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Microsoft Corporation
Company typePublic
ISINUS5949181045
Industry
PredecessorTraf-O-Data
FoundedApril 4, 1975; 49 years ago (1975-04-04) in Albuquerque, New Mexico, U.S.
Founders
HeadquartersOne Microsoft Way
Redmond, Washington,
U.S.
Area served
Worldwide
Key people
Products
Services
RevenueIncrease US$143 billion[1] (2020)
Increase US$53 billion[1] (2020)
Increase US$44.3 billion[1] (2020)
Total assetsIncrease US$301.3 billion[1] (2020)
Total equityIncrease US$118.3 billion[1] (2020)
Number of employees
Increase 166,475[2] (2020)
SubsidiariesLinkedIn
Xbox Game Studios
Skype Technologies
GitHub
Websitewww.microsoft.com

Microsoft Corporation (/ˈmaɪkroʊsɒft/ MY-kroh-soft) is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. Microsoft ranked No. 21 in the 2020 Fortune 500 rankings of the largest United States corporations by total revenue;[3] it was the world's largest software maker by revenue as of 2016.[4] It is considered one of the Big Five companies in the U.S. information technology industry, along with Google, Apple, Amazon, and Facebook.

Microsoft (the word being a portmanteau of "microcomputer software"[5]) was founded by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Microsoft Windows. The company's 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions, their largest being the acquisition of LinkedIn for $26.2 billion in December 2016,[6] followed by their acquisition of Skype Technologies for $8.5 billion in May 2011.[7]

As of 2015, Microsoft is market-dominant in the IBM PC compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android.[8] The company also produces a wide range of other consumer and enterprise software for desktops, laptops, tabs, gadgets, and servers, including Internet search (with Bing), the digital services market (through MSN), mixed reality (HoloLens), cloud computing (Azure), and software development (Visual Studio).

Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a "devices and services" strategy.[9] This unfolded with Microsoft acquiring Danger Inc. in 2008,[10] entering the personal computer production market for the first time in June 2012 with the launch of the Microsoft Surface line of tablet computers, and later forming Microsoft Mobile through the acquisition of Nokia's devices and services division. Since Satya Nadella took over as CEO in 2014, the company has scaled back on hardware and has instead focused on cloud computing, a move that helped the company's shares reach its highest value since December 1999.[11][12]

Earlier dethroned by Apple in 2010, in 2018 Microsoft reclaimed its position as the most valuable publicly traded company in the world.[13] In April 2019, Microsoft reached the trillion-dollar market cap, becoming the third U.S. public company to be valued at over $1 trillion after Apple and Amazon respectively.[14]

History[edit]

Further information: History of Microsoft and Timeline of Microsoft
See also: Microsoft Windows version history

1972–1985: Founding[edit]

An Altair 8800 computer (left) with the popular Model 33 ASR Teletype as terminal, paper tape reader, and paper tape punch.

Childhood friends Bill Gates and Paul Allen sought to make a business using their skills in computer programming.[15] In 1972, they founded Traf-O-Data, which sold a rudimentary computer to track and analyze automobile traffic data. Gates enrolled at Harvard University while Allen pursued a degree in computer science at Washington State University, though he later dropped out to work at Honeywell.[16] The January 1975 issue of Popular Electronics featured Micro Instrumentation and Telemetry Systems's (MITS) Altair 8800 microcomputer,[17] which inspired Allen to suggest that they could program a BASIC interpreter for the device. Gates called MITS and claimed that he had a working interpreter, and MITS requested a demonstration. Allen worked on a simulator for the Altair while Gates developed the interpreter, and it worked flawlessly when they demonstrated it to MITS in March 1975 in Albuquerque, New Mexico. MITS agreed to distribute it, marketing it as Altair BASIC.[18]: 108, 112–114  Gates and Allen established Microsoft on April 4, 1975, with Gates as CEO,[19] and Allen suggested the name "Micro-Soft", short for micro-computer software.[20][21] In August 1977, the company formed an agreement with ASCII Magazine in Japan, resulting in its first international office of ASCII Microsoft.[22] Microsoft moved its headquarters to Bellevue, Washington in January 1979.[19]

Microsoft entered the operating system (OS) business in 1980 with its own version of Unix called Xenix,[23] but it was MS-DOS that solidified the company's dominance. IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS to be used in the IBM Personal Computer (IBM PC).[24] For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle Computer Products which it branded as MS-DOS, although IBM rebranded it to IBM PC DOS. Microsoft retained ownership of MS-DOS following the release of the IBM PC in August 1981. IBM had copyrighted the IBM PC BIOS, so 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. Microsoft eventually became the leading PC operating systems vendor.[25][26]: 210  The company expanded into new markets with the release of the Microsoft Mouse in 1983, as well as with a publishing division named Microsoft Press.[18]: 232  Paul Allen resigned from Microsoft in 1983 after developing Hodgkin's disease.[27] Allen claimed in Idea Man: A Memoir by the Co-founder of Microsoft that Gates wanted to dilute his share in the company when he was diagnosed with Hodgkin's disease because he did not think that he was working hard enough.[28] Allen later invested in low-tech sectors, sports teams, commercial real estate, neuroscience, private space flight, and more.[29]

1985–1994: Windows and Office[edit]

Windows 1.0 was released on November 20, 1985 as the first version of the Microsoft Windows line

Microsoft released Microsoft Windows on November 20, 1985, as a graphical extension for MS-DOS,[18]: 242–243, 246  despite having begun jointly developing OS/2 with IBM the previous August.[30] Microsoft moved its headquarters from Bellevue to Redmond, Washington on February 26, 1986, and went public on March 13,[31] with the resulting rise in stock making an estimated four billionaires and 12,000 millionaires from Microsoft employees.[32] Microsoft released its version of OS/2 to original equipment manufacturers (OEMs) on April 2, 1987.[18] In 1990, the Federal Trade Commission examined Microsoft for possible collusion due to the partnership with IBM, marking the beginning of more than a decade of legal clashes with the government.[33] : 243–244  Meanwhile, the company was at work on Microsoft Windows NT, which was heavily based on their copy of the OS/2 code. It shipped on July 21, 1993, with a new modular kernel and the 32-bit Win32 application programming interface (API), making it easier to port from 16-bit (MS-DOS-based) Windows. Microsoft informed IBM of Windows NT, and the OS/2 partnership deteriorated.[34]

In 1990, Microsoft introduced the Microsoft Office suite which bundled separate applications such as Microsoft Word and Microsoft Excel.[18]: 301  On May 22, Microsoft launched Windows 3.0, featuring streamlined user interface graphics and improved protected mode capability for the Intel 386 processor,[35] and both Office and Windows became dominant in their respective areas.[36][37]

On July 27, 1994, the Department of Justice's Antitrust Division filed a competitive impact statement which said: "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."[38]

  1. ^ a b c d e "FY20 Q4 - Press Releases - Investor Relations". Microsoft Investor Relations. Microsoft. July 22, 2020. Retrieved August 19, 2020.
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  6. ^ "U.S. Securities and Exchange Commission – Linkedin". US SEC. December 8, 2016. Archived from the original on October 18, 2017. Retrieved April 29, 2018. As a result of the Merger, a change in control of [Linkedin] occurred and [Linkedin] became a wholly-owned subsidiary of [Microsoft]. The transaction resulted in the payment of approximately $26.4 billion in cash merger consideration.
  7. ^ "Microsoft confirms takeover of Skype". BBC. May 10, 2011. Archived from the original on June 20, 2018. Retrieved April 29, 2018.
  8. ^ Keizer, Gregg (July 14, 2014). "Microsoft gets real, admits its device share is just 14%". Computerworld. International Data Group. Archived from the original on August 21, 2016. [Microsoft's chief operating officer] Turner's 14% came from a new forecast released last week by Gartner, which estimated Windows' share of the shipped device market last year was 14%, and would decrease slightly to 13.7% in 2014. [..] Android will dominate, Gartner said, with a 48% share this year
  9. ^ Blodget, Henry (August 23, 2013). "And Microsoft Is Giving Up On The Software Business!". Business Insider Australia. Archived from the original on August 2, 2017. Retrieved August 2, 2017.
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  13. ^ "How did Microsoft just overtake Apple as the world's most valuable company?". NBC News. Archived from the original on November 29, 2018. Retrieved November 28, 2018.
  14. ^ Levy, Ari (April 24, 2019). "Microsoft hits $1 trillion market cap after earnings beat estimates". CNBC. Archived from the original on April 24, 2019. Retrieved April 24, 2019.
  15. ^ "Bill Gates". Biography.com. Archived from the original on November 6, 2016. Retrieved November 8, 2016.
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  18. ^ a b c d e Cite error: The named reference Allan 2001 was invoked but never defined (see the help page).
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  21. ^ Allen, Paul (2011). Paul Allen: Idea Man. Penguin Group. p. 91. ISBN 978-0-14-196938-1.
  22. ^ Staples, Betsy (August 1984). "Kay Nishi bridges the cultural gap". Creative Computing. 10 (8): 192. Archived from the original on May 11, 2011. Retrieved July 15, 2010.
  23. ^ Dyar, Dafydd Neal (November 4, 2002). "Under The Hood: Part 8". Computer Source. Archived from the original on September 1, 2006. Retrieved July 14, 2010.
  24. ^ Engines That Move Markets: Technology Investing from Railroads to the Internet and Beyond. John Wiley & Sons. 2002. ISBN 978-0-471-20595-1. Archived from the original on March 23, 2019. Retrieved February 8, 2018.
  25. ^ "Microsoft to Microsoft disk operating system (MS-DOS)". Smart Computing. 6 (3). Sandhills Publishing Company. March 2002. Archived from the original on April 5, 2004. Retrieved August 18, 2008.
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