Microsoft

Microsoft Corporation (NASDAQ: MSFT) (SEHK: 4338), is an American multinational computer technology corporation with 79,000 employees in 102 countries and global annual revenue of US $51.12 billion as of 2007[2]. It develops, manufactures, licenses and supports a wide range of software products for computing devices.[4][3] Headquartered in Redmond, Washington, USA, its best selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software. These products have prominent positions in the desktop computer market, with market share estimates as high as 90% or more as of 2003 for Microsoft Office and 2006 for Microsoft Windows, in line with Bill Gates's vision "to get a workstation running our software onto every desk and eventually in every home".[5][6][7][8][9][10][11][12]

Founded 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. The company released an initial public offering (IPO) in the stock market, which, due to the ensuing rise of the stock price, has made four billionaires and an estimated 12,000 millionaires from Microsoft employees.[13][14][15] Throughout its history the company has been the target of criticism for various reasons, including monopolistic business practices—both the U.S. Justice Department and the European Commission, among others, brought Microsoft to court for antitrust violations and software bundling.[16][17]

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.[4] Known for what is generally described as a developer-centric business culture, Microsoft has historically given customer support over Usenet newsgroups and the World Wide Web, and awards Microsoft MVP status to volunteers who are deemed helpful in assisting the company's customers.[18][15] The company's official website is one of the most visited on the Internet, receiving more than 2.4 million unique page views per day according to Alexa.com, who ranked the site 18th amongst all websites for traffic rank on September 12, 2007.[19]

History

1975–1985: Founding

Following the launch of the Altair 8800, Bill Gates called the creators 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.[20] 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, entitled "ASCII Microsoft" (now called "Microsoft Japan").[20] On January 1, 1979, the company moved from Albuquerque to a new home in Bellevue, Washington.[20] Steve Ballmer joined the company on June 11, 1980, and later succeeded Bill Gates as CEO.[20]

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.[21][22][23][24][25][26][27] The company expanded into new markets with the release of the Microsoft Mouse in 1983, as well as a publishing division named Microsoft Press.[20]

1985–1995: OS/2 and Windows

In August 1985, Microsoft and IBM partnered in the development of a different operating system called OS/2.[28] On November 20, 1985, Microsoft released its first retail version of Microsoft Windows, originally a graphical extension for its MS-DOS operating system.[20] On March 13, 1986 the company went public with an IPO, with a starting initial offering price of $21.00 and ending at the first day of trading as at US $28.00. In 1987, Microsoft eventually released their first version of OS/2 to OEMs.[29]
The sign at a main entrance to the Microsoft corporate campus. The Redmond Microsoft campus today includes more than 8 million square feet (approx. 750,000 m²) and over 30,000 employees.
The sign at a main entrance to the Microsoft corporate campus. The Redmond Microsoft campus today includes more than 8 million square feet (approx. 750,000 m²) and over 30,000 employees.[30]

In 1989, Microsoft introduced its flagship office suite, Microsoft Office. This was a bundle of separate office productivity applications, such as Microsoft Word and Microsoft Excel.[20] On May 22, 1990 Microsoft launched Windows 3.0.[31] 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.[32] 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.[33] 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.[34][35] 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.[36] Eventually, Microsoft Office became the dominant business suite, with a market share far exceeding that of its competitors.[37]

In 1993, Microsoft released Windows NT 3.1, a business operating system with the Windows 3.1 user interface but an entirely different kernel.[34] 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.[34] The company also released its web browser, Internet Explorer, with the Windows 95 Plus! Pack in August 1995 and subsequent Windows versions.[38]

1995–2005: Internet and legal issues

In the mid-90s, Microsoft began to 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.[20][34][39] 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.[34][40] 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.[41] 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.[20]

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.[20] 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.[20] On April 3, 2000, a judgment was handed down in the case of United States v. Microsoft,[16] calling the company an "abusive monopoly"[7] 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. XP introduced a new graphical user interface, the first such change since Windows 95.[20][42] Later, with the release of the Xbox Microsoft entered the multi-billion-dollar game console market dominated by Sony and Nintendo.[20] Microsoft encountered more turmoil in March 2004 when antitrust legal action was brought against it by the European Union for allegedly abusing its market dominance (see European Union Microsoft antitrust case), eventually resulting in a judgement 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.[43][44]

2005–present: Vista and other transitions

In 2006, Bill Gates announced a two year transition period from his role as Chief Software Architect, which would be taken by Ray Ozzie, and planned to remain the company's chairman, head of the Board of Directors and act as an adviser on key projects.[45] As of July 2007, Windows Vista is Microsoft's latest operating system, released in January 2007. Microsoft Office 2007 was released at the same time; its "Ribbon" user interface is a significant departure from its predecessors.

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.[4]

The division focuses on developing 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.[4]

Entertainment and Devices Division
The Xbox 360, Microsoft's second system in the gaming console market.
The Xbox 360, Microsoft's second system in the gaming console market.

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.[4]

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,[48] 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 2005-11-22 in North America and other countries.[49][50] 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 HDD and providing limited backward compatibility with only particular Xbox titles.[51][52] . 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.[4]

Business culture

Microsoft has often been described as having a developer-centric business culture. A great deal of time and money is spent each year on recruiting young university-trained software developers and on keeping them in the company. For example, while many software companies often place an entry-level software developer in a cubicle desk within a large office space filled with other cubicles, Microsoft assigns a private or semiprivate closed office to every developer or pair of developers. In addition, key decision makers at every level are either developers or former developers. In a sense, the software developers at Microsoft are considered the "stars" of the company in the same way that the sales staff at IBM are considered the "stars" of their company.[18]

Within Microsoft the expression "eating our own dog food" is used to describe the policy of using the latest Microsoft products inside the company in an effort to test them in "real-world" situations. Only prerelease and beta versions of products are considered dog food.[53] This is usually shortened to just "dogfood" and is used as noun, verb, and adjective. The company is also known for their hiring process, dubbed the "Microsoft interview", which is notorious for off-the-wall questions such as "Why is a manhole cover round?" and is a process often mimicked in other organizations, although these types of questions are rarer now than they were in the past.[54] For fun, Microsoft also hosts the Microsoft Puzzle Hunt, an annual puzzle hunt (a live puzzle game where teams compete to solve a series of puzzles) held at the Redmond campus.

As of 2006, Microsoft employees, not including Bill Gates, have given over $2.5bn dollars to non-profit organizations worldwide, making Microsoft the worldwide top company in per-employee donations.[55] Starting around 2005, a blogger claiming to be an employee of Microsoft, dubbing itself Mini-Microsoft, claims that the company has become a "passionless, process-ridden, lumbering idiot," due in part to ineffective management, and calls for the company to be downsized.[56][57] In January 2007, the Harris Interactive/The Wall Street Journal Reputation Quotient survey came to the conclusion that Microsoft had the world's best corporate reputation, citing strong financial performance, vision & leadership, workplace environment rankings, and the charitable deeds of the Bill & Melinda Gates Foundation.[58]