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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. On February 16, 1986, Microsoft relocated their headquarters to a corporate office campus in Redmond, Washington. Softletter estimated that in 1986 the « Big Three » of Lotus (9%), Microsoft (8%, more than $250 million), and Ashton-Tate (6%) together had 23% of total revenue of the top 100 microcomputer software companies. By then Forrester Research considered Microsoft, Ashton-Tate, Lotus Development, and Borland the « Big Four » of personal computer software.
1994: Windows and Office
In January 2023, CEO Satya Nadella announced Microsoft would lay off some 10,000 employees. Microsoft has not released statements regarding Activision’s recent legal controversies regarding employee abuse, but reports have alleged that Activision CEO Bobby Kotick, a major target of the controversy, will leave the company after the acquisition is finalized. Microsoft plans to incorporate Ally.io into its Viva family of employee experience products. On October 7, Microsoft acquired Ally.io, a software service that measures companies’ progress against OKRs.
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In December 2022, Microsoft announced a new 10-year deal with the London Stock Exchange for products including Microsoft Azure; Microsoft acquired ~4% of the latter company as part of the deal. On January 18, 2022, Microsoft announced the acquisition of American video game developer and holding company Activision Blizzard in an all-cash deal worth $68.7 billion. In October 2021, Microsoft announced that it began rolling out end-to-end encryption (E2EE) support for Microsoft Teams calls in order to secure business communication while using video conferencing software. On September 21, 2020, Microsoft announced its intent to acquire video game company ZeniMax Media, the parent company of Bethesda Softworks, for about $7.5 billion, with the deal expected to occur in the second half of 2021 fiscal year. On February 17, Microsoft released an update to its business line of software in Windows 2000. 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.
The acquisition positioned Microsoft to grow its presence in the market of providing an online education to large numbers of people. In early September 2021, it was announced that the company had acquired Takelessons, an online platform which connects students and tutors in numerous subjects. On September 22, 2020, Microsoft announced that it had an exclusive license to use OpenAI’s GPT-3 artificial intelligence language generator.
Welcome to the Microsoft 365 Copilot app
However, Microsoft encountered 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 Microsoft Corp. v. Commission). In 2004, the company released Windows XP Media Center Edition 2005, a version of Windows XP designed for multimedia abilities, and Windows XP Starter Edition, a version of Windows XP with a smaller feature set designed for entry-level consumers. Microsoft launched their second console, the Xbox 360, in 2005 – which was more successful than the original. The operating system was the first to require Microsoft Product Activation, an anti-piracy mechanism that requires users to activate the software with Microsoft within 30 days.
The next update to the consumer line, Windows ME (or Windows Millennium Edition), was released on September 14, 2000. On June 15, 2000, the company released a new version of its hand-held operating system, Windows CE 3.0. The documents also alluded to legal and other actions against Linux as well as other open source software.
More apps in one place
Microsoft also released a new version of its Office suite, called Microsoft Office 2007, alongside Windows Vista. Formerly codenamed « Longhorn » in the early development stages, Windows Vista was released to consumers on January 30, 2007. On June 15, 2006, Bill Gates announced his plans for a two-year transition period out of a day-to-day role with Microsoft until July 31, 2008. Activity grew quickly as developers from around the world began to participate, and by early 2007 commercial open source companies, such as Aras Corp. began to offer enterprise open source software exclusively on the Microsoft platform. 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, the market saw a flood of IBM PC clones after Columbia Data Products successfully cloned the IBM BIOS, quickly followed by Eagle Computer and Compaq. Is widely recognized as the most influential company in the microcomputer-software industry. InfoWorld stated in 1984 that Microsoft, with $55 million (~$140 million in 2024) in 1983 sales, When the IBM PC debuted, Microsoft was the only company that offered operating system, programming language, and application software for the new computer.
- Microsoft also marketed through an Apple dealer in West Palm Beach, Florida two products for the Radio-Shack TRS-80.
- The company’s first international office was founded on November 1, 1978, in Japan, entitled « ASCII Microsoft » (now called « Microsoft Japan »), and on November 29, 1979, the term, « Microsoft » was first used by Bill Gates.
- Windows Server 2008 and Visual Studio 2008, the next versions of the company’s server operating system and development suite, respectively, were released on February 27, 2008.
- The Alliance for Affordable Internet (A4AI) was launched in October 2013 and Microsoft was part of the coalition of public and private organizations that also included Facebook, Intel and Google.
- On February 20, 2019, Microsoft Corp said it will offer its cyber security service AccountGuard to 12 new markets in Europe including Germany, France and Spain, to close security gaps and protect customers in political space from hacking.
Following the release of Windows Phone, Microsoft underwent a gradual rebranding of its product range throughout 2011 and 2012—the corporation’s logos, products, services and websites adopted the principles and concepts of the Metro design language. On May 10, 2011, the company acquired Skype Technologies for US$8.5 billion (~$11.7 billion in 2024). On April 12, 2010, Microsoft launched their Kin phone line, a result of their acquisition of Danger Incorporated in 2008. On June 26, 2009, Microsoft started taking pre-orders at a discounted price for Windows 7 which was launched on October 22, 2009. During the show, Ballmer announced the first public Beta Test of Windows 7 for partners and developers on January 8, but also for the general public two days later. In 2008, Microsoft wanted to purchase Yahoo (first completely, later partially) in order to strengthen its position on the search engine market vis-à-vis Google.
Due to potential copyright infringement problems with CP/M, IBM marketed both CP/M and PC DOS for US$240 and US$40, respectively, with PC DOS eventually becoming the standard because of its lower price. For this deal, Microsoft purchased a CP/M clone called 86-DOS from Tim Paterson of Seattle Computer Products for less than US$100,000, which IBM renamed to IBM PC DOS. IBM first approached Gates and Allen about Microsoft’s upcoming IBM Personal Computer (IBM PC) in July 1980, shortly after Gates’s mother began working on United Way’s executive board with IBM CEO John Opel. By the mid-1980s Microsoft had gotten out of the Unix business, except for its ownership stake in SCO. (Earlier magazine on-disk distributions included Robert Uiterwyk’s BASIC in the May 1977 issue of Information Age.) However, Xenix was never sold to end users directly although it was licensed to many software OEMs for resale.
The company continued to branch out into new markets in 1996, starting with a joint venture with NBC to create a new 24-hour cable news television station, MSNBC. On August 24, 1995, it launched a major online service, MSN (Microsoft Network), as a direct competitor to AOL. On August 24, 1995, Microsoft released Windows 95, a new version of the company’s flagship operating system which featured a completely new user interface, including a novel start button; more than a million copies were sold in the first four days after its release. The interface was discontinued in 1996 due to poor sales; Bill Gates later attributed its failure to hardware requirements that were too high for typical computers, and is widely regarded as one of Microsoft’s most unsuccessful products.
The company released Microsoft Bob, a graphical user interface designed for novice computer users, in March 1995. In October, Windows for Workgroups 3.1 was released with integrated networking abilities such as peer-to-peer file and printing sharing. During the transition from MS-DOS to Windows, the success of Microsoft Office allowed the company to gain ground on application-software competitors, such as WordPerfect and Lotus 1-2-3.
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On March 1, 2016, Microsoft announced the merge of its PC and Xbox divisions, with Phil Spencer announcing that Universal Windows Platform (UWP) apps would be the focus for Microsoft’s gaming in the future. The successor to Windows Phone 8.1, Windows 10 Mobile, was released November 20, 2015. On July 29, 2015, Microsoft released the next version of the Windows operating system, Windows 10.
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As of June 30, 2015, Microsoft has a global annual revenue of US$86.83 billion (~$112 billion in 2024) and 128,076 employees worldwide. In 1980, Microsoft formed a partnership with chicken road game IBM to bundle Microsoft’s operating system with IBM computers; with that deal, IBM paid Microsoft a royalty for every sale.
During the previous summer of 2015 the company wrote down $7.6 billion (~$9.8 billion in 2024) related to its mobile-phone business and fired 7,800 employees from those operations. In May 2016, the company announced it will lay off 1,850 workers, taking an impairment and restructuring charge of $950 million (~$1.21 billion in 2024). The deal also made Viacom a preferred publisher partner for casual game development and distribution through MSN and Windows. Windows Server 2008 and Visual Studio 2008, the next versions of the company’s server operating system and development suite, respectively, were released on February 27, 2008. 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.
OS/2 was marketed in connection with a new hardware design proprietary to IBM, the PS/2. Ireland became home to one of Microsoft’s international production facilities in 1985, and on November 20 Microsoft released its first retail version of Microsoft Windows (Windows 1.0), originally a graphical extension for its MS-DOS operating system. Microsoft committed to develop Macintosh versions of Multiplan, Word, and Microsoft Chart; Apple agreed to not provide software development kits and prototype computers to companies with applications competing with Microsoft’s. With the release of the Microsoft Mouse on May 2, 1983, Microsoft continued to expand its product line in other markets.
- Word was first released in the spring of 1983, and free demonstration copies of the application were bundled with the November 1983 issue of PC World, making it one of the first programs to be distributed on-disk with a magazine.
- Skeptics questioned the system software vendor’s decision to produce application software.
- 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 abilities such as peer-to-peer file and printing sharing.
present: Acquisitions, Xbox Series X/S, and Windows 11
The company restructured on June 25, 1981, to become an incorporated business in its home state of Washington (with a further change of its name to « Microsoft Corporation, Inc. »). The company’s first international office was founded on November 1, 1978, in Japan, entitled « ASCII Microsoft » (now called « Microsoft Japan »), and on November 29, 1979, the term, « Microsoft » was first used by Bill Gates. Allen came up with the original name of Micro-Soft, a portmanteau of microcomputer and software.
The first operating system publicly released by the company was a variant of Unix announced on August 25, 1980. It was an immediate success; 5,000 cards, a large number given the microcomputer market at the time, were purchased in the initial three months at $349 (~$1,112 in 2024) each and it was Microsoft’s number one revenue source in 1980. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. When Microsoft launched several versions of Microsoft Windows in the 1990s, they had captured over 90% market share of the world’s personal computers. Within hours, CrowdStrike released a patch for the faulty update that prevented future crashes, but affected computers had to be fixed manually, so problems persisted for some time.
