Microsoft
Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge Web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreenpersonal computers. As of 2016, it is the world's largest software maker by revenue,[3] and one of the world's most valuable companies.[4] The word "Microsoft" is a portmanteau of "microcomputer" and "software".[5] Microsoft is ranked No. 30 in the 2018 Fortune 500 rankings of the largest United States corporations by total revenue.[6]
Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Microsoft Windows. The company's 1986 initial public offering (IPO), 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 and has made a number of corporate acquisitions, their largest being the acquisition of LinkedIn for $26.2 billion in December 2016,[7] followed by their acquisition of Skype Technologies for $8.5 billion in May 2011.[8]
As of 2015, Microsoft is market-dominant in the IBM PC compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android.[9] The company also produces a wide range of other consumer and enterprise software for desktops, laptops, tabs, gadgets, servers, etc. including Internet search (with Bing), the digital services market (through MSN), mixed reality (HoloLens), cloud computing (Azure) and software development (Visual Studio).
Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a "devices and services" strategy.[10] This began with the acquisition of Danger Inc. in 2008,[11] entering the personal computer production market for the first time in June 2012 with the launch of the Microsoft Surface line of tablet computers; and later forming Microsoft Mobile through the acquisition of Nokia's devices and services division. Since Satya Nadella took over as CEO in 2014, the company has scaled back on hardware and has instead focused on cloud computing, a move that helped the company's shares reach its highest value since December 1999.[12][13]
In 2018, Microsoft surpassed Apple Inc. as the most valuable publicly traded company in the world after being dethroned by the tech giant in 2010[14] and in April 2019, Microsoft became the third U.S. public company to be valued at over $1 trillion after Apple and Amazon respectively, reached the trillion-dollar market cap in 2018.
History
1972–1985: The founding of Microsoft
Childhood friends Bill Gates and Paul Allen sought to make a business utilizing their shared skills in computer programming.[17] In 1972 they founded their first company, named Traf-O-Data, which sold a rudimentary computer to track and analyze automobile traffic data. While Gates enrolled at Harvard, Allen pursued a degree in computer science at Washington State University, though he later dropped out of school to work at Honeywell.[18] The January 1975 issue of Popular Electronics featured Micro Instrumentation and Telemetry Systems's (MITS) Altair 8800 microcomputer,[19] which inspired Allen to suggest that they could program a BASIC interpreter for the device. After a call from Gates claiming to have a working interpreter, MITS requested a demonstration. Since they didn't yet have one, Allen worked on a simulator for the Altair while Gates developed the interpreter. Although they developed the interpreter on a simulator and not the actual device, it worked flawlessly when they demonstrated the interpreter in March 1975 to MITS in Albuquerque, New Mexico. MITS agreed to distribute it, marketing it as Altair BASIC.[16]:108, 112–114 Gates and Allen officially established Microsoft on April 4, 1975, with Gates as the CEO.[20] The original name of "Micro-Soft" (short for microcomputer software) was suggested by Allen.[21][22] In August 1977 the company formed an agreement with ASCII Magazine in Japan, resulting in its first international office, "ASCII Microsoft".[23] Microsoft moved its headquarters to Bellevue, Washington in January 1979.[20]
Microsoft entered the operating system (OS) business in 1980 with its own version of Unix, called Xenix.[24] However, it was MS-DOS that solidified the company's dominance. After negotiations with Digital Research failed, IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS, which was set to be used in the upcoming IBM Personal Computer (IBM PC).[25] 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. Following the release of the IBM PC in August 1981, Microsoft retained ownership of MS-DOS. Since IBM had copyrighted the IBM PC BIOS, other companies had to reverse engineer it in order for non-IBM hardware to run as IBM PC compatibles, but no such restriction applied to the operating systems. Due to various factors, such as the software selection available for MS-DOS, Microsoft eventually became the leading PC operating systems vendor.[26][27]:210 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.[16]:232 Paul Allen resigned from Microsoft in 1983 after developing Hodgkin's disease.[28] Allen claimed that Gates wanted to dilute his share in the company when he was diagnosed with Hodgkin's disease because he didn't think he was working hard enough.[29] After leaving Microsoft, Allen lost billions of dollars on ill-conceived or mistimed technology investments. He later invested in low-tech sectors, sports teams, and commercial real estate.[30]
1985–1994: Windows and Office
Despite having begun jointly developing a new operating system, OS/2, with IBM in August 1985,[31] Microsoft released Microsoft Windows, a graphical extension for MS-DOS, on November 20.[16]:242–243, 246 Microsoft moved its headquarters from Bellevue to Redmond, Washington, on February 26, 1986, and on March 13 went public,[32] with the resulting rise in stock making an estimated four billionaires and 12,000 millionaires from Microsoft employees.[33] Microsoft released its version of OS/2 to original equipment manufacturers (OEMs) on April 2, 1987.[16] In 1990, due to the partnership with IBM, the Federal Trade Commission set its eye on Microsoft for possible collusion, marking the beginning of over a decade of legal clashes with the U.S. government.[34] :243–244 Meanwhile, the company was at work on a 32-bit OS, 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 Win32 application programming interface (API), making porting from 16-bit (MS-DOS-based) Windows easier. Once Microsoft informed IBM of NT, the OS/2 partnership deteriorated.[35]
In 1990, Microsoft introduced its office suite, Microsoft Office. The suite bundled separate productivity applications, such as Microsoft Wordand Microsoft Excel.[16]:301 On May 22, Microsoft launched Windows 3.0, featuring streamlined user interface graphics and improved protected mode capability for the Intel 386 processor.[36] Both Office and Windows became dominant in their respective areas.[37][38]
On July 27, 1994, the U.S. Department of Justice, Antitrust Division filed a Competitive Impact Statement that said, in part: "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."[39]
1995–2007: Foray into the Web, Windows 95, Windows XP, and Xbox
Following Bill Gates' 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.[40] 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 a market dominance.[41]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.[42][43]:20 Windows 95 came bundled with the online serviceMSN, which was at first intended to be a competitor to the Internet,[dubious ] and (for OEMs) Internet Explorer, a Web browser. Internet Explorer was not bundled with the retail Windows 95 boxes, because the boxes were printed before the team finished the Web browser, and instead was included in the Windows 95 Plus! pack.[44] Branching out into new markets in 1996, Microsoft and General Electric's NBC unit created a new 24/7 cable news channel, MSNBC.[45] Microsoft created Windows CE 1.0, a new OS designed for devices with low memory and other constraints, such as personal digital assistants.[46] 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.[16]:323–324
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.[16]:111, 228[20] Various companies including Microsoft formed the Trusted Computing Platform Alliance in October 1999 to (among other things) increase security and protect intellectual property through identifying changes in hardware and software. Critics decried the alliance as a way to enforce indiscriminate restrictions over how consumers use software, and over how computers behave, and as a form of digital rights management: for example the scenario where a computer is not only secured for its owner, but also secured against its owner as well.[47][48] On April 3, 2000, a judgment was handed down in the case of United States v. Microsoft Corp.,[49] calling the company an "abusive monopoly."[50] Microsoft later settled with the U.S. Department of Justice in 2004.[32] On October 25, 2001, Microsoft released Windows XP, unifying the mainstream and NT lines of OS under the NT codebase.[51] The company released the Xbox later that year, entering the video game console market dominated by Sonyand Nintendo.[52] 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 ($613 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.[53][54] In November 2005, the Xbox 360 was released. There were two versions, a no-frills version for $299.99 and a bells-and-whistles version for $399.99.
2007–2011: Microsoft Azure, Windows Vista, Windows 7, and Microsoft Stores
Released in January 2007, the next version of Windows, Vista, focused on features, security and a redesigned user interface dubbed Aero.[57][58] Microsoft Office 2007, released at the same time, featured a "Ribbon" user interface which was a significant departure from its predecessors. Relatively strong sales of both products helped to produce a record profit in 2007.[59] The European Union imposed another fine of €899 million ($1.4 billion) for Microsoft's lack of compliance with the March 2004 judgment on February 27, 2008, saying that the company charged rivals unreasonable prices for key information about its workgroup and backoffice servers. Microsoft stated that it was in compliance and that "these fines are about the past issues that have been resolved".[60] 2007 also saw the creation of a multi-core unit at Microsoft, following the steps of server companies such as Sun and IBM.[61]
Gates retired from his role as Chief Software Architect on June 27, 2008, a decision announced in June 2006, while retaining other positions related to the company in addition to being an advisor for the company on key projects.[62][63] Azure Services Platform, the company's entry into the cloud computing market for Windows, launched on October 27, 2008.[64] On February 12, 2009, Microsoft announced its intent to open a chain of Microsoft-branded retail stores, and on October 22, 2009, the first retail Microsoft Store opened in Scottsdale, Arizona; the same day Windows 7 was officially released to the public. Windows 7's focus was on refining Vista with ease-of-use features and performance enhancements, rather than an extensive reworking of Windows.[65][66][67]
As the smartphone industry boomed in 2007, Microsoft had struggled to keep up with its rivals Apple and Google in providing a modern smartphone operating system. As a result, in 2010 Microsoft revamped their aging flagship mobile operating system, Windows Mobile, replacing it with the new Windows Phone OS. Microsoft implemented a new strategy for the software industry that had them working more closely with smartphone manufacturers, such as Nokia, and providing a consistent user experience across all smartphones using the Windows Phone OS. It used a new user interface design language, codenamed "Metro", which prominently used simple shapes, typography and iconography, utilizing the concept of minimalism. Microsoft is a founding member of the Open Networking Foundation started on March 23, 2011. Fellow founders were Google, HP Networking, Yahoo!, Verizon Communications, Deutsche Telekom and 17 other companies. This nonprofit organization is focused on providing support for a new cloud computing initiative called Software-Defined Networking.[68] The initiative is meant to speed innovation through simple software changes in telecommunications networks, wireless networks, data centers and other networking areas.[69]
2011–2014: Windows 8/8.1, Xbox One, Outlook.com, and Surface devices
Following the release of Windows Phone, Microsoft undertook a gradual rebranding of its product range throughout 2011 and 2012, with the corporation's logos, products, services and websites adopting the principles and concepts of the Metro design language.[70] Microsoft unveiled Windows 8, an operating system designed to power both personal computers and tablet computers, in Taipei in June 2011.[71] A developer preview was released on September 13, which was subsequently replaced by a consumer preview on February 29, 2012, and released to the public in May.[72] The Surface was unveiled on June 18, becoming the first computer in the company's history to have its hardware made by Microsoft.[73][74] On June 25, Microsoft paid US$1.2 billion to buy the social network Yammer.[75] On July 31, they launched the Outlook.com webmail service to compete with Gmail.[76] On September 4, 2012, Microsoft released Windows Server 2012.[77]
In July 2012, Microsoft sold its 50% stake in MSNBC, which it had run as a joint venture with NBC since 1996.[78] On October 1, Microsoft announced its intention to launch a news operation, part of a new-look MSN, with Windows 8 later in the month.[79] On October 26, 2012, Microsoft launched Windows 8 and the Microsoft Surface.[74][80] Three days later, Windows Phone 8 was launched.[81] To cope with the potential for an increase in demand for products and services, Microsoft opened a number of "holiday stores" across the U.S. to complement the increasing number of "bricks-and-mortar" Microsoft Stores that opened in 2012.[82] On March 29, 2013, Microsoft launched a Patent Tracker.[83]
In August 2012, the New York City Police Department announced a partnership with Microsoft for the development of the Domain Awareness System which is used for Police surveillance in New York City. [84]
The Kinect, a motion-sensing input device made by Microsoft and designed as a video game controller, first introduced in November 2010, was upgraded for the 2013 release of the Xbox One video game console. Kinect's capabilities were revealed in May 2013: an ultra-wide 1080p camera, function in the dark due to an infrared sensor, higher-end processing power and new software, the ability to distinguish between fine movements (such as a thumb movements), and determining a user's heart rate by looking at their face.[85] Microsoft filed a patent application in 2011 that suggests that the corporation may use the Kinect camera system to monitor the behavior of television viewers as part of a plan to make the viewing experience more interactive. On July 19, 2013, Microsoft stocks suffered its biggest one-day percentage sell-off since the year 2000, after its fourth-quarter report raised concerns among the investors on the poor showings of both Windows 8 and the Surface tablet. Microsoft suffered a loss of more than US$32 billion.[86]
In line with the maturing PC business, in July 2013, Microsoft announced that it would reorganize the business into four new business divisions, namely Operating System, Apps, Cloud, and Devices. All previous divisions will be dissolved into new divisions without any workforce cuts.[87] On September 3, 2013, Microsoft agreed to buy Nokia's mobile unit for $7 billion,[88] following Amy Hood taking the role of CFO.[89]
2014–present: Windows 10, Microsoft Edge and HoloLens
On February 4, 2014, Steve Ballmer stepped down as CEO of Microsoft and was succeeded by Satya Nadella, who previously led Microsoft's Cloud and Enterprise division.[90] On the same day, John W. Thompson took on the role of chairman, in place of Bill Gates, who continued to participate as a technology advisor.[91] Thompson became the second chairman in Microsoft's history.[92] On April 25, 2014, Microsoft acquired Nokia Devices and Services for $7.2 billion.[93] This new subsidiary was renamed Microsoft Mobile Oy.[94] On September 15, 2014, Microsoft acquired the video game development company Mojang, best known for Minecraft, for $2.5 billion.[95] On June 8, 2017, Microsoft acquired Hexadite, an Israeli security firm, for $100 million.[96][97]
On January 21, 2015, Microsoft announced the release of their first Interactive whiteboard, Microsoft Surface Hub.[98] On July 29, 2015, Windows 10 was released,[99] with its server sibling, Windows Server 2016, released in September 2016. In Q1 2015, Microsoft was the third largest maker of mobile phones, selling 33 million units (7.2% of all). While a large majority (at least 75%) of them do not run any version of Windows Phone— those other phones are not categorized as smartphones by Gartner – in the same time frame 8 million Windows smartphones (2.5% of all smartphones) were made by all manufacturers (but mostly by Microsoft).[100] Microsoft's share of the U.S. smartphone market in January 2016 was 2.7%.[101] During the summer of 2015 the company lost $7.6 billion related to its mobile-phone business, firing 7,800 employees.[102]
On March 1, 2016, Microsoft announced the merger 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.[103] On January 24, 2017, Microsoft showcased Intune for Education at the BETT 2017 education technology conference in London.[104] Intune for Education is a new cloud-based application and device management service for the education sector.[105] In May 2016, the company announced it was laying off 1,850 workers, and taking an impairment and restructuring charge of $950 million.[102] In June 2016, Microsoft announced a project named Microsoft Azure Information Protection. It aims to help enterprises protect their data as it moves between servers and devices.[106] In November 2016, Microsoft joined the Linux Foundation as a Platinum member during Microsoft's Connect(); developer event in New York.[107] The cost of each Platinum membership is US$500,000 per year.[108] Some analysts deemed this unthinkable ten years prior, however, as in 2001 then-CEO Steve Ballmer called Linux "cancer".[109] Microsoft planned to launch a preview of Intune for Education "in the coming weeks", with general availability scheduled for spring 2017, priced at $30 per device, or through volume licensing agreements.[110]
In January 2018, Microsoft patched Windows 10 to account for CPU problems related to Intel's Meltdown security breach. The patched led issues with the Microsoft Azure virtual machines reliant on Intel's CPU architecture. On January 12, Microsoft released PowerShell Core 6.0for the macOS and Linux operating systems.[111] In February 2018, Microsoft killed notification support for their Windows Phone devices which effectively ended firmware updates for the discontinued devices.[111] In March 2018, Microsoft recalled Windows 10 S to change it to a mode for the Windows operating system rather than a separate and unique operating system. In March the company also established guidelines that censor users of Office 365 from using profanity in private documents.[111] In April 2018, Microsoft released the source code for Windows File Manager under the MIT License to celebrate the program's 20th anniversary. In April the company further expressed willingness to embrace open source initiatives by announcing Azure Sphere as its own derivative of the Linux operating system.[111] In May 2018, Microsoft partnered with 17 American intelligence agencies to develop products that track American citizens. The project is dubbed "Azure Government" and has ties to the Joint Enterprise Defense Infrastructure (JEDI) surveillance program.[111] On June 4, 2018, Microsoft officially announced the acquisition of GitHub for $7.5 billion, a deal that closed on October 26, 2018.[112][113] On July 10, 2018, Microsoft revealed the Surface Go platform to the public. Later in the month it converted Microsoft Teams to gratis.[111] In August 2018, Microsoft released two projects called Microsoft AccountGuard and Defending Democracy. It also unveiled Snapdragon 850 compatibility for Windows 10 on the ARM architecture.[114][115][111]
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In August 2018, Toyota Tsusho began a partnership with Microsoft to create fish farming tools using the Microsoft Azure application suite for Internet of things (IoT) technologies related to water management. Developed in part by researchers from Kindai University, the water pump mechanisms use artificial intelligence to count the number of fish on a conveyor belt, analyze the number of fish, and deduce the effectiveness of water flow from the data the fish provide. The specific computer programs used in the process fall under the Azure Machine Learning and the Azure IoT Hub platforms.[116] In September 2018, Microsoft discontinued Skype Classic.[111] On October 10, 2018, Microsoft joined the Open Invention Networkcommunity despite holding more than 60,000 patents.[117] In November 2018, Microsoft agreed to supply 100,000 Microsoft HoloLens headsets to the United States military in order to "increase lethality by enhancing the ability to detect, decide and engage before the enemy."[118] In November 2018, Microsoft introduced Azure Multi-Factor Authentication for Microsoft Azure.[119] In December 2018, Microsoft announced Project Mu, an open source release of the Unified Extensible Firmware Interface (UEFI) core used in Microsoft Surface and Hyper-V products. The project promotes the idea of Firmware as a Service.[120] In the same month, Microsoft announced the open source implementation of Windows Forms and the Windows Presentation Foundation (WPF) which will allow for further movement of the company toward the transparent release of key frameworks used in developing Windows desktop applications and software. December also saw the company discontinue the Microsoft Edge project in favor of Chromium backends for their browsers.[119]
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.[121] In February 2019, hundreds of Microsoft employees protested the company's war profiteering from a $480 million contract to develop virtual reality headsets for the United States Army.[122]
Corporate affairs
Operations
As of 2017, the company is organized into three operating business units, and four operating development or engineering units.
Board of Directors
The company is run by a board of directors made up of mostly company outsiders, as is customary for publicly traded companies. Members of the board of directors as of January 2018 are Bill Gates, Satya Nadella, Reid Hoffman, Lee Johnson, Teri L. List-Stoll, Charles Noski, Helmut Panke, Sandi Peterson, Penny Pritzker, Charles W. Scharf, Arne Sorenson, John W. Stanton, John W. Thompson and Padmasree Warrior.[123] Board members are elected every year at the annual shareholders' meeting using a majority vote system. There are five committees within the board which oversee more specific matters. These committees include the Audit Committee, which handles accounting issues with the company including auditing and reporting; the Compensation Committee, which approves compensation for the CEO and other employees of the company; the Finance Committee, which handles financial matters such as proposing mergers and acquisitions; the Governance and Nominating Committee, which handles various corporate matters including nomination of the board; and the Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws.
.svg){kind=logo}
Microsoft's logo since 2012
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Building 92 on the Microsoft Redmond campusin Redmond, Washington
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| Public | |
| Traded as | |
| ISIN | US5949181045 |
| Industry | |
| Founded | April 4, 1975 in Albuquerque, New Mexico, U.S. |
| Founders | |
| Headquarters | One Microsoft Way,
,
U.S.
|
Area served
| Worldwide |
Key people
| |
| Products | |
| Services | |
| Revenue |  US$110.36 billion[1] (2018) |
| US$35.05 billion[1] (2018) | |
| US$16.57 billion[1] (2018) | |
| Total assets | US$258.84 billion[1] (2018) |
| Total equity | US$82.71 billion[1] (2018) |
Number of employees
| 134,944[2] (2018) |
| Subsidiaries | List of Microsoft assets |
| Website | microsoft.com |
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