Bill Gates Quiting day to day operations of Microsoft

Macintosh computer fanatics won't have Bill Gates to kick around anymore.

The Microsoft co-founder whose boyish face and nerdy manner epitomizes the US software colossus spends his last day at the office on Friday.

Paul Allen, who teamed with Gates to start Microsoft in a garage in 1975, will be among those "roasting" his childhood friend at a gala dinner affair Friday night.

After decades devoted to Microsoft, Gates turns his attention full time to the philanthropic Bill & Melinda Gates Foundation he established with his wife.

Gates leaves Microsoft to wrestle with a fast-changing computer era and growing challenges from Internet juggernaut Google and longtime rival Apple, which makes Macintosh computers.

Three people will essentially fill the void Gates leaves behind at Microsoft.

Gate's job as chief software architect is being handled by Ray Ozzie.

Craig Mundie inherited Gate's chief research and strategy officer duties, while former Harvard University classmate Steve Ballmer is chief executive officer at the software colossus based in Redmond, Washington.

Gates remains chairman of the Microsoft board of directors and its largest shareholder.

Microsoft is losing Gates at a time when "cloud computing" is shaking the packaged software foundation on while the company's fortune is built.

Cloud computing refers to a trend in which firms such as Google and Salesforce.com let people use programs on the Internet instead of having to install and maintain software on their own machines.

Microsoft competes in the "software as a service" arena but tends to combine offerings with packaged products in a "software-plus" marketing model, according to analysts.

Meanwhile, Microsoft's Windows Vista operating system released in January of 2007 has flopped with customers, many of whom are clinging to its predecessor Windows XP.

Vista loathing is heightening interest in free Linux open-source software and Macintosh computers, which use operating systems built by Apple.

Rivalry between Microsoft and Apple is legendary in Silicon Valley. Apple ads and press conferences take swipes at Microsoft and devotees of competing systems routinely swap barbs in cafes or other social venues.

The culture-shifting popularity of Apple's iPods and iPhones is credited with increasing interest in Macintosh machines.

While Windows is still used on 90 percent of the world's computers, Macintosh computers have grown to more than five percent of the market.

Microsoft began selling Zune brand MP3 players in September of 2006 to compete with Apple's market-dominating iPods but the devices haven't been a hit with customers.

Microsoft failed in a recent bid to buy Yahoo for nearly 50 billion dollars in order to combine online resources to better battle Google in the booming Internet search and advertising.

Microsoft's server and tools division is its most profitable unit. Its entertainment unit, which sells Xbox videogame consoles and gaming software, has yet to make a profit.

Gates is expected to maintain the ears of Microsoft leaders. He bequeathed them a legacy that includes focusing in-house teams on what Gates expects to be major technology trends, such as an "Internet tidal wave."

"At some point the firm has to take the essence of what made Bill Gates successful and make sure that is preserved," said analyst Rob Enderle of Enderle Group in Silicon Valley.