Microsoft at 50: Its incredible rise, 15 lost years, and stunning comeback - in 4 charts

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Microsoft is celebrating its 50th day this week. I've been a keenly funny perceiver for astir of that history. I started penning astir Microsoft technologies arsenic a full-time occupation much than 3 decades ago, and I was an enthusiastic aboriginal adopter of the company's products for a decennary earlier that. Thinking backmost connected that past brings backmost a flood of memories.

When 1 talks astir Microsoft, it's tempting (and easy!) to absorption connected the numbers and the milestones. Revenue. Gross margins and profits. The fig of employees and partners. And, of course, the banal price. You volition beryllium bombarded with timelines and charts this week, I guarantee.

Also: Microsoft's escaped AI skills grooming 'Fest' starts soon - however to motion up

Those numbers are important, of course, but for maine they're mostly markers, tiny flags thrown down to people the ebb and travel of a institution that has genuinely changed the satellite arsenic we cognize it.

Officially, Microsoft plans to stroke retired those day candles connected April 4, 2025. That's an arbitrary date, frankly, due to the fact that Microsoft's aboriginal days were not precisely good organized. The institution did a lengthy bid of past videos successful 2009 that chronicled each twelvemonth of its beingness starting successful 1975, and that day is obscurity to beryllium recovered successful the opening episode.

Anyway, that bid ended abruptly with a conception connected 1999, accompanied by this apology:

1999 is the Series finale due to the fact that we whitethorn effort and bash thing a spot antithetic for the past decennary which would see the years 2000 to 2009. Maybe spell a spot much indepth. We haven't decided and they person not been changeable yet.

They did not ever prime up this task again, for reasons that mightiness go evident arsenic you proceed reading.

Microsoft made a batch of billionaires, almost-billionaires, and multi-millionaires successful their archetypal decennary oregon two. Why? Well ...

If you bought $1000 worthy of banal arsenic portion of Microsoft's IPO successful 1986, that banal is worthy $5 cardinal today. Even if you weren't capable to bargain shares until the extremity of that day, aft they had risen 70% supra the opening price, you would inactive person $1.4 cardinal today.

[Full disclosure: During the galore years I person covered Microsoft I person not owned shares successful immoderate idiosyncratic tech companies, including Microsoft.]

Now deliberation of the thousands of Microsoft employees who were granted banal shares arsenic portion of their compensation bundle successful those aboriginal years and past stayed astatine the institution for a decennary oregon more. I've done the math, and the fig of zeroes gets precise ample precise quickly.

Also by Ed Bott: How to upgrade your 'incompatible' Windows 10 PC to Windows 11 successful 2025

But capable astir money. In those 50 years, Microsoft has besides had a tremendous taste impact, not to notation the translation of the planetary system that was enabled by the company's software.

It's convenient to disagreement the company's past into 4 chiseled eras, 1 arsenic a startup and past 3 arsenic a nationalist company. Each of those 3 nationalist eras coincides with the tenure of the 3 Microsoft CEOs: Bill Gates, Steve Ballmer, and Satya Nadella. But it's a mistake to deliberation that each of those individuals deserves sole recognition (or blame) for what happened portion they were occupying the bureau of the CEO.

Let's commencement astatine the beginning.

Microsoft Founders Paul Allen and Bill Gates successful 1984

1975-1985: Preparing for takeoff

When 19-year-old Bill Gates and 22-year-old Paul Allen decided to crook their Altair BASIC programme for the MITS Altair 8080 into a commercialized product, they were dealing with a tiny but passionate marketplace of enthusiasts. Steve Wozniak and Steve Jobs were members of 1 of those enthusiast groups, the Homebrew Computer Club, and they wouldn't merchantability their archetypal Apple 1 for different year.

At the extremity of 1975, the brand-new institution (which Gates referred to arsenic Micro-Soft) reported full income of conscionable implicit $16,000. That's astir $96,000 successful 2025 dollars, which isn't atrocious for a mates of assemblage dropouts who had hired precisely 1 worker that year.

The adjacent fewer years were a struggle, but wrong a decade, the institution was booking much than $100 cardinal successful gross per year. By then, the institution had moved to Seattle, and the fig of employees had risen to much than 1,000.

Microsoft's aboriginal products were programming languages for hobbyists utilizing machines similar the MITS Altair 8080. They were nerds penning codification to assistance different nerds constitute code.

But the existent accelerant, the booster rocket that turned Microsoft from a postulation of misfits successful Albuquerque, New Mexico, into a planetary juggernaut successful the Pacific Northwest, was the 1981 motorboat of the IBM PC. Just look astatine the illustration supra to spot what an interaction that declaration had connected hiring.

This communicative has been told a cardinal times, truthful I won't repetition it here. (The Wikipedia nonfiction connected MS-DOS has a coagulated recap.)

Every IBM PC included a transcript of PC-DOS, which Microsoft had adapted from 86-DOS, which successful crook was a clone of Digital Research's CP/M, ported to tally connected Intel's 8086 processors. Microsoft received a royalty from IBM for each transcript of PC-DOS it shipped. Crucially, the woody with IBM allowed Microsoft to proceed selling its ain variant of the operating system, MS-DOS, which meant much licensing gross from clone makers similar Compaq and Leading Edge.

Also: It's back! Microsoft and IBM unfastened root MS-DOS 4.0

And the clone-makers took afloat vantage of their quality to undercut IBM's precocious prices. Full disclosure: I bought a Leading Edge Model D successful 1986, paying much than $2000 for an IBM PC clone that had a 30MB hard drive. (Yes, 30MB. That is not a typo.) That was a tiny fraction of what the aforesaid instrumentality would person outgo had it carried an IBM logo. Adjusted for inflation, that would beryllium equivalent to much than $5,300 today.

Over the people of its archetypal decade, Microsoft shipped Word and Excel, which brought successful a spectacular magnitude of gross to supplement the torrent of dollars that were coming successful with MS-DOS.

What's singular to retrieve astir this clip is the relation of Apple. Through the years, Microsoft and Apple person squared disconnected implicit and implicit again, but successful those aboriginal days, Microsoft made immense sums of wealth selling its exertion bundle to radical who had bought 1 of those archetypal Macintosh models.

Also: The Mac turns 40: How Apple's rebel PC astir failed again and again

Excel came retired for the Mac successful 1985. It didn't marque it to the PC until 1987. I vividly retrieve being astatine a backyard meal enactment successful 1986 erstwhile a bully person could not halt raving astir the implicit awesomeness of Excel connected his caller Mac. "Life-changing," helium called it.

Although the companywide gross numbers mightiness look ridiculously tiny to an perceiver successful 2025, the outgo to idiosyncratic users was staggering. Just however costly was productivity bundle successful those days? If you grumble astatine the thought of paying $10 a period for a bundle subscription, hole for immoderate sticker shock.

WordPerfect? $495
Microsoft Word for MS-DOS? $395
Lotus 1-2-3? $495
dBase III+ $695

Microsoft Pascal outgo $195. Borland's Turbo Pascal was an unbelievable bargain astatine lone $69.95.

Anyway, if you wanted the apical 3 PC/MS-DOS applications of the epoch -- WordPerfect, 1-2-3, and dBase -- you would beryllium paying astir $1700, which would beryllium astir $4500 successful 2025 aft adjusting for inflation. That's astir arsenic overmuch arsenic the underlying hardware cost.

What a clip to beryllium alive.

1986-1999: The 'rocket ship' years

Microsoft's archetypal nationalist offering connected March 13, 1986, was a large deal, the "IPO of the year," according to pb underwriter Goldman Sachs. By modern standards, the IPO seems downright modest, raising $61 cardinal for the institution ($163 cardinal successful 2025 dollars).

Demand was enormous, and the institution began a maturation curve that was staggering. By the extremity of 1987, Gates was a billionaire, with astir of that wealthiness attributable to a banal terms that was skyrocketing acknowledgment to licensing gross from MS-DOS and PC-DOS and a increasing postulation of apps that would aboriginal go Microsoft Office.

When fiscal analysts speech astir "hockey instrumentality maturation curves," this is what they mean.

The decennary became a bid of large wins.

In its 1990 yearly report, Microsoft noted the tremendous maturation of the PC market: "In 1980, astir 1 cardinal radical utilized idiosyncratic computers. By 1990, that fig had grown to 50 million." More than 90% of them were PCs moving Microsoft's operating strategy and Microsoft desktop applications similar Word and Excel.

Also: Dell turns 40: How a teen transformed $1,000 worthy of PC parts into a tech giant

That was besides the twelvemonth Microsoft founded its firm consulting radical and expanded its enactment with strategy integrators, cementing its presumption arsenic the preferred computing services supplier of large corporations worldwide.

Apple's Macintosh was a humble occurrence astatine that point, having sold 5 cardinal oregon truthful units. But with Steve Jobs having been forced retired of Apple, the institution was floundering. Meanwhile, Microsoft was turning Windows into an unstoppable force, reaping immense successes with Windows 3.1 successful 1991 and past creating a taste lawsuit with the merchandise of Windows 95.

I don't request to recap the past of Windows here, due to the fact that I already did that 10 years ago: "30 years of Windows: 10 milestones that changed the look of computing."

From a modern perspective, those aboriginal releases mightiness look cringeworthy. But they allowed businesses to get enactment done, and that was what mattered. As former Apple CEO John Sculley said years later, "People said, 'Well, possibly the IBM PC isn't arsenic casual to usage oregon is not arsenic charismatic arsenic the Macintosh, but it really does thing which we privation to beryllium capable to bash – spreadsheets, connection processing and database..."

In 1988, Apple filed a copyright infringement lawsuit against Microsoft and Hewlett-Packard, alleging that Gates and Company had stolen the "look and feel" of the Macintosh operating system. The lawsuit dragged connected for six years, with Apple losing each claims but for a ruling that the trash tin icon was protected. And that's wherefore you determination deleted files into a Recycle Bin connected the desktop of a Windows PC.

And past determination was Internet Explorer, which was hastily cobbled unneurotic and released arsenic portion of an add-on battalion for Windows 95. It was added to Windows successful 1996 and began gobbling marketplace stock from what had been the ascendant browser of the time, Netscape Navigator, whose IPO successful 1995 defined that decennary arsenic Microsoft had defined the 1980s.

Also: How Netscape lives on: 30 years of shaping the web, unfastened source, and business

IE grew its stock successful the web browser marketplace from 0 to 86%, utilizing Microsoft's acquainted tactics of bundling bundle with OEM PCs. But the institution was large capable by this clip that antitrust authorities were taking notice. In 1994, Microsoft had signed a consent decree with the US Department of Justice, agreeing not to necktie different Microsoft products to the merchantability of Windows.

Microsoft argued that Internet Explorer was a feature, not a product. The DOJ disagreed, filing an antitrust suit successful 1998 that had a profound interaction connected the company's growth.

By the extremity of the decade, Microsoft was inactive generating immense gross and profits, but determination were acheronian clouds connected the horizon.

2000-2014: The mislaid years

If the erstwhile 2 decades had been a relentless succession of victories for Microsoft, the crook of the millennium flipped a power that turned each of that momentum upside down. And it each started astatine the opening of 2000 erstwhile caller CEO Steve Ballmer took over.

At the opening of 2000, I had a quiescent speech with a workfellow who had been a Microsoft spouse for much than a decennary and had built a thriving business. He was selling each of his Microsoft stock, helium said, due to the fact that the institution was going obscurity for the adjacent decade.

This illustration says helium made a bully call.

If you bought Microsoft banal astatine the opening of its fiscal twelvemonth 2000 and held it for a decennary and a half, your holding would person been underwater. At the opening of fiscal twelvemonth 2015, you inactive wouldn't person caught up.

Even the biggest triumph of that decade, the merging of the user and concern operating systems into Windows XP, was clouded by disaster. The motorboat enactment was held successful New York City successful October 2001, a period aft the 9/11 attacks, and the solemnisation was subdued.

In fact, that full decade-and-a-half was a bid of what concern schools euphemistically telephone challenges.

The institution mislaid its antitrust lawsuit. An appeals tribunal threw retired the judge's bid that the institution beryllium breached up, and the institution coiled up signing a colony that importantly hampered its quality to vie successful the important marketplace for online bundle and services for the adjacent decade. That opened up immense opportunities for Google and a resurgent Apple, which they exploited fully. How effectual was their competition? I wrote successful 2010 when the consent decree expired:

[W]e present unrecorded successful an epoch where, arguably, 3 companies person effectual monopolies successful antithetic corners of the exertion industry. Microsoft inactive has an overwhelming stock of the PC market, though that stock is nether onslaught arsenic alternate devices statesman to bash what utilized to necessitate a PC. Google has a stranglehold connected hunt and online advertizing and is doing each it tin to widen that monopoly into caller markets. Apple has a Microsoft-like stock of the marketplace for integer euphony and portable devices and is reportedly nether antitrust scrutiny by 2 agencies of the United States government.

Meanwhile, Microsoft was struggling with Windows. In January 2002, aft a bid of widespread, high-profile, and highly embarrassing information incidents that affected Windows customers and Microsoft itself, Bill Gates wrote his present famous "Trustworthy Computing" memo. It took years for that effort to wage disconnected successful tangible terms, and the disruption was astir apt the cardinal origin successful Microsoft's determination to standard backmost its ambitious Longhorn upgrade and alternatively crook it into ... Windows Vista.

How'd that enactment out? For Apple, it was the accidental of a lifetime. Remember the "Get a Mac" ads, wherever John Hodgman arsenic the frumpy PC and Justin Long arsenic the chill Mac skewered each flaw successful the Windows ecosystem? ZDNET Editor-in-Chief Jason Hiner nailed the 5 reasons Vista failed mode backmost successful 2008.

Also: If your Windows 10 PC can't beryllium upgraded, you person 5 options earlier clip runs out

Microsoft recovered with Windows 7, past delivered the biggest nonaccomplishment successful its agelong past of operating systems: Windows 8. That was a bold gamble to harvester PCs and tablets, and it was specified a spectacular miss that its main architect, Steven Sinofsky, was fixed the prime to permission oregon beryllium fired conscionable days earlier the merchandise launched. It lasted 3 years, and its successor, Windows 10, brought backmost the Start paper portion tossing retired astir each facet of the touch-centric Windows 8 interface.

No treatment of this play would beryllium implicit without a thorough dissection of Microsoft's long, expensive, and unsuccessful effort to ace the mobile market. It started with Windows Mobile and turned into a full-court property to marque the Windows operating strategy standard to tally connected mobile devices arsenic good arsenic it did connected PCs.

And successful the astir disastrous determination of all, Ballmer green-lighted a woody to wage €5.44bn ($7.2 billion) for Nokia's devices and services concern successful 2013; little than 15 months aft the woody was complete, the institution folded the business, taking a $7.6 cardinal writedown, positive a $750m to $850m restructuring charge.

It was an ignominious extremity to Steve Ballmer's tenure, for sure. It didn't assistance that helium had to conflict done the dot-com illness and the 2008 fiscal crisis, but still...

2015-2025: To the cloud!

When New Year's Day 2015 rolled around, Satya Nadella had been CEO of Microsoft for little than a year. When helium took over, the company's marketplace capitalization was astir $269 billion. When I checked conscionable now, the marketplace headdress had risen to $2.9 trillion. That's reminiscent of the aboriginal days, isn't it?

Maybe we tin get backmost to that Ballmer feline and springiness him a stock of the recognition for that immense gain. After all, he's the 1 who promoted Nadella into a enactment relation reporting straight to him. Ballmer was besides successful complaint for the years erstwhile Microsoft was investing billions of dollars into its unreality businesses, Azure and Microsoft 365.

Those investments paid disconnected large time, arsenic this illustration shows.

Give Nadella recognition for ruthlessly sidesplitting disconnected unprofitable businesses and focusing the institution connected unreality services.

We already talked astir Windows Phone, which was connected beingness enactment astatine the commencement of 2014 and flatlined soon after. Internet Explorer was inactive hanging around, absorbing improvement resources. It's present defunct, but successful a well-hidden, heavy sandboxed mode for a fewer borderline cases (sorry) that endeavor customers insisted on.

Xbox, connected the different hand, seems to beryllium doing conscionable fine, with a dependable pulse and nary signs of slowing down.

Also: Microsoft's caller AI agents purpose to assistance information pros combat the latest threats

Windows is inactive a profitable concern for Microsoft, but it's nary longer the halfway of the company. Perpetual licenses of Office are besides declining, replaced by Microsoft 365 subscriptions.

The pandemic gave an unexpected boost to the PC business, but it's unclear however agelong that tin spell on. An expanding magnitude of idiosyncratic concern is being done connected smartphones, a concern that Microsoft is progressive successful lone tangentially, and corporations are making PCs past longer, due to the fact that astir of their workloads are present being done successful the cloud.

Microsoft's future: AI and beyond

What exertion volition specify the adjacent epoch of Microsoft's existence? Conventional contented says that AI is the way, and that's surely the absorption the institution is taking with its insistence connected putting a Copilot successful each product. You tin gully a throughline from Clippy, the Office adjunct that was the butt of a cardinal jokes successful the 1990s, to Cortana, the astute adjunct that was expected to beryllium Microsoft's reply to Siri, to the AI-driven Copilot.

Also: How to region Copilot from your Microsoft 365 plan

Microsoft has been working with OpenAI since 2019, erstwhile it invested $1 cardinal successful the company, and it's poured astatine slightest different $12 cardinal into the concern since then, contempt having an awkward competitory relationship with its partner. And that's conscionable a down payment. The existent concern comes successful gathering monolithic information centers to grip those computer-intensive workloads. Earlier this year, Microsoft reported that it was planning to walk a staggering $80 billion successful fiscal twelvemonth 2025 gathering those information centers.

Those are immoderate gigantic bets, and there's nary assurance they'll wage off.

If past teaches america anything, it's that the aboriginal is unpredictable, and the biggest changes volition travel from events that nary 1 saw coming. Just for grins, though, I asked Microsoft's Copilot for Windows what it thought.

Hey, Copilot, tin you foretell the aboriginal of Microsoft?

I can't foretell the future, but I tin connection immoderate educated insights based connected trends and Microsoft's strategical direction. Under Satya Nadella's leadership, Microsoft has successfully transformed into a cloud-first company, with Azure arsenic a large operator of growth. Its investments successful AI, productivity tools, and gaming (like Xbox and the acquisition of Activision Blizzard) suggest the institution volition proceed expanding crossed aggregate sectors.

Additionally, with its absorption connected sustainability and integrating AI technologies into its products, Microsoft is positioning itself arsenic a person successful innovation and ethical tech development.

Of course, marketplace dynamics and unforeseen challenges could ever interaction its trajectory, but Microsoft seems well-equipped to accommodate and thrive.

That sounds similar a reasonably harmless bet. But aft decades of watching this company, the 1 happening I cognize for definite is that thing is certain. And determination are nary harmless bets.

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