Microsoft | Research & Encyclopedia Articles

Microsoft

Microsoft is a United States-based company that develops and sells a wide variety of software products and services for business and personal computing. Microsoft is the world's largest supplier of operating systems (OSs) and other software for IBM-compatible personal computers. The Microsoft Windows OS is the most widely used OS in the world. Microsoft operates subsidiary and sales offices in more than 50 countries and employs nearly 44,000 people worldwide, but performs nearly all of its research and development at its corporate headquarters in Redmond, Washington.

Microsoft's best-known products include Microsoft Disk Operating System (MS-DOS), Microsoft Windows, and Windows NT. Its popular programs Word (a word processor), Excel (a spreadsheet), PowerPoint (for business presentations), and Access (for databases) are sold individually and also bundled together as Microsoft Office (a suite of integrated office software). The company also makes such software programs as BackOffice (an integrated set of server products), Microsoft Internet Explorer (a web browser), LAN Manager (an OS/2-based network operating system), SQL Server (a relational-database management system), ODBC (Open Data Base Connectivity, providing access to databases), and MS Mail (the Windows e-mail program). Among its other products are programming languages, reference applications (e.g., Encarta Encyclopedia), games, financial software, input devices (e.g., keyboards and mice), and computer-related books. Microsoft operates the Microsoft Network (MSN), an Internet web site featuring news, information, finance, travel, and entertainment. Microsoft and television network NBC together operate MSNBC, an around-the-clock news, talk, and information cable-television channel and Internet web site.

In 1975, the magazine Popular Electronics reported the advent of the Altair 8800, the first personal computer. This prompted Bill Gates and Paul Allen (high school friends interested in programming the DEC PDP-10 computer) to adapt BASIC (a popular mainframe programming language) for use with the Altair. The two young men licensed the software to Altair's manufacturer, Micro Instrumentation and Telemetry Systems. Gates and Allen soon formed a company they called "Micro-soft" (for MICROcomputer SOFTware) on April 4, 1975, in Albuquerque, New Mexico, to develop versions of BASIC for other computer companies. They later renamed the company Microsoft. In 1977 Microsoft sold its second programming language, Microsoft FORTRAN, and later released new versions of BASIC for the Intel-8080 and Intel-8086 microprocessors.

The company moved to Bellevue, Washington, in January 1979, a Seattle suburb that was Gates's and Allen's home town. In 1980 International Business Machines Corporation (IBM) asked Microsoft to write the OS for its first personal computer, the IBM PC. Having no suitable operating system ready to hand, Microsoft purchased QDOS (Quick and Dirty Operating System) from Seattle programmer Tim Paterson and renamed it MS-DOS (Microsoft Disk Operating System). In August 1981 the IBM PC, running the operating system MS-DOS, was introduced to the commercial market. As part of the IBM contract, Microsoft was allowed to license the OS to other companies. Microsoft was incorporated on June 25, 1981. By 1984 Microsoft had licensed MS-DOS 1.0 to 200 PC manufacturers. By the early 1990s Microsoft had sold more than 100 million copies of all versions of MS-DOS, and in the process had squeezed out most of its competition.

During this time, Microsoft began to develop business PC applications. In 1983 it released the word processing program Word. In 1984 Microsoft was one of the few established software companies to develop applications for Apple Computers' Macintosh computer. Microsoft's early support for the Macintosh resulted in tremendous success for its Macintosh application software, including Word, Excel, and Works (an integrated software suite).

In 1985 Microsoft released Windows, an operating system that extended the features of MS-DOS and introduced a graphical user interface (GUI) modeled on the Macintosh GUI, which improved the PC's user-friendliness. In 1986 Microsoft moved to its current headquarters in Redmond, Washington and became a publicly owned company. Windows 2.0, released in 1987, improved performance and appearance. In 1990 Microsoft introduced its most complex version to that date, Windows 3.0, which swiftly went through versions Windows 3.1 and 3.11. These OSs usually came preinstalled on new PCs and quickly became the world's most used operating systems. (Choice was limited.) By 1993 Windows 3.0 and later versions were selling at a rate of one million copies per month, with nearly 90% of the world's PCs running on a Microsoft OS.

In 1991 Microsoft and IBM ended their partnership; IBM pursued the OS/2 operating system while Microsoft chose to stick with Windows. In 1993 Apple lost a copyright-infringement lawsuit against Microsoft that claimed Windows was an illegal copy of Macintosh's GUI. Apple had granted a license to Microsoft in 1985 to use Apple's windows-and-icons motifs in the development of Windows 1.0, as Microsoft had threatened to cease development of software for the Macintosh unless the license was granted. Apple sued Microsoft for breaching the term of the license when Microsoft 2.0 was released in 1987, but finally lost its case in 1993. Microsoft thus retained its exclusive rights to Windows.

In 1993 Microsoft released Windows NT, an OS that effectively networked PCs within business environments. In August 1995, the company released Windows 95, which for the first time fully integrated MS-DOS with Windows. It featured a simplified interface, multitasking, and graphical improvements that nearly matched the elegance of Apple's Macintosh OS. About 7 million copies of Windows 95 were sold worldwide within seven weeks of its release. During this period Microsoft also became the leader in productivity software (i.e., word-processing and spreadsheet programs).

In 1996 Microsoft introduced Windows CE, an OS for handheld PCs. The next year Microsoft bought the company WebTV Networks, a manufacturer of low-cost devices that connected televisions to the Internet. Soon afterwards Microsoft invested in cable-television operator Comcast Corporation in order to expand into the high-speed Internet. In June 1998, Microsoft released Windows 98, which featured integrated Internet capabilities. By first giving away its Internet Explorer web browser, and then packaging it into Windows 98, Microsoft managed to make IE the most popular access Internet browser. In February 2000, the company released Windows 2000, the latest version of the Windows NT operating system.

As Microsoft's influence grew in the market for PC operating systems, Microsoft was criticized for monopolistic business practices. These claims have been investigated several times by the United States Justice Department. These investigations have resulted in numerous rulings that have been contested by Microsoft over the years, with some settled and others still open as of this writing.