When did Bill Gates start Microsoft? Microsoft is a multinational computer technology corporation. Microsoft was founded on April 4, 1975, by Bill Gates and Paul Allen in Albuquerque, New Mexico. Its current best-selling products are the Microsoft Windows operating system; Microsoft Office, a suite of productivity software; Xbox, a line of entertainment of games, music, and video; Bing, a line of search engines; and Microsoft Azure, a cloud services platform.
In 1980, Microsoft formed a partnership with IBM to bundle Microsoft’s operating system with IBM computers; with that deal, IBM paid Microsoft a royalty for every sale. In 1985, IBM requested Microsoft to develop a new operating system for their computers called OS/2. Microsoft produced that operating system, but also continued to sell their own alternative, which proved to be in direct competition with OS/2. Microsoft Windows eventually overshadowed OS/2 in terms of sales. When Microsoft launched several versions of Microsoft Windows in the 1990s, they had captured over 90% market share of the world’s personal computers.
As of June 30, 2015, Microsoft has a global annual revenue of US$86.83 (~$98.2 billion in 2021) Billion and 128,076 employees worldwide. It develops, manufactures, licenses, and supports a wide range of software products for computing devices.
When did Bill Gates start Microsoft?
On April 4, 1975, at a time when most Americans used typewriters, childhood friends Bill Gates and Paul Allen found Microsoft, a company that makes computer software. Originally based in Albuquerque, New Mexico, Microsoft relocated to Washington State in 1979 and eventually grew into a major multinational technology corporation. In 1987, the year after Microsoft went public, 31-year-old Gates became the world’s youngest billionaire.
Gates and Allen started Microsoft—originally called Micro-Soft, for microprocessors and software—in order to produce software for the Altair 8800, an early personal computer. Allen quit his job as a programmer in Boston and Gates left Harvard University, where he was a student, to focus on their new company, which was based in Albuquerque because the city was home to electronics firm MITS, maker of the Altair 8800.
By the end of 1978, Microsoft’s sales topped more than $1 million and in 1979 the business moved its headquarters to Bellevue, Washington, a suburb of Seattle, where Gates and Allen grew up. The company went on to license its MS-DOS operating system to IBM for its first personal computer, which debuted in 1981.
Afterward, other computer companies started licensing MS-DOS, which had no graphical interface and required users to type in commands in order to open a program. In 1983, Allen departed Microsoft after being diagnosed with Hodgkin’s lymphoma; he was successfully treated for the disease and went on to pursue a variety of other business ventures.
In 1985, Microsoft released a new operating system, Windows, with a graphical user interface that included drop-down menus, scroll bars and other features. The following year, the company moved its headquarters to Redmond, Washington, and went public at $21 a share, raising $61 million.
By the late 1980s, Microsoft had become the world’s biggest personal-computer software company, based on sales. In 1995, amidst skyrocketing purchases of personal computers for home and office use, Windows 95 made its debut. It included such innovations as the Start menu (TV commercials for Windows 95 featured the Rolling Stones singing “Start Me Up”) and 7 million copies of the new product were sold in the first five weeks. During the second half of the 1990s, Internet usage took off, and Microsoft introduced its web browser, Internet Explorer, in 1995.
In 1998, the U.S. Department of Justice and 20 state attorneys general charged Microsoft with violating antitrust laws by using its dominance to drive competitors out of business; in 2001, the company reached a settlement with the government that imposed restrictions on its corporate practices. Also in 2001, Microsoft joined the video-game market with the launch of its Xbox console.
So how did Microsoft become so successful?
Microsoft is engaged in developing, licensing and supporting a range of software products and services catering to different requirements. In 2000 Steve Ballmer was appointed the new CEO of Microsoft. Bill Gates had met Steve Ballmer at Harvard University before he left. Although there was some concern over Ballmer’s ability, Microsoft retained its top spot in both business and personal computer markets.
Microsoft’s primary strengths and most of its profits were obtained from the business side. Although the company recognised that they had a major presence in consumer markets as technology advances.
The successful Altair deal back in January 1975 inspired Bill Gates and Paul Allen to form Microsoft. Their revenues for 1975 totalled $16,000. Microsoft’s big break was in 1980 when a partnership was formed with IBM which resulted in Microsoft providing a crucial operating system, DOS, for IBM PCs.
This meant that for every IBM Computer sold a royalty was paid to Microsoft. In 1990, Gates showed the future plan for Microsoft with the introduction of Windows 3.0. 60 million copies of Windows had been sold now which effectively made Microsoft the sole keeper of the PC software standard.
Microsoft before 1990 was predominantly a supplier to the hardware manufacturers. That was their target market. As technology advanced and personal computers become so popular, the bulk of Microsoft’s revenue was generated from sales to consumers. It was the first software company to reach $1 Billion in revenues. As more and more versions of Microsoft Windows were launched, Microsoft captured a higher market share of the world’s PC (around 90%).
Timeline: The Gates era at Microsoft
Bill Gates is pretty much synonymous with Microsoft Corp., which he co-founded and built into the world’s largest software vendor and the IT industry’s most influential company. But Gates is stepping away from his day-to-day role at Microsoft at the end of this month. Here’s a brief history of his 33 years at the company.
1975: Bill Gates, then 19, and 22-year-old boyhood friend Paul Allen found “Micro-Soft” in Albuquerque, initially to create a version of the BASIC programming language for the Altair 8800 personal computer. The formation of the new business continues a partnership from their school days in Seattle that several years earlier had produced a computerized traffic-counting machine called Traf-O-Data, which was based on the Intel 8008 microprocessor. Gates and Allen later drop the hyphen, then move Microsoft to the Seattle area in 1979 and officially incorporate it in 1981.
1976: Gates writes his famous “Open Letter to Hobbyists,” accusing them of pirating Micro-Soft’s Altair BASIC. “As the majority of hobbyists must be aware, most of you steal your software,” he writes. The letter concludes: “Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.”
1981: IBM introduces its first PC, an 8088-based system running Microsoft’s 16-bit MS-DOS 1.0 operating system. Microsoft didn’t develop the software itself; it bought the rights to the technology from a company called Seattle Computer Products, which originally marketed the operating system under the name QDOS (for “Quick and Dirty Operating System”).
1983: Microsoft announces Windows, initially as an extension of MS-DOS giving the software a graphical operating environment. But starting something of a tradition, Windows wouldn’t be ready to ship until…
1985: The company finally releases Windows 1.0, two years and 10 days after the initial announcement. Gates initially wanted to call the product Interface Manager but was talked out of it. Even Microsoft acknowledges that neither Windows 1.0 nor Windows 2.0, which followed in 1987, really set the world on fire. But they did get the attention of executives at what was then called Apple Computer Inc., who noticed some similarities between Windows and Apple’s operating systems. (See some screen grabs of Windows 2.0).
1988: Apple files Apple Computer Inc. v. Microsoft Corporation, a copyright infringement lawsuit aimed at stopping Microsoft, as well as Hewlett-Packard Co., from using graphical user interface features that Apple claimed were copied from its Lisa and Macintosh operating systems. A federal judge threw out most of the claims four years later. But the lawsuit was a harbinger of things to come for Microsoft.
1989: Microsoft introduces the initial version of its Office application suite — ironically for the Macintosh, with a Windows version not following until the next year. Office still dominates the desktop apps market today, but online rivals such as Google Docs and free office suites such as the one from OpenOffice.org are starting to pose some threats to its hegemony.
1990: Microsoft launches Windows 3.0 and goes on to sell 10 million copies of it within two years, establishing Windows as the dominant PC operating system. This was also the year when the development deal between Microsoft and IBM for the OS/2 operating system fell apart — big surprise, considering the sudden success of Windows 3.0. Just three years earlier, Microsoft had announced OS/2 as its planned successor to DOS and Windows.
1994: Gates becomes the wealthiest person in America, according to Forbes magazine, which a year later proclaims him the richest individual in the world. Gates retained both of those distinctions until this year, when he lost them to one of his friends, investor Warren Buffett. But Forbes said that Gates’ net worth still increased $2 billion over the magazine’s 2007 estimate, to a total of $58 billion as of Feb. 11.
1995: Microsoft misses the first stop of the Internet Express (see part 1 and part 2 of this BusinessWeek story). Trying to jump aboard the fast-moving online train, Gates writes a “let’s get going” internal memo (download PDF) that is titled “The Internet Tidal Wave” and proclaims that the Net “is the single most important development to come along since the IBM PC.” Microsoft quickly launches Internet Explorer, using Mosaic Web browser technology licensed from Spyglass Inc.
Also in 1995, Microsoft with great fanfare releases Windows 95, code-named Chicago — using the Rolling Stones song “Start Me Up” as the centerpiece of its marketing campaign for the operating system, which added the Start button to Windows. While not exclusively 32-bit, the new operating system marked a shift to PCs based on Intel’s 32-bit 80386 chip, although Gates apparently wasn’t impressed by that processor at first. Windows 95 also sounded the death knell for OS/2, although IBM continued to update and market that operating system until 2005.
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