The PC, which was Microsoft's foundation and still determines the company's financial performance, has been nudged aside by powerful phones and tablets running Apple Inc and Google Inc software, the former Microsoft executive said.

"People argue about 'are we in a post-PC world?'. Why are we arguing? Of course we are in a post-PC world," Ozzie said at a technology conference run by tech blog GeekWire in Seattle on Wednesday.

"That doesn't mean the PC dies, that just means that the scenarios that we use them in, we stop referring to them as PCs, we refer to them as other things."

Ozzie was making his first public comments on Microsoft since stepping down from the tech giant abruptly in 2010. He spoke just hours after Tim Cook, the chief executive of Microsoft's arch-rival Apple, stressed the emergence of the "post-PC world" forged by the iPad.

Sales of smartphones have already overtaken PCs, and tablets are catching up fast. For a graphic on relative sales, click on r.reuters.com/ban56s

The 56-year old legendary programmer, who developed e-mail application Lotus Notes in the 1980s and 1990s, was hand-picked by Gates to take over his role of chief software architect in 2006, to bring his skills in web-based collaboration to the center of Microsoft's thinking.

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Ozzie was central in the creation of Microsoft's Azure project -- its main push into 'cloud', or internet-based computing -- but he left four years later with Microsoft still trailing Amazon.com and Google in web-savvy.

"My job there was primarily a change management job. I was asked by Bill (Gates) and Steve (Ballmer, the CEO) to come in, look at the company, decide what was broken and try your best to fix it," said Ozzie.

"I feel very good about a number of things that did change. The company's a lot different now, it's come a long way and I'm happy about some things and I'm impatient about other things."

Ozzie said the fate of Windows 8 would determine Microsoft's future. The latest version of the company's operating system will work on tablets powered by low-power ARM Holdings chips, which Microsoft hopes will allow it to rival Apple's iPad, and put the company back at the cutting edge of consumer technology.

"If Windows 8 shifts in a form that people really want to buy the product, the company will have a great future," said Ozzie. "In any industry, if people look at their own needs, and look at the products and say, 'I understand why I had it then, and I want something different', they will not have as good a future. It's too soon to tell."

Windows 8 may help Microsoft bridge the gap to the post-PC world, but the "doom and gloom" scenario for the company is people switching to portable, non-Windows devices, said Ozzie.

"It's a world of phones and pads and devices of all kinds, and our interests in general purpose computing -- or desktop computing -- starts to wane and people start doing the same things and more in other scenarios."

(Reporting By Bill Rigby; Editing by Ed Davies)

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