Microsoft celebrates its 50th anniversary. This article was written using the Microsoft Word on a computer running Microsoft Windows. It is likely to be published on platforms hosted by Microsoft Azure, including LinkedIn, which is Microsoft a subsidiary with more than a billion users. In 2024, the company generated a net profit of $ 88 billion from the sale of $ 245 billion. Its stock market price is close to $ 3,000 billion, making it the second most valuable company in the world behind Apple and is almost equal to NVIDIA. Since 2002, cumulative profits are reaching close to $ 640 billion.
And yet, 50 years ago, Microsoft was just a small computer company, established by Albuquerque, New Mexico by two former Harvard students, Bill Gates and Paul Alan, who were 19 and 22 years old. Twis and twist that enable it to become one of the world’s most powerful companies, become manifold, and they can be divided into four different erases.
First era: Bill Gates rides on IBM’s shoulders
In the late 1970s, IBM was an undeniable leader of the computer industry. It was soon felt that the micro computer developed by young Silicon Valley entrepreneurs, such as Apple II, would eventually receive the mainframe of IBM, and therefore IBM PC The project was launched. However, it was soon clear that the company’s heavy internal processes would prevent it from delivering micro computers on the schedule. Therefore it was decided that various components of the machine could be outsourced using external suppliers.
Several special companies were contacted to provide operating systems. They all refused, symbolizing IBM to destroy the enemy, centralized, bureaucratic computing. Mary Maxwell Gates, who was sitting on the board of an NGO next to the President of IBM, Sugged his son’s name William, surname Bill, who had just founded Microsoft, and the first contact was established in 1980.
The problem was that Microsoft was focused on a programming language called Basic and certainly not special in the operating system. It is not that it was going to be a problem for Bill Gates, which was quite a fair nerve, agreed to sign a deal with IBM to give an operating system that he did not have. Gates then bought the QDOS system from Seattle Computer Products, from which he developed MS-DOS (where MS Microsoft).
Gates, whose father, was the founder partner of a prominent Seattle Law firm, then took his next step. He offered the IBM a non-exclusive contract for the use of MS-DOS, giving them the right to sell it to other computer companies. The IBM, which was not used to the subcontinent, was not sufficiently suspicious: the contract brought luck for Microsoft and IBM when Compac, Olivetti and Hewlett-Packed IBM ran away to develop PC clones, giving birth to a whole. New industry,
Follow success for Microsoft. It not only benefited from the serious image of IBM, which appealed to businesses, but also received royalty on every PC sold in the market. In 1986, the company was introduced in the stock market. Bill Gates, Paul Alan and two of his early employees became billionaires, while 12,000 additional Microsoft employees became millionaires.
Second era: Windows, The Golden Goose (courtesy of Zerox)
In the mid-1980s, the micro computers were not very functional: their operating system, including Microsoft’s MS-Doss, ran away with the infamous C:/refusing command lines. It all changed in 1984 with Apple Macintosh, which was equipped with a graphic interface (icon, drop-down menu, font, a mouse, etc.). This revolutionary technique was developed Zerox research laboratoryEven though photocopy veterans failed to understand their ability. On the other hand, Apple’s CEO, Steve Jobs, was largely inspired by this: to ensure the success of the Macintosh computer, Jobs asked Microsoft to develop a customized version of his office suit, especially its Excel spreadsheet. Microsoft adopted the graphic interface principle and launched Windows 1 in 1985, after which the office suit (Word, Excel and PowerPoint) was soon.
In the next years, Windows was further improved, the conclusion in Windows 95, launched in 1995, with an advertising campaign over $ 200 million, for which Bill Gates bought the rights of rolling stones’ “start Me Up”At that time, Microsoft’s stake in the world market was more than 70%in the operating system. It has rarely changed.
In 1997, Microsoft also went to save Apple from bankruptcy by investing $ 150 million in its capital as non-polls shares, which was sold back after three years. During one of his famous main speeches, Steve Jobs thanked Bill Gates: “Bill, thanks. A better place in the world.” The bailout also filed against Microsoft by Apple to prosecute the Windows operating system, accused of copying its graphic interface while designing the Windows operating system.
Third era: bureaucracy, internal conflict and a failed diversification strategy
In the mid -1990s, computing made a new change with the explosion of the World Wide Web. Microsoft Stand-Alone was an expert in PC, with a business model based on selling boxing software, and it was ill for the new global network. Its first response was to develop internet explorer, a browser Developed by acquisition of mosaic browser designed by Spiiglass CompanyLike MS-Doss in your day. The Internet Explorer was eventually integrated into Windows, prosecuting Microsoft for misuse of its leading position, allowing the company’s break-ups. New contestants, such as Google, took advantage of these developments to attract users, with their chrome browser.
In 2000, Bill Gates, one of his former Harvard classmates, assigned Steve Ballor his position as the CEO of Microsoft, which aims to convert the company into an electronics and service company. In the next fifteen years, Balmer launched a series of initiatives to diversify the company by including video games (flight Simulator), CD encyclopedia (Encarca), Hardware (rats, keyboards), MP3 players (zune), online web hosting (Azure), game console (XBOX), phone (Windows phone), tablet and computer (surface).
While some of these products were successful (especially Azure and Xbox), there were other bitter failures. Encarca Wikipedia was quickly marshy and there was no match for Zune Apple’s IPod. Windows phone is one of the greatest strategic blunders in the company’s history. To secure the success of the company in Mobile Telefony and compete with the iPhone, Microsoft bought Nokia’s cell phone division in September 2013 for $ 5.4 billion. The resulting integration was a disaster: Steve Baller wanted to use Microsoft’s phone a version of Windows 10, making them slow and impractical. After less than two years, Microsoft abolished the operation of his mobile phone, with the loss to $ 7.6 billion. Nokia was sold for only $ 350 million.
One of the results of several commercial initiatives of Microsoft has been an explosion in its number of employees, from 61,000 to 2024 in 2005 to 228,000. Many internal disputes broke between various professional units, which sometimes refused to work together.
These turf wars, together with widespread bureaucracy and comfortable profitability (for each Windows installation, pay $ 50 around PC manufacturers, while the marginal cost of the license is approximately zero), has hindered the capacity of Microsoft for innovation. Its software, including the Internet Explorer 6 and Windows Vista, was soon mocked by users for its flaws, which were constantly plugged by continuous updates. As some people said, Windows is equipped with a “safe” mode, suggests that its normal mode is “failure”.
Fourth era: Is Microsoft New Cool (thanks to Cloud and Openai)?
In 2014, Satya Nadella converted Steve Ballmer as the head of Microsoft. Coming from the online services division, Nadella was aimed at online redirection of Microsoft’s strategy, especially by developing Azure online web hosting business. In 2024, Azure Amazon became the world’s second largest cloud service behind web services, and more than 56% turnover of Microsoft came from its online services. Nadella replaced the company’s business model: Software is no longer sold, but in the shape of products like office 365 and Xbox Live, is available on the basis of membership.
On the way, Microsoft acquired online game MincraftAfter professional social network LinkedIn in 2016, $ 26.2 billion (its biggest acquisition till date), and in 2018 for the online development forum Github for $ 7.5 billion.
Between 2023 and 2025, Microsoft invested over $ 14 billion Openai, company behind chatgptIt offers it a particularly important position in the artificial intelligence revolution. The models of Chatgpt also contribute to Microsoft’s In-House AI, Copilot.
In the last 50 years, bold moves, thanks to a series of failed strategies to acquire timely acquisition and diversity, Microsoft has developed significantly in its scope, competitive advantage and business models. Once surrounded by grandeur and internal conflicts, the company has become attractive again, most specially for young graduates. Who can predict whether Microsoft will still be present in 50 years? Bill Gates themselves say the oppositeBut he can lure.
,Author: Fradric FraryStrategy, Professor of Power Plants, ESCP Business School,
,disclosure statement: Frédéric does not work for fréry, consults, works for funding from any company or organization that will benefit from this article, and has not revealed any relevant affiliation beyond their educational appointment)
This article has been reinstated Conversation Under a Creative Commons License. read the Original article,
(This story is not edited by NDTV employees and auto-generated from a syndicated feed.)