Harvard drop-out to billionaire: Gates to retire from Microsoft

There was always something about Bill Gates, the exceptionally bright, if geeky, high school kid from Seattle who spent all his spare time fiddling with computers and sold his first software program at the age of 17. By the time he went to Harvard University he had already sold timetabling software to his school and a traffic planning system for state governments.

And by the time he dropped, impatiently, out of Harvard, he had the idea for a company that would change the world: Microsoft.

And by yesterday, when Mr Gates announced plans to step back from the running of that company, he had become the world's richest man, with a fortune of $50bn (£27bn) and a new idea for changing the world: giving it all to charity. "This is not a retirement," he insisted. "It is a re-ordering of my priorities."

Mr Gates, 50, said that he will gradually hand over day-to-day responsibilities at Microsoft to a new generation of executives, leaving him with more time to spend with his family foundation. The Bill and Melinda Gates Foundation aims to funnel his fortune - 95 per cent of it, by the end of his life, he says - to projects that promote health and education for all.

It has supported ambitious projects to eradicate diseases, including Aids and malaria, in the developing world, working not just with aid agencies, but also by forging partnerships between governments and the private sector, where Mr Gates has used all his connections and his financial clout. In the US, the foundation has focused on hooking up local libraries to the internet to ensure everyone has access to the web.

Gates has been No 1 in the list of global billionaires for the past 12 years and his fortune briefly passed $100bn at the height of the dot.com boom in 1999. Only last month he was complaining about living with the label of "world's richest man", saying that "nothing good that comes out of that, you get more visibility as a result of it".

He has since clarified that he meant the label, not the money itself. The creation of his charitable foundation in 2000 cast him in a new global role and set a new standard for charitable giving by executives with more money than they could possibly need. It has put him on more lists than just Rich Lists. Most recently, he was No 8 on the New Statesman's league table of Heroes of Our Time - one rung above the Dalai Lama.

"When Melinda and I set up the foundation, we didn't realise all the advances it could make. We are already seeing results in new medicines and new ways of delivering healthcare," Gates said. The globetrotting role has left him increasingly stretched, however - and it was Microsoft which had to give. "I'm very lucky to have two passions that I feel are so important and so challenging," he told employees yesterday.

"I believe he is headed to become the greatest philanthropist of all time," said Steve Ballmer, an old Harvard friend and his No 2 at Microsoft for the past 10 years.

Mr Gates founded Microsoft with his high school friend Paul Allen in 1975, two years into his programming course at Harvard and turning their old after-school hobby into a serious business venture. It would make them rich and enable the development of the personal computer. Their genius was to realise that a common operating system for computers would make them more useful for a wider range of tasks than was ever though possible in the Seventies.

Three decades later, Microsoft has annual sales of $43bn and is worth $225bn - almost 40 times the value it had when it went public in 1986. Its Windows operating system lies at the heart of most personal and corporate computers and its word processing software is ubiquitous. The company's products also offer a window on the worldwide web and Microsoft has also carved a piece of the Net itself, with Hotmail e-mail and instant messaging software available for free.

That dominance has turned Microsoft into a technology industry bogeyman, an anti-competitive monolith determined to crush or assimilate smaller, more innovative rivals. It also put the company on a collision course with regulators on both sides of the Atlantic, who accused it of abusing a monopoly. It is still fighting the EU, which wants it to open up its secret software codes to rivals.

But as long as Mr Gates has been the figurehead, it has managed to keep a semblance of geeky innovation in the corporate spirit. Observers fear an exodus of the company's brilliant scientists if the transition to new management is not handled smoothly. Mr Gates will retain his title of chairman and stay on as a part-time adviser, but will gradually pass day-to-day responsibilities to others between now and 2008. The hand-over is deliberately drawn out, so as not to shock shareholders on Wall Street or the company's 63,000 employees.

Ray Ozzie, the inventor of Lotus Notes e-mail software, has emerged as a new force. He is taking over Gates's role as chief software architect and faces the challenge of reinventing Microsoft's software for the internet age. With rivals such as Google giving away software, Microsoft's domination of the industry looks vulnerable like at no time in the past two decades.

Bouquets and brickbats

"For being shrewd about doing good, rewiring politics and re-engineering justice, making mercy smarter and hope strategic, daring us to follow, Bill and Melinda Gates and Bono are Time's Persons of the Year."

"Time" magazine, 2005

"No matter how much Bill Gates may claim otherwise, he missed the internet, like a barreling freight train that he didn't hear or see coming."

Jim Clark, entrepreneur who founded Netscape Communications Corporation

"Bill Gates wants people to think he's Edison, when he's really Rockefeller. Referring to Gates as the smartest man in America isn't right... wealth isn't the same thing as intelligence."

Larry Ellison, co-founder and CEO of database software firm Oracle Corporation

"I remember when Bill Gates visited me to sell me MS DOS, his operating system. I told him we couldn't take such a retrograde step."

Hermann Hauser, entrepreneur who co-founded Acorn Computers