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Microsoft Corporation Business Information, Profile, and History

1 Microsoft Way
Redmond, Washington 98052-6399
U.S.A.

Company Perspectives:

To enable people and businesses throughout the world to realize their full potential.

History of Microsoft Corporation

With annual revenues of more than $32 billion, Microsoft Corporation is more than the largest software company in the world: it is a cultural phenomenon. The company's core business is based on developing, manufacturing, and licensing software products, including operating systems, server applications, business and consumer applications, and software development tools, as well as Internet software, technologies, and services. Led by Bill Gates, the world's wealthiest individual and most famous businessman, Microsoft has succeeded in placing at least one of its products on virtually every personal computer in the world, setting industry standards and defining markets in the process.

Origins of an Empire

Bill Gates was born in Seattle in 1955, the second of three children in a well-to-do family. His father, William H. Gates II, was a lawyer, while his mother, Mary Gates, was a teacher, a regent of the University of Washington, and member of several corporate boards. Gates was first exposed to computers at school in the late 1960s with his friend Paul Allen, the son of two Seattle librarians. By the time Gates was 14, the two friends were writing and testing computer programs for fun and profit.

In 1972 they established their first company, Traf-O-Data, which sold a rudimentary computer that recorded and analyzed traffic data. Allen went on to study computer science at the University of Washington and then dropped out to work at Honeywell, while Gates enrolled at Harvard. Inspired in 1975 by an issue of Popular Electronics that showed the new Altair microcomputer kit just released by MITS Computer, Gates and Allen wrote a version of BASIC for the machine. Later that year Gates left college to work full time developing programming languages for the Altair, and he and Allen relocated to Albuquerque, New Mexico, to be near MITS Computer, where Allen took a position as director of software development. Gates and Allen named their partnership Micro-soft. Their revenues for 1975 totaled $16,000.

A year later, Gates published "An Open Letter to Hobbyists" in the Altair newsletter, in which he enjoined users to avoid illegally copied software. Arguing that software piracy prevented "good software from being written," Gates wrote prophetically, "Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software." In November 1976 Allen left MITS to devote his full attention to Microsoft, and the company's tradename was registered. In 1977 Apple and Radio Shack licensed Microsoft BASIC for their Apple II and Tandy computers, with the Apple license going for a flat fee of $21,000. As Apple sold a million machines complete with BASIC, Microsoft's unit revenues dropped to two cents a copy.

That same year Microsoft released its second programming language, Microsoft FORTRAN, which was followed in 1978 by a version of COBOL. Both were written for the CP/M operating system, one of many available in the rapidly expanding but still unstandardized microcomputer market. As CP/M was adopted by computer manufacturers including Sirius, Zenith, and Sharp, Microsoft became the leading distributor for microcomputer languages. By the end of 1978 Microsoft had 13 employees, a sales subsidiary in Japan, and $1 million in revenues. The following year Gates and Allen moved the company to Bellevue, Washington.

The Early 1980s: Associations with IBM and Apple

Microsoft's big break came in 1980 as IBM began developing its Personal Computer, or PC. While IBM contracted Microsoft to develop languages for the PC, IBM's first choice to provide an operating system was the leader in the field, Digital Research; however, IBM and Digital Research were unable to agree on terms, so the contract for the operating system was awarded to Microsoft. As Microsoft was under a tight deadline and did not have an operating system of its own, the company purchased the rights to one from Seattle Computer Products for $75,000. Originally dubbed Q-DOS (for "Quick and Dirty Operating System"), the product was renamed MS-DOS (for "Microsoft Disk Operating System") and modified for IBM's purposes. Under the terms of the agreement, Microsoft retained the right to sell the operating system to other companies and to consumers, while IBM could not. Neither company could have foreseen the value of this arrangement: as other manufacturers developed hardware compatible with the IBM PC, and as personal computing became a multibillion-dollar business, the fast and powerful MS-DOS became the industry's leading operating system, and Microsoft's revenues skyrocketed.

The year 1980 also saw the arrival of Steve Ballmer, a close friend of Gates from Harvard, who was hired to organize the non-technical side of the business. Ballmer later recalled the company's stormy beginnings under Gates's leadership: "Our first major row came when I insisted it was time to hire 17 people. He claimed I was trying to bankrupt him." Conservative in his spending, Gates dictated that the company must always have enough money in the bank to operate for a year with no revenues. Nearly 20 years later that policy still stood--in 1999 Microsoft had cash reserves of more than $13 billion and no long-term debt--while Ballmer, who had by then become Microsoft president, remained Gates's closest friend and adviser.

In 1981 the company was incorporated as Microsoft, Inc., with Gates as president and chairman and Allen as executive vice-president. The company closed the year with 128 employees and revenues of $16 million. Two years later Allen left Microsoft after being diagnosed with Hodgkin's disease. He remained on the board of directors and continued to hold more than 10 percent of the company's stock. Also in 1983 Microsoft launched a word processing program, Word 1.0, in an effort to supplant the category leader, WordStar. Simpler to use and less expensive than WordStar, Word used a mouse to move the cursor and was able to display bold and italic type on the screen. Nevertheless, some users felt that the product was too complex--designed for software engineers rather than business users--and it was quickly surpassed in the market by WordPerfect, released by the WordPerfect Corporation. Word did not become a success until its greatly improved version 3.0 was released in 1986, whereupon the application became Microsoft's best-selling product.

Throughout its history, Microsoft has been known for releasing products that were initially unsuccessful but eventually grew to dominate their categories. Many reviewers have been harsh in their criticism: David Kirkpatrick, writing in Fortune, described the first release of one product as a "typically unreliable, bug-ridden Microsoft mess," while Brent Schlender noted in the same magazine that "from its beginnings, Microsoft has been notorious for producing inelegant products that are frequently inferior and bringing them to the market way behind schedule." These critics note that the success of Microsoft has been based not only--or even principally--on the company's technological prowess, but also on Bill Gates's business acumen, which combined dogged perseverance, strategic marketing, powerful alliances, and, increasingly as the years went on, highly aggressive competitive tactics.

Microsoft worked closely with Apple during the development of Apple's Macintosh computer, which was introduced in 1984. Revolutionary in its design, the Mac featured a graphical user interface based on icons rather than the typed commands used by the IBM PC, making its programs simple to use and easy to learn, even by computer novices. Microsoft introduced Mac versions of BASIC, Word, and the spreadsheet program Multiplan, and quickly became the leading supplier of applications for the Mac. Revenues jumped from $50 million in 1983 to nearly $100 million in 1984.

Convinced that the Mac's graphical user interface represented the future of end-user applications, Gates sought to develop an interface manager to work on top of MS-DOS that would convert the operating system to a graphical model that would be user-friendly and provide a single method for interacting with the many non-standardized programs designed to run on the system. Because other companies, including IBM, were working to develop similar interface managers for MS-DOS, Gates solicited support from hardware manufacturers and software publishers who were concerned about IBM's continued dominance of the PC market. Compaq, Hewlett-Packard, Texas Instruments, Digital Equipment Corporation, and others announced their support for the project, called Microsoft Windows, while IBM, in the face of this opposition, threw its weight behind VisiOn, a similar product already being marketed by VisiCalc, while working to develop its own program, called TopView. Plagued by delays in development, the release of Windows was repeatedly rescheduled throughout 1984 and 1985, causing tensions at Microsoft and with other software publishers who were forced to delay releases of the applications they were designing for the system. Finally released in November 1985, after some 110,000 hours of frantic work by programmers, Windows faced a disappointing reception. The system was slow, few applications were available to run on it, and customers delayed purchase decisions while waiting for the introduction of TopView.

In 1985 Microsoft also introduced Excel 1.0, a Mac spreadsheet product. Based on the earlier and less successful Multiplan, Excel gradually took hold against its principal competitor, Lotus 1-2-3, and eventually came to account for more than $1 billion of Microsoft's annual revenues. That same year Microsoft began collaborating with IBM on a next-generation operating system, called OS/2.

The Late 1980s: Emergence of a Corporate Culture

In early 1986 Microsoft moved to a new 40-acre corporate campus in Redmond, Washington, near Seattle. Designed to provide a refuge free of distractions for those whose job was, in Gates's words, to "sit and think," the campus was nestled in a quiet woodland setting and reflected huge expenditures for tools, space, and comfort. Buildings were designed in the shape of an X to maximize light, with each programmer given a private office rather than a cubicle. The buildings featured many small, subsidized cafeterias, as well as refrigerators stocked with juice and caffeinated beverages. The self-contained, collegiate surroundings were carefully designed to promote the company's distinctive culture, which one commentator described as a close approximation of "math camp." Like most software companies, Microsoft had no dress code (although company lore recounts that in 1988 senior management did express a preference that employees not go barefoot indoors). Employees were hired on the basis of sheer intelligence, with the company selecting only a small fraction of applicants from the more than 100,000 resumes it received each year, and were expected to work brutal schedules to bring products to market as quickly as possible. Microsoft paid salaries that were distinctly lower than elsewhere in the industry, even to their senior executives, but compensated with generous stock options that made thousands of Microsoft employees millionaires. At the same time, the company tried to maintain a small company mentality, in which executives traveled coach class, the necessity of additional staff positions was closely scrutinized, and other unnecessary expenditures were vigilantly avoided.

In March 1986 Microsoft held an initial public offering (IPO) of 2.5 million shares which raised $61 million. Within a year the stock had risen from $25 to $85, making Bill Gates a billionaire at the age of 31. The following year Microsoft released its first CD-ROM product, Microsoft Bookshelf, a collection of ten reference works, as well as Excel for Windows, its first application for the new operating system. Microsoft also purchased Forethought, Inc., for $12 million, thereby acquiring that company's PowerPoint presentation graphics program, and released OS/2 in collaboration with IBM. In November 1987 Microsoft introduced Windows 2.0, a greatly improved version of the operating system, and by the end of the year Windows had sold more than one million copies. As Windows began to take hold, more software companies were convinced to develop applications for the operating system, which brought it increased usefulness and further sales momentum. In 1988 Microsoft surpassed Lotus Development Corporation as the leading software vendor, with more than $500 million in sales. The company was accused of copyright infringement by Apple, which alleged that Microsoft had copied the "look and feel" of the Macintosh, in a lawsuit that was finally dismissed after five years of litigation. In 1989 the company introduced Microsoft Office, a "suite" of programs that eventually came to dominate the market and become Microsoft's best-selling application product. While the initial release of Office was a discount package, later versions incorporated standard, shared features and included Word, Excel, PowerPoint, and the e-mail program Mail, with the Access database management program included in the Office Professional version.

Before 1990 Microsoft was primarily a supplier to hardware manufacturers, but after 1990 the bulk of the company's revenues came from sales to consumers. That year Microsoft became the first software company to reach $1 billion in revenues, closing the year with 5,600 employees.

Product Development in the 1990s

In 1993 Microsoft introduced Encarta, the first multimedia encyclopedia on CD-ROM, as well as the first version of Windows NT, an operating system for users on corporate networks. While the initial acceptance of Windows NT was disappointing, an upgrade shipped in September of the following year as NT 3.5 was a dramatic success: winning the PC Magazine award for technical excellence in system software and named the best operating system product of 1994, the upgrade boosted sales of NT to more than one million copies by the end of the year. Microsoft announced an agreement to purchase Intuit, the producer of the leading package of personal financial software, called Quicken; however, after the U.S. Department of Justice filed suit to prevent the takeover on the basis of antitrust concerns, Microsoft withdrew its offer. Revenues for 1994 exceeded $4 billion.

In August 1995 Microsoft launched its next version of Windows, called Windows 95, which sold more than one million copies in the first four days after its release. For the rest of the decade Microsoft expanded aggressively into new businesses associated with its core franchise. Its projects included two joint ventures with the National Broadcasting Company under the name MSNBC: an interactive online news service and a cable channel broadcasting news and information 24 hours a day. The company's web-based services included the Microsoft Network online service, a travel agency, local events listings, car buying information, a personal financial management site, and a joint venture with First Data that allowed consumers to pay their bills online. Microsoft purchased 11 percent of the cable television company Comcast for $1 billion and cut a licensing deal with the largest U.S. cable operator, TCI Communications, to put Windows into at least five million set-top boxes. The company also purchased WebTV, whose core technology allowed users to surf the Internet without a PC. Microsoft's latest generation of Windows, Windows CE, was designed to expand the franchise into computer-like devices including mobile phones, point-of-sale terminals, pocket organizers, digital televisions, digital cameras, handheld computers, automobile multimedia systems, and pagers. By early 1999 the company had secured more than 100 licensing agreements with manufacturers of these "intelligent appliances."

Legal Challenges and Competition in the Future

Microsoft's many critics believed that the company's goal in this widespread expansion was to control every delivery channel of information, thereby providing the means to control the content. According to Scott McNealy of rival company Sun Microsystems, "By owning the entry points to the Internet and electronic marketplace, Microsoft has the power to exercise predatory and exclusionary control over the very means for people to access the Internet and all it represents."

The U.S. government apparently agreed. After an intensive investigation of Microsoft's competitive practices that had gone on for much of the decade, in 1998 the U.S. Department of Justice and a group of 20 state attorneys general filed two antitrust cases against Microsoft alleging violations of the Sherman Act. The government sought to prove a broad pattern of anticompetitive behavior on Microsoft's part by demonstrating an array of claims, including the following: that Microsoft had a monopoly on the market for operating systems; that the company used that monopoly as a means of preventing other companies from selling its competitors' products (most notably Netscape's Internet browser); that it was illegal for Microsoft to bundle its own browser into the operating system Windows 98 as a means of precluding customers from purchasing Netscape's product; that the company sought to divide markets with competitors; that Microsoft sought to subvert the Java programming language, developed by Sun Microsystems, which it viewed as a threat to Windows; and, finally, that Microsoft's business practices were detrimental to consumers. The case was conducted under a flurry of media attention, with all parties agreeing that the stakes were extremely high: should Microsoft win, its brand of extremely aggressive capitalism would secure a legal blessing; should the company lose, the company could be forced to license the source code for Windows to competitors, thus destroying its monopoly, or could be broken up into smaller components, crippling its hold over the marketplace.

The fear and resentment that Microsoft and its founder Gates engendered were testament to the company's mythic status and Gates's role as the embodiment of the digital era. Gates's extreme wealth (in early 1999 he was worth $50 billion) made him the subject of constant scrutiny, while the Internet was rife with Bill Gates "hate pages," named, for example, "The Society for the Prevention of Bill Gates Getting Everything." Resentment and legal action notwithstanding, with more than $14 billion in sales in 1998, Microsoft showed no signs of slowing down.

Microsoft continued to grow rapidly, increasing its net revenue by 29 percent, to $19.7 billion, in 1999. Additionally, net income rose to $7.79 billion, a dramatic 73 percent increase over 1998. While the antitrust suit against Microsoft showed threats of a forced breakup of Microsoft, innovations in the company continued. Encarta Africana, the first complete encyclopedia of black history and culture, was launched, as well as Shop, Microsoft's first online store.

Unprecedented Growth in 2000 and Beyond

In 2000 Microsoft acquired Visio Corporation, the top supplier of business diagramming and technical drawing software. The transaction, at approximately $1.3 billion, became the largest acquisition in Microsoft history. Also in 2000, Microsoft invested $135 million in the software publisher Corel. Apparently, Corel negotiated the investment, offering to drop "certain legal actions" it had against the company, even as it had no legal claims filed against Microsoft. Another transaction--in Microsoft's desire to expand into the television market--involved a $56 million investment in Intertainer Inc, a provider of video-on-demand service. In the same year, Microsoft increased its employee base by nearly 9,000, from 39,170 to 48,030. The total expenditures took a temporary toll on Microsoft's net income, which dropped 22 percent, to $7.35 billion, in 2001. At the same time, net revenue continued to increase, up 10 percent from 2000.

The release of Windows 2000, while causing a stir, was overshadowed by the highly anticipated debut and worldwide release of Microsoft Windows XP. So confident was Microsoft in the product, and in its ability to boost worldwide sales of computers (which had declined 11.3 percent since the September 11 attacks just a month before), they launched a $250 million ad campaign for the product. The software did not represent a brand new development, as much of the technology came from that of its predecessor, Windows 2000. But as Paul Thurrott, writer for Network Windows magazine, wrote, "There's no doubt that we'll eventually look back on Windows XP as one of the key OS releases of all time."

Meanwhile, the Department of Justice ruled that they would not enforce a breakup of Microsoft. By the end of 2002, the U.S. District Court approved the settlement Microsoft reached with the Justice Department. The settlement included preventing Microsoft from benefiting from exclusive deals that could hinder competition; uniform contract terms for computer manufacturers; the required ability of customers to remove icons from certain Microsoft features; and a requirement that Microsoft release specific innovational technical information to its rivals, in order to enforce competition.

Microsoft's net revenue increased to $28.37 billion in 2002, while net income rebounded, gaining 6 percent from the previous year. In 2003, Microsoft saw an impressive 28 percent jump in net income, to reach just below $10 billion. The launching of Windows Server 2003, the largest software development project in the company's history to date, contributed to the growth. According to Microsoft, Windows Server 2003 would be a more reliable, more manageable, and more collaborative piece of software. Security would also be tighter, especially due to a newly built IIS (Internet Information Server) Web Server.

By 2004, with more than 56,000 employees and anticipated year-end revenues of up to $38 billion, Microsoft continued to hold a strong lead in the computer software industry. With an emphasis on continuous innovation--including such business products as the BizTalk Server 2004--further success seemed ensured. Still, resentment toward Microsoft was omnipresent. In April 2004, the company was fined by the European Union for abusing its monopoly on computer operating systems. The fine, at EUR 497 million ($596 million), was not likely to be the last for Microsoft.

Principal Subsidiaries: Microsoft Asia, Ltd. (Nevada); Microsoft Business Solutions Aps (Denmark); Microsoft Capital Group, L.P.; Microsoft E-Holdings, Inc.; Microsoft Finance Company Ltd. (Ireland); Microsoft Ireland Capital Ltd.; Microsoft Ireland Operations Ltd.; Microsoft Licensing, Inc.; Microsoft Manufacturing BV (Netherlands); Microsoft T-Holdings, Inc.; MSLI, GP; Round Island, LLC; Round Island One Ltd.

Principal Divisions: Client; Server & Tools; Information Worker; Business Solutions; MSN; Mobile and Embedded Devices; Home and Entertainment; Other.

Principal Competitors: Apple Computer, Inc.; Hewlett-Packard Company; International Business Machines Corporation; Logitech International SA; Novell, Inc.; Sony Corporation; Sun Microsystems, Inc.; Time Warner Inc.; Yahoo! Inc.

Related information about Microsoft

A computer company which came into prominence with the design and supply of the operating system (MS-DOS) for the IBM personal computer. The system is supported by spreadsheet and word-processing packages and more recently by the Windows application software. During the 1990s, Microsoft became the world's leading computer company, and found itself having to defend its practices when the US government brought an initially successful anti-trust (monopoly) action against it in 1999, arguing that Microsoft unfairly used the dominance of its Windows computer operating system to squeeze out smaller rivals. In 2000 a judge ordered that Microsoft be split into two companies. This ruling was overturned in June 2001 by the US Court of Appeals, and later that year Microsoft and the Justice Dept. agreed on a settlement, though a group of states continued to press for tougher penalties. In November 2003 Microsoft faced a European challenge in Brussels along similar lines, and in March 2004 a record fine of €497.2 million was imposed on the company for using its near-monopoly dominance in European markets to eliminate competition unfairly.

key_people = Bill Gates, Co-founder and Executive Chairman
Paul Allen, Co-founder
Steve Ballmer, Chief Executive
Ray Ozzie, Chief Software Architect
| industry = Computer hardware
Computer software
Publishing
Research and development
Television
Video games| products = Microsoft Windows
Microsoft Office
MSNBC
Xbox
Xbox 360
(See complete listing.)
| homepage = www.microsoft.com
}}
The Microsoft Corporation, commonly known as just Microsoft, (, ) is a multinational computer technology corporation with global annual sales of US$44.28 billion and 71,553 employees in 102 countries and regions as of July 2006. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its most popular products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software, each of which has achieved near-ubiquity in the desktop computer market. Microsoft possesses footholds in other markets, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse as well as home entertainment products such as the Xbox, Xbox 360 and MSN TV.

Microsoft's name, originally bi-capitalized as MicroSoft or with hyphenation as Micro-Soft, is a portmanteau of "microcomputer software"The History of Computing Project - January 3, 1975 and is often abbreviated informally as MS. The company was founded in Albuquerque, New Mexico on April 4 1975 by Bill Gates and Paul Allen to develop and sell BASIC interpreters for the Altair 8800. After the market saw a flood of IBM PC clones in the mid-1980s, Microsoft used its new position, which it gained in part due to a contract from IBM, to dominate the home computer operating system market with MS-DOS. The company later released an initial public offering (IPO) in the stock market, which netted several of its employees millions of dollars due to the ensuing rise of the stock price. The price of the stock continued its rise steadily into the early 2000s. In Microsoft Windows, originally an add-on for MS-DOS, the company was selling what would become the most widely used operating system in the world; Microsoft continued to push into multiple markets, such as computer hardware and television. In addition, Microsoft has historically given customer support over Usenet newsgroups and the World Wide Web, and awards Microsoft MVP status to volunteers who are deemed helpful in assisting the company's customers.Multiple:



With what is generally described as a developer-centric business culture, Microsoft has become widely known for some of its internal codes of conduct for its employees.Multiple:




  • One example is the "eat your own dog food" mantra, which describes the practice of using pre-release products inside the company to test them in an environment geared towards the real world. Microsoft has been convicted of monopolistic business practices ? the U.S. Justice Department, among others, has sued Microsoft for antitrust violations and software bundling. homepage at the United States Department of Justice The slogan "embrace, extend, and extinguish" is often used to describe Microsoft's strategy for entering product categories involving widely-used standards, extending those standards with proprietary capabilities, and then using those differences to disadvantage its competitors. In addition, Microsoft has been criticized for the insecurity of its software. However, Microsoft has won several awards, such as the "1993 Most Innovative Company Operating in the U.S." by Fortune magazine, as well as maintaining a place on the Fortune 500 list of companies as of 2006.

History

1985?1991: The rise and fall of OS/2

The Republic of Ireland became home to Microsoft's first international production facility in 1985, and on November 20 Microsoft released its first retail version of Microsoft Windows, originally a graphical extension for its MS-DOS operating system. In August, Microsoft and IBM partnered in the development of a different operating system called OS/2. Microsoft Works, an integrated office program which combined features typically found in a word processor, spreadsheet, database and other office applications, saw its first release as an application for the Apple Macintosh towards the end of 1986. Microsoft Works would later be sold with other Microsoft products including Microsoft Word and Microsoft Bookshelf, a reference collection introduced in 1987 that was the company's first CD-ROM product. Later, on August 8, 1989, Microsoft would introduce its most successful office product, Microsoft Office. While Microsoft Word and Microsoft Office were mostly developed internally, Microsoft also continued its trend of rebranding products from other companies, such as SQL Server on January 13 1988, a relational database management system for companies that was based on technology licensed from Sybase.

On May 22, 1990 Microsoft launched Windows 3.0. The new version of Microsoft's operating system boasted such new features as streamlined user interface graphics and improved protected mode capability for the Intel 386 processor; it sold over 100,000 copies in two weeks. Windows at the time generated more revenue for Microsoft than OS/2, and the company decided to move more resources from OS/2 to Windows. In an internal memo to Microsoft employees on May 16, 1991, Bill Gates announced that the OS/2 partnership was over, and that Microsoft would henceforth focus its platform efforts on Windows and the Windows NT kernel. Some people, especially developers who had ignored Windows and committed most of their resources to OS/2, were taken by surprise, and accused Microsoft of deception. 1991 also marked the founding of Microsoft Research, an organization in Microsoft for researching computer science subjects, and Microsoft Visual Basic, a popular development product for companies and individuals.

1992?1995: Domination of the corporate market

During the transition from MS-DOS to Windows, the success of Microsoft's product Microsoft Office allowed the company to gain ground on application-software competitors, such as WordPerfect and Lotus 1-2-3. Novell, an owner of WordPerfect for a time, alleged that Microsoft used its inside knowledge of the DOS and Windows kernels and of undocumented Application Programming Interface features to make Office perform better than its competitors. Eventually, Microsoft Office became the dominant business suite, with a market share far exceeding that of its competitors. In March 1992, Microsoft released Windows 3.1 along with its first promotional campaign on TV; the software sold over three million copies in its first two months on the market. In October, Windows for Workgroups 3.1 was released with integrated networking capabilities such as peer-to-peer file and printing sharing. In November, Microsoft released the first version of their popular database software Microsoft Access.

By 1993, Windows had become the most widely used GUI operating system in the world. Fortune Magazine named Microsoft as the "1993 Most Innovative Company Operating in the U.S." The year also marked the end of a five-year copyright infringement legal case brought by Apple Computer, dubbed , in which the ruling was in Microsoft's favor, the release of Windows for Workgroups 3.11, a new version of the consumer line of Windows, and Windows NT 3.1, a server-based operating system with a similar user interface to consumer versions of the operating system, but with an entirely different kernel. As part of its strategy to broaden its business, Microsoft released Microsoft Encarta on March 22, the first encyclopedia designed to run on a computer. Microsoft changed its slogan to "Where do you want to go today?" in 1994 as part of an attempt to appeal to nontechnical audiences in a US$100 million advertising campaign.

Microsoft continued to make strategic decisions directed at consumers. Microsoft Bob is widely regarded as Microsoft's most unsuccessful product.Multiple:





  • DreamWorks SKG and Microsoft formed a new company, DreamWorks Interactive (in 2000 acquired by Electronic Arts which named it EA Los Angeles), to produce interactive and multimedia entertainment properties. In August 24, Microsoft released Microsoft Windows 95, a new version of the company's flagship operating system which featured a completely new user interface, including a novel start button; Pack that was released in August 1995.Microsoft - The History of Internet Explorer In September, the Chinese government chose Windows to be the operating system of choice in that country, and entered into an agreement with the Company to standardize a Chinese version of the operating system. Microsoft also released the Microsoft Sidewinder 3D Pro joystick in an attempt to further expand its profile in the computer hardware market.

    1995?1999: Foray into the Internet and other ventures

    In the mid-90s, Microsoft began to expand its product line into computer networking and the World Wide Web. On August 24 1995, it launched a major online service, MSN (Microsoft Network), as a direct competitor to AOL. MSN became an umbrella service for Microsoft's online services, using Microsoft Passport (now called Windows Live ID) as a universal login system for all of its websites. The company continued to branch out into new markets in 1996, starting with a joint venture with NBC to create a new 24/7 cable news station, MSNBC. The station was launched on July 15 to compete with similar news outlets such as CNN. Microsoft also launched Slate, an online magazine edited by Michael Kinsley, which offered political and social commentary along with the cartoon Doonesbury. In an attempt to extend its reach in the consumer market, the Company acquired WebTV, which enabled consumers to access the Internet from their televisions. Microsoft entered the palm computing market in November with Windows CE 1.0, a new built-from-scratch version of their flagship operating system, specifically designed to run on low-memory, low-performance machines, such as handhelds and other palm-sized computers. 1996 saw the release of Windows NT 4.0, which brought the Windows 95 GUI and Windows NT kernel together.

    While Microsoft largely failed to participate in the rise of the Internet in the early 1990s, some of the key technologies in which the company had invested to enter the Internet market started to pay off by the mid-90s. this enabled Microsoft and others to embed controls in many programming languages, including the company's own scripting languages, such as JScript and VBScript. ActiveX included frameworks for documents and server solutions. The company also released the Microsoft SQL Server 6.5, which had built-in support for internet applications. Later in 1997, Microsoft Office 97 as well as Internet Explorer 4.0 were released, marking the beginning of the takeover of the browser market from rival Netscape, and by agreement with Apple Computer, Internet Explorer was bundled with the Apple Macintosh operating system as well as with Windows. Windows CE 2.0, the handheld version of Windows, was released this year, including a host of bug fixes and new features designed to make it more appealing to corporate customers. In October, the Justice Department filed a motion in the Federal District Court in which they stated that Microsoft had violated an agreement signed in 1994, and asked the court to stop the bundling of Internet Explorer with Windows.

    The year 1998 was significant in Microsoft's history, with Bill Gates appointing Steve Ballmer president of Microsoft but remaining as Chair and CEO himself. The company released an update to the consumer version of Windows, Windows 98. Windows 98 came with Internet Explorer 4.0 SP1 (which had Windows Desktop Update bundled), and included new features from Windows 95 OSR 2.x including the FAT32 file system, and new features specifically for Windows 98, such as support for multiple displays. Microsoft launched its Indian headquarters as well, which would eventually become the company's second largest after its U.S. headquarters. Finally, a great deal of controversy took place when a set of internal memos from the company were leaked on the internet. On February 17, 2000 Microsoft released an update to its business line of software in Windows 2000, which some considered to be a significant improvement over previous versions. It provided an OS stability similar to that of its Unix counterparts due to its usage of the Windows NT kernel, and provided matching features for several of those found in the home line of the operating system including a DOS emulator that could run many legacy DOS applications. On April 3 2000, a judgment was handed down in the case of United States v. On June 15, 2000 the company also released a new version of its hand-held operating system, Windows CE 3.0. The main change was the new programming APIs of the software. The update to the consumer line, Windows Me (or Windows Millennium Edition), was released on September 14, 2000. It sported several new features such as enhanced multimedia capabilities and consumer-oriented PC maintenance options, but is often regarded as one of the worst versions of Windows due to installation problems and other issues.


    Microsoft released Windows XP in 2001, a version that aimed to encompass the features of both its business and home product lines. Later, Microsoft would enter the multi-billion-dollar game console market dominated by Sony and Nintendo, with the release of the Xbox. As of 2005, the console ranked second to Sony's PlayStation 2 and ahead of Nintendo's GameCube in market share in the United States. The console sold 24 million units,24 million sold compared with PlayStation 2 at greater than 100 million units, and the company took a US$4 billion loss on the console.

    In 2002, Microsoft launched the .NET initiative, along with new versions of some of its development products, such as Microsoft Visual Studio. The initiative has been an entirely new development API for Windows programming, and includes a new programming language, C#. Windows Server 2003 was launched, featuring enhanced administration capabilities, such as new user interfaces to server tools. In 2004, the company released Windows XP Media Center Edition 2005, a version of Windows XP specifically designed for multimedia capabilities, and Windows XP Starter Edition, a version of Windows XP with a smaller feature set designed for entry-level consumers. However, Microsoft would encounter more turmoil in March 2004 when antitrust legal action would be brought against it by the European Union for allegedly abusing its market dominance (see European Union Microsoft antitrust case). It had to pay out US$32 million and produce more than one version of Windows for the country in the same vein as the European Union - one with Windows Media Player and Windows Messenger and one without the two programs.

    2005?2006: The road to Vista



    Formerly codenamed "Longhorn" in the early development stages, the next planned version of Windows, Windows Vista, is in its first release candidate and is scheduled for release to consumers in January, 2007 as of September 2006. Microsoft announced the new name of the operating system at the Microsoft Global Business Conference (MGB) in Atlanta, Georgia on July 21, 2005. The next version of the company's server operating system, codenamed Windows Server "Longhorn" is scheduled for release in 2007 as of March 2006 . Microsoft plans to release a new version of Microsoft Office as well, called Microsoft Office 2007, and is set to be released along side Vista in January 2007 as of May 2006. In addition to Office, the next version of Visual Studio, the company's development suite, code named Orcas, is currently available as a Community Technology Preview (CTP). As of May 2006, an official release date is yet to be set for the development suite.

    In guise of competing with other Internet companies such as the search service Google, in 2005 Microsoft announced a new version of its MSN search service. Later, in 2006, the company launched Microsoft adCenter, a service that offers pay per click advertisements, in an effort to further develop their search marketing revenue.

    On June 15, 2006 Gates announced his plans for a two year transition period out of a day-to-day role with Microsoft until July 31, 2008. His role as Chief Software Architect will be filled immediately by Ray Ozzie, the Chief Technical Officer of the company as of June 15, 2006. Bill Gates stated "My announcement is not a retirement ? It has been produced in many versions, including Windows 3.1, Windows 95, Windows 98, Windows 2000, Windows Me, Windows XP, and Windows Server 2003. Along with Windows Vista, MSN is to become Windows Live.

    Microsoft Visual Studio is the company's set of programming tools and compilers. Similar to offerings from Cisco, Sun Microsystems, Novell, IBM, and Oracle Corporation, these tests are designed to identify a minimal set of proficiencies in a specific role; this includes developers ("Microsoft Certified Solution Developer"), system/network analysts ("Microsoft Certified Systems Engineer"), trainers ("Microsoft Certified Trainers") and administrators ("Microsoft Certified Systems Administrator" and "Microsoft Certified Database Administrator").

    Microsoft offers a suite of server software, entitled Windows Server System. Other server products include:

    • SQL Server, a relational database management system;
    • Exchange Server, for certain business-oriented e-mail features;
    • Small Business Server, for messaging and other small business-oriented features; The software product includes Word (a word processor), Access (a personal relational database application), Excel (a spreadsheet program), Outlook (Windows-only groupware, frequently used with Exchange Server), PowerPoint (presentation software) and Microsoft FrontPage (a WYSIWYG HTML editor), and Publisher (desktop publishing software). A number of other products were added later with the release of Office 2003 including Visio, Project, MapPoint, InfoPath and OneNote.

      The division focuses on developing financial and business management software for companies. The group markets Axapta and Solomon, catering to similar markets, which is scheduled to be combined with the Navision and Great Plains lines into a common platform called Microsoft Dynamics.

      Microsoft Entertainment and Devices Division

      Microsoft has attempted to expand the Windows brand into many other markets, with products such as Windows CE for PDAs and its "Windows-powered" Smartphone products. Microsoft entered the multi-billion-dollar game console market dominated by Sony and Nintendo in late 2001, with the release of the Xbox. The company develops and publishes its own video games for this console, with the help of its Microsoft Game Studios subsidiary, in addition to third-party Xbox video game publishers such as Electronic Arts and Activision, who pay a license fee to publish games for the system. The Xbox also has a successor in the Xbox 360, released on 2005-11-22 in North America and other countries. With the Xbox 360, Microsoft hopes to compensate for the losses incurred with the original Xbox. In addition to the Xbox line of products, Microsoft also markets a number of other computing-related hardware products as well, including mice, keyboards, joysticks, and gamepads, along with other game controllers, the production of which is outsourced in most cases.

      The division also houses Microsoft's Macintosh Business Unit, one of the largest developers of Macintosh software outside Apple itself. MSDN also offers subscriptions for companies and individuals, and the more expensive subscriptions usually offer access to pre-release beta versions of Microsoft software. In recent years, Microsoft launched a community site for developers and users, entitled Channel9, which provides many modern features such as a wiki and an Internet forum. Another community site that provides daily videocasts and other services, On10.net, launched on March 3, 2006.

      Most free technical support available through Microsoft is provided through online Usenet newsgroups (in the early days it was also provided on CompuServe). class=ilnk>James Cash, Jr., Dina Dublon, Bill Gates, Raymond Gilmartin, Ann Korologos, David Marquardt, Charles Noski, Helmut Panke, and Jon Shirley. Other Executive Officers include the Presidents and Vice Presidents of the various product divisions, leaders of the marketing section, and the CTO, among others.

      Stock

      When the company debuted its IPO in March 13, 1986, the stock price was US$21. (Microsoft Excel format) By the close of the first trading day, the stock had closed at twenty-eight dollars, equivalent to 9.7 cents when adjusted for the company's first nine splits. The initial close and ensuing rise in subsequent years made several Microsoft employees millions. The stock price peaked in 1999 at around US$119 (US$60.928 adjusting for splits). While the company has had nine stock splits, the first of which was in September 18 1987, the company did not start offering a dividend until January 16 2003. The dividend for the 2003 fiscal year was eight cents per share, followed by a dividend of sixteen cents per share the subsequent year. The company switched from yearly to quarterly dividends in 2005, for eight cents a share per quarter with a special one-time payout of three dollars per share for the second quarter of the fiscal year.

      Around 2003 the stock price began a slow descent. Despite the company's ninth split on February 2 2003 and subsequent increases in dividend payouts, the price of Microsoft's stock continues to stagnate as of June 2006.

      Diversity

      In 2005, Microsoft received a 100% rating in the Corporate Equality Index from the Human Rights Campaign relating to its policies concerning LGBT (lesbian, gay, bisexual and transsexual) employees. Partly through the work of the Gay and Lesbian Employees at Microsoft (GLEAM) group, Microsoft added gender expression to its antidiscrimination policies in April 2005, and the Human Rights Campaign upgraded Microsoft's Corporate Equality Index from its 86% rating in 2004 to its current 100% rating, putting it among the most progressive companies in the world, according to the Human Rights Campaign. (PDF format)

      In April 2005, Microsoft received wide criticism for withdrawing support from Washington state's H.B. However, under harsh criticism from both outside and inside the company's walls, Microsoft decided to support the bill again in May 2005.

      During his visit to Waterloo in October 2005, Microsoft co-founder Bill Gates stated, "Most years, we hire more students out of Waterloo than any university in the world, typically 50 or even more."

      Microsoft hires many foreign workers as well as domestic ones, and is an outspoken opponent of the cap on H1B visas, which allow companies in the United States to employ certain foreign workers. A group of companies that seek to implement an initiative called Trusted Computing (which sets out to increase security and privacy in a user's computer), the TCPA is decried by critics as a means to allow software developers to enforce any sort of restriction they wish over their software.

      Advocates of free software also take issue with Microsoft's promotion of Digital Rights Management (DRM), and the company's total cost of ownership (TCO) comparisons with its "Get the facts" campaign. For example, Apple Computer has been under fire from the French Government for "FairPlay," a DRM system used to control usage of content downloaded from its iTunes Music Store service. The "Get the facts" campaign argues that Windows Server has a lower TCO than Linux and lists a variety of studies in order to prove its case. Proponents of Linux unveiled their own study arguing that, contrary to one of Microsoft's claims, Linux has lower management costs than Windows Server. Another study by the Yankee Group claims that Windows Server cost less than Linux for those with legacy systems and more for those without.

      Technical

      Older versions of Microsoft products were often characterized as being unstable ? Rob Pegoraro, writing for the Washington Post, says that due to Windows leaving five Internet ports open for various running services, malefactors have an easier time compromising the system. A study conducted by Forrester Research refutes these claims, stating that it found that after a year of studying Windows and several Linux distributions, Windows had the fewest vulnerabilities and that "Microsoft was the only vendor to have corrected 100% of the publicly known flaws during the study's time period." In an article for SecurityFocus, Scott Granneman said that as of 2004-06-17 there were 153 accumulated security holes since 2001-04-18 and that Internet Explorer "is a buggy, insecure, dangerous piece of software." Mike Nash, a Microsoft Corporate Vice President, responded to Internet Explorer security concerns in a 2005 interview by stating that the version of Internet Explorer shipped with Windows XP Service Pack 2 gives it security on the same level as its competition. The next planned version of Internet Explorer, 7, is scheduled to feature a security overhaul with anti-phishing and malware prevention technology. In a recent review, PC Magazine's Neil Rubenking commented that the phishing technologies in Internet Explorer 7 Beta 3 were superior to equivalents from McAfee and Symantec.

      Microsoft.com

      Microsoft.com is one of the most popular destinations on the internet. They expand the TOC and make the FAC people rather unhappy -->

      General
      • Pirates of Silicon Valley - A movie based on the rise of Apple and Microsoft.
      Microsoft
      • Actimates - Set of toys developed by Microsoft.
      • Pcsafety - Part of Microsoft's technical support that deals with malware and virus issues.
      • Trustworthy Computing - Controversial initiative by Microsoft for increasing security and reliability on PCs.
      • Scenario Voting - Microsoft's new system of obtaining customer satisfaction on Windows Vista
      • Ultra Mobile PC - Joint specification by Microsoft and others for a small form factor tablet PC.
      • Microsoft Studios - A division responsible for the creation of video content for Microsoft and its partners.
      Lists
      • List of assets owned by Microsoft Corporation
      • List of companies acquired by Microsoft Corporation
      • List of Microsoft software applications
      • List of Microsoft topics

      References and footnotes

Chronology

  • Key Dates:
  • 1975: Microsoft is founded by Bill Gates and Paul Allen; they sell BASIC, the first PC computer language program to MITS Computer, Microsoft's first customer.
  • 1981: Microsoft, Inc. is incorporated; IBM uses Microsoft's 16-bit operating system for its first personal computer.
  • 1982: Microsoft, U.K., Ltd. is incorporated.
  • 1983: Paul Allen resigns as executive vice-president but remains on the board; Jon Shirley is made president of Microsoft (he later becomes CEO); Microsoft introduces the Microsoft Mouse and Word for MS-DOS 1.00.
  • 1985: Microsoft and IBM forge a joint development agreement.
  • 1986: Microsoft stock goes public at $21 per share.
  • 1987: The company's first CD-ROM application, Microsoft Bookshelf, is released.
  • 1990: Jon Shirley retires as president and CEO; Michael R. Hallman is promoted in Shirley's place; the company becomes the first PC software firm to surpass $1 billion of sales in a single year.
  • 1992: Bill Gates is awarded the National Medal of Technology for Technological Achievement.
  • 1993: The company introduces Windows NT.
  • 1995: Bill Gates publishes his first book, The Road Ahead.
  • 1996: The company acquires Vermeer Technologies and its software application, FrontPage.
  • 1997: The Justice Department alleges that Microsoft violated a 1994 consent decree concerning licensing the Windows operating system to computer manufacturers.
  • 1998: The U.S. Department of Justice files two antitrust cases against Microsoft, alleging the company had violated the Sherman Act.
  • 2000: The company acquires Visio Corporation, its largest acquisition to date.
  • 2001: Microsoft Windows XP is released internationally.
  • 2003: Microsoft launches Windows Server 2003.

Additional topics

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