The Story of Microsoft


Author: Fil Zivko
19/3/2019

You can’t mention the word PC without thinking of Microsoft. From its origins as a competitive start-up in the 1970s the company went on to take over personal computing in the nineties, and is now worth about 750 billion US dollars, making it the 4th most valuable company in the world. Perhaps just as well known as the 4-window logo, is the company’s philanthropist founder, Bill Gates who’s 90-billion-dollar net worth makes him the second richest person in the world. While things look rosy now, at one-point Bill Gates was hated by the public and Microsoft was being sued by the US government over breaching antitrust laws. The story of Microsoft and Bill Gates is one of incredible genius, a turbulent development and involves Gates trying to save the world while Microsoft tries to take over it. So just how big is Microsoft? And how did they start? Sit back and relax because I’ll tell you all about it in this video. William Gates was born in 1955 in Seattle, as a child, he enjoyed playing board games such as the world domination game of RISK and Monopoly where players try to crush their opponents financially in a sudo-economy. These early games perhaps nurtured the young Gates’ competitiveness and ruthlessness, which he later brought to the business world. From an early age, he had a passion for computers. While Gates was in high school in the late 1960’s microcomputers were starting to take off. Microcomputers were one of the first computers available to the public. While expensive to the common person, they were far cheaper than the large mainframe computers used by universities and large organisations. One of the first microcomputers, the PDP-8 cost about 150,000 USD in today’s money. Gates along with future co-founder Paul Allan and a few other friends would learn to code by renting time on corporate machines. The gang was banned after it was found that they exploited bugs in the computers code to obtain free additional time on the machines. Surprisingly, when the company found out about the boys’ trick, they then hired them to search and fix these bugs. Gates was so far ahead of the curve that the school even let him build their class scheduling program. Coincidentally, the program assigned the young Gates to no classes on Fridays and a disproportionate number of girls in his remaining classes. The future was bright for Gates. The story of Microsoft starts in 1974. Bill Gates was studying law at Harvard when his childhood friend Paul Allen showed him a new DIY microcomputer called the Altair 8800 featured on the cover of a magazine. The computer was dumb even by the standards of the day, all it could do was flash some lights. But Gates immediately realised, with some strong software, the rudimentary machine could become an affordable personal computer for anyone to use. Gate’s insight caused him to drop out so he an Allen could start a software company. They would build the software for microcomputers; logically they named the company Micro-Soft. Allen and Gates phoned the company MITS, who produced the Altair 8800 microcomputers and told them they had software written for their machine. The only problem was, that they hadn’t even started writing the software yet. Two months later, after sleepless nights and caffeinated soft drinks, they would have a meeting with MITS to showcase their work. Despite only relying on a book from a chip manufacturer and not having an Altair machine to test their code on Gates and Allen were successful in their project. Their makeshift code would be the humble start of a revolution. Soon people were using the Altair machines to process word documents and play games. Microsoft was in business. In the 80s, Microsoft would go on to provide an operating software for IBMs new personal computer for a one-time fee of $50,000. Critically, Microsoft held onto the rights of this software rather than signing it over to IBM. This allowed them to gain royalties for each licence sold on the IBM machines, but it also let them sell their operating system to other PC manufacturers, which were beginning to form. This made Microsoft a big player in the industry and was called the greatest deal in history, it did come at the cost of Garry Kildal, who was a losing player in the deal and eventually ended up spiralling to depression and an early death because of it, I’ve already covered that story, so I’ll leave a link below for you to watch that fascinating side note. Microsoft and Bill Gates became synonymous with this new age of personal computers. In the early days, Microsoft worked with Apple to create software for Apple’s hardware, in fact, Gates featured on the Macintosh 1984 promotional video. The rivalry between Microsoft and Apple would only start later that year when Gates announced plans to make a competing graphical interface operating system, inspired by his time working with Apple. Jobs blasted Gates, accusing Microsoft of theft, later filing a lawsuit, even though Xerox originally developed graphical operating systems, not Apple. The relationship between Apple and Microsoft is a complicated one, in fact, Microsoft would go on to save Apple from bankruptcy in 1997 and the reason they did it is just as interesting. In 1986, Microsofts’ IPO would go on to create 3 billionaires and approximately 12,000 millionaires. They were riding a fame wave, having just released their Windows operating system followed by the office suite. But around the mid-90s, Microsoft would land in hot water after the company bullied PC manufacturers to sign an agreement where Microsoft was paid a licencing fee every time a competitor’s software was installed on a machine. The Department of Justice was represented by David Boies, the same lawyer who would go on to represent the medical start-up fraud, Theranos. His deposition of a difficult Gates was key to the case. The pressure was building on Microsoft as the investigations continued. At this time Gates was not at all a philanthropist and was generally disliked by the public. Meanwhile, Apple was on the brink of bankruptcy, with only 90 days of cash left. In 1997, Jobs announced that Apple was entering a partnership with Microsoft, much to the dismay of fans at Macworld. Microsoft would step in to save the day by giving Apple 150 million USD in exchange for shares and making Microsoft Office included on every Mac for the next 5 years. But this move also helped Microsoft look like it helped their competitors rather than illegally bulling them. Microsoft would settle in 2004, with the judge calling Microsoft an “abusive monopoly”. Once it was all over, Gates sold all of the Apple stock. Microsoft spent the 2000s as a household name, however, the stock price remained relatively stagnated. Gates and his wife Melinda launched the Bill and Melinda Gates Foundation and eventually in 2014 Bill would make the foundation his full-time project. Needless to say, Gates philanthropy won him many supporters in the public. Gates pledged to give away 95% of his wealth in his lifetime. The foundation has faced some criticism over the causes it donates to, however, Gates seems to genuinely be trying to save the world or at least win a Nobel prize. Gates has invested in the effort to try to help Alzheimer’s disease, poverty, famine and global health. His current quest is to reinvent the toilet, challenging researchers and companies to try inventing a cheap sanitary toilet to function in the developing world. Perhaps one day, Microsoft will just be a small footnote in the life of Bill Gates. So how just how big is Microsoft today? Well, their market share of the operating system has slowly been declining, but still an astonishing 75% of PCs run Windows. In 2018, their revenue was $110 billion USD, that’s enough to give every single person in the world about $14.33. If Microsoft was a country it would be the 37th wealthiest and 193rd most populated. Microsoft owns Skype, Github, Bing, Hotmail, Xbox, LinkedIn and Nokia. Microsoft also has substantial investments in Uber, AT&T and Facebook just to name a few. And Microsoft is looking to grow. Since Gates stepped away from a full-time role at Microsoft, the stock price has been almost exponential, doubling in a 5-year period. This is largely due to the companies rebirth under new CEO Satya Nadella. Nadella oversaw the acquisition of LinkedIn, which unlike the 7 billion USD Nokia acquisition, is so far considered a great success. Microsoft also launched its range of surface laptops and other hardware. The company is diversifying and getting its fingers in a lot of pies. They’ve recently made acquisitions in video games, virtual reality, cloud computing and AI. Windows 10, released in 2015 has just passed 800 million users becoming the companies most popular operating system and is currently installed on 40% of PCs globally. Microsoft’s Hololens 2, is pitted to be an augmented reality game changer, allowing a potentially incredible change to the way we work and learn. Microsoft Azure is the second largest cloud services provider. Nadella also eased the rivalry with Apple, announcing in 2014 that office apps would become available on iOS and Android. Microsoft Edge is also trying to dent the browser market, the younger brother of the internet explorer looks promising to gain some users back from Google Chrome. However, a lot of Microsoft’s business divisions which are helping to grow the stock price now, were in place before Nadella took over. So, while Nadella has overseen this drastic change, it must be taken with a grain of salt. Let us look at some quick facts about Microsoft that are worth mentioning. During the early years of Microsoft, Gates was arrested twice for driving without a licence. The mugshot later becoming the silhouette for the default outlook 2010 profile avatar. The company grounds are littered with bunnies after someone supposedly left a bunch of unwanted pets on the campus, other reports say it was a prank. Either way, they multiplied and now they are part of the company. Microsoft beat Apple to the smartphone back in the early 2000s, however, the project never really took off for Microsoft. Microsoft passed on the opportunity to buy YouTube for 500 million in 2006 leaving it wide open for Google to purchase six months later and turn it into the internet’s most popular video hosting service. If you type in the text “= rand.old()” into word, and hit enter, it spits out the phrase “the quick brown for jumps over the lazy dog” which contains all the letters of the alphabet once. An early investment in Microsoft of $21 in 1986, would turn into over $15,000 by 2018. Microsoft employees must bring in M&Ms to share for their work anniversary, one pound for each year they have been with the company. Gates and Allen had already founded one business together in high school before Microsoft, called Traf-O-Data which managed traffic data. Analysts warned that by losing Gates to a part-time adviser role, the company would struggle. The founder mentality he brought and his presence was too important. But in 2019 that couldn’t be further from the truth. Microsoft is a long shot away from just a simple software company. It’s diversified and grown over the last 43 years into a multinational doesn’t look to be slowing down.

Tags : Microsoft, Bill Gates, How Big, Apple, PC,
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