Microsoft
Microsoft Corporation is an American multinational technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the rise of personal computers through software like Windows, and has since expanded to Internet services, cloud computing, artificial intelligence, video gaming, and other fields. Often described as a Big Tech company, Microsoft is the largest software company by revenue, one of the most valuable public companies, and one of the most valuable brands globally.
Founded by Bill Gates and Paul Allen to market BASIC interpreters for the Altair 8800, Microsoft rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Windows. During the 41 years from 1980 to 2021 Microsoft released 9 versions of MS-DOS with a median frequency of 2 years, and 13 versions of Windows with a median frequency of 3 years. The company's 1986 initial public offering and subsequent rise in its share price created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market. Steve Ballmer replaced Gates as CEO in 2000. He oversaw the then-largest of Microsoft's corporate acquisitions in Skype Technologies in 2011, an increased focus on hardware that led to its first in-house PC line, the Surface, in 2012, and the formation of Microsoft Mobile through Nokia. Since Satya Nadella took over as CEO in 2014, the company has changed focus towards cloud computing, as well as its acquisition of LinkedIn for $26.2 billion in 2016. Under Nadella's direction, the company has expanded its video gaming business to support the Xbox brand, establishing the Microsoft Gaming division in 2022 and the acquisition of Activision Blizzard for $68.7 billion in 2023.
Microsoft has been dominant in the IBM PC–compatible operating system market and the office software suite market since the 1990s. Its best-known software products are the Windows line of operating systems and the Microsoft Office and Microsoft 365 suite of productivity applications, which most notably include the Word word processor, Excel spreadsheet editor, and the PowerPoint presentation program. Its flagship hardware products are the Surface lineup of personal computers and Xbox video game consoles, the latter of which includes the Xbox network; the company also provides a range of consumer Internet services such as Bing web search, the MSN web portal, the Outlook.com email service and the Microsoft Store. In the enterprise and development fields, Microsoft most notably provides the Azure cloud computing platform, Microsoft SQL Server database software, and Visual Studio.
In April 2019, Microsoft became the third public U.S. company to be valued at over $1 trillion. It has been criticized for its monopolistic practices, and the company's software received criticism for problems with ease of use, robustness, and security. More recently, it has been criticized for its role in providing services to Israel during the Gaza war.
History
1972–1985: Founding
Childhood friends Bill Gates and Paul Allen sought to make a business using their skills in computer programming. In 1972, they founded Traf-O-Data, which sold a rudimentary computer to track and analyze automobile traffic data. Gates enrolled at Harvard University while Allen pursued a degree in computer science at Washington State University, though he later dropped out to work at Honeywell.The January 1975 issue of Popular Electronics featured Micro Instrumentation and Telemetry Systems's Altair 8800 microcomputer, which inspired Allen to suggest that they could program a BASIC interpreter for the device. Gates called MITS and claimed that he had a working interpreter, and MITS requested a demonstration. Allen worked on a simulator for the Altair while Gates developed the interpreter, and it worked flawlessly when they demonstrated it to MITS in March 1975 in Albuquerque, New Mexico. MITS agreed to distribute it, marketing it as Altair BASIC. Gates and Allen established Microsoft on April 4, 1975, with Gates as CEO, and Allen suggested the name "Micro-Soft", short for micro-computer software. In August 1977, the company formed an agreement with ASCII Magazine in Japan, resulting in its first international office of ASCII Microsoft. Microsoft moved its headquarters to Bellevue, Washington, in January 1979.
Microsoft entered the operating system business in 1980 with its own version of Unix, licensed from AT&T Corporation a year before, called Xenix, but it was MS-DOS that solidified the company's dominance. IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS to be used in the IBM Personal Computer. For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle Computer Products which it branded as MS-DOS, although IBM rebranded it to IBM PC DOS. Microsoft retained ownership of MS-DOS following the release of the IBM PC in August 1981. IBM had copyrighted the IBM PC BIOS, so other companies had to reverse engineer it for non-IBM hardware to run as IBM PC compatibles, but no such restriction applied to the operating systems. The company expanded into new markets with the release of the Microsoft Mouse in 1983, as well as with a publishing division named Microsoft Press.
Paul Allen resigned from Microsoft in 1983 after developing Hodgkin's lymphoma.
1985–1994: Windows and Office
Microsoft released Windows 1.0 on November 20, 1985, as a graphical extension for MS-DOS, despite having begun jointly developing OS/2 with IBM that August. Microsoft moved its headquarters from Bellevue to Redmond, Washington, on February 26, 1986, and went public with an initial public offering at the NASDAQ exchange on March 13, with the resulting rise in stock making an estimated four billionaires and 12,000 millionaires from Microsoft employees. Microsoft released its version of OS/2 to original equipment manufacturers on April 2, 1987. In 1990, the Federal Trade Commission examined Microsoft for possible collusion due to the partnership with IBM, marking the beginning of more than a decade of legal clashes with the government. Meanwhile, the company was at work on Microsoft Windows NT, which was heavily based on their copy of the OS/2 code. It shipped on July 21, 1993, with a new modular kernel and the 32-bit Win32 application programming interface, making it easier to port from 16-bit Windows. Microsoft informed IBM of Windows NT, and the OS/2 partnership deteriorated.In 1990, Microsoft introduced the Microsoft Office suite which bundled separate applications such as Microsoft Word and Microsoft Excel. On May 22, Microsoft launched Windows 3.0, featuring streamlined user interface graphics and improved protected mode capability for the Intel 386 processor, and both Office and Windows became dominant in their respective areas.
On July 27, 1994, the Department of Justice's Antitrust Division filed a competitive impact statement that said: "Beginning in 1988 and continuing until July 15, 1994, Microsoft induced many OEMs to execute anti-competitive per processor licenses. Under a per-processor license, an OEM pays Microsoft a royalty for each computer it sells containing a particular microprocessor, whether the OEM sells the computer with a Microsoft operating system or a non-Microsoft operating system. In effect, the royalty payment to Microsoft when no Microsoft product is being used acts as a penalty, or tax, on the OEM's use of a competing PC operating system. Since 1988, Microsoft's use of per processor licenses has increased."
1995–2007: Foray into the Web, Windows 95, Windows XP, and Xbox
Following Bill Gates's internal "Internet Tidal Wave memo" on May 26, 1995, Microsoft began to redefine its offerings and expand its product line into computer networking and the World Wide Web. With a few exceptions of new companies, like Netscape, Microsoft was the only major and established company that acted fast enough to be a part of the World Wide Web practically from the start. Other companies like Borland, WordPerfect, Novell, IBM and Lotus, being much slower to adapt to the new situation, would give Microsoft market dominance.The company released Windows 95 on August 24, 1995, featuring pre-emptive multitasking, a completely new user interface with a novel start button, and 32-bit compatibility; similar to NT, it provided the Win32 API. Windows 95 came bundled with the online service MSN, which was intended to be a competitor to services such as CompuServe and AOL. The web browser Internet Explorer was not bundled with the retail release of Windows 95, and was instead included in the later Microsoft Plus! pack, as well as OEM releases of Windows 95. Backed by a high-profile marketing campaign and what The New York Times called "the splashiest, most frenzied, most expensive introduction of a computer product in the industry's history," Windows 95 quickly became a success. Branching out into new markets in 1996, Microsoft and General Electric's NBC unit created a new 24/7 cable news channel, MSNBC. Microsoft created Windows CE 1.0, a new OS designed for devices with low memory and other constraints, such as personal digital assistants. In October 1997, the Justice Department filed a motion in the Federal District Court, stating that Microsoft violated an agreement signed in 1994 and asked the court to stop the bundling of Internet Explorer with Windows.
File:Xbox-console.jpg|thumb|Microsoft released the first installment in the Xbox series of consoles in 2001. The Xbox, graphically powerful compared to its rivals, featured a standard PC's 733 MHz Intel Pentium III processor.
On January 13, 2000, Bill Gates handed over the CEO position to Steve Ballmer, an old college friend of Gates and employee of the company since 1980, while creating a new position for himself as Chief Software Architect.
On October 25, 2001, Microsoft released Windows XP, unifying the mainstream and NT lines of OS under the NT codebase. The company released the Xbox later that year, entering the video game console market dominated by Sony and Nintendo. In March 2004 the European Union brought antitrust legal action against the company, citing it abused its dominance with the Windows OS, resulting in a judgment of €497 million and requiring Microsoft to produce new versions of Windows XP without Windows Media Player: Windows XP Home Edition N and Windows XP Professional N. In November 2005, the company's second video game console, the Xbox 360, was released. There were two versions, a basic version for $299.99 and a deluxe version for $399.99.
Increasingly present in the hardware business following Xbox, Microsoft 2006 released the Zune series of digital media players, a successor of its previous software platform Portable Media Center.