Microsoft At 50: The 7 Biggest Game-changers Through Five Decades

It hasn't ever been soft sailing for Microsoft, but location are clear moments successful nan company's history that proved to beryllium important turning points connected nan roadworthy to success.

When Microsoft was founded 50 years ago this month, it wasn’t clear nan institution would past 50 weeks, overmuch little 50 years. Since then, it’s grown from a three-person institution pinch hardly immoderate gross to 1 worthy approximately $1 trillion, depending connected nan day’s banal price, with 228,000 labor successful 190 countries.

These 7 game-changers paved nan measurement for nan company’s success. (In my adjacent column, I’ll look astatine Microsoft biggest bombs complete nan years.)

In nan earliest days of nan PC gyration during nan early-to-mid 1970s, 1960s-style idealism reigned. Many of nan earliest techies believed exertion could usher successful a much equitable world, and arsenic a exemplary for that, they shared knowledge and activity pinch each different freely. Nowhere was this much existent than successful nan influential Homebrew Computer Club, successful which group traded tips and proposal connected really to usage nan earliest PC, nan Altair 8800 (which had to beryllium assembled by hand).

Microsoft’s first merchandise was a type of nan BASIC programming connection for nan machine. Much to Gates’ chagrin, though, group weren’t paying for it. Instead, they shared copies of it pinch each different for free.

So successful February 1976 he wrote an unfastened missive to nan Homebrew Computer Club titled “An Open Letter to Hobbyists.” It was a declaration of warfare connected those he saw arsenic thieves, and laid nan operating principles that would later turn his institution (then called Micro-Soft) into a behemoth.  Gates wrote, successful part:

“The magnitude of royalties we person received from income to hobbyists makes nan clip spent connected Altair BASIC worthy little than $2 an hour.

“As nan mostly of hobbyists must beryllium aware, astir of you bargain your software…. Who cares if nan group who activity connected it get paid?

“Who tin spend to do master activity for nothing? What hobbyist tin put 3 man- years into programming, uncovering each bugs, documenting his merchandise and administer for free?…Most directly, nan point you do is theft.”

So overmuch for nan share-and-share-alike ethos of nan 1960s. The missive worked. After it, Microsoft had a coagulated rate flow.

Microsoft hits large pinch MS-DOS

For its first fewer years, Microsoft continued to constitute and waste programming languages for individual computers. It was a profitable niche. But that’s each it was…a niche, and a mini 1 astatine that. Gates had bigger things successful mind.

The company’s first large breakthrough came successful 1981 erstwhile he convinced IBM to pay Microsoft $430,000 to create an operating strategy and supply different services for its still-secret, yet-to-be released caller PC. IBM thought it was getting a awesome woody — it had expected to salary moreover more. But Gates outsmarted Big Blue. He negotiated position that allowed Microsoft to waste nan aforesaid operating strategy to different individual machine makers. (Microsoft called IBM’s operating strategy DOS and its ain compatible operating strategy MS-DOS.) 

So-called “clones” of nan IBM PC flooded nan market, and Microsoft sewage a royalty for each 1 of them sold because they each needed an operating strategy compatible pinch IBM’s PC. The institution soon was rolling successful money.

Microsoft didn’t person to walk overmuch clip aliases money processing DOS and MS-DOS. It paid $50,000 to a institution for an existing operating strategy called QDOS (short for “quick-and-dirty operating system”) and tweaked it to tally connected IBM’s PC and clones.

Windows 3.0 and 3.1 norm nan world

To tally MS-DOS and DOS you had to usage a bid line, which was nary one’s thought of a bully clip and not peculiarly easy to do. While IBM PCs and clones were stuck successful nan aged world, Apple was creating a caller 1 pinch its graphically based operating strategy for nan Lisa machine successful 1983, and past nan groundbreaking Macintosh operating strategy successful 1984. It became clear graphical OSes were nan future, and Microsoft yet released its first type of one, Windows, successful 1985. But it didn’t tally arsenic an operating system; instead, it ran arsenic an exertion wrong DOS. The aforesaid was existent for Windows 2.0. 

Neither type of Windows went anyplace fast.

Then, successful 1990 Microsoft released Windows 3.0 and 2 years later, nan improved type called Windows 3.1. The operating systems were acold easier to usage than MS-DOS. But they were besides inelegant and awkward, kludgy, collapsed acold excessively often and astatine times were head-scratchingly confusing to use. But they were bully capable to switch MS-DOS arsenic nan modular for PCs, and they cemented Microsoft’s worldwide monopoly complete operating systems. 

They mightiness not person been pretty, easy-to-use aliases reliable, but they accomplished their superior purpose: printing rate by nan billions for Microsoft.

Microsoft intends for its adjacent target, businesses

By nan precocious 1980s, it was clear nan PC gyration that had begun successful nan 1970s for hobbyists had gone big-time successful nan business world. Microsoft went aft nan marketplace pinch a vengeance, launching Office successful 1990. It included not conscionable a package suite (Word, Excel and PowerPoint), but server package arsenic well. Gates swept distant nan title pinch shark-like tactics, immoderate of which were recovered to break antitrust laws.  

Microsoft followed suit pinch countless different business services and software, including SQL Server, Power BI, Dynamics 365, Power Platform and galore more. Microsoft soon owned nan endeavor market.

Satya Nadella replaces Steve Ballmer arsenic CEO

In 2000, Steve Ballmer replaced Gates arsenic CEO. Under his hard-charging, sometimes clownish activity that focused obsessively connected Windows to nan detriment of different products and technologies, Microsoft slow drifted into irrelevance. It missed retired connected nan mobile gyration and became an also-ran successful nan net and societal media. Ballmer tried to lick astir problems pinch the bluster and business tactics that did good successful nan 1970s done 2000, but grounded miserably successful nan 21st century.

Bill Gates and Steve Ballmer during a gathering successful nan ’90s.

Microsoft

He lasted until 2014, erstwhile Satya Nadella took over. Many people’s first guidance to nan prime was “Who?” Nadella didn’t brag and outcry for illustration Ballmer aliases swagger and edifice to forbidden strategies for illustration Gates. Instead, with a calm demeanor, he dragged nan institution into nan caller century, sidesplitting flailing multi-billion-dollar projects for illustration Windows Mobile, turning nan institution into a soft operation rather than a bid of warring fiefdoms, and pouring billions into caller technologies that would yet make Microsoft a tech leader again.

Nadella turns to nan cloud 

Microsoft launched Azure, its unreality platform, nether Ballmer successful 2010. But it took Nadella to spot its importance. He refocused nan institution distant from Windows and towards nan cloud. By 2024, its Intelligent Cloud section tallied $100 cardinal successful sales. But that vastly understates really overmuch cloud-related gross nan institution brings in, because package and services for illustration Office (now called Microsoft 365) person go unreality services arsenic well.

Satya Nadella addresses nan Microsoft Build arena successful Seattle connected May 21, 2024.

Dan DeLong / Microsoft

In essence, Microsoft became a unreality company.

Microsoft bets large connected AI

Six years ago, Microsoft made what was astatine nan time something of an under-the-radar investment: $1 cardinal into nan startup OpenAI. Few group took notice. Three years later, successful November 2022, OpenAI’s ChatGPT took nan world by storm — acknowledgment successful portion to $12 cardinal much successful Microsoft investments. A twelvemonth aft that, Microsoft released its ain type of ChatGPT, called Copilot, for enterprises.