Founded in 1975, Microsoft is commemorating its 50th anniversary as a key player in the personal computing evolution, initially driving progress with MS-DOS and subsequently with the Windows operating system. The company shifted the paradigm of business computing in the 1980s, demonstrating that computing could be accessible beyond the confines of specialized personnel in server rooms, notably through the IBM Project Chess and the introduction of the IBM PC with VisiCalc, a groundbreaking spreadsheet application.
Breakthroughs of the 1990s
The 1990s marked a significant transition from MS-DOS’s command-line interface to the graphical user interface (GUI) that Windows offered. This era also saw a pivotal split between IBM and Microsoft, with IBM promoting OS/2 and seeking alternatives in collaboration with Apple and Motorola to develop a rival architecture. Meanwhile, Microsoft concentrated on refining its Windows GUI, achieving notable improvements with the release of Windows 3 in 1990.
By 1995, Microsoft launched Windows 95, its first fully GUI-based operating system, amidst the rising adoption of the World Wide Web. During this time, Microsoft also began developing Windows NT, a server operating system that would support SQL Server, originally a cooperative project with Sybase and Ashton-Tate.
As Linux gained popularity in data centers, Microsoft introduced Exchange in 1996, an email server designed to run on Windows NT Server, further solidifying its presence in the server market.
The Upgrade Dilemma
Microsoft is also prepping its clientele for the integration of artificial intelligence (AI) into desktop computing, necessitating the inclusion of neural processing units (NPUs) for local AI tasks.
Love for Developers
Former CEO Steve Ballmer famously underscored Microsoft’s commitment to developers, recognizing early that fostering a robust developer community was vital. Starting with Microsoft Basic, the first programming language for microcomputers, Microsoft established its influence in software development. The introduction of a software development kit (SDK) for Windows created an ecosystem that encouraged software innovation, leading to the emergence of integrated development environments (IDEs) like Visual Studio, which has become an industry standard.
Relationship with Regulators
Microsoft’s journey has often intersected with regulatory challenges as the company sought to establish industry standards that enabled its technology’s wide adoption. The bundling of software, such as Internet Explorer with Windows, led to legal scrutiny, resulting in a 2000 ruling against the company for anti-competitive behavior. More recently, the EU fined Microsoft for similar practices regarding Teams and its Office 365 suite.
Change of Tack with Open Source
Initially competing with Linux-based systems, Microsoft has shifted its stance towards open source, acquiring GitHub in 2016 for $7.6 billion. The inclusion of a Linux subsystem in Windows allows users to leverage familiar command-line tools within their Windows environment, showcasing the company’s adaptability.
The Cloud and AI
Microsoft’s Azure public cloud has emerged as a formidable competitor against Amazon Web Services, bolstered by its long-standing relationships with enterprise customers. With Azure capturing 21% of the cloud market share, the company is positioned to leverage its existing client base for cross-selling cloud services. The 2023 investment of $10 billion in OpenAI has further propelled Microsoft into the AI forefront, contributing significantly to its cloud service revenue growth.
What Next?
Under Satya Nadella’s leadership since 2014, Microsoft has positioned itself as a leader in AI, yet questions arise about the future development of LinkedIn, acquired for over $26 billion in 2016. Despite generating $2.2 billion in annual revenue, LinkedIn’s integration into Microsoft’s suite of enterprise software remains ambiguous, posing challenges for future growth strategies.