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Gates founder Microsoft |
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Microsoft
Corporation, is a multinational
computer technology corporation
with global annual revenue of US$44.28
billion and 71,553 employees in
102 countries as of July 2006. It
develops, manufactures, licenses,
and supports a wide range of software
products for computing devices.
Headquartered in Redmond, Washington,
USA, its best selling products are
the Microsoft Windows operating
system and the Microsoft Office
suite of productivity software,
each of which has achieved near-ubiquity
in the desktop computer market.
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Microsoft possesses footholds in other
markets, with assets such as the MSNBC
cable television network, the MSN Internet
portal, and the Microsoft Encarta multimedia
encyclopedia. The company also markets
both computer hardware products such as
the Microsoft mouse as well as home entertainment
products such as the Xbox, Xbox 360 and
MSN TV.
Microsoft's
name, originally bi-capitalized as MicroSoft
or with hyphenation as Micro-Soft, is
a portmanteau of "microcomputer software"
and is often abbreviated as MS. The company
was founded in Albuquerque, New Mexico
on April 4, 1975 by Bill Gates and Paul
Allen to develop and sell BASIC interpreters
for the Altair 8800. After the market
saw a flood of IBM PC clones in the mid-1980s,
Microsoft used its new position, which
it gained in part due to a contract from
IBM, to dominate the home computer operating
system market with MS-DOS, which stood
for Microsoft Disk Operating System. The
company later released an initial public
offering (IPO) in the stock market, which
netted several of its employees millions
of dollars due to the ensuing rise of
the stock price.The price of the stock
continued its rise steadily into the early
2000s. In Microsoft Windows, originally
an add-on for MS-DOS, the company was
selling what would become the most widely
used operating system in the world; Microsoft
continued to push into multiple markets,
such as computer hardware and television.In
addition, Microsoft has historically given
customer support over Usenet newsgroups
and the World Wide Web, and awards Microsoft
MVP status to volunteers who are deemed
helpful in assisting the company's customers.
With
what is generally described as a developer-centric
business culture, Microsoft has become
widely known for some of its internal
codes of conduct for its employees.One
example is the principle "eat your
own dog food", which describes the
practice of using pre-release products
inside the company to test them in an
environment geared towards the real world.Microsoft
has been convicted of monopolistic business
practices — the U.S. Justice Department,
among others, has sued Microsoft for antitrust
violations and software bundling. The
slogan "embrace, extend, and extinguish"
is often used to describe Microsoft's
strategy for entering product categories
involving widely-used standards, extending
those standards with proprietary capabilities,
and then using those differences to disadvantage
its competitors.In addition, Microsoft
has been criticized for the insecurity
of its software. However, Microsoft has
won several awards, such as the "1993
Most Innovative Company Operating in the
U.S." by Fortune magazine, as well
as maintaining a place on the Fortune
500 list of companies as of 2006.
After
reading the January 1, 1975 issue of Popular
Electronics that demonstrated the Altair
8800, Bill Gates called the creators of
the new microcomputer, MITS (Micro Instrumentation
and Telemetry Systems), offering to demonstrate
an implementation of the BASIC programming
language for the system. Gates had neither
an interpreter nor an Altair system, yet
in the eight weeks before the demo he
and Allen developed the interpreter. The
interpreter worked at the demo and MITS
agreed to distribute Altair BASIC. Gates
left Harvard University, moved to Albuquerque,
New Mexico where MITS was located, and
founded Microsoft there. The name Microsoft,
without the hyphen, was first used in
a letter from Gates to Allen on November
29, 1975,and on November 26, 1976 the
name became a registered trademark.The
company's first international office was
founded on November 1, 1978, in Japan,
entitled "ASCII Microsoft" (now
called "Microsoft Japan"). On
January 1, 1979, the company moved from
Albuquerque to a new home in Bellevue,
Washington. Steve Ballmer joined the company
on June 11, 1980, and would later succeed
Bill Gates as CEO. 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, Inc."). As part
of the restructuring, Bill Gates became
president of the company and Chairman
of the Board, and Paul Allen became Executive
Vice President.
The
first operating system the company publicly
released was a variant of Unix in 1980.
Acquired from AT&T through a distribution
license, Microsoft dubbed it Xenix, and
hired Santa Cruz Operation in order to
port/adapt the operating system to several
platforms. This Unix variant would become
home to the first version of Microsoft's
word processor, Microsoft Word. Originally
titled "Multi-Tool Word", Microsoft
Word became notable for its concept of
"What You See Is What You Get",
or WYSIWYG. Word was also the first application
with such features as the ability to display
bold text. It 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 the first program to be distributed
on-disk with a magazine. However, Xenix
was never sold to end users directly although
it was licensed to many software OEMs
for resale. By the mid-1980s Microsoft
had gotten out of the Unix business entirely.
DOS
(Disk Operating System) was the operating
system that brought the company its real
success. On August 12, 1981, after negotiations
with Digital Research failed, IBM awarded
a contract to Microsoft to provide a version
of the CP/M operating system, which was
set to be used in the upcoming IBM Personal
Computer (PC). For this deal, Microsoft
purchased a CP/M clone called QDOS (Quick
and Dirty Operating System) from Tim Paterson
of Seattle Computer Products for less
than US$50,000, which IBM renamed to PC-DOS.
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.Around
1983, in collaboration with numerous companies,
Microsoft created a home computer system,
MSX, which contained its own version of
the DOS operating system, entitled MSX-DOS;
this became relatively popular in Japan,
Europe and South America. 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. The deal with IBM allowed
Microsoft to have control of its own QDOS
derivative, MS-DOS, and through aggressive
marketing of the operating system to manufacturers
of IBM-PC clones Microsoft rose from a
small player to one of the major software
vendors in the home computer industry.
With the release of the Microsoft Mouse
on May 2, 1983, Microsoft continued to
expand its product line in other markets.
This expansion included Microsoft Press,
a book publishing division, on July 11
the same year, which debuted with two
titles: "Exploring the IBM PCjr Home
Computer" by Peter Norton, and "The
Apple Macintosh Book" by Cary Lu.
The
Republic of Ireland became home to Microsoft's
first international production facility
in 1985, and on November 20 Microsoft
released its first retail version of Microsoft
Windows, originally a graphical extension
for its MS-DOS operating system. In August,
Microsoft and IBM partnered in the development
of a different operating system called
OS/2. OS/2 was marketed in connection
with a new hardware design proprietary
to IBM, the PS/2. On February 16, 1986,
Microsoft relocated to Redmond, Washington.
Around one month later, on March 13, the
company went public with an IPO, raising
US$61 million at US$21.00 per share. By
the end of the trading day, the price
had risen to US$28.00. In 1987, Microsoft
eventually released their first version
of OS/2 to OEMs.
Meanwhile,
Microsoft began introducing its most prominent
office products. 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. Microsoft Works would later be
sold with other Microsoft products including
Microsoft Word and Microsoft Bookshelf,
a reference collection introduced in 1987
that was the company's first CD-ROM product.Later,
on August 8, 1989, Microsoft would introduce
its most successful office product, Microsoft
Office. Unlike the model of Microsoft
Works, Microsoft Office was a bundle of
separate office productivity applications,
such as Microsoft Word, Microsoft Excel
and so forth. While Microsoft Word and
Microsoft Office were mostly developed
internally, Microsoft also continued its
trend of rebranding products from other
companies, such as SQL Server on January
13, 1988, a relational database management
system for companies that was based on
technology licensed from Sybase.
On
May 22, 1990 Microsoft launched Windows
3.0. The new version of Microsoft's operating
system boasted such new features as streamlined
user interface graphics and improved protected
mode capability for the Intel 386 processor;
it sold over 100,000 copies in two weeks.
Windows at the time generated more revenue
for Microsoft than OS/2, and the company
decided to move more resources from OS/2
to Windows.In an internal memo to Microsoft
employees on May 16, 1991, Bill Gates
announced that the OS/2 partnership was
over, and that Microsoft would henceforth
focus its platform efforts on Windows
and the Windows NT kernel. Some people,
especially developers who had ignored
Windows and committed most of their resources
to OS/2, were taken by surprise, and accused
Microsoft of deception. This changeover
from OS/2 was frequently referred to in
the industry as "the head-fake".In
the ensuing years, the popularity of OS/2
declined, and Windows quickly became the
favored PC platform. 1991 also marked
the founding of Microsoft Research, an
organization in Microsoft for researching
computer science subjects, and Microsoft
Visual Basic, a popular development product
for companies and individuals.
During the transition from MS-DOS to Windows,
the success of Microsoft's product Microsoft
Office allowed the company to gain ground
on application-software competitors, such
as WordPerfect and Lotus 1-2-3.Novell,
an owner of WordPerfect for a time, alleged
that Microsoft used its inside knowledge
of the DOS and Windows kernels and of
undocumented Application Programming Interface
features to make Office perform better
than its competitors. Eventually, Microsoft
Office became the dominant business suite,
with a market share far exceeding that
of its competitors. 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 capabilities
such as peer-to-peer file and printing
sharing. In November, Microsoft released
the first version of their popular database
software Microsoft Access.
By
1993, Windows had become the most widely
used GUI operating system in the world.
Fortune Magazine named Microsoft as the
"1993 Most Innovative Company Operating
in the U.S."The year also marked
the end of a five-year copyright infringement
legal case brought by Apple Computer,
dubbed Apple Computer, Inc. v. Microsoft
Corp., in which the ruling was in Microsoft's
favor, the release of Windows for Workgroups
3.11, a new version of the consumer line
of Windows, and Windows NT 3.1, a server-based
operating system with a similar user interface
to consumer versions of the operating
system, but with an entirely different
kernel.As part of its strategy to broaden
its business, Microsoft released Microsoft
Encarta on March 22, the first encyclopedia
designed to run on a computer.Microsoft
changed its slogan to "Where do you
want to go today?" in 1994 as part
of an attempt to appeal to nontechnical
audiences in a US$100 million advertising
campaign.
Microsoft
continued to make strategic decisions
directed at consumers. The company released
Microsoft Bob, a graphical user interface
designed for novice computer users, in
March 1995. Discontinued in 1996 due to
poor sales, Bill Gates later attributed
its failure to hardware requirements that
were too high for typical computers; Microsoft
Bob is widely regarded as Microsoft's
most unsuccessful product. DreamWorks
SKG and Microsoft formed a new company,
DreamWorks Interactive (in 2000 acquired
by Electronic Arts which named it EA Los
Angeles), to produce interactive and multimedia
entertainment properties.In August 24,
Microsoft released Microsoft 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
of Microsoft Windows 95 were sold in the
first four days after its release.
Windows
95 was released without a browser as
Microsoft had not yet developed one.
The success of the Internet caught them
by surprise and they subsequently approached
Spyglass to license their browser as
Internet Explorer. Spyglass went on
to later dispute the terms of the agreement,
as Microsoft was to pay a royalty for
every copy sold. However, Microsoft
sold no copies of Internet Explorer,
choosing instead to bundle it for free
with the operating system.
Internet
Explorer was first included in the Windows
95 Plus! Pack that was released in August
1995.In September, the Chinese government
chose Windows to be the operating system
of choice in that country, and entered
into an agreement with the Company to
standardize a Chinese version of the
operating system.[14] Microsoft also
released the Microsoft Sidewinder 3D
Pro joystick in an attempt to further
expand its profile in the computer hardware
market.
In
the mid-90s, Microsoft began to expand
its product line into computer networking
and the World Wide Web. On August 24,
1995, it launched a major online service,
MSN (Microsoft Network), as a direct competitor
to AOL. MSN became an umbrella service
for Microsoft's online services, using
Microsoft Passport (now called Windows
Live ID) as a universal login system for
all of its web sites. The company continued
to branch out into new markets in 1996,
starting with a joint venture with NBC
to create a new 24/7 cable news station,
MSNBC. The station was launched on July
15 to compete with similar news outlets
such as CNN. Microsoft also launched Slate,
an online magazine edited by Michael Kinsley,
which offered political and social commentary
along with the cartoon Doonesbury. In
an attempt to extend its reach in the
consumer market, the Company acquired
WebTV, which enabled consumers to access
the Web from their televisions. Microsoft
entered the palm computing market in November
with Windows CE 1.0, a new built-from-scratch
version of their flagship operating system,
specifically designed to run on low-memory,
low-performance machines, such as handhelds
and other palm-sized computers.] 1996
saw the release of Windows NT 4.0, which
brought the Windows 95 GUI and Windows
NT kernel together.
While
Microsoft largely failed to participate
in the rise of the Internet in the early
1990s, some of the key technologies in
which the company had invested to enter
the Internet market started to pay off
by the mid-90s. One of the most prominent
of these was ActiveX, an application programming
interface built on the Microsoft Component
Object Model (COM); this enabled Microsoft
and others to embed controls in many programming
languages, including the company's own
scripting languages, such as JScript and
VBScript. ActiveX included frameworks
for documents and server solutions.[14]
The company also released the Microsoft
SQL Server 6.5, which had built-in support
for internet applications. Later in 1997,
Microsoft Office 97 as well as Internet
Explorer 4.0 were released, marking the
beginning of the takeover of the browser
market from rival Netscape, and by agreement
with Apple Computer, Internet Explorer
was bundled with the Apple Macintosh operating
system as well as with Windows. Windows
CE 2.0, the handheld version of Windows,
was released this year, including a host
of bug fixes and new features designed
to make it more appealing to corporate
customers. In October, the Justice Department
filed a motion in the Federal District
Court in which they stated that Microsoft
had violated an agreement signed in 1994,
and asked the court to stop the bundling
of Internet Explorer with Windows.
The
year 1998 was significant in Microsoft's
history, with Bill Gates appointing
Steve Ballmer president of Microsoft
but remaining as Chair and CEO himself.The
company released an update to the consumer
version of Windows, Windows 98.Windows
98 came with Internet Explorer 4.0 SP1
(which had Windows Desktop Update bundled),
and included new features from Windows
95 OSR 2.x including the FAT32 file
system, and new features specifically
for Windows 98, such as support for
multiple displays.Microsoft launched
its Indian headquarters as well, which
would eventually become the company's
second largest after its U.S. headquarters.
Finally, a great deal of controversy
took place when a set of internal memos
from the company were leaked on the
Internet. These documents, colloquially
referred to as "The Halloween Documents",
were widely reported by the media and
go into detail of the threats that free
software / open source software poses
to Microsoft's own software, previously
voiced mainly by analysts and advocates
of open source software. The documents
also allude to legal and other actions
against Linux as well as other open
source software.While Microsoft acknowledges
the documents, it claims that they are
merely engineering studies. Despite
this, however, some believe that these
studies were used in the real strategies
of the company.
Microsoft
in 2000 released new products for all
three lines of the company's flagship
operating system, and saw the beginning
of the end of one its most prominent
legal cases. On February 17, 2000 Microsoft
released an update to its business line
of software in Windows 2000, which some
considered to be a significant improvement
over previous versions. It provided
an OS stability similar to that of its
Unix counterparts due to its usage of
the Windows NT kernel, and provided
matching features for several of those
found in the home line of the operating
system including a DOS emulator that
could run many legacy DOS applications.On
April 3, 2000, a judgment was handed
down in the case of United States v.
Microsoft,calling the company an "abusive
monopoly" and forcing the company
to split into two separate units. Part
of this ruling was later overturned
by a federal appeals court, and eventually
settled with the U.S. Department of
Justice in 2001. On June 15, 2000 the
company also released a new version
of its hand-held operating system, Windows
CE 3.0.The main change was the new programming
APIs of the software. Previous versions
of Windows CE supported only a small
subset of the WinAPI, the main development
library for Windows, and with Version
3 of Windows CE, the operating system
now supported nearly all of the core
functionality of the WinAPI. The update
to the consumer line, Windows Me (or
Windows Millennium Edition), was released
on September 14, 2000.It sported several
new features such as enhanced multimedia
capabilities and consumer-oriented PC
maintenance options,but is often regarded
as one of the worst versions of Windows
due to installation problems and other
issues.
Microsoft
released Windows XP in 2001, a version
that aimed to encompass the features of
both its business and home product lines.
The release included an updated version
of the Windows 2000 kernel, enhanced DOS
emulation capabilities, and many of the
home-user features found in previous consumer
versions. XP introduced a new graphical
user interface, the first such change
since Windows 95.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. Later,
Microsoft would enter the multi-billion-dollar
game console market dominated by Sony
and Nintendo, with the release of the
Xbox. As of 2005, the console ranked distant
second to Sony's PlayStation 2 and slightly
ahead of Nintendo's GameCube in market
share in the United States. The console
sold 24 million units,compared with PlayStation
2 at greater than 100 million units, and
the company took a US$4 billion loss on
the console.
In
2002, Microsoft launched the .NET initiative,
along with new versions of some of its
development products, such as Microsoft
Visual Studio.The initiative has been
an entirely new development API for Windows
programming, and includes a new programming
language, C#. Windows Server 2003 was
launched, featuring enhanced administration
capabilities, such as new user interfaces
to server tools.In 2004, the company released
Windows XP Media Center Edition 2005,
a version of Windows XP specifically designed
for multimedia capabilities, and Windows
XP Starter Edition, a version of Windows
XP with a smaller feature set designed
for entry-level consumers.However, Microsoft
would encounter 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 European Union Microsoft
antitrust case). Eventually Microsoft
was fined 497 million (US$613 million),
ordered to divulge certain protocols to
competitors, and to produce a new version
of its Windows XP plataform—called Windows
XP Home Edition N—that did not include
its Windows Media Player.Microsoft was
also ordered to produce separate packages
of Windows after South Korea also landed
a settlement against the company in 2005.
It had to pay out US$32 million and produce
more than one version of Windows for the
country in the same vein as the European
Union - one with Windows Media Player
and Windows Messenger and one without
the two programs.
Formerly
codenamed "Longhorn" in the
early development stages, the next planned
version of Windows, Windows Vista is
scheduled for release to consumers on
January 30, 2007 as of November 2006.Microsoft
announced the new name of the operating
system at the Microsoft Global Business
Conference (MGB) in Atlanta, Georgia
on July 21, 2005.Microsoft plans to
release a new version of Microsoft Office
as well, called Microsoft Office 2007,
and is set to be released along side
Vista in January 2007 as of May 2006.In
addition to Office, the next version
of Visual Studio, the company's development
suite, code named Orcas, is currently
available as a Community Technology
Preview (CTP).As of May 2006, an official
release date is yet to be set for the
development suite.
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,
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.
On
June 15, 2006 Gates announced his plans
for a two year transition period out
of a day-to-day role with Microsoft
until July 31, 2008. After that date,
Gates will continue in his role as the
company's chairman, head of the Board
of Directors and act as an adviser on
key projects. His role as Chief Software
Architect will be filled immediately
by Ray Ozzie, the Chief Technical Officer
of the company as of June 15, 2006.Bill
Gates stated "My announcement is
not a retirement — it’s a reordering
of my priorities."
Microsoft
has often been described as having a
developer-centric business culture.
A great deal of time and money is spent
each year on recruiting young university-trained
software developers and on keeping them
in the company. For example, while many
software companies often place an entry-level
software developer in a cubicle desk
within a large office space filled with
other cubicles, Microsoft assigns a
private or semiprivate closed office
to every developer or pair of developers.
In addition, key decision makers at
every level are either developers or
former developers. In a sense, the software
developers at Microsoft are considered
the "stars" of the company
in the same way that the sales staff
at IBM are considered the "stars"
of their company.
Within
Microsoft the expression "eating
our own dog food" is used to describe
the policy of using the latest Microsoft
products inside the company in an effort
to test them in "real-world"
situations. Only prerelease and beta versions
of products are considered dog food. This
is usually shortened to just "dog
food" and is used as noun, verb,
and adjective. The company is also known
for their hiring process, dubbed the "Microsoft
interview", which is notorious for
off-the-wall questions such as "Why
is a manhole cover round?" and is
a process often mimicked in other organizations,
although these types of questions are
rarer now than they were in the past.For
fun, Microsoft also hosts the Microsoft
Puzzle Hunt, an annual puzzle hunt (a
live puzzle game where teams compete to
solve a series of puzzles) held at the
Redmond campus. It is a spin-off of the
MIT Mystery Hunt.
As
of 2006, Microsoft employees, not including
Bill Gates, have given over $2.5bn dollars
to non-profit organizations worldwide,
making Microsoft the worldwide top company
in per-employee donations.
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