History of Microsoft
With Windows and Office, Microsoft became a pioneer in the computer and internet age. Today, the company founded by Bill Gates and Paul Allen is one of the world’s largest and a pioneer in cloud solutions and artificial intelligence. This is a portrait of a company that is using artificial intelligence to reinvent itself.
The history of Microsoft
It was founded by two programming enthusiasts, Bill Gates and Paul Allen, who developed a simple software program for the first personal computers that were being sold at the time. At the time, no one could have imagined that this company would become a multinational corporation and one of the world’s largest companies.
The birth of Microsoft
It all started in 1975. On April 4, Bill Gates and Paul Allen founded Micro-Soft in their hometown of Albuquerque, New Mexico. The word “Soft” in the company name was not dropped until later in the company’s development.
The first product developed by the two founders was Altair BASIC 2.0. This was a programming language for the Altair 8800, one of the first home computers. It allowed users to write simple calculation programs on the computer, and the two founders successfully signed a distribution contract with the computer company MITS (Micro Instrumentation and Telemetry Systems), also based in Albuquerque.
Within the first month, Gates and Allen had earned $1,516, which they divided equally between them. The contract with MITS stipulated that Microsoft had to provide telephone support at a minimum cost of $2,500 and hire a second employee at a minimum cost of $5,000. Thereafter, the two founders gave up their studies and devoted themselves fully to the company.
1980: Cooperation with IBM
After their first success with Microsoft BASIC (which was also licensed by companies such as Apple Computer and Commodore), the founders realised that with the growing popularity of home computers, the market for user programs would have to be much larger than that for programming languages, and they began to focus on this.
This attracted the attention of computer giant IBM to the small company in New Mexico. When IBM decided to enter the home computer market in 1980 and needed an operating system, it turned to Microsoft.
Bill Gates was initially hesitant, but he and Paul Allen eventually signed a contract worth $186,000 for an operating system for IBM personal computers. This deal laid the foundation for Microsoft’s rise.
Two days after the agreement with IBM, Bill Gates acquired the 86-DOS operating system and its programmers from Seattle Computer Products, and Microsoft began developing the MS-DOS operating system for IBM based on this system. In the autumn of 1981, the IBM PC was launched with the MS-DOS operating system and was an enormous success, thanks in particular to IBM’s open licensing policy, which allowed other manufacturers to produce PCs.
Windows and the stock market
After Paul Allen left Microsoft for health reasons, the company accelerated its work on a new graphical user interface that would greatly simplify the use of computers. Apple had already demonstrated the possibilities in 1983. However, it took two years to develop and prepare the solution for the market.
On November 20, 1985, Microsoft finally released its new operating system Windows 1.0, which featured a graphical user interface for the first time. This was a milestone in the history of computing, as it meant that people no longer needed to be computer experts to use a computer or peripheral devices such as printers.
With Windows, Bill Gates’ vision of “a computer on every desk and in every home” from 1975 also began to become a reality. Although it took around 20 years and several versions of Windows to make this vision a reality, it laid the foundations for the computer age.
In March 1986, Microsoft went public on the stock exchange. The issue price was 21 US dollars per share, which rose to 28 US dollars on the same day, generating 61 million US dollars for the company and Bill Gates, who was only 30 years old at the time.
It is calculated that the price of a Microsoft share at the time of the initial public offering was 7.2 cents, and there have been nine stock splits since then. In the following years, the stock market’s phenomenal growth made Bill Gates the richest man in the world for a time. Many of the early employees also became millionaires. At the time, Microsoft gave employees Christmas gifts of stock worth a few hundred dollars, which became worth millions of dollars a few years later.
The evolution of Windows
Windows 1.0 was followed by version 2.0 in 1988, Windows 3.0 at the end of 1990 and beginning of 1991 and, finally, Windows 3.1 in 1992 and 1993 and Windows 3.11 at the beginning of 1994. A version that would remain the standard operating system for many computers until after the turn of the millennium.
However, Microsoft’s operating system reached the next level with Windows 95, launched in 1995. The MS-DOS system was only used for secondary processes. Computer boxes became multimedia machines suitable for the living room, which with Microsoft Internet Explorer and the integrated email function also made the Internet accessible to a wide range of users.
Windows 95 and Internet Explorer were so successful that Microsoft was able to dominate the Internet market for a time, which caused the competition regulators to take action and force Microsoft to separate the web browser from the operating system once again.
The evolution of the world’s most widespread and used computer operating system continued to advance step by step. Windows 98 and ME followed.
In parallel to the operating systems designed for consumer devices, Microsoft had already introduced Windows NT in 1993, designed for more professional work environments, which from the turn of the millennium became the standard operating system for all desktop and laptop computers with Windows 2000 and, above all, with its successor Windows XP from 2001 onwards.
Windows XP also became a huge success for Microsoft and one of the best-selling products in the company’s history. Computer manufacturers began to pre-install the operating system on devices on a large scale and, with computers connecting to the Internet becoming almost standard, Microsoft began to fight cyber-attacks, hackers and computer viruses with regular security updates and features.
After only 6 years, Windows XP was slowly replaced by Windows Vista from 2007 onwards. Vista was again a big step forward in terms of usability, but it had to contend with the problem that the lighter Windows XP demanded less performance from computers and, therefore, many users preferred to stick with the familiar previous version.
From 2009, Microsoft began to number its operating systems, starting with Windows 7. The current version, Windows 11, was launched in 2021. At the time of its launch, it was estimated that Windows was installed as the operating system on some 1.3 billion devices worldwide.
The move from Microsoft Office to Office 365 is complete in Microsoft 365
On August 1, 1989, coinciding with the launch of Windows 3.0, Microsoft released its next flagship product, one that would leave a lasting mark on the company’s rise to become a global computing giant: Microsoft Office. With it, the programs Word, Excel and PowerPoint, which until then had been sold separately, were brought together in a single package.
From then on, Microsoft Office became a standard product for all office environments throughout the world, but especially in Europe and the United States, and is used for professional and semi-professional tasks such as word processing, spreadsheets, creating presentations or communicating by email and scheduling appointments. More than a billion people use Microsoft products on an almost daily basis, whether at work, in education or in the private sphere.
With Office 365, the Office suite has become a cloud offering which, in combination with Microsoft Teams, also offers a collaboration solution for networking and collaboration in hybrid teams.
At the beginning of 2023, the name “Office” was abandoned after more than 33 years and the Office 365 offering was renamed Microsoft 365 or, for short, M 365.
The core of the new Microsoft 365 solution is the application Microsoft 365, which brings all programs (applications) and content together in one place. It combines the familiar features of the Office application with a fresh design and other intelligent features that encourage creativity and teamwork and make it possible without limits.
Xbox Gaming
In 2001/2002, Microsoft, encouraged by the success of companies such as Sony, Sega and Nintendo, also entered the video game sector and launched its own game console, the Xbox. The current version of the console is the Xbox Series X or Xbox Series S, of which some 12 million units had been sold as of January 2022.
Bill Gates, Steve Ballmer and Satya Nadella: the CEOs of Microsoft
Three men have so far left their mark on the history of Microsoft as CEOs. Each of them was a prominent decision-maker at a particular stage in the company’s development.
The Bill Gates era (1975-1999)
For 25 years, the company’s founder, Bill Gates, determined the history and development of the company. From the first program, which he programmed himself and sold on paper tape in 1975, until the turn of the millennium.
Gates was a computer geek from the start. He was already writing computer programs as a student, and at the age of 14 he founded his first company with his school friend Paul Allen and developed a program to measure traffic flows.
In 1973, the computer and maths genius went to study at Harvard, but he spent more time in the computer room than anywhere else and soon after he founded Microsoft together with Paul Allen.
In July 2008, Gates resigned from this position as well, and he stepped back from day-to-day operations to join the Supervisory Board.
Gates continued as chairman of the board of the company until 2014, but since 2014 he has only acted as a technical advisor to Microsoft and has effectively ceased to be involved in the company’s operations.
The Steve Ballmer era (2000-2014)
Steve Ballmer befriended Bill Gates at Harvard, and in 1980 the company founder brought his classmate to Microsoft. In June 1980, Ballmer became Microsoft’s first CEO and went on to lead several divisions, including Windows development.
Ballmer became Microsoft’s chairman of the board in 1998, and on January 13, 2000, he succeeded Bill Gates as CEO.
The Ballmer era saw not only several generations of Windows updates, but also the introduction of tablets and Microsoft’s mobile offensive with Windows Mobile, which culminated in the acquisition of the ailing Finnish mobile phone manufacturer Nokia in 2013. However, Ballmer’s vision of achieving smartphone success on a par with Apple has not materialized.
The acquisition of Nokia’s mobile division also marked the end of the Ballmer era. In August 2013, Ballmer announced that he would step down as CEO of Microsoft within a year, and was replaced by Satya Nadella on February 4, 2014. Ballmer then became a member of Microsoft’s Supervisory Board, but left in August 2014, thus ending his career at Microsoft.
The Satya Nadella era (from 2014 until today)
With Satya Nadella at the helm of Microsoft, a whole new era began for the company. Previously responsible for Microsoft’s cloud services, Nadella revolutionized the company and its product offering, constantly focusing on developing cloud services and artificial intelligence solutions across all business areas.
Under Nadella’s leadership, the company quickly abandoned its mobile ambitions. First, the company shut down its own manufacturing facilities, then it fired Stephen Elop, the head of Microsoft’s mobile division, in July 2015, and finally, after its market share had shrunk considerably, it began to withdraw from the mobile market. In 2017, Microsoft stopped further development of its own smartphone operating system, Windows Phone, and has not carried out any security work since 2020. There have been no security updates since the beginning of the year. Microsoft recommends users to switch to Android or iOS devices.
Focus on cloud and AI solutions: oneDrive, Open AI and Microsoft Copilot
Under Nadella’s leadership, Microsoft has been more successful in developing new cloud and AI services than in its mobile division. During Nadella’s tenure, Microsoft Office was developed as a cloud solution , Office 365, which then became Microsoft 365 .
Microsoft has invested heavily in artificial intelligence. Through the Microsoft Artificial Intelligence Platform and Azure Artificial Intelligence, the company offers a framework for developing new AI solutions in areas such as artificial intelligence in conversations, machine learning, data science, robotics and IoT.
In 2019, Microsoft invested $1 billion in Open AI, an AI development company that develops AI applications such as text generator ChatGPTo and image generator Dall-E.
In January 2013, Microsoft confirmed its partnership with Open AI and invested $10 billion. The goal is to use AI technology in all future products, and Azure Business Solutions has already taken this step: Copilot is an AI integration in Microsoft 365 solutions such as Word, Excel, PowerPoint, Outlook or Teams, which can take on and perform tasks on its own. Microsoft sees this as the future of work: a world where AI can do in minutes what would take a human several hours to do.
In word processing programs, the co-pilot creates sketches, in Excel it automatically analyzes and displays trends, and in PowerPoint it creates presentations with a simple command (prompt).
Commenting on Microsoft’s AI strategy, Microsoft CEO Satya Nadella said: “Our partnership with OpenAI is part of our shared commitment to responsibly advancing cutting-edge AI research and making AI accessible as a new technology platform. In the next phase of the partnership, developers and enterprises across all industries will be able to use Azure to develop and run their applications and gain access to the best AI infrastructure, models and toolchains.”
Microsoft Redmond Campus and Headquarters
It is a huge corporate campus covering an area roughly equivalent to 100 football pitches and boasting more than 100 office buildings. It is basically a Microsoft city, a self-contained city with around 45,000 employees. The campus has a corresponding commuter service. The campus also has direct access to the motorway. There are more than ten restaurants, its own shopping centre, football and basketball courts, a tree house and a small lake with recreational areas.
A major modernisation programme was launched in 2019 to enhance the campus’s attractiveness. The oldest buildings on the campus, built in the 1980s, have been demolished. As part of the ongoing construction work, the east and west sides of the campus, separated by the motorway, have been connected by a footbridge.
New squares and car-free zones are being created on the campus. New office buildings are being developed that will become collaborative spaces, and the entire campus is being expanded into a cloud campus with flexible workplaces.
Microsoft Austria
Microsoft Austria was founded in 1991. The company is not only a sales organisation for Microsoft products. Over the past 30 years, Microsoft Austria has become a solution partner for the domestic economy and education and has made an invaluable contribution to the country’s digitalisation with its products, solutions, services and partner companies.
The company employs more than 1,000 people at three locations in Austria, including healthcare provider Nuance and the planned acquisition of Activision. More than 4,000 local partner companies create solutions for their customers based on the Microsoft cloud platform. Around 1.2 million students and teachers have free access to Office solutions from M356, and every year Microsoft Austria also supports around 250 domestic start-ups and provides software solutions worth around 11 million euros free of charge to NGOs and non-profit organisations.
Microsoft’s headquarters in Wienerberg has been demonstrating how to work in a hybrid way without a fixed workplace for over ten years, and in November 2022 it opened the ‘Hive Vienna’, a hybrid meeting room of the future.
In January 2022, the ‘Make Today Possible 2’ digital initiative was launched under the patronage of Microsoft Austria. Since then, more than 150 companies and organisations have joined the future-oriented Austrian digital initiative. The initiative focuses on sustainable growth, digital skills and more equal opportunities.
Microsoft and sustainability
Sustainability and social responsibility have always been important issues for Microsoft. The company supports and promotes many relevant initiatives internationally.
However, in January 2020, CEO Satya Nadella set a particularly ambitious goal for the company: by 2030, the IT group will achieve negative carbon emissions, i.e. sequester or offset more carbon dioxide from the atmosphere than it emits.
In the second phase, by reducing its own carbon emissions and supporting climate protection projects, the company will remove more carbon dioxide from the atmosphere by 2050 than it has directly and indirectly caused through its electricity consumption since it was founded in 1975.
“The beginning of a new decade is a good time to say goodbye to old models and set bold goals,” Nadella explained. “No one can solve the world’s climate problems alone, but as a global company, we have a special responsibility to do our part.”
Among Microsoft’s many initiatives is the AI for Earth program, which aims to drive innovation in the field of environmental technologies. This Microsoft funding program supports companies that use artificial intelligence and cloud computing to solve ecological problems.
Microsoft Cloud for Healthcare also aims to innovate and optimize patient care in the healthcare sector. Here too, AI solutions from Microsoft and Nuance will be used.
Microsoft’s AI solutions are also being trained for future use in self-driving vehicles. A similar collaboration exists with Volkswagen, for example.