeovers, such as his recent failed bid for Yahoo.

Gates and Ballmer, both 52, first met at Harvard university in the mid-1970s.

Gates founded Microsoft to develop software for the Altair 8800, a precursor to the personal computer. The company rose to dominate the home computer market with its MS-DOS operating system in the mid-1980s. Throughout its history Microsoft has criticised for its monopoly status and anti-competitive business practices.

Despite Ballmer's confidence that he will be in the corner office for the foreseeable future, he already faces calls from some observers to resign over the poor reception received by the Windows Vista operating system and Microsoft's failed buyout of Yahoo.

Chief software architect Ray Ozzie has been touted as a possible successor.

The company is undergoing restructuring beyond the Gates-Ballmer handover. Earlier this year Joanne Bradford, who was chief media officer for the company's MSN media network, resigned, as did corporate vice president for Windows core technology Rob Short. Business division chief Jeff Raikes will retire in September to be replaced by Stephen Elop from Juniper Networks.