A few questions pop to mind right away. How effective can Gates be as a technology advisor when he has been away from the daily computer industry fray since 2008? How much effort will he put into this, and for how long? Is he really interested in doing this? Could his influence be counter-productive?
Clearly Gates was a visionary when he founded Microsoft and led it to astounding success in the 1980s and 1990s. But toward the end of his tenure as CEO, with the rise of the Internet, his vision wasn't as clear, as evidenced by Netscape taking an early lead with its Web browser.
Asked for more details about Gates' role, a Microsoft spokeswoman said via email that the company had no further details to share beyond what it announced on Tuesday.
"At Satya's request, Bill will step up to take on a new role as Technology Advisor, focused on supporting Satya and the company in shaping the overall technology and product direction," she said.
Industry analyst Jack Gold, of J. Gold Associates, said Gates' role doesn't seem to be well-defined yet.
At this point in his career, it would be unfair to expect Gates to act as a visionary who can read the tea leaves and unequivocally point Microsoft in the direction of future success. "I'm not sure he can do that," Gold said.
However, Gates could be very effective as a spokesman for the company, an area where Ballmer, for all his passion, bravado and sales ability, wasn't the best, according to Gold.
"Microsoft needs a better voice," he said. "You want someone to be out in front promoting your positions, and he can do that very well with customers, partners and, very important, with Wall Street."
He also could be very valuable helping Nadella learn the CEO job, and introducing him to other CEOs with whom Gates has long-standing relationships, said James Staten, a Forrester Research analyst.
"It's going to work out fine," Staten said. "Satya wanted Gates to stay and play a mentor role. There are things Gates knows about being a CEO, and about being the CEO of this company in particular, that would take Satya a long time to learn."
Staten is also optimistic that Gates will be effective as a technology sounding board for Nadella, since both men are deep technologists. In addition, it may be a plus that Gates has been away from Microsoft's daily operations, because he could bring an outsider's perspective, he said.
However, if Gates is still advising Nadella a year from now, that will be a red flag, Staten said. Gates would rather spend all his work time at his foundation, so a longer stint would mean Nadella was struggling with the job, he said.
"If Gates can't leave [this role] in a year, then the CEO pick was wrong," Staten said.