On 4 April, 1975, Bill Gates and Paul Allen founded Microsoft. The small firm used to develop and sell BASIC interpreters. Little did they know that in the next 40 years, their company will become the biggest software firm in the world, and also bag the title for one of the most valuable companies.
Today, there is a little bit of Microsoft in everybody’s life. Whether it is the desktop computer where Microsoft’s Windows has about 90 per cent market share or the company’s Office which is unarguably the best productivity suite available. Maybe you are into gaming and own an Xbox One, or your company relies on Azure cloud services.
In the last 40 years, Microsoft - which once used to sell program language interpreters - has expanded into several categories, and now makes full-fledged operating systems for not just desktop computers, but smartphones, gaming consoles, servers, as well as Internet of Things devices. Surface tablets and Xbox consoles show the company’s side interest in developing its own hardware modules.
But a vast majority of the revenue Microsoft is generating still comes from software. Windows and Office sell like hot cakes in their respective categories. Besides, in the last couple of decades, Microsoft has also gleaned several crucial patents that are helping the company make money off Android devices.
"Early on, Paul Allen and I set the goal of a computer on every desk and in every home. It was a bold idea and a lot of people thought we were out of our minds to imagine it was possible. It is amazing to think about how far computing has come since then, and we can all be proud of the role Microsoft played in that revolution", Gates wrote in an email sent to all Microsoft employees on Friday.
"In the coming years, Microsoft has the opportunity to reach even more people and organisations around the world. Technology is still out of reach for many people, because it is complex or expensive, or they simply do not have access. So I hope you will think about what you can do to make the power of technology accessible to everyone, to connect people to each other, and make personal computing available everywhere even as the very notion of what a PC delivers makes its way into all devices", Gates noted.
And in the past, the Redmond-based company has also picked fights with several companies and found itself in numerous antitrust probes. It has been a crazy 40 years. We saw Gates lay the foundation, Steve Ballmer take the charge and look into new categories including Xbox, and Satya Nadella making bold decisions.
"Under Satya's leadership, Microsoft is better positioned than ever to lead these advances. We have the resources to drive and solve tough problems. We are engaged in every facet of modern computing and have the deepest commitment to research in the industry. In my role as technical advisor to Satya, I get to join product reviews and am impressed by the vision and talent I see. The result is evident in products like Cortana, Skype Translator, and HoloLens - and those are just a few of the many innovations that are on the way".
Satya does seem to have changed things at the company. Under his new unswervingly "mobile-first, cloud first" strategy, the company has dramatically changed its stand on a number of things. And it seems to be doing wonders for the company. Also under his realm, the company fired around 18,000 employees last year as part of a large restructuring plan.
Microsoft was late to join the mobile party. When Apple launched the iPhone in 2007, Ballmer, the then-CEO of the company scoffed at the idea of Apple becoming a force in the smartphone game with just one iPhone and believed Windows Mobile had a head start by being the only real smartphone platform that pushed most of the PC functionality into mobile devices. In the later years, Ballmer's decision proved to be a huge understatement.
And this attitude was the reason Windows Phone 7 - arguably Microsoft's first real take on a mobile operating system - wasn’t released until 2010. By this time, iPhone had showed its dominance in the world, and Google was upping the ante with Android. Windows Phone is still struggling to gain any substantial market share. The mobile platform still has a wide "app-gap" problem, though the company seems to have found a couple of ways to fix it.
Microsoft is going where users are
But one of the most exciting things that happened in the company was its decision to open up. Under Nadella, Microsoft finally accepted that it doesn’t have a significant user base in smartphones.
The company realised that if it didn't open up to rival platforms, it would miss out on a lot of users. And that’s one of the first things Nadella did after taking the charge of the company. Microsoft launched Office on iOS. Until then Office was only available on Windows, Windows RT, and Windows Phone, and a half-baked mobile version on Android.
The move received an overwhelming response from users, resulting in Office apps - Word, Excel and PowerPoint - top the app chart in within 24 hours of their release on the platform. Late last year, the company made premium access to the Office suite free on iOS and Android. Office for iOS was in the works at Microsoft for a long time, but Ballmer used to prioritise its products on Windows devices first. Nadella evidently changed that.
Last year Microsoft also made its Project Garage public. The company now devotes a reasonable amount of resources into making apps and services for rival platforms Android and iOS.
The company bought Acompli, an email startup and made the Outlook client better. It has also acquired the Sunrise calendar app. Microsoft is no longer complacent. It no longer gloats. The Microsoft under Nadella is an opportunistic company which is willing to improve, and experiment with bold decisions while having constant faith in its products. After losing nearly two billion dollars on Surface tablets, the company is finally making money from it.
The Windows Insider program, wherein the company allows users to send feedback and test its beta products, is yet another example of how Microsoft has changed over the years and is setting itself apart from other companies. Microsoft now wants to know what features its consumers want in its next operating system and other products. Apple, on the other hand, ships its product with features that it believes its users will want to use.
"We have accomplished a lot together during our first 40 years and empowered countless businesses and people to realise their full potential. But what matters most now is what we do next", Gates writes in his email. Microsoft does have a lot of things to look forward to in the coming months and years.
Later this year, Microsoft will release Windows 10 for desktop computers, as well as smartphones, IoT devices and Xbox One. In the coming months, Microsoft will also release the next iteration of its productivity suite, Office 2016. For the first time, the company is simultaneously releasing Office on OS X and Windows.
Additionally, Microsoft has showcased a number of products that could change the way we compute and interact with technology. Its augmented reality headset HoloLens is just one example.
It will be interesting to see what the company does next and how things work out for it in the coming years.