“Market Cap $343.82 B As of May 2014
At a Glance
- Industry: Software & Programming
- Founded: 1975
- Country: United States
- CEO: Satya Nadella
- Website: www.microsoft.com/msft
- Employees: 99,000
- Sales: $83.26 B
- Headquarters: Redmond, Washington
#32 Global 2000
- #82 in Sales
- #13 in Profit
- #176 in Assets
- #4 in Market value
#2 World’s Most Valuable Brands
Microsoft Corp. develops and markets software, services and hardware that deliver new opportunities, greater convenience and enhanced value to people’s lives. The company’s products include operating systems for personal computers, servers, phones and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games and online advertising. It also designs and sells hardware, including the Xbox 360 gaming and entertainment console, Kinect for Xbox 360, Xbox 360 accessories and Microsoft PC hardware products. The company operates its business through five segments: Windows & Windows Live, Server & Tools, Online Services, Microsoft Business, and Entertainment & Devices. The Windows & Windows Live segment develops and markets PC operating systems, related software and online services and PC hardware products. The Server & Tools segment develops and markets server software, software developer tools, services and solutions that are designed to make information technology professionals and developers and their systems more productive and efficient. The Server & Tools segment’s product and service offerings include Windows Server, Microsoft SQL Server, Windows Azure, Visual Studio, System Center products, Windows Embedded device platforms and Enterprise Services. The Online Services segment develops and markets information and content designed to help people simplify tasks and make more informed decisions online and that help advertisers connect with audiences. This segment’s offerings include Bing, MSN, adCenter and advertiser tools. The Microsoft Business segment develops and markets software and online services designed to increase personal, team and organization productivity. The Microsoft Business segment offers Microsoft Office system, comprising mainly Office, SharePoint, Exchange, Lync and Office 365 and Microsoft Dynamics business solutions. The Entertainment & Devices segment develops and markets products and services designed to entertain and connect people. This segment’s offers Xbox 360 entertainment platform, which includes the Xbox 360 gaming and entertainment console, Kinect for Xbox 360, Xbox 360 video games, Xbox LIVE and Xbox 360 accessories. Microsoft was founded by William Henry Gates III in 1975 and is headquartered in Redmond, WA.“
1972–83: Founding and company beginnings
Paul Allen and Bill Gates, childhood friends with a passion in computer programming, were seeking to make a successful business utilizing their shared skills. In 1972 they founded their first company named Traf-O-Data, which offered a rudimentary computer that tracked and analyzed automobile traffic data. Allen went on to pursue a degree in computer science at the University of Washington, later dropping out of school to work at Honeywell. Gates began studies at Harvard. The January 1975 issue of Popular Electronicsfeatured Micro Instrumentation and Telemetry Systems’s (MITS) Altair 8800 microcomputer. Allen noticed that they could program a BASICinterpreter for the device; after a call from Gates claiming to have a working interpreter, MITS requested a demonstration. Since they didn’t actually have one, Allen worked on a simulator for the Altair while Gates developed the interpreter. Although they developed the interpreter on a simulator and not the actual device, the interpreter worked flawlessly when they demonstrated the interpreter to MITS in Albuquerque, New Mexico in March 1975; MITS agreed to distribute it, marketing it as Altair BASIC. They officially established Microsoft on April 4, 1975, with Gates as the CEO. Allen came up with the original name of “Micro-Soft,” the combination of the words microcomputer and software, as recounted in a 1995 Fortune magazine article. In August 1977 the company formed an agreement with ASCII Magazine in Japan, resulting in its first international office, “ASCII Microsoft”. The company moved to a new home in Bellevue, Washington in January 1979.
Microsoft entered the OS business in 1980 with its own version of Unix, called Xenix. However, it was MS-DOS that solidified the company’s dominance. After negotiations with Digital Research failed, IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS, which was set to be used in the upcoming IBM Personal Computer (IBM PC). For this deal, Microsoft purchased a CP/M clone called 86-DOS fromSeattle Computer Products, branding it as MS-DOS, which IBM rebranded to PC DOS. Following the release of the IBM PC in August 1981, Microsoft retained ownership of MS-DOS. Since IBM copyrighted the IBM PC BIOS, other companies had to reverse engineer it in order for non-IBM hardware to run as IBM PC compatibles, but no such restriction applied to the operating systems. Due to various factors, such as MS-DOS’s available software selection, Microsoft eventually became the leading PC operating systems vendor. The company expanded into new markets with the release of the Microsoft Mouse in 1983, as well as a publishing division named Microsoft Press. Paul Allen resigned from Microsoft in February after developing Hodgkin’s disease.
1984–94: Windows and Office
While jointly developing a new OS with IBM in 1984, OS/2, Microsoft released Microsoft Windows, a graphical extension for MS-DOS, on November 20, 1985.Microsoft moved its headquarters to Redmond on February 26, 1986, and on March 13 the company went public; the ensuing rise in the stock would make an estimated four billionaires and 12,000 millionaires from Microsoft employees. Due to the partnership with IBM, in 1990 the Federal Trade Commission set its eye on Microsoft for possiblecollusion; it marked the beginning of over a decade of legal clashes with the U.S. Government. Microsoft announced the release of its version of OS/2 to original equipment manufacturers (OEMs) on April 2, 1987; meanwhile, the company was at work on a 32-bit OS, Microsoft Windows NT, using ideas from OS/2; it shipped on July 21, 1993, with a new modular kernel and the Win32 application programming interface (API), making porting from 16-bit (MS-DOS-based) Windows easier. Once Microsoft informed IBM of NT, the OS/2 partnership deteriorated.
In 1990, Microsoft introduced its office suite, Microsoft Office. The software bundled separate office productivity applications, such as Microsoft Word and Microsoft Excel. On May 22 Microsoft launched Windows 3.0 with a streamlined user interface graphics and improved protected mode capability for the Intel 386 processor. Both Office and Windows became dominant in their respective areas. Novell, a Word competitor from 1984–1986, filed a lawsuit years later claiming that Microsoft left part of its APIs undocumented in order to gain a competitive advantage.
On July 27, 1994, the U.S. Department of Justice, Antitrust Division filed a Competitive Impact Statement that said, in part: “Beginning in 1988, and continuing until July 15, 1994, Microsoft induced many OEMs to execute anti-competitive “per processor” licenses. Under a per processor license, an OEM pays Microsoft a royalty for each computer it sells containing a particular microprocessor, whether the OEM sells the computer with a Microsoft operating system or a non-Microsoft operating system. In effect, the royalty payment to Microsoft when no Microsoft product is being used acts as a penalty, or tax, on the OEM’s use of a competing PC operating system. Since 1988, Microsoft’s use of per processor licenses has increased.”
1995–2005: Internet and the 32-bit era
Bill Gates handed over the CEO position on January 13, 2000, to Steve Ballmer, an old college friend of Gates and employee of the company since 1980, creating a new position for himself as Chief Software Architect. Various companies including Microsoft formed the Trusted Computing Platform Alliance in October 1999 to, among other things, increase security and protect intellectual propertythrough identifying changes in hardware and software. Critics decry the alliance as a way to enforce indiscriminate restrictions over how consumers use software, and over how computers behave, a form of digital rights management; for example the scenario where a computer is not only secured for its owner, but also secured against its owner as well. On April 3, 2000, a judgment was handed down in the case of United States v. Microsoft, calling the company an “abusive monopoly”; it settled with the U.S. Department of Justice in 2004. On October 25, 2001, Microsoft released Windows XP, unifying the mainstream and NT lines under the NT codebase. The company released the Xbox later that year, entering the game console market dominated by Sony and Nintendo. In March 2004 the European Union brought antitrust legal action against the company, citing it abused its dominance with the Windows OS, resulting in a judgment of €497 million ($613 million) and to produce new versions of Windows XP without Windows Media Player, Windows XP Home Edition N and Windows XP Professional N.
2006–10: Windows Vista, mobile, and Windows 7
Released in January 2007, the next version of Windows, Windows Vista, focused on features, security, and a redesigned user interface dubbed Aero. Microsoft Office 2007, released at the same time, featured a “Ribbon” user interface which was a significant departure from its predecessors. Relatively strong sales of both titles helped to produce a record profit in 2007. The European Union imposed another fine of €899 million ($1.4 billion) for Microsoft’s lack of compliance with the March 2004 judgment on February 27, 2008, saying that the company charged rivals unreasonable prices for key information about its workgroup and backoffice servers. Microsoft stated that it was in compliance and that “these fines are about the past issues that have been resolved”.
2007 also saw the creation of a multi-core unit at Microsoft, as they followed in the steps of server companies such as Sun and IBM.
Bill Gates retired from his role as Chief Software Architect on June 27, 2008, while retaining other positions related to the company in addition to being an advisor for the company on key projects. Azure Services Platform, the company’s entry into the cloud computingmarket for Windows, launched on October 27, 2008. On February 12, 2009, Microsoft announced its intent to open a chain of Microsoft-branded retail stores, and on October 22, 2009, the first retail Microsoft Store opened in Scottsdale, Arizona; the same day the first store opened, Windows 7 was officially released to the public. Windows 7’s focus was on refining Vista with ease of use features and performance enhancements, rather than a large reworking of Windows.
As the smartphone industry boomed beginning in 2007, Microsoft struggled to keep up with its rivals Apple and Google in providing a modern smartphone operating system. As a result, in 2010, Microsoft revamped their aging flagship mobile operating system, Windows Mobile, replacing it with the new Windows Phone OS; along with a new strategy in the smartphone industry that has Microsoft working more closely with smartphone manufacturers, such as Nokia, and to provide a consistent user experience across all smartphones using Microsoft’s Windows Phone OS. It used a new user interface design language, codenamed “Metro”, which prominently used simple shapes, typography and iconography, and the concept of minimalism.
Microsoft is a founding member of the Open Networking Foundation started on March 23, 2011. Other founding companies include Google, HP Networking, Yahoo, Verizon,Deutsche Telekom and 17 other companies. The nonprofit organization is focused on providing support for a new cloud computing initiative called Software-Defined Networking. The initiative is meant to speed innovation through simple software changes in telecommunications networks, wireless networks, data centers and other networking areas.
2011–present: Rebranding, Windows 8, and Surface
On June 18, 2012, Microsoft announced the Microsoft Surface, the first computer in the company’s history to have its hardware made by Microsoft. On June 25, Microsoft announced that it was paying US$1.2 billion to buy the social network Yammer. On July 31, 2012, Microsoft launched the Outlook.com webmail service to compete with Gmail. On September 4, 2012, Microsoft released Windows Server 2012. On October 1, Microsoft announced its intention to launch a news operation, part of a new-look MSN, at the time of the Windows 8 launch that was later in the month. On October 26, 2012, Microsoft launched Windows 8 and the Microsoft Surface.Three days later, Windows Phone 8 was launched. To cope with the potential for an increase in demand for products and services, Microsoft opened a number of “holiday stores” across the U.S. to complement the increasing number of “bricks-and-mortar” Microsoft Stores that opened in 2012.
On March 29, 2013, Microsoft launched a Patent Tracker. The Kinect sensor device was upgraded for the 2013 release of the eighth-generation Xbox One and its capabilities were revealed in May 2013. The new Kinect uses an ultra-wide 1080p camera, it can function in the dark due to an infrared sensor, it employs higher-end processing power and new software, it can distinguish between fine movements (such as a thumb movements), and the device can determine a user’s heart rate by looking at his/her face. Microsoft filed a patent application in 2011 that suggests that the corporation may use the Kinect camera system to monitor the behavior of television viewers as part of a plan to make the viewing experience more active.On July 19, 2013, Microsoft stocks suffered its biggest one-day percentage sell-off since the year 2000 after its fourth-quarter report raised concerns among the investors on the poor showings of both Windows 8 and the Surface tablet; with more than 11 percentage points declining Microsoft suffered a loss of more than USD 32billion. For the 2010 fiscal year, Microsoft had five product divisions: Windows Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.
On September 3, 2013, Microsoft agreed to buy Nokia’s mobile unit for $7 billion. Also in 2013, Amy Hood became the CFO of Microsoft.
The Alliance for Affordable Internet (A4AI) was launched in October 2013 and Microsoft is part of the coalition of public and private organizations that also includes Facebook, Intel and Google. Led by Tim Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the developing world, where only 31% of people are online. Google will help to decrease internet access prices so that they fall below the UN Broadband Commission’s worldwide target of 5% of monthly income.
In line with the maturing PC business, in July 2013 Microsoft announced that it would reorganize the business into 4 new business divisions by function: Operating System, Apps, Cloud and Devices. All previous divisions will be diluted into new divisions without any workforce cut.
In August 2013, Steve Ballmer announced he would resign as CEO of Microsoft within twelve months. He was succeeded by Satya Nadellaon February 4, 2014, who previously led Microsoft’s Cloud and Enterprise division. On the same day, it was announced that John W. Thompson will take on the role of chairman, with Bill Gates stepping down from the position to become more active within the company as Technology Advisor.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Corporate Valley“