August 24, 2010

Microsoft Corporation- Timeline of Success

English: Microsoft sign at the entrance of Mic...
English: Microsoft sign at the entrance of Microsoft Dubai office. (Photo credit: Wikipedia)
Microsoft Corporation (NASDAQ: MSFT, HKEX: 4338) is a multinational computer technology corporation that develops,  manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its most profitable products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software.

The company was founded in 1975, to develop and sell BASIC interpreters for the Altair 8800. Microsoft rose to dominate the home computer operating system market with MS-DOS in the mid-1980s, followed by the Windows line of operating systems. Many of its products have achieved near-ubiquity in the desktop computer market. One commentator notes that Microsoft's original mission was "a computer on every desk and in every home, running Microsoft software." Microsoft possesses footholds in other markets, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse as well as home entertainment products such as the Xbox, Xbox 360, Zune and MSN TV. The company's initial public stock offering (IPO) was in 1986; the ensuing rise of the company's stock price has made four billionaires and an estimated 12,000 millionaires from Microsoft employees.

Throughout its history the company has been the target of criticism, including monopolistic business practices and anti-competitive strategies including refusal to deal and tying. The U.S. Justice Department and the European Commission, among others, have ruled against Microsoft for various antitrust violations accordingly in today's political-cultural climate of mixed economies and "public interest of society".
1975–1984: Founding

Following the launch of the Altair 8800, William Henry Gates III, (known as Bill Gates) called the developers of the new microcomputer, Micro Instrumentation and Telemetry Systems (MITS), offering to demonstrate an implementation of the BASIC programming language for the system. After the demonstration, MITS agreed to distribute Altair BASIC. Gates left Harvard University, moved to Albuquerque, New Mexico where MITS was located, and founded Microsoft there. The company's first international office was founded on November 1, 1978, in Japan, titled "ASCII Microsoft" (now called "Microsoft Japan"). On January 1, 1979, the company moved from Albuquerque to a new home in Bellevue, Washington. Steve Ballmer joined the company on June 11, 1980, and later succeeded Bill Gates as CEO.

Among pre-IBM-PC products were the software package TASC (The AppleSoft Compiler), which compiled a BASIC program into Apple machine language, and the hardware Microsoft Softcard, an add-on Z80 processor card for the Apple II and compatible computers which allowed the use of the CP/M operating system instead of Applesoft and Apple DOS. In 1980, Microsoft entered the operating system business with its own version of Unix, called Xenix, which it licensed to various computer vendors.

DOS (Disk Operating System) was the operating system that brought the company its first real success. On August 12, 1981, after negotiations with Digital Research failed, IBM awarded a contract to Microsoft to provide a version of the CP/M operating system, which was set to be used in the upcoming IBM Personal Computer (PC). For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle Computer Products, which IBM renamed to PC-DOS. Later, the market saw a flood of IBM PC clones after Columbia Data Products successfully cloned the IBM BIOS, and by aggressively marketing MS-DOS to manufacturers of IBM-PC clones, Microsoft rose from a small player to one of the major software vendors in the home computer industry. The company expanded into new markets with the release of the Microsoft Mouse in 1983, as well as a publishing division named
Microsoft Press.

1985–1994: IPO, OS/2 and Windows

In August 1985, Microsoft and IBM partnered in the development of a different operating system called OS/2. On November 20, 1985, Microsoft released its first retail version of Microsoft Windows, originally a graphical extension for its MS-DOS operating system. On March 13, 1986 the company went public with an initial public offering (IPO), with a starting initial offering price of $21.00 and ending at the first day of trading as at US $28.00. The ensuing rise of the stock price has made four billionaires and an estimated 12,000 millionaires from Microsoft employees. In 1987, Microsoft eventually released their first version of OS/2 to OEMs.

Microsoft's Initial Public Offering occurred on March 14, 1986. The stock closed at $27.75 per share after peaking at $29.25 shortly after the opening. Microsoft's two founders, Gates and Allen, were made instant millionaires. Gates owned 45% of the company's 24.7 million outstanding shares and Allen roughly 25%. Gates' stake was therefore $234 million and Microsoft's total-value $520million ($1.01 billion in present-day terms), at that time.


In 1989, Microsoft introduced its flagship office suite, Microsoft Office. The software bundled separate office productivity applications, such as Microsoft Word and Microsoft Excel. On May 22, 1990 Microsoft launched Windows 3.0. The new version of Microsoft's operating system boasted such new features as streamlined user interface graphics and improved protected mode capability for the Intel 386 processor; it sold over 100,000 copies in two weeks. Windows at the time generated more revenue for Microsoft than OS/2, and the company decided to move more resources from OS/2 to Windows. In the ensuing years, the
popularity of OS/2 declined, and Windows quickly became the favored PC platform.

During the transition from MS-DOS to Windows, the success of Microsoft's product Microsoft Office allowed the company to gain ground on application-software competitors, such as WordPerfect and Lotus 1-2-3. According to The Register, Novell, an owner of WordPerfect for a time, alleged that Microsoft used its inside knowledge of the DOS and Windows kernels and of undocumented Application Programming Interface features to make Office perform better than its competitors. Eventually, Microsoft Office became the dominant business suite, with a market share far exceeding that of its competitors.

In 1993, Microsoft released Windows NT 3.1, a business operating system with the
Windows 3.1 user interface but an entirely different kernel.

1995–2005: Internet and legal issues

In 1995, Microsoft released Windows 95, a new version of the company's flagship
operating system which featured a completely new user interface, including a
novel start button; more than a million copies of Microsoft Windows 95 were sold
in the first four days after its release. The company also released its web
browser, Internet Explorer, with the Windows 95 Plus! Pack in August 1995 and
subsequent Windows versions.

On, May 26, 1995, following Bill Gates's internal "Internet Tidal Wave memo",
Microsoft began to redefine its offerings and expand its product line into
computer networking and the World Wide Web. On August 24, 1995, it launched a
major online service, MSN (Microsoft Network), as a direct competitor to AOL.
MSN became an umbrella service for Microsoft's online services. The company
continued to branch out into new markets in 1996, starting with a joint venture
with NBC to create a new 24/7 cable news station, MSNBC. Microsoft entered the
personal digital assistant (PDA) market in November with Windows CE 1.0, a new
built-from-scratch version of their flagship operating system, specifically
designed to run on low-memory, low-performance machines, such as handhelds and
other small computers. Later in 1997, Internet Explorer 4.0 was released for
both Mac OS and Windows, marking the beginning of the takeover of the browser
market from rival Netscape. In October, the Justice Department filed a motion in
the Federal District Court in which they stated that Microsoft had violated an
agreement signed in 1994, and asked the court to stop the bundling of Internet
Explorer with Windows.

The year 1998 was significant in Microsoft's history, with Bill Gates appointing
Steve Ballmer as president of Microsoft but remaining as Chair and CEO himself.
The company released Windows 98, an update to Windows 95 that incorporated a
number of Internet-focused features and support for new types of devices. On
April 3, 2000, a judgment was handed down in the case of United States v.
Microsoft, calling the company an "abusive monopoly" and forcing the company to
split into two separate units. Part of this ruling was later overturned by a
federal appeals court, and eventually settled with the U.S. Department of
Justice in 2001.

In 2001, Microsoft released Windows XP, the first version that encompassed the
features of both its business and home product lines. Before XP was released,
Microsoft had to maintain both the NT and the 9x codebase. XP introduced a new
graphical user interface, the first such change since Windows 95. In late 2001,
with the release of the Xbox, Microsoft entered the multi-billion-dollar game
console market dominated by Sony and Nintendo. Microsoft encountered turmoil in
March 2004 when antitrust legal action was brought against it by the European
Union for abusing its current dominance with the Windows operating system (see
European Union Microsoft antitrust case), eventually resulting in a judgment to
produce new versions of its Windows XP platform—called Windows XP Home Edition N
and Windows XP Professional N—that did not include its Windows Media Player, as
well as a fine of €497 million ($613 million).

2006–present: Vista and other transitions

On June 27, 2008, Bill Gates retired from day-to day activities in the company,
following a two year transition period from his role as Chief Software
Architect, which was taken by Ray Ozzie, but remained the company's chairman,
head of the Board of Directors and would act as an adviser on key projects.
Windows Vista, released in January 2007, was Microsoft's latest operating system
and had sold 300 million copies by December 2008. Microsoft Office 2007,
released at the same time, features a "Ribbon" user interface which is a
significant departure from its predecessors. Relatively strong sales of both
titles helped to produce a record profit in 2007.

On February 1, 2008, Microsoft made an unsolicited bid to purchase Internet
services competitor Yahoo! for up to $44.6 billion, though this offer was
rejected on February 10. On May 3, 2008, Microsoft withdrew their offer.

Microsoft announced on February 21, 2008 that it will share information about
its products and technology to make it easier for developers to create software
that works with its products. and followed that up by providing such
information. However, the European Union continued to demonstrate its
dissatisfaction with the company for its lack of compliance with the March 2004
judgment and subsequently, on February 27, 2008 imposed a fine of €899 million
($1.4 billion), then the largest fine in the history of EU competition policy

In its January 2009 report of financial results, Microsoft announced layoffs of
up to 5,000 employees in response to slowing economic activity due to the
ongoing financial crisis.

On February 12, 2009, Microsoft announced its intent to open a small chain of
Microsoft-branded retail stores. David Porter, a former executive at Wal-Mart
and DreamWorks, was named corporate vice president of Retail Stores. On October
22, 2009 the first retail Microsoft Store open in Scottsdale, Arizona.

NBC Universal and Microsoft Corporation have teamed up in an effort to sell NBC
Universal's broadcast and cable advertising using Admira, the software giant's
automated planning and buying tool.

Product divisions

To be more precise in tracking performance of each unit and delegating
responsibility, Microsoft reorganized into seven core business groups—each an
independent financial entity—in April 2002. Later, on September 20, 2005,
Microsoft announced a rationalization of its original seven business groups into
the three core divisions that exist today: the Windows Client, MSN and Server
and Tool groups were merged into the Microsoft Platform Products and Services
Division; the Information Worker and Microsoft Business Solutions groups were
merged into the Microsoft Business Division; and the Mobile and Embedded Devices
and Home and Entertainment groups were merged into the Microsoft Entertainment
and Devices Division.

Platform Products and Services Division

This division produces Microsoft's flagship product, the Windows operating
system. It has been produced in many versions, including Windows 3.1, Windows
95, Windows 98, Windows 2000, Windows Me, Windows Server 2003, Windows XP,
Windows Vista and Windows 7. Almost all IBM compatible personal computers come
with Windows preinstalled. The current desktop version of Windows is Windows 7.
The online service MSN, the cable television station MSNBC and the Microsoft
online magazine Slate are all part of this division. (Slate was acquired by The
Washington Post on December 21, 2004.) At the end of 1997, Microsoft acquired
Hotmail, the most popular webmail service, which it rebranded as "MSN Hotmail."
In 1999, Microsoft introduced MSN Messenger, an instant messaging client, to
compete with the popular AOL Instant Messenger. Along with Windows Vista, MSN
Messenger became Windows Live Messenger.

Microsoft Visual Studio is the company's set of programming tools and compilers.
The software product is GUI-oriented and links easily with the Windows APIs. The
current version is Visual Studio 2008. The previous version, Visual Studio 2005
was a major improvement over its predecessor, Visual Studio.Net 2003, named
after the .NET initiative, a Microsoft marketing initiative covering a number of
technologies. Microsoft's definition of .NET continues to evolve. As of 2004,
.NET aims to ease the development of Microsoft Windows-based applications that
use the Internet, by deploying a new Microsoft communications system, Indigo
(now renamed Windows Communication Foundation). This is intended to address some
issues previously introduced by Microsoft's DLL design, which made it difficult,
even impossible in some situations, to manage, install multiple versions of
complex software packages on the same system (see DLL-hell), and provide a more
consistent development platform for all Windows applications (see Common
Language Infrastructure). In addition, the Company established a set of
certification programs to recognize individuals who have expertise in its
software and solutions. Similar to offerings from Cisco, Sun Microsystems,
Novell, IBM, and Oracle Corporation, these tests are designed to identify a
minimal set of proficiencies in a specific role; this includes developers
("Microsoft Certified Solution Developer"), system/network analysts ("Microsoft
Certified Systems Engineer"), trainers ("Microsoft Certified Trainers") and
administrators ("Microsoft Certified Systems Administrator" and "Microsoft
Certified Database Administrator").

Microsoft offers a suite of server software, titled Windows Server System.
Windows Server 2003, an operating system for network servers, is the core of the
Windows Server System line. Another server product, Systems Management Server,
is a collection of tools providing remote-control abilities, patch management,
software distribution and a hardware/software inventory. Other server products
  •     Microsoft SQL Server, a relational database management system;
  •     Microsoft Exchange Server, for certain business-oriented e-mail and scheduling
  •     features;
  •     Small Business Server, for messaging and other small business-oriented
  •     features; and
  •     Microsoft BizTalk Server, for business process management.

Business Division

The Microsoft Business Division produces Microsoft Office, which is the
company's line of office software. The software product includes Word (a word
processor), Access (a personal relational database application), Excel (a
spreadsheet program), Outlook (Windows-only groupware, frequently used with
Exchange Server), PowerPoint (presentation software), and Publisher (desktop
publishing software). A number of other products were added later with the
release of Office 2003 including Visio, Project, MapPoint, InfoPath and OneNote.

The division also develops financial and business management software for
companies. These products include products formerly produced by the Business
Solutions Group, which was created in April 2001 with the acquisition of Great
Plains. Subsequently, Navision was acquired to provide a similar entry into the
European market, resulting in the planned release of Microsoft Dynamics NAV in
2006. The group markets Axapta and Solomon, catering to similar markets, which
is scheduled to be combined with the Navision and Great Plains lines into a
common platform called Microsoft Dynamics.

Entertainment and Devices Division

Microsoft has attempted to expand the Windows brand into many other markets,
with products such as Windows CE for PDAs and its "Windows-powered" Smartphone
products. Microsoft initially entered the mobile market through Windows CE for
handheld devices, which today has developed into Windows Mobile 6. The focus of
the operating system is on devices where the OS may not directly be visible to
the end user, in particular, appliances and cars.

The company produces MSN TV, formerly WebTV, a television-based Internet
appliance. Microsoft used to sell a set-top Digital Video Recorder (DVR) called
the UltimateTV, which allowed users to record up to 35 hours of television
programming from a direct-to-home satellite television provider DirecTV. This
was the main competition in the UK for British Sky Broadcasting's (BSkyB) SKY +
service, owned by Rupert Murdoch. UltimateTV has since been discontinued, with
DirecTV instead opting to market DVRs from TiVo Inc. before later switching to
their own DVR brand.

Microsoft sells computer games that run on Windows PCs, including titles such as
Age of Empires, Halo and the Microsoft Flight Simulator series. It produces a
line of reference works that include encyclopedias and atlases, under the name
Encarta. Microsoft Zone hosts free premium and retail games where players can
compete against each other and in tournaments.

Microsoft entered the multi-billion-dollar game console market dominated by Sony
and Nintendo in late 2001, with the release of the Xbox. The company develops
and publishes its own video games for this console, with the help of its
Microsoft Game Studios subsidiary, in addition to third-party Xbox video game
publishers such as Electronic Arts and Activision, who pay a license fee to
publish games for the system. The Xbox also has a successor in the Xbox 360,
released on November 22, 2005 in North America and other countries. With the
Xbox 360, Microsoft hopes to compensate for the losses incurred with the original Xbox. However, Microsoft made some decisions considered controversial in the video gaming community, such as releasing the console with high failure rates, selling two different versions of the system, one without the hard disk drive and providing limited backward compatibility with only particular Xbox titles.

In addition to the Xbox line of products, Microsoft also markets a number of other computing-related hardware products as well, including mice, keyboards, joysticks, and gamepads, along with other game controllers, the production of which is outsourced in most cases. As of November 15, 2007, Microsoft announced the purchase of Musiwave, Openwave's mobile phone music sales business.

Economic impact
One of Bill Gates' key visions for the company was to "to get a workstation running our software onto every desk and eventually in every home."

Microsoft has footholds in other markets besides operating systems and office suites, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse and home entertainment products such as the Xbox, Xbox 360, Zune and MSN TV.

User culture
Technical reference for developers and articles for various Microsoft magazines such as Microsoft Systems Journal (or MSJ) are available through the Microsoft Developer Network (MSDN). MSDN also offers subscriptions for companies and individuals, and the more expensive subscriptions usually offer access to pre-release beta versions of Microsoft software. In recent years, Microsoft launched a community site for developers and users, titled Channel9, which provides many modern features such as a wiki and an Internet forum. Another community site that provides daily videocasts and other services,, launched on March 3, 2006.

Most free technical support available through Microsoft is provided through online Usenet newsgroups (in the early days it was also provided on CompuServe). There are several of these newsgroups for nearly every product Microsoft provides, and often they are monitored by Microsoft employees. People who are helpful on the newsgroups can be elected by other peers or Microsoft employees for Microsoft Most Valuable Professional (MVP) status, which entitles people to a sort of special social status, in addition to possibilities for awards and other benefits.

Corporate affairs -
Corporate structure

The company is run by a Board of Directors consisting of ten people, made up of mostly company outsiders (as is customary for publicly traded companies). Current members of the board of directors are: Steve Ballmer, James Cash, Jr., Dina Dublon, Bill Gates, Raymond Gilmartin, Reed Hastings, David Marquardt, Charles Noski, Helmut Panke, and Jon Shirley. The ten board members are elected every year at the annual shareholders' meeting, and those who do not get a majority of votes must submit a resignation to the board, which will subsequently choose whether or not to accept the resignation. There are five committees within the board which oversee more specific matters. These committees include the Audit Committee, which handles accounting issues with the company including auditing and reporting; the Compensation Committee, which approves compensation for the CEO and other employees of the company; the Finance Committee, which handles financial matters such as proposing mergers and acquisitions; the Governance and Nominating Committee, which handles various corporate matters including nomination of the board; and the Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws.

There are several other aspects to the corporate structure of Microsoft. For worldwide matters there is the Executive Team, made up of sixteen company officers across the globe, which is charged with various duties including making sure employees understand Microsoft's culture of business. The sixteen officers of the Executive Team include the Chairman and Chief Software Architect, the CEO, the General Counsel and Secretary, the CFO, senior and group vice presidents from the business units, the CEO of the Europe, the Middle East and Africa regions; and the heads of Worldwide Sales, Marketing and Services; Human Resources; and Corporate Marketing. In addition to the Executive Team there is also the Corporate Staff Council, which handles all major staff functions of the company, including approving corporate policies. The Corporate Staff Council is made up of employees from the Law and Corporate Affairs, Finance, Human Resources, Corporate Marketing, and Advanced Strategy and Policy groups at Microsoft. Other Executive Officers include the Presidents and Vice Presidents of the various product divisions, leaders of the marketing section, and the CTO, among others.

In 2005, Microsoft received a 100% rating in the Corporate Equality Index from the Human Rights Campaign, a ranking of companies by how progressive the organization deems their policies concerning LGBT (lesbian, gay, bisexual and transsexual) employees. Partly through the work of the Gay and Lesbian Employees at Microsoft (GLEAM) group, Microsoft added gender expression to its anti-discrimination policies in April 2005, and the Human Rights Campaign upgraded Microsoft's Corporate Equality Index from its 86% rating in 2004 to its current 100% rating.

In April 2005, Microsoft received wide criticism for withdrawing support from Washington state's H.B. 1515 bill that would have extended the state's current anti-discrimination laws to people with alternate sexual orientations. Microsoft was accused of bowing to pressure from local evangelical pastor Ken Hutcherson who met with a senior Microsoft executive and threatened a national boycott of Microsoft's products. Microsoft also revealed they were paying evangelical conservative Ralph Reed's company Century Strategies a $20,000 monthly fee. Over 2,000 employees signed a petition asking Microsoft to reinstate support for the bill. Under harsh criticism from both outside and inside the company's walls, Microsoft decided to support the bill again in May 2005.

Microsoft hires many foreign workers as well as domestic ones, and is an outspoken opponent of the cap on H1B visas, which allow companies in the United States to employ certain foreign workers. Bill Gates claims the cap on H1B visas make it difficult to hire employees for the company, stating "I'd certainly get rid of the H1B cap."

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