Microsoft

Microsoft is a multinational information technology company that manufactures, licenses, acquires, and supports a range of software for use on computing devices. Its portfolio of interests also includes publishing, computer hardware, and a cable TV channel. The history of Microsoft is, to a great extent, the history of its products. Due to the manner of the development of its product portfolio and the strategies behind it, Microsoft is often portrayed as aggressive and predatory; an innovator, rather than a creator. However, the same evidence can also be construed as demonstrating a vigorous competitor that has benefited the global marketplace by supplying innovative, integrated products, enhancing the productivity of businesses and the lifestyles of consumers, and promoting corporate philanthropy while meeting new threats to profitability.

Microsoft was founded in 1975 by Bill Gates and Paul Allen in Albuquerque, New Mexico, to produce a programming language for the popular Altair 8800 computer. The pair had met at Seattle's Lakeside School over their interest in computers, and together they had dropped out of Harvard to pursue the Altair opportunity. In 1981 Microsoft won the contract to produce an operating system (OS) for the IBM personal computer (PC). For this, Gates purchased an OS from Seattle Computer Products, developing and re-branding it as MS-DOS. This gave them a pricing and a first mover advantage over competing products. In a masterstroke of contracting, Microsoft was allowed to license the operating system to other PC manufacturers, essentially becoming a premium paid to Microsoft on sales of all PCs as the market exploded. For most of the 1980s, MS-DOS accounted for 40–50 percent of revenues.

Although a usable OS was significant, it was “productivity” application software such as the VisiCalc spreadsheet that established the PC as an office tool. As users became accustomed to the possibilities offered by these kinds of software, a need for multitasking between applications and increased usability became apparent. A “windowing” graphical user interface (GUI) was seen as the solution, such as Apple had produced in 1984. In 1985 Microsoft released Windows as a GUI to the MS-DOS. This set the ground for Microsoft's growth in the 1990s from integrated productivity applications for office workers. Bundling MS Word, Excel, and PowerPoint into MS Office allowed Microsoft to build the cash reserves necessary to take on established one-application specialists such as WordPerfect and Lotus.

In the mid-1990s, after a momentary error in reading the strategic opportunity of the internet, Gates moved Microsoft strongly in that direction with MS Internet Explorer (IE), a Web browser that began as a separate application but became an integrated part of the Windows OS. The major controversies over Microsoft's strategies became apparent in this phase of its development—first over MS Windows, where Apple Computer claimed copyright infringement of their GUI, and then with MS Internet Explorer with charges of bundling and monopoly leveraging. This second charge included tactics in the so-called Browser Wars against the competitor Netscape, such as bundling IE with Windows. These various strategic moves and legal/commercial consequences contributed to a growing anti-Microsoft sentiment in popular culture.

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