Microsoft and How It’s Changed Technology

Microsoft is almost everywhere you look. It’s a massive multinational company that has existed since the 1970s and continues to be a powerful force in technology development to this day. Its products and services have integrated into both our work environments and our home lives to the point that it would be hard to imagine life without some form of Microsoft’s creative touch. From personal computers to gaming to email, Microsoft has worked its way into multiple facets of our daily lives and shaped the way we use computers today. 

History of Microsoft

Microsoft began in 1975 from the efforts of Bill Gates and Paul Allen. The name was a condensed version of ‘Micro-computer software”. They dove into the business of computer operating systems in 1980 with Xenix, their version of the operating system Unix. On November 20, 1985, they released Microsoft Windows, probably their most well-known creation.

Five years later, they brought out Microsoft Office, a combination of various highly useful applications including Microsoft Word and Microsoft Excel. Versions of these are still highly used today in both business and personal applications. In another five years, Bill Gates would recognize the potential and changing atmosphere of computers and Microsoft would jump into the World Wide Web. This lack of hesitation would prove to be fruitful as they established themselves with computer networking earlier than other companies.

Microsoft continued to improve their existing services with things like Windows 95, but their next major deviation from their norm was in 2001 when they joined the video game console business with Xbox. This would be another profitable move for them.

The world of technology and how people use computer software is always changing and evolving and as cell phones and other mobile devices began to grow, Microsoft knew they needed to get into that market as well. In 2012 they started making their own hardware and used it in their new Surface. They also wanted to compete with the rising star Google and created Outlook to offer a similar online mailing service to Gmail. Realizing they needed to split up the focus of their company, they reshaped their structure to have four divisions midway through 2013. These would each handle different areas of their growing services with an Operating System division, a division for apps, one for the Cloud, and the last for their devices.

Microsoft has continued to acquire other companies and make changes within itself in order to accommodate the growing needs of its consumers.

Microsoft finances and acquirements

Microsoft first went public in 1986 with an opening stock price of $21. It then closed at the price of $27.75. In 1999, the stock price peaked at about $199 and they began to give a dividend in 2003 and they were able to switch from annual to quarterly dividends two years later. In July of 2010, Microsoft’s stock split.

In 2011, Microsoft would release a bond amounting to $2.25 billion and see assets equaling $41 billion, while only having unsecured debts that added up to $8.5 billion. However, it wasn’t a perfect year as they also saw Apple Inc. finally pass them in quarterly profits and revenues. This was a result of a decrease in PC sales, but also because Microsoft’s Online Services Division was struggling. Since 2006 this division has continued to lose the company money and the same year Apple Inc. pulled ahead they saw a loss of $726 million in the first quarter.

This was followed by the first quarterly loss Microsoft experienced, posting a $492 million net loss on July 20, 2012. This was primarily caused by an advertising company called aQuantive they acquired for $6.2 billion in 2007.

Despite the problems, the company continued to grow and change, and in 2014 was the 8th largest company in the world by market capitalization. They acquired two other companies to aid them in branching out more. One was Nokia for $7.2 billion and the other was a quickly growing game developer company called Mojang, the creators of the immensely popular game Minecraft.

Microsoft saw a huge success in November of 2018 when they won a $480 million contract with the US military. The contract was for developing AR, or augmented reality technology to help train soldiers. The two-year contract may lead to further contracts down the road and will be used in various training and Microsoft providing 100,000 headsets.

Problems with Microsoft

They seem to fall behind when it comes to new ideas

Microsoft was innovative and took full advantage of the growing new online world in its beginnings. However, they seem to have lost some of that initiative with time. They’ve continued to fall behind other major technology companies as the industry has shifted to more mobile developments. Towards the end of 2010, they replaced their Windows Mobile operating system with Windows Phone OS. Despite this being the right move, they’ve still lagged behind other major names like Apple and Android.

Legal problems

Microsoft, like most major companies, has seen its share of controversy and legal issues. Back in 1990, the FTC (Federal Trade Commission) began to look into their partnership with IBM for possible collusion. This started a long list of legal issues throughout the duration of the company. In 1994, the Antitrust Division of the Dep. Of Justice filed a statement detailing how Microsoft committed competitive impact by demanding an OEM pay Microsoft a royalty for each computer it sells with a certain microprocessor. This means that even if the computer being sold isn’t using a Microsoft operating system, it may still have to pay Microsoft. According to the statement, this royalty is acting as a tax or penalty for using a competing PC operating system.

This wasn’t the end of Microsoft’s abuse of power. In 1997, a motion was filed with the Federal District Court, claiming that Microsoft was in violation of an agreement they signed in 1994 by bundling Internet Explorer and Windows.

In 1999, this attempt at controlling competition continued as Microsoft and some other major technology companies created the Trusted Computing Platform Alliance. This alliance was started to keep their intellectual property safe. However, it also meant that consumers were severely restricted in their use of software and computers. This alliance made it so hardware manufacturers could control which software is run and restricting any software that wasn’t approved by them. This rubbed many the wrong way and limited the ability of people to control their own computers.

Microsoft found itself in legal trouble again with the case of the United States v. Microsoft Corp. in 2000. The judgement deemed the company an “abusive monopoly” and Microsoft settled with the US Dep. Of Justice in 2004.

Employee controversy

Throughout the years, Microsoft has proven they are not afraid to lay off mass numbers of employees. In 2009, after the Great Recession, Microsoft laid off 5,800 employees to try and recover some of the loss the company felt from the financial crisis. In 2014, the company revealed they would be committing a 14% reduction in the number of employees and planned to lay off 18,000 of their employees. Many have criticized these layoffs, stating that such a large and wealthy company could have found alternate ways to make up for these losses or that they should have reduced the amount of employees impacted. 

Bill Gates

Early life

Bill Gates was born to a respectable family on October 28, 1955, his father a successful lawyer and his mother involved in the financial world as a daughter to the national bank president and serving on the board of a financial holding company. However, Gates’ childhood wasn’t always ideal. He was small for his age and was often the victim of bullying.

Gates grew up in a highly competitive home where his parents encouraged him to try and be better than others. In an interview with 1PBS, Vern Raburn, former president of Microsoft’s Consumer Products Division, said that, “I ended up spending Memorial Day Weekend with him out at his grandmother’s house on Hood Canal. She turned everything into a game. It was a very very very competitive environment, and if you spent the weekend there, you were part of the competition, and it didn’t matter whether it was hearts or pickleball or swimming to the dock… there was always a reward for winning and there was always a penalty for losing.”

When he was 13, he enrolled in a private school for gifted students called Lakeside Prep where he would meet two of his lifelong friends and business relations Paul Allen, Kent Evans, and Ric Weiland. He was able to have access to an electromechanical teleprinter, which was a machine designed to send and receive typed messages. The Mother’ Club for the school was able to get the students some computer time as well, as computers were not something available to everyone. The decision by a group of mothers to use rummage sale proceeds for this purpose would be the stepping stones for Gates to finding his passion and shaping the way the world uses technology.

Gates was fascinated with programming, loving the programming language called BASIC and was so adept at it that he was excused from math class in order to have more time on the machines. He created his first program to play a game with the computer. After a while, the time block the Mothers’ Club’s donation paid for ran out, but Gates was hooked. He and some other students began to seek out computer time for themselves. One of the computer companies they used was the Computer Center Corporation, which banned Gates and his friends from returning one summer. They were caught taking advantage of bugs within the system to get more time for themselves.

Instead of letting this get in their way, they formed the Lakeside Programmers Club and got the Computer Center Corporation to hire them to find bugs. Through this small business, Gates was able to go to the company offices and actually get a look at the source codes used by the minicomputers, which would not fit what we would consider mini today. He would stay working for the Computer Center Corporation until they closed in 1970.

Gates and Evans had formed a tight bond over their time as fellow Lakeside students, and they continued working together when the school hired them, while still students, to automate the class scheduling. They worked hard to finish the program by their senior year, earning more computer time as part of their pay.

However, on May 28, 1972, over the Memorial Day weekend, a tragedy that Gates could never forget occurred. After pulling multiple all-nighters and working around the clock to achieve their goal, Kent Evans decided to take a break and went mountain climbing. He slipped and fell, ending his young life. Gates has never forgotten his childhood friend, and in an interview with the 2Washington Post in 2000, he said, “It’s been nearly thirty years and I still remember his phone number.”

Unwilling to let their shared project end, Gates enlisted the help of another friend, Paul Allen. They were able to finish the job and went on to start another called Traf-O-Data, a traffic counting system that would look at traffic tape and read it automatically instead of requiring a person to read it.

In 1973, he graduated as a National Merit Scholar and passed the Scholastic Aptitude Tests (SAT) with a score of 1590 out of a possible 1600. He enrolled at Harvard College and, following in his father’s footsteps, majored in pre-law. He couldn’t let go of his passions entirely and also took mathematics and computer science at a graduate level. It was at Harvard that he met Steve Ballmer, another lifelong friend. After two years, Gates decided to leave Harvard. He had stayed in contact with Paul Allen and decided to work with him at Honeywell in 1973, a company that focused on the four Business Groups Aerospace, Performance Materials & Technologies, Safety & Productivity Solutions, and Building Technologies.

The start of Microsoft

In 1974, MITS (Micro Instrumentation and Telemetry Systems) released the microcomputer called the Altair 8800 and was the reason Gates dropped out of Harvard. He and Allen knew this was their chance to start their career in programming, and with his parents’ blessing, he left behind a potential law career and moved towards his real interests. Discussing his decision to leave Harvard, 3Gates said, “If things hadn’t worked out, I could always go back to school.”

The two ambitious young men decided to bluff, and Gates contacted MITS to tell them that they were working on an interpreter for MITS new platform. The goal was to see if the interest was there, and it was. MITS wanted to see a demonstration. This was a problem for Gates and Allen as they didn’t even have the Altair 8800 and they had not started to work on any coding. Over the next few weeks, they managed to create an Altair 8800 emulator that they could work with. Gates then returned to his favorite programming language when he was a child, BASIC. They pulled it off and MITS was impressed with what they had created.

The two began working together and Allen decided to name their partnership after a combination of the words ‘microcomputer’ and ‘software’, Micro-Soft. After only a year, the hyphen was removed to give us the name we recognize today, Microsoft. The first person the two hired was someone they knew they could trust, their childhood friend Ric Weiland. As they worked to create the interpreter, a pre-market copy was distributed and hobbyist programmers began to build their own. Gates sent out an open letter which displayed an understanding of the financial prospects of this technology. In the letter, he discusses that there will never be adequate careers and standards to the industry if hobbyists continued to simply build their own versions. While many didn’t agree with Gates, it proved he wanted to make this into a career option not only for himself, but for others like him. “

In 2000, Bill Gates stepped down as CEO and chose Steve Ballmer to take his place. He would still maintain other positions within the company and created the position of Chief Software Architect for himself. In 2006, he retired from this created role, but still had some other positions as well as continuing to be an advisor for the company.

Controversy

Paul Allen was diagnosed with cancer and had to step away from Microsoft in 1983. For a while, it seemed that Gates and Allen were still on somewhat good terms. However, it was later revealed by Allen in his book, “Idea Man: A Memoir by the Co-founder of Microsoft,” that while he was in treatment for his cancer, Gates was trying to underhandedly take shares from him. This painted a completely different picture of one of the world’s richest men than what his philanthropic public image has portrayed. Combining this with the bullying tactics Microsoft has used over the years, some have wondered about the morality of Gates.

Good deeds

Despite these concerns, Bill Gates has made several moves to helping various charities, as well as starting his own called the Bill and Melinda Gates Foundation that works to help a variety of causes, especially with major health needs and concerns.

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