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The Future Startup Dossier: Microsoft

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May 30, 2021

The Journey of Microsoft Inc. When it comes to operating systems for computers the first name that comes to our mind is 'Windows Operating System'. The manufacturer company of Windows, the Microsoft Corporation is one of the largest technology corporations. 

The two childhood friends, Bill Gates and Paul Allen, started Microsoft after they developed BASIC interpreters for Altair 8800, an early personal computer designed by MITS in 1974 and their product was marketed as Altair BASIC. The deal with MITS inspired them to start their own company. Thus they initiated Microsoft in Albuquerque, the home of MITS.The name Microsoft is a portmanteau of 'Microcomputer' and 'software'. Though Microsoft started its journey in Albuquerque, New Mexico, it was relocated to Washington, in 1979.

In August 1977 Microsoft opened its first international office ASCII Microsoft in Japan. By 1978, just after three years of initiating, the sales of Microsoft reached more than $1M. The following year the headquarter of the company was moved to Bellevue, Washington, where the two co-founders of Microsoft grew up.The first operating system of Microsoft was Xenix, a version of Unix, which was released in 1980, and was later used as the basis of 'Multi-Tool Word', a predecessor of Microsoft Word.  In 1981 IBM introduced its first personal computer and Microsoft went on to license its operating system MS-DOS (Microsoft Disk Operating System) to IBM, which was followed by other computer manufacturing companies licensing the operating system of Microsoft as well. The MS-DOS operating system had no graphical user interface and users had to input commands to open any programme. Microsoft became highly successful after the debut of MS-DOS. In 1983, Paul Allen left Microsoft after being diagnosed with Hodgkin’s lymphoma.

Two years later, in 1985, Microsoft introduced a new operating system for personal computers, Windows, which later became the crown of Microsoft. Windows had a graphical user interface which included drop down menus, scroll bars and other features. Soon after its launching Windows became so popular for its user friendly features that, by the late 1980's Microsoft became the largest personal computer software company. In 1986 the company moved its headquarter to its current location, Redmond, Washington and in the same year it went public raising $61M. Bill Gates became a billionaire at the age of 31 after the IPO.

Microsoft introduced 'Microsoft Office', a collection of features suitable for office work.In 1995, when the demand of personal computers was rising Windows 95 was launched and within just five weeks 7M copies of this newly introduced operating system was sold. Windows 95 is the first operating system where Microsoft introduced the 'Start' menu bar. It also included built-in dial-up networking and Transmission Control Protocol/ Internet Protocol (TCP/IP). In the same year Microsoft's web browser, Internet Explorer made its debut.

Within just two decades of its inception, Microsoft turned into a monopoly in the technology industry driving its opponents out of business. In 2001 Microsoft reached a settlement with the government which imposed restrictions on the company's corporate practices. In the same year Microsoft launched its video game console Xbox. Xbox 360, which was released in 2005, was a huge success. In 2012, Microsoft launched Microsoft Surface tablets, which ran Windows RT and Windows 8 Pro. Through the debut of Surface tablets Microsoft joined the personal computer manufacturing industry. 

Since the 1990s, Microsoft has made multiple acquisitions, expanding its territory outside the operating system. In May 2011, Microsoft acquired Skype.In December 2016, Microsoft acquired LinkedIn for $26.2B.

Since Satye Nadella became the CEO of Microsoft in 2014, the company has focused on cloud computing which helped the share of the company reach its highest value since December 1999.

In April 2019, the company became the third US company to be valued over a trillion USD after Apple and Amazon. In 2020 Microsoft ranked 21, in the Fortune 500 ranking of the largest US corporations based on the revenue. At present, it is considered as one of the largest five information technology companies in the US along with Google, Facebook, Apple, and Amazon. The company has developed multiple consumer and enterprise software including Bing, Azure, MSN, etc. The company has the third-highest global brand valuation. As of April 2021, the company is currently worth $1.9 Trillion and according to Forbes, it is on the track to become the second US public company to suppress the $2 trillion market cap after Apple, which is now worth $2.3 trillion.

Currently, Microsoft is currently focusing on becoming a dominant cloud host and service provider. Besides, the company is heavily investing in advanced technologies such as AI and quantum computing. In April, the company announced to acquire Nuance Communications, an artificial intelligence provider, for about $16B to expand its territory in healthcare technology service.


Behind Microsoft's Growth. Whether we acknowledge it or not, Microsoft has caused a revolution in the technology industry making microcomputers easy to use, even for those who are not particularly computer geeks. One of the main reasons behind Microsoft's massive growth was that its founders accurately predicted the upcoming success of microcomputers. Hence when IBM offered to license their MS-DOS solely to IBM, Bill and Allen, the two co-founders of Microsoft declined the offer and decided to license the operating system to multiple companies instead. Though it was a risky step for Microsoft, luckily that worked out, enabling Microsoft to have equal reach like IBM and become a dominant player in the software industry.

Microsoft is constantly changing its strategies to keep pace with the ever-changing and highly competitive technology market. One of the steps that kept them in the race which they took after being replaced by another operating system, Android was, making their products such as office, word, one drive, etc available in Android and iOS, even for Chromebooks. As a result, even when sales of PCs had decreased due to the introduction of smartphones, Microsoft still remained as one of the dominant players maintaining the reputation of all-time high stock trading.

As Microsoft has departed from its usual strategies and accepted the fact that they are no longer the most dominant player in the operating system market and is heavily investing in AI, data management, and quantum computing, it can be predicted that even if the technology market evolve in the future Microsoft Inc has the capability to remain in the race as one of the dominant players.


Read.

An Interview with Bill Gates on the Future of Energy: Gates is on a solo global lobbying campaign to press his species to accomplish something on a scale it has never attempted before. He wants human beings to invent their way out of the coming collision with planetary climate change, accelerating a transition to new forms of energy that might normally take a century or more. To head off a rise in average global temperatures of 2 degrees Celsius above pre-industrial levels—the goal set by international agreement—Gates believes that by 2050, wealthy nations like China and the United States, the most prodigious belchers of greenhouse gases, must be adding no more carbon to the skies.

How Top-Valued Microsoft Has Avoided the Big Tech Backlash: Today, Microsoft has positioned itself as the tech sector’s leading advocate on public policy matters like protecting consumer privacy and establishing ethical guidelines for artificial intelligence. Though it has sued to limit government access to users’ data, Microsoft is seen in capitals around the world as the most government-friendly of the tech companies.

Microsoft Nears $2 Trillion Market Value—Second Only To Apple In The US: Microsoft, the storied software company co-founded by Bill Gates 46 years ago, is on track to become the second U.S. company ever worth more than $2 trillion as shares test new record highs Monday amid a raging bull market that's lifted a slew of technology stocks to stratospheric levels.


Watch.

The Story of Microsoft - How a Computer Club Took Over The World: The History of Microsoft. This video is about the lakeside computer club. And how a group of teenagers in Seattle took over the computer industry, the operating system industry, and the internet browser industry.

The Full Interview With Bill Gates: On February 21, 2021 - Bill Gates, Microsoft co-founder and co-chair of the Bill and Melinda Gates Foundation, discusses the importance of addressing climate change, his collaboration with Amazon.com Inc. Chief Executive Officer Jeff Bezos, and the debate over Bitcoin. He speaks with Bloomberg's Emily Chang on "Bloomberg Technology."

Microsoft CEO Satya Nadella On The Cloud Computing Industry And The Future Of Microsoft: CNBC's Jon Fortt interviews Microsoft CEO Satya Nadella about how he turned around the software and hardware company, and how it's now a major player in the cloud computing space.


Lessons from Microsoft

  1. Being open to risk taking

When the two co-founders of Microsoft offered to license their MS-DOS only to IBM, one of the technology giants, they could play it safe by accepting the offer. But instead of accepting the offer, the two founders decided to take the risk of licensing the MS-DOS to multiple companies. Luckily this simple decision worked out, becoming a stepping stone for Microsoft, enabling it to reach an almost equal number of users like IMB and grow rapidly. The success that came after proves that, rather than playing it defensively, it is better to be open to risky ideas if the idea is good enough to bet on.

  1. Having a flexible strategy 

One of the reasons behind Nokia’s downfall was being too confident over their product and being late to act upon the situation. By the time Nokia introduced its Symbian operating system, it was already too late. Many companies fail due to being too reluctant to change their strategies and not acting on time. If Microsoft would stick to their legacy of Windows, they would have to face the same consequences as Nokia. One of the lessons we can learn from Microsoft is having a flexible strategy to keep pace with the continuously evolving market. Shifting to cloud computing, AI, and data management, helped them to remain a worthy competitor of two other technology giants, Google and AWS.

  1. Reorganizing the team structure to keep pace

As Microsoft shifted its focus on cloud computing, Satya Nadella, the current CEO of Microsoft appointed Judson Althoff and Jean-Philippe Courtois as head of worldwide commercial business and head of global sales respectively. By changing the leadership Microsoft created a change in the work culture and strategies as well, resulting in making Microsoft more flexible and helping them to keep pace with their competitors.

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Tithi Chowdhury is an undergraduate student majoring in Botany at the University of Dhaka. She is a Trainee Analyst at Future Startup and looks after our Collective Knowledge initiative where she prepares interviews and writes articles on interesting topics. She is a voracious reader and loves listening to podcasts in her spare time.

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