Microsoft | How Microsoft got to $1trillion

How Microsoft got to $1trillion

On 25th April 2019, Microsoft joined Apple and Amazon in being one of three companies to be valued over $1trillion on the stock market. The day before, the company announced revenue rose by 14% to $30.6billion in its fourth quarter due to rapid cloud growth and a surge in software investment.

Microsoft’s CMO, Chris Capossela, dismissed the importance of the milestone saying, “nobody is sitting around high-fiving when the stock hits some new high.” Regardless of their humility and focus, Microsoft has come a long way since 1975 and Executive Grapevine wants to give a brief history of some pretty landmark moments, good or bad.

4th April 1975 – Bill Gates and Paul Allen found Microsoft. The two schoolboy friends obsessed with computers decide to make their own company after Allen pressures Gates to join him in a technology endeavour, setting up the Microsoft HQ in Albuquerque, New Mexico. The name was “Micro-Soft”, a portmanteau of microcomputer and software, suggested by Allen in a letter about their partnership. They produced microprocessors and software for the early PC Altair 8800.

August 1977 – First international office. Gates and Allen expand to Japan, calling their first international office ASCII Microsoft. The first move of many.

August 1980 – Microsoft-IBM deal. The contract was Microsoft’s first major deal. IBM asked them to develop and produce an operating system for IBM’s first PC. When the computer is released in August 1980, it dominated the market and used the MS-DOS system, produced by Microsoft from the “QDOS” system they bought from Seattle Computer Products.

April 1982 – International Division is set up. The official international division of Microsoft is set up in Europe and aimed to find local agents and handle overseas business deals with the developing market there.

30th May 1983 – Microsoft Multi-Tool Word released. This was the company’s pre-cursor to Microsoft Word. It had a slow start but its successors would come to dominate the market.

September 1985 – Microsoft releases Excel. IBM had previously released Lotus 1-2-3 which was a fiery success, Gates wished to compete and challenge it and Microsoft Excel became the market leader in spreadsheet programs. A month later, the company debuted Windows 1.0 – a simple computer system with a basic graphical user interface (GUI), something that was extremely impressive back in 1985.

February-March 1986 – Big moves. By now Microsoft was gaining speed in the business world and in February they moved the HQ to Redmond, Washington. Shortly after in March, Gates and Allen went public with an IPO and raised $61million according to the Telegraph’s reports. It sold at $21 a share and was an instant market success.

March 1988 – The competition. Apple sues Microsoft over its GUI likeness to its Lisa interface system. This soured their relations and led to a near-decade-long bitter rivalry which would eventually be amicably resolved in 1997.

19th November 1990 – The Office. C-Suite, headed by Gates, decide to bundle its top client software into one package for PCs, called Microsoft Office. This combined Word, Excel, and PowerPoint together, later with other interfaces such as Publisher and Outlook. This decision cemented them in the business world forever as the go-to for user-friendly business tools.

24th August 1995 – 95. After a string of operating system upgrades and releases, Gates and Allen decide to release Windows 95, selling a staggering seven million copies in the first five weeks, becoming the most popular operating system on the market. The release without a web-browser put nobody off and it helped establish Microsoft as the empire it is today. That same year the firm announced a partnership with NBC to create a cable news station on TV called MSNBC, which still ranks 2nd across all cable television in terms of viewership as of 2018.

6th August 1997 – Feud resolved. Apple announced it will enter a partnership with Microsoft to bring the Office feature to Macintosh, a $150million investment which saved Apple from the brink of bankruptcy. TIME Magazine reported a telephone call between Steve Jobs and Bill Gates in which Jobs said: “Bill, thank you. The world’s a better place.” And credits Gates with ‘saving Apple’. Once the feud was resolved, Windows 98 was released on Mac and included Windows Internet Explorer, a web navigator that held the most popular title until 2005 when Firefox surpassed it.

1998 – Expansion and troubles. Microsoft launched its Indian HQ, becoming its 2nd largest HQ after the original US one. That same year on 18th May, Microsoft was caught up in a legal battle with the Department of Justice for illegally reducing competition in order to protect its market share. It’s packaged web browser and Office features meant that in 1999 Microsoft hit TIME Magazine’s front cover once more – for all the wrong reasons. The repercussions resulted in a lot of changes including separate packaging of the Microsoft Office systems and Internet Explorer, as well as…

13th January 2000 – Gates hands the reigns to Ballmer. The ruling of a forced separation into two companies by Judge Jackson in 2000, which could have led to Microsoft’s demise, was rejected by the Court of Appeals and he was accused of unethical conduct after it appeared that he was talking to journalists during the case. Ballmer, who was Gates’ school friend and right-hand-man, replaced him as CEO but Gates remained Chairman. The new millennial start wasn’t the greatest for Microsoft, but after a long legal battle ending in 2002, it remained at the top of the software and systems industry.

October-November 2001 – XP and XBOX. Microsoft launched and released two products in 2001 which would go on to rule the market and be huge contenders in their industry. A Techland feature revealed that Windows XP sold 17 million copies just two months after original release. XBOX was a similar success, released in November, it reached 24million units sold by May 2006. It was the father to the next two models, 360 (in 2005) and One (in 2013, both selling a combined amount of over 120million units. XBOX gaming consoles was a new branch for the company and the investment certainly paid off and has sustained its position as major players in the industry.

30th January 2007 – Windows Vista. Microsoft announced that more than 20million copies where sold in the month following the new OS release. This was double the amount XP sold in their first month and demonstrated to the markets that despite a few years of plateaued success, Microsoft are still running the game.

27th June 2008 – Gates retires. In a humble move to devote more of his time to philanthropy, Bill Gates retires as the Chief Software Architect and Ray Ozzie takes over, a man credited with developing Windows Azure, a cloud platform from the company that later developed into an integrated form.

November 2010 – The hit-and-miss phone. The announcement of a Windows phone was highly anticipated, but with no app store comparable to that of Android or Apple, the phone’s flopped and were discontinued after a short stint in the market. Microsoft failed to establish a strong influence in the phone market and would buy Nokia in September 2013 to increase its presence.

10th May 2011 – Skype joins Microsoft. In a deal valued at $8.5billion, Microsoft expands its empire into video and voice call chat forums. It came just days after Google and Facebook both expressed an interest in the company, which brought in revenues of $860million the year before it was bought. This was Microsoft’s biggest ever acquisitional purchase, smashing the $6billion benchmark it set in 2007 with their purchase of aQuantive.

4th February 2014 – CEO switch. Steve Ballmer steps down after a long and impressive service to Microsoft. During his tenure, he limited the releases of potentially successful products to guarantee they were of high quality and assured top market performance. In his place came Satya Nadella, the current CEO of Microsoft. He’s faced criticisms over a statement made at a Women in Computing event in Phoenix, Arizona where he told women to not ask for pay-rises and “trust the system.” He later apologised on Twitter. A month later he announced the debut of “Cortana”, Microsoft’s personal computer assistant on all their updated technology.

29th July 2015 – “last operating system.” In a statement made with the release of Windows 10, Nadella announced this would be the last operating system Microsoft would make and will have universal application across all Microsoft family products. The end of an era of system developments which led the original company to its successes.

2016-2017 – Buy, buy, buy. Microsoft buys a series of companies in 2016 such as SwiftKey, Xamarin, LinkedIn and Cloudyn.

13th March 2018 – Boys’ Club? A lawsuit reported by the Guardian claimed that this software giant failed to redress 238 internal complaints of sexual harassment, discrimination and rape. Microsoft apologised and said that it would  spend $55million a year on ‘innovative diversity and inclusion programmes…[that] are critically important to Microsoft’. That same year it was found by survey forum Elephant in the Valley that 60% of women in Silicon Valley experienced unwanted sexual advances. Despite these issues, the company’s stock price increased by 19% in 2018.

25th April 2019 – Microsoft hits a stock market value of $1trillion. Microsoft continues to improve its performance and flex its muscles in a world of growing competition. What does the future hold for Microsoft? What do you think of it’s interesting history? Put your ideas in the comments below…

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