Microsoft, founded in 1975 by Bill Gates and Paul Allen, grew from a small software company to become one of the largest technology companies in the world. With a product portfolio ranging from operating systems to productivity software, cloud services to video games, Microsoft has shaped the digital lives of billions of people around the world.
Bill Gates and Paul Allen have a vision
It all starts when Gates and Allen have a vision. In the future there should be a computer on every desk. At that time they were already known to the general public, but they were not yet suitable for the normal consumer. Computer nerds want to change that. The Microsoft founders have known each other since their time together at the Lakeside private school in Seattle. Even back then, they regularly skipped school together to spend time in front of the computer.
After high school, both began their studies, Gates at Harvard and Allen in Seattle, Washington state. They both quickly abandoned their training to focus entirely on their work. They founded the company Traf-o-Data in 1972. The company's goal: to develop software for traffic payments.
1975: Gates and Allen found “Micro-Soft”
As of now, Gates and Allen are programming to get closer to their vision. From now on, Gates is working on developing a programming language for the Altair 8800 computer and successfully achieving it. To better market the “Basic” programming language, Gates and Allen founded Micro-Soft in Albuquerque, New Mexico in 1975, initially written with a hyphen and a capital “S.” The company name is a combination of the terms “microcomputer” and “software.” The first small calculating machines were then called “microcomputers.”
Microsoft's founders sell their software to Micro Instrumentations and Telemetry Systems, the maker of the Altair 8800. In the first year, the company made $16,005 in sales.
In the following years, the company developed another programming language, and computers from several companies such as Apple, Commodore, and Radio Shack shipped with Microsoft Basics. And since there were few good programmers in Albuquerque, in 1979 the company moved to Bellevue, in the state of Washington, in the northwest of the United States.
In the early 1980s, the company purchased 86-DOS to develop a new operating system for IBM. This purchase ultimately creates MS-DOS. IBM released the first personal computer in 1981 and allowed Microsoft to retain the rights to MS-DOS.
Microsoft launches Word
In 1983, Microsoft finally began selling Word productivity software. The company also launches the Microsoft mouse, its first hardware product, on the market. At the end of the year, Microsoft announced that it was working on an operating system with a graphical user interface. It is the first version of Windows, which was then called “Interface Manager”.
Meanwhile, founder Paul Allen leaves the company due to illness. However, he will remain at Microsoft as a member of the supervisory board and strategic advisor. Allen died of cancer in 2018.
The first version of Windows was released in 1984.
In 1984 the company already reached sales of 100 million dollars. A year later, Windows 1.0 and the Excel spreadsheet program were released. Now even laymen can use computers.
The first Windows offers drop-down menus, dialog boxes, and icons. The Paint drawing program is installed and a calendar, calculator and editor are included. But applications are missing. At the same time, Microsoft was commissioned by IBM to develop a new operating system that could compete with Windows. In 1985, Microsoft also broke ground on a new $25 million headquarters in Redmond, Washington.
In 1987, IBM launched the OS/2 operating system developed by Microsoft. Windows 2.0 also starts. Gates' company makes money from both products. Windows prevails and has a market share of more than 90 percent in the 1990s.
The Office suite is taking shape
The company is now buying Forethought and its graphics presentation program for $14 million. A little later, the software was sold as Microsoft Powerpoint. It becomes part of the Office suite, which also includes Word, Excel, and Mail. In 1989, Steve Ballmer was named senior vice president. The company is expanding and now has offices in Brazil, Switzerland, Belgium, Taiwan and Israel.
15 years after the company was founded, Microsoft surpassed the $1 billion mark in sales for the first time. In 1991, the Windows flag became the company's symbol.
In 1995, Microsoft released Windows 95. The operating system supports an Internet connection and has plug-and-play features. Internet Explorer also celebrates its debut. Microsoft operating systems run on more than 80 percent of all computers in the world. In 1996, Microsoft and NBC launched a 24-hour news channel called MSNBC.
Steve Ballmer will succeed Bill Gates
In the following years, Microsoft released additional versions of Windows and Steve Ballmer replaced Bill Gates as the company's CEO in 2000.
In 2001, the company entered the video game market and sold the XBOX to compete with Nintendo and Sony. In 2005, almost 22 million game consoles were sold.
Microsoft has to pay heavy fines
In 2003, Microsoft had to pay a fine of $750 million to AOL Time Warner. The reason is the browser wars of the 90s. In 2004, the company had to pay another large fine. The EU forces Microsoft to pay almost 500 million euros. He accuses the company of abusing its monopoly position. In 2008, the EU increased the fine to €899 million because Microsoft refused to pay.
In 2012, the European Court of Justice finally confirmed the payment of the fine. It is the highest sentence ever imposed by a European court. The company is repeatedly criticized for abusing its monopoly position, violating competition rules and evading taxes.
Smartphone boom bypasses Microsoft
At the same time, the company did not develop an operating system for the smartphone. Apple and Google are taking over this market. Microsoft is losing touch. In 2011, Microsoft acquired the video telephony portal Skype for $8.5 billion, beating Facebook and Google. In 2013, Microsoft launched its first computer, the Surface tablet.
13 years after Steve Ballmer succeeded Bill Gates as head of the company, he will step down. Then the stock market price increases. He will be replaced by Satya Nadella as CEO. He is faced with the task of leading the company into the future. Microsoft fell behind Google and Apple in the smartphone and tablet markets. That's why new ideas are needed.
Ballmer's successor Nadella relies on cloud and AI
Under Nadella's leadership, Microsoft has become a company that relies on open platforms and cloud services. Artificial intelligence (AI) and machine learning play a central role in the company's strategy and product development.
For this reason, the company will invest 3.3 billion euros in artificial intelligence in Germany over the next two years, ZEIT reports. In this way, the capabilities of data centers for artificial intelligence and cloud computing applications will be expanded. Microsoft had invested early in the artificial intelligence startup OpenAI. The company uses AI as a co-pilot in its Bing search engine and in its office programs.
Microsoft with a long tradition in Germany
Microsoft has been present in Germany for a long time. The company founded Microsoft GmbH in Germany in 1983. The company's headquarters are located in Munich-Schwabing. Microsoft also has regional offices in Stuttgart, Cologne, Hamburg, Frankfurt, Berlin and Walldorf. The company employs more than 3,000 people in this country.
Microsoft employs about 221,000 people worldwide. The company is the largest software manufacturer in the world. In 2023, the company generated sales of $221 billion (equivalent to about $207 billion).