Microsoft Corporation:
The American multinational technology company Microsoft Corporation creates computer software, home appliances, laptops, and associated services. The Windows series of operating systems, the Microsoft Office package, and the Internet Explorer and Edge web browsers are among Microsoft's most well-known software offerings. Microsoft is headquartered on the Microsoft campus in Redmond, Washington. The Xbox video gaming consoles and the Microsoft Surface range of touchscreen personal PCs are its two main hardware offerings. Microsoft, the largest software producer in the world by sales as of 2019, was rated No. 21 in the 2020 Fortune 500 rankings of the biggest American firms. Along with Alphabet, Amazon, Apple, and Meta, it is one of the Big Five American technological firms.
On April 4, 1975, Bill Gates and Paul Allen established Microsoft to create and market BASIC interpreters for the Altair 8800. In the middle of the 1980s, MS-DOS and then Windows propelled it to the top of the market for personal computer operating systems. Three people became billionaires thanks to Microsoft's 1986 initial public offering (IPO) and subsequent increase in share price, while an estimated 12,000 Microsoft workers became millionaires. Since the 1990s, it has expanded its market outside operating systems and acquired several businesses. Their most significant purchase to date was LinkedIn for $26.2 billion in December 2016, which was followed by Skype Technologies for $8.5 billion in May 2011.
Although it has lost the majority of the total operating system market to Android, Microsoft continues to have a commanding position in the markets for operating systems compatible with IBM PCs and office software suites as of 2015. In addition, the company creates a wide variety of additional consumer and business software for desktops, laptops, tabs, gadgets, and servers, including Internet search (with Bing), the digital services market (through MSN), mixed reality (HoloLens), cloud computing (Azure), and software development (Visual Studio).
In 2000, Steve Ballmer succeeded Bill Gates as CEO, and he later developed the "devices and services" strategy. As a result, Microsoft acquired Danger Inc. in 2008, made its debut in the personal computer manufacturing industry in June 2012 with the release of its Surface line of tablets, and subsequently established Microsoft Mobile by purchasing Nokia's devices and services business. The firm has reduced its emphasis on hardware and increased its usage of cloud computing since Satya Nadella became CEO in 2014. This shift has helped the company's stock achieve its highest value since December 1999.
In 2018, Microsoft recaptured its title as the most valuable publicly listed business in the world after being dethroned by Apple in 2010. After Apple and Amazon, Microsoft became the third American public firm to have a market worth $1 trillion or more when it did so in April 2019. Microsoft will have the fourth-highest worldwide brand worth as of 2022.
Microsoft has been under fire for its monopolistic business methods, as well as for issues with its software's usability, reliability, and security.
History:
1972–1985: Founding:
Bill Gates and Paul Allen were childhood friends who wanted to start a business using their expertise in computer programming. They established Traf-O-Data in 1972, a company that sold a crude computer for monitoring and analyzing data on vehicle traffic. While Allen attended Washington State University to earn a degree in computer science before leaving to work at Honeywell, Gates enrolled at Harvard University. Allen proposed that they could create a BASIC interpreter for the device after reading about the Altair 8800 microcomputer from Micro Instrumentation and Telemetry Systems (MITS) in the January 1975 issue of Popular Electronics. MITS called Gates and asked for a demonstration after Gates claimed to have a functional interpreter. Gates created the interpreter while Allen worked on an Altair simulator, and they showed MITS in Albuquerque, New Mexico, in March 1975 how well it worked. MITS agreed to market it as Altair BASIC and distribute it. 108, 112–114 On April 4, 1975, Gates and Allen founded Microsoft. Gates served as CEO, and Allen suggested the name "Micro-Soft," which is short for microcomputer software. As a result of an agreement the company made with ASCII Magazine in Japan in August 1977, ASCII Microsoft opened its first overseas office. In January 1979, Microsoft relocated its corporate headquarters to Bellevue, Washington.
Microsoft made its foray into the operating system (OS) market in 1980 with its own Unix variant called Xenix, but MS-DOS cemented the company's hegemony. In November 1980, IBM and Microsoft signed a contract for Microsoft to deliver a CP/M OS version for the IBM Personal Computer (IBM PC). Microsoft acquired the CP/M clone 86-DOS from Seattle Computer Products for this deal, branding it as MS-DOS while IBM rebranded it as IBM PC DOS. MS-DOS was still under Microsoft's control after the IBM PC was introduced in August 1981. For non-IBM hardware to function as IBM PC compatibles, other firms had to reverse engineer the IBM PC BIOS since IBM had copyrighted it. However, no such limitation applied to the operating systems. Microsoft ultimately rose to prominence as the major provider of PC operating systems. With the introduction of the Microsoft Mouse in 1983 and the establishment of a publishing subsidiary called Microsoft Press, the business entered new markets.: 232 In 1983, Paul Allen left Microsoft after being diagnosed with Hodgkin's lymphoma. When Gates was diagnosed with Hodgkin's illness, Allen said in Idea Man: A Memoir by the Co-Founder of Microsoft that Gates wanted to reduce his ownership stake in the business because he did not believe he was working hard enough. Later, Allen made investments in low-tech industries, sports franchises, corporate real estate, neurology, commercial spaceflight, and other things.
1985–Present (Acquisitions, Xbox Series X/S, and Windows 11):
Despite having started working together on OS/2 with IBM the previous August, Microsoft introduced Windows as a graphical add-on for MS-DOS on November 20, 1985: 242-243, 246. On February 26, 1986, Microsoft relocated its headquarters from Bellevue to Redmond, Washington, and on March 13, it went public. As a consequence of the increase in stock price, Microsoft workers became an estimated four billionaires and 12,000 millionaires. On April 2, 1987, Microsoft made their version of OS/2 available to original equipment manufacturers (OEMs).
Microsoft started to reevaluate its products and broaden its product line into computer networking and the World Wide Web after Bill Gates's internal "Internet Tidal Wave letter" on May 26, 1995. Microsoft was the only significant, established corporation that moved quickly enough to be a part of the World Wide Web nearly from the beginning, with a few outliers of new businesses like Netscape. Microsoft would dominate the market since other businesses like Borland, WordPerfect, Novell, IBM, and Lotus were significantly slower to adjust to the new circumstances.
The next version of Windows, Vista, was released in January 2007 and focused on features, security, and a revamped user interface known as Aero. The concurrently launched Microsoft Office 2007 included a "Ribbon" user interface, which marked a substantial change from the program's forerunners. Both items' relatively good sales contributed to a record profit in 2007. On February 27, 2008, the European Union levied further penalties of €899 million ($1.4 billion) for Microsoft's violation of the March 2004 ruling, claiming that the corporation had paid competitors unfair pricing for crucial information about its workgroup and back-office systems. Microsoft said that it has complied with all laws and regulations and that "these penalties relate to previously fixed problems."
Microsoft announced on March 26, 2020, that it will buy Affirmed Networks for around $1.35 billion. Microsoft shuttered all of its retail locations indefinitely due to the COVID-19 outbreak owing to safety concerns. Microsoft revealed plans to shut down its Mixer service on July 22, 2020, and to transfer current partners to Facebook Gaming.
Microsoft was said to be in discussions to purchase TikTok on July 31, 2020, after the Trump government ordered ByteDance to relinquish control of the program to the U.S. Donald Trump said on August 3, 2020, after rumors about the agreement, that Microsoft may purchase the software, but it needed to be finished by September 15, 2020, and that the US Department of the Treasury should get a cut if it did.
Microsoft's xCloud game streaming test for iOS devices was discontinued on August 5, 2020. Microsoft claims that it is unsure about and perhaps powerless over the future of xCloud on iOS. Applications are only permitted to connect to a host device or game console that the user owns due to severe restrictions placed on "remote desktop clients" by Apple. On September 21, 2020, Microsoft declared its intention to buy ZeniMax Media, the parent company of Bethesda Softworks, for around $7.5 billion. The acquisition is anticipated to take place in the second part of the fiscal year 2021. The deal was completed on March 9, 2021, and ZeniMax Media joined Microsoft's Xbox Game Studios division. The transaction cost $8.1 billion in total.
Corporate affairs
Board of directors:
Gates stated on March 13, 2020, that he is stepping down from the Microsoft and Berkshire Hathaway boards of directors to devote more time to his humanitarian endeavors. This is "marking the greatest boardroom exit in the computer sector since the death of longtime competitor and Apple Inc. co-founder Steve Jobs," said Aaron Tilley of The Wall Street Journal.
The Wall Street Journal reported on January 13, 2022, that the board of directors of Microsoft intends to hire an outside law firm to review the company's sexual harassment and gender discrimination policies and to publish a summary of how it handled prior allegations of misconduct against Bill Gates and other corporate executives.
Chief executives:
- Bill Gates (1975–2000)
- Steve Ballmer (2000–2014)
- Satya Nadella (2014–present)
Financial:
In 1986, Microsoft conducted its initial public offering (IPO) and went public. The starting stock price was $21, and at the end of the trading day, it finished at $27.75. Any IPO shares would be multiplied by 288 as of July 2010, after the company's nine stock splits; if one were to purchase the IPO today, given the splits and other circumstances, it would cost around 9 cents.: 235-236 The greatest stock price was roughly $119 ($60.928 after correcting for splits) in 1999. On January 16, 2003, the company started paying out dividends. The first year, the dividend was eight cents per share for the fiscal year, and the following year, it was sixteen cents per share. In 2005, the company switched to quarterly dividends, paying out eight cents per share, with a special one-time payout of three dollars per share for the second quarter of the fiscal year. The price of Microsoft's shares stayed constant for years, despite the business later increasing dividend distributions.
Microsoft received a AAA rating from Standard & Poor's and Moody's Investors Service despite having assets worth $41 billion and just $8.5 billion in unsecured debt. As a result, Microsoft issued a $2.25 billion corporate bond in February 2011 with relatively cheap borrowing rates compared to government bonds. Apple Inc. outperformed Microsoft for the first time in 20 years in Q1 2011 quarterly earnings and revenues due to a decline in PC sales and enormous ongoing losses in Microsoft's Online Services Division (which contains its search engine Bing). On $14.5 billion in sales for Microsoft and $24.7 billion for Apple Inc., respectively, profits were $5.2 billion and $6 billion. Since 2006, Microsoft's Online Services Division has consistently posted losses, and in the first quarter of 2011, it lost $726 million. This comes after a $2.5 billion deficit for the previous year, 2010.
Microsoft reported its first-ever quarterly loss on July 20, 2012, despite achieving record sales for the quarter and fiscal year. A write-down linked to the advertising firm aQuantive, which had been bought for $6.2 billion back in 2007, resulted in a net loss of $492 million. Microsoft was the eighth-largest corporation in the world by market capitalization as of January 2014, with a market worth of $314 billion. Microsoft surpassed ExxonMobil on November 14, 2014, to pass Apple Inc. as the second-most valuable firm by market value. With the stock price reaching $50.04 per share, the highest since early 2000, its entire market worth exceeded $410 billion. According to Reuters, Microsoft Corp. earned foreign revenues of $76.4 billion in 2015 that were not subject to Internal Revenue Service taxation. Corporations are not required by U.S. law to pay income tax on foreign earnings until such profits are brought into the country.
Subsidiaries:
Microsoft operates on a global scale. It thus requires subsidiaries to be present in whatever national markets it decides to target. Microsoft Canada is one such. It was founded in 1985. Similar infrastructure exists in other nations, which is used to transfer income back to Redmond and pay dividends to MSFT stockholders.
Marketing:
In 2004, Microsoft paid research firms to conduct independent studies comparing the total cost of ownership (TCO) of Windows Server 2003 to Linux; the firms came to the conclusion that businesses found Windows to be easier to administer than Linux, which would allow them to administer more quickly and at a lower cost to their business (i.e. lower TCO). This sparked a wave of related studies, and one by the Yankee Group found that switching from a Windows Server version to another only costs a small fraction of what switching to a Linux server would cost. However, the companies surveyed also expressed concern about being forced to use Microsoft products and noted the increased security and dependability of Linux servers. Another research, published by the Open Source Development Labs, said that the Microsoft studies were "just old and one-sided," and their survey found that Linux had a lower TCO because, among other things, Linux administrators often manage more servers.
Microsoft emphasized the trading platform for the London Stock Exchange that it had created in collaboration with Accenture as part of the "Get the Facts" campaign, stating that it offered "five nines" dependability. The London Stock Exchange said in 2009 that it intended to abandon its Microsoft solution and move to one based on Linux in 2010 after experiencing prolonged unavailability and instability.
Microsoft recruited Mark Penn as its Executive Vice-President, Advertising and Strategy in 2012. The New York Times described Penn as "renowned for bulldozing" his political rivals. Penn produced a slew of derogatory commercials aimed against Google, one of Microsoft's main rivals. The "Scroogled" advertisements claim that Google is "screwing" users with search results that are biassed in favor of Google's paid advertisers, that Gmail is violating users' privacy by displaying ads related to the content of their emails, and that shopping results that favor Google products are biassed in favor of Google products. While Google workers have loved the advertising campaign, tech journals like TechCrunch have given it harsh criticism.
Layoffs:
Microsoft made intentions to fire 18,000 workers public in July 2014. As of June 5, 2014, Microsoft employed 127,104 individuals, making this the largest layoff in the company's history (nearly 14%). 12,500 manufacturing workers and professionals were included in this. Previously, in 2009, in response to the Great Recession of 2008–2017, Microsoft had cut 5,800 positions. Microsoft made 2,100 layoffs in September 2014, including 747 in the Seattle-Redmond region, where the business is based. The firings occurred as a follow-up to the previously announced layoffs. Out of the 18,000 anticipated cutbacks, this raised the total to above 15,000. Microsoft said in October 2014 that it was almost through with the largest-ever round of layoffs, which included the termination of 18,000 workers. Microsoft made a further 7,800 job layoffs in the following month's announcement in July 2015. Microsoft announced a further 1,850 job cutbacks in May 2016, mostly in its Nokia mobile phone segment. The business will therefore record an impairment and restructuring charge of around $950 million, of which roughly $200 million will be related to severance compensation.
