Microsoft Volume I

In the 1970s, Bill Gates and Paul Allen, childhood friends and computer prodigies, founded Microsoft. This company would later become synonymous with the personal computing revolution.

Microsoft was founded in 1975 by Bill Gates and Paul Allen, who were childhood friends and prodigiously skilled computer programmers.

Bill Gates was born in 1955 to a prominent Seattle family, and from a young age demonstrated immense intelligence, competitiveness, and interest in computer technology.

Bill Gates III, born to Bill and Mary Gates in Seattle, Washington, was immersed in business and politics from a young age in a family that valued competition and intellect. Mary Gates was a notable businesswoman and Bill Gates Sr. a leading lawyer. The household fostered Gates's competitive spirit and ambition; by 13, he was already contemplating his future CEO role.

As teenagers, Gates, Allen, and others formed the "Lakeside Programmers Group." They gained programming experience with early microcomputers by finding bugs for a startup company, C cubed, and writing software for another company in Portland. Gates, especially known for his math skills, had access to advanced technology like the PDP-10 during his school years, which shaped his understanding of computer technology's potential.

As teenagers, Gates and Allen became involved with the early microcomputer scene, gaining valuable programming experience and establishing relationships with key industry players.

In high school and college, Gates and Allen got their first taste of the microprocessor through projects. Their early venture, Traf-O-Data, demonstrated their knack for applying technology to real-world issues. They realized the revolution that microcomputers would bring to the computing landscape well before the term "personal computer" became mainstream. Allen even moved to Boston to be near Gates in anticipation of the microcomputer revolution, and they both worked at Honeywell to expand their programming expertise.

The vision that spurred the founding of Microsoft came while Gates was at Harvard. With the release of the Intel 8080 chip, Gates and Allen recognized the impending shift from unwieldy machines to compact, powerful microcomputers. They initially waited for big companies to dominate the emerging market, but when that didn’t happen, they seized the opportunity. Gates dedicated his talents to software, a decision shaped by the realization of his natural capacities intersecting with this technology inflection point.

The pair falsely told MITS, makers of the Altair 8800, they had a BASIC interpreter ready, securing a monopoly agreement with MITS. They then quickly developed a working interpreter using Harvard’s PDP-10, and Allen had to hand-code a bootloader in-flight to Albuquerque to demo their software, which worked successfully. This venture marked Microsoft's first major breakthrough.

The company was initially established as a partnership, with Gates owning 64% and Allen 36%, before later incorporating and taking on outside investment.

Microsoft's original business structure was a partnership established on April 4, 1975, with an ownership split that favored Gate ...

Microsoft's rise to dominance in the computing world is largely attributed to its key partnerships and strategic deals, particularly the historic agreement with IBM in 1980.

Microsoft cultivated important early partnerships and licensing deals, including with Digital Research and Seattle Computer Products, laying the foundation for their later success.

In the early 1980s, IBM, then the leading force in computing, turned its focus to the personal computer market, marking a departure from their mainframe stronghold. This move came after witnessing the rapid growth of the microcomputer market and an eagerness not to miss out as they did with the mini-computer era dominated by DEC.

Recognizing the opportunity, IBM formed the entry-level systems division and initiated Project Chess to develop the IBM PC using off-the-shelf components. The project was conducted in secret with the aim of competing against the burgeoning market of microcomputers epitomized by companies like Apple.

To avoid antitrust claims and due to a lack of priority on owning software, IBM sought to separate software from their hardware, which proved advantageous for Microsoft. Bill Gates foresaw the potential of a widespread clone-PC market, envisioning a strategy to position Microsoft at the forefront.

It was against this backdrop that Microsoft's established team, including Bill Gates, Paul Allen, Steve Ballmer, and Charles Simonyi, worked closely with IBM. In November 1980, IBM and Microsoft signed an agreement for Microsoft to provide DOS for the IBM PC. Microsoft leveraged their knowledge of the market and secured full rights to QDOS from Seattle Computer Products, which allowed them to license the operating system to other manufacturers freely.

The IBM deal in 1980 was a pivotal moment, where Microsoft was able to secure the rights to provide the operating system (DOS) for the new IBM PC, establishing Microsoft as the standard platform.

The deal with IBM was a landmark moment for Microsoft, laying the groundwork for their subsequent industry dominance. For an initial payment of $430,000 from IBM for DOS and other tools, Microsoft retained the right to license DOS independently. The strategic significance of this deal cannot be overstated: it allowed Microsoft to sell DOS to any PC manufacturer, ensuring that their operating system became the standard in the burgeoning PC market. The release of the IBM PC in August 1981 marked the emergence of Microsoft as the linchpin of the PC industry.

Microsoft's willingness to license DOS widely to other PC manufacturers, rather than locking it to IBM, allowed them to rapidly become the dominant operating system for the entire personal computer industry.

By structuring the IBM deal to keep the rights to DOS, Microsoft effectively turned DOS into the default operating system. As other manufacturers sought to create IBM-compatible PCs, they naturally turned to Microsoft for their operating system needs. Compaq's reverse-engineering of IBM's BIOS further entrenched DOS's position in the market. Microsoft's savvy licensing agreements, which stipulated payment per shipped PC, turned out to be a lucrative strategy, reflected in their soaring revenue from $25 million in 1982 to $98 million by 1984.

Simul ...

Microsoft’s remarkable evolution into a powerhouse of the personal computing industry is a tale of strategic growth through product development, smart marketing, and by leveraging its operating system to build an encompassing ecosystem.

Microsoft leveraged their position as the provider of the standard PC operating system to rapidly grow their business, outpacing competitors through strategy and execution.

Microsoft has cleverly used its position as the provider of the standard PC operating system to accelerate its growth, outstripping competitors through both its strategy and execution. This was complemented by the rapid advancements in microprocessor technology, such as the shift from 8-bit to 16-bit processors, which set the stage for the growth of personal computing.

In 1985, Microsoft delved into the concept of a software suite by releasing a bundle originally called the Business Pack for Microsoft, starting on the Mac. This included Word, File, Chart, and Multiplan, marking the introduction of a unified marketing message for different applications sold together. By 1988 or 1989, the Microsoft Office suite expanded to include Word, Excel, PowerPoint, and despite the absence of product integration like copying from Excel and pasting into Word in the earlier versions, Microsoft was pioneering the idea of selling software at a bundled, reduced price if bought together.

Microsoft pursued a multi-faceted approach, simultaneously developing their applications (like Office) and operating systems (like Windows) to create a mutually reinforcing ecosystem.

The company’s strategy for creating an ecosystem is evident in Bill Gates’ 1991 memo that envisioned "Windows, one evolving architecture, a couple of implementations, and an immense number of great applications from Microsoft and others." This strategy is exemplified by the release of Windows 3.0, which, thanks to the installed base of 386 and 486 machines, could effectively run a multitasking graphical user interface. This was a turning point that helped establish Microsoft’s dominance and signaled a move away from IBM's traditional PC model, paving the way for an era of multitasking graphical operating environments.

Additionally, the development of Windows NT laid the groundwork for Windows Server and Azure, indicating foresight into the long-term product strategy. As more users adopted Windows, developers were encouraged to create applications for the platform, which in turn, increased Windows’ popularity among users.

The Developer Relations Group at Microsoft was pivotal in fostering an environment that was conducive to application development by identifying and meeting developer needs for a platform, providing vital APIs, support, and documentation.

The company's ability to rapidly iterate and improve their products, combined with aggressive marketing and distribution, enabled Windows to become the dominant PC operating system.

Microsoft's approach to market dominance was strategic, focusing on software quality and user preference, rather than simply pushing their products onto consumers. Their market strategy saw them build critical relationships with OEMs such as HP, Compaq, Dell, and Gateway, propelling Windows' go-to-market strategy. Moreover, by internationalizing their efforts early on, Microsoft ensured their software was globally prepared, which broadened their user base significantly.

Internal practices, such as encouraging companies not to ship any operating systems other than DOS or Windows on their computers, contributed to the spread of Microsoft's operating systems – despite later scrutiny by regulators.

Microsoft's willingness to copy and improve upon successful products from competitors, ...

Following the launch of Windows 95 in 1995, Microsoft was transformed into the preeminent technology company, and Windows became the standard computing platform.

The launch of Windows 95 in 1995 was a seminal moment, transforming Microsoft into the preeminent technology company and cementing Windows as the standard computing platform.

The Windows 95 launch was a massive, global marketing event that captured the public's imagination and drove widespread adoption of the new operating system.

Windows 95 was recognized as a significant force that won the market, with Microsoft making a full commitment from viewing it as a "Plan B" to making it their main focus. This choice was pivotal in confirming Windows as the franchise product of the company for approximately the next two decades. The launch event on August 24th, 1995, was a grand affair likened to cultural events like movie or album releases. Microsoft's campus in Redmond, Washington, was decked in tents, journalists and beta testers were flown in, and people queued around blocks worldwide to purchase the product, similar to an iPhone launch. Notable landmarks like the CN Tower and the Tower of London lit up for the event. Rosenthal echoed the sentiment of miracle-like internal processes to bring everything together, while the iconic song "Start Me Up" by the Rolling Stones was licensed as the official theme song, signaling the operating system's importance as a cultural phenomenon.

Windows 95 introduced numerous user-friendly features and capabilities that made personal computing more accessible to mainstream consumers, accelerating the growth of the PC market.

The aim was to create an operating system for everyone, focusing on ease of use, quality of life, and affordability. Features like the Start menu made computers user-friendly and attracted new demographics, including those not typically associated with technology. Moreover, technical shifts from an operating environment to a true 32-bit system, with its own file system, led to higher efficiency and user experience advantages.

The success of ...