Microsoft Corporation ( MS) is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of , the Microsoft Office office suite, and the Internet Explorer and Microsoft Edge . Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. As of 2016, it is the world's largest software maker by revenue, and one of the world's most valuable companies. The word "Microsoft" is a portmanteau of "microcomputer" and "software". Microsoft is ranked No. 30 in the 2018 Fortune 500 rankings of the largest United States corporations by total revenue.
Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Microsoft Windows. The company's 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions, their largest being the acquisition of LinkedIn for $26.2 billion in December 2016, followed by their acquisition of Skype Technologies for $8.5 billion in May 2011.
, Microsoft is market-dominant in the IBM PC-compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android. The company also produces a wide range of other consumer and enterprise software for desktops and servers, including Internet search (with Bing), the digital services market (through MSN), mixed reality (HoloLens), cloud computing (Microsoft Azure) and software development (Visual Studio).
Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a "devices and services" strategy. This began with the acquisition of Danger Inc. in 2008, entering the personal computer production market for the first time in June 2012 with the launch of the Microsoft Surface line of ; and later forming Microsoft Mobile through the acquisition of Nokia's devices and services division. Since Satya Nadella took over as CEO in 2014, the company has scaled back on hardware and has instead focused on cloud computing, a move that helped the company's shares reach its highest value since December 1999.
Microsoft entered the operating system (OS) business in 1980 with its own version of Unix, called Xenix. However, it was MS-DOS that solidified the company's dominance. After negotiations with Digital Research failed, IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS, which was set to be used in the upcoming IBM Personal Computer (IBM PC).
In 1990, Microsoft introduced its office suite, Microsoft Office. The suite bundled separate productivity applications, such as Microsoft Word and Microsoft Excel. On May 22, Microsoft launched Windows 3.0, featuring streamlined user interface graphics and improved protected mode capability for the Intel 386 processor. Both Office and Windows became dominant in their respective areas.
On July 27, 1994, the U.S. Department of Justice, Antitrust Division filed a Competitive Impact Statement that said, in part: "Beginning in 1988, and continuing until July 15, 1994, Microsoft induced many OEMs to execute anti-competitive "per processor" licenses. Under a per processor license, an OEM pays Microsoft a royalty for each computer it sells containing a particular microprocessor, whether the OEM sells the computer with a Microsoft operating system or a non-Microsoft operating system. In effect, the royalty payment to Microsoft when no Microsoft product is being used acts as a penalty, or tax, on the OEM's use of a competing PC operating system. Since 1988, Microsoft's use of per processor licenses has increased."
On January 13, 2000, Bill Gates handed over the CEO position to Steve Ballmer, an old college friend of Gates and employee of the company since 1980, while creating a new position for himself as Chief Software Architect. Various companies including Microsoft formed the Trusted Computing Platform Alliance in October 1999 to (among other things) increase security and protect intellectual property through identifying changes in hardware and software. Critics decried the alliance as a way to enforce indiscriminate restrictions over how consumers use software, and over how computers behave, and as a form of digital rights management: for example the scenario where a computer is not only secured for its owner, but also secured against its owner as well.
Gates retired from his role as Chief Software Architect on June 27, 2008, a decision announced in June 2006, while retaining other positions related to the company in addition to being an advisor for the company on key projects. Azure Services Platform, the company's entry into the cloud computing market for Windows, launched on October 27, 2008. On February 12, 2009, Microsoft announced its intent to open a chain of Microsoft-branded retail stores, and on October 22, 2009, the first retail Microsoft Store opened in Scottsdale, Arizona; the same day Windows 7 was officially released to the public. Windows 7's focus was on refining Vista with ease of use features and performance enhancements, rather than a large reworking of Windows.
As the smartphone industry boomed in 2007, Microsoft had struggled to keep up with its rivals Apple and Google in providing a modern smartphone operating system. As a result, in 2010 Microsoft revamped their aging flagship mobile operating system, Windows Mobile, replacing it with the new Windows Phone OS. Microsoft implemented a new strategy for the software industry that had them working more closely with smartphone manufacturers, such as Nokia, and providing a consistent user experience across all smartphones using the Windows Phone OS. It used a new user interface design language, codenamed "Metro", which prominently used simple shapes, typography and iconography, utilizing the concept of minimalism. Microsoft is a founding member of the Open Networking Foundation started on March 23, 2011. Fellow founders were Google, HP Networking, Yahoo, Verizon, Deutsche Telekom and 17 other companies. This nonprofit organization is focused on providing support for a new cloud computing initiative called Software-Defined Networking. The initiative is meant to speed innovation through simple software changes in telecommunications networks, wireless networks, data centers and other networking areas.
In July 2012, Microsoft sold its 50% stake in MSNBC.com, which it had run as a joint venture with NBC since 1996. On October 1, Microsoft announced its intention to launch a news operation, part of a new-look MSN, with Windows 8 later in the month. On October 26, 2012, Microsoft launched Windows 8 and the Microsoft Surface.Eichenwald, Kurt, "Microsoft's Lost Decade: How Microsoft Lost Its Mojo", Vanity Fair, August 2012 Three days later, Windows Phone 8 was launched. To cope with the potential for an increase in demand for products and services, Microsoft opened a number of "holiday stores" across the U.S. to complement the increasing number of "bricks-and-mortar" Microsoft Stores that opened in 2012. On March 29, 2013, Microsoft launched a Patent Tracker.
The Kinect, a motion-sensing input device made by Microsoft and designed as a Game controller, first introduced in November 2010, was upgraded for the 2013 release of the Xbox One video game console. Kinect's capabilities were revealed in May 2013: an ultra-wide 1080p camera, function in the dark due to an infrared sensor, higher-end processing power and new software, the ability to distinguish between fine movements (such as a thumb movements), and determining a user's heart rate by looking at their face. Microsoft filed a patent application in 2011 that suggests that the corporation may use the Kinect camera system to monitor the behavior of television viewers as part of a plan to make the viewing experience more interactive. On July 19, 2013, Microsoft stocks suffered its biggest one-day percentage sell-off since the year 2000, after its fourth-quarter report raised concerns among the investors on the poor showings of both Windows 8 and the Surface tablet. Microsoft suffered a loss of more than US$32 billion.
In line with the maturing PC business, in July 2013, Microsoft announced that it would reorganize the business into four new business divisions: Operating System, Apps, Cloud, and Devices. All previous divisions will be diluted into new divisions without any workforce cut. On September 3, 2013, Microsoft agreed to buy Nokia's mobile unit for $7 billion, following Amy Hood taking the role of CFO.
On January 21, 2015, Microsoft announced the release of their first Interactive whiteboard, Surface Hub. On July 29, 2015, Windows 10 was released, with its server sibling, Windows Server 2016, released in September 2016. In Q1 2015, Microsoft was the third largest maker of mobile phones, selling 33 million units (7.2% of all). While a large majority (at least 75%) of them do not run any version of Windows Phone – those other phones are not categorized as by Gartner – in the same time frame 8 million Windows smartphones (2.5% of all smartphones) were made by all manufacturers (but mostly by Microsoft). Microsoft's share of the U.S. smartphone market in January 2016 was 2.7%. During the summer of 2015 the company lost $7.6 billion related to its mobile-phone business, firing 7,800 employees.
On March 1, 2016, Microsoft announced the merger of its PC and Xbox divisions, with Phil Spencer announcing that Universal Windows Platform (UWP) apps would be the focus for Microsoft's gaming in the future. On January 24, 2017, Microsoft showcased Intune for Education at the BETT 2017 education technology conference in London. Intune for Education is a new cloud-based application and device management service for the education sector. In May 2016, the company announced it was laying off 1,850 workers, and taking an impairment and restructuring charge of $950 million. In June 2016, Microsoft announced a project named Microsoft Azure Information Protection. It aims to help enterprises protect their data as it moves between servers and devices. In November 2016, Microsoft joined the Linux Foundation as a Platinum member during Microsoft's Connect(); developer event in New York. The cost of each Platinum membership is US$500,000 per year. Some analysts deemed this unthinkable ten years prior, however, as in 2001 then-CEO Steve Ballmer called Linux "cancer". Microsoft planned to launch a preview of Intune for Education "in the coming weeks", with general availability scheduled for spring 2017, priced at $30 per device, or through volume licensing agreements.
In January 2018, Microsoft patched Windows 10 to account for CPU problems related to Intel's Meltdown security breach. The patched led issues with the Microsoft Azure virtual machines reliant on Intel's CPU architecture. On January 12, Microsoft released Powershell for the macOS and Linux operating systems. In February 2018, Microsoft killed notification support for their Windows Phone devices which effectively ended firmware updates for the discontinued devices. In March 2018, Microsoft clawed back Windows 10 S to change it to a mode for the Windows operating system rather than a separate and unique operating system. In March the company also established guidelines which censor users of Office 365 from using profanity in private documents. In April 2018, Microsoft released the source code for Windows File Manager under the MIT license to celebrate the program's 20th anniversary. In April the company further expressed willingness to embrace open source initiatives by announcing Azure Sphere as its own derivative of the Linux operating system. In May 2018, Microsoft partnered with 17 American intelligence agencies to develop products that NSA. The project is dubbed Azure Government and has ties to the JEDI surveillance program. On June 4, 2018, Microsoft officially announced the acquisition of GitHub for $7.5 billion, a deal that is expected to close by the end of the year. On July 10, 2018, Microsoft revealed the Surface Go platform to the public. Later in the month it converted Microsoft Teams to gratis. In August 2018, Microsoft released two projects called Microsoft AccountGuard and Defending Democracy. It also unveiled Snapdragon 850 compatibility for Windows 10 on the ARM architecture.
In August 2018, Toyota Tsusho began a partnership with Microsoft to create fish farming tools using the Microsoft Azure application suite for IoT technologies related to water management. Developed in part by researchers from Kindai University, the water pump mechanisms use artificial intelligence to count the number of fish on a conveyor belt, analyze the number of fish, and deduce the effectiveness of water flow from the data the fish provide. The specific computer programs used in the process fall under the Azure Machine Learning and the Azure IoT Hub platforms. In September 2018, Microsoft discontinued Skype. On 10 October, 2018, Microsoft joined the Open Invention Network community despite holding more than 60,000 patents. In November 2018, Microsoft agreed to supply 100,000 HoloLens headsets to the United States military in order to "increase lethality by enhancing the ability to detect, decide and engage before the enemy." In November 2018, Microsoft introduced Azure Multi-Factor Authentication for Microsoft Azure. In December 2018, Microsoft announced Project Mu, an open source release of the UEFI core used in Microsoft Surface and Hyper-V products. The project promotes the idea of Firmware as a Service. In the same month, Microsoft announced the open source implementation of Windows Forms and the Windows Presentation Foundation (WPF) which will allow for further movement of the company toward the transparent release of key frameworks used in developing Windows desktop applications and software. December also saw the company discontinue the Microsoft Edge project in favor of Chromium backends for their browsers.
Standard and Poor's and Moody's have both given a AAA rating to Microsoft, whose assets were valued at $41 billion as compared to only $8.5 billion in unsecured debt. Consequently, in February 2011 Microsoft released a corporate bond amounting to $2.25 billion with relatively low borrowing rates compared to government bonds. For the first time in 20 years Apple Inc. surpassed Microsoft in Q1 2011 quarterly profits and revenues due to a slowdown in PC sales and continuing huge losses in Microsoft's Online Services Division (which contains its search engine Bing). Microsoft profits were $5.2 billion, while Apple Inc. profits were $6 billion, on revenues of $14.5 billion and $24.7 billion respectively. Microsoft's Online Services Division has been continuously loss-making since 2006 and in Q1 2011 it lost $726 million. This follows a loss of $2.5 billion for the year 2010.
On July 20, 2012, Microsoft posted its first quarterly loss ever, despite earning record revenues for the quarter and fiscal year, with a net loss of $492 million due to a writedown related to the advertising company aQuantive, which had been acquired for $6.2 billion back in 2007. As of January 2014, Microsoft's market capitalization stood at $314B, making it the 8th largest company in the world by market capitalization. On November 14, 2014, Microsoft overtook Exxon Mobil to become the 2nd most valuable company by market capitalization, behind only Apple Inc. Its total market value was over $410B — with the stock price hitting $50.04 a share, the highest since early 2000. In 2015, Reuters reported that Microsoft Corp had earnings abroad of $76.4 billion which were untaxed by the IRS. Under U.S. law corporations don't pay income tax on overseas profits until the profits are brought into the United States.
As part of the "Get the Facts" campaign, Microsoft highlighted the .NET trading platform that it had developed in partnership with Accenture for the London Stock Exchange, claiming that it provided "five nines" reliability. After suffering extended downtime and unreliability the LSE announced in 2009 that it was planning to drop its Microsoft solution and switch to a Linux-based one in 2010.
In 2012, Microsoft hired a political pollster named Mark Penn, whom the New York Times called "famous for bulldozing" his political opponents as Executive Vice-President, Advertising and Strategy. Penn created a series of negative ads targeting one of Microsoft's chief competitors, Google. The ads, called "Scroogled", attempt to make the case that Google is "screwing" consumers with search results rigged to favor Google's paid advertisers, that Gmail violates the privacy of its users to place ad results related to the content of their emails and shopping results which favor Google products. Tech publications like TechCrunch have been highly critical of the ad campaign, while Google employees have embraced it.
We provide customer data only when we receive a legally binding order or subpoena to do so, and never on a voluntary basis. In addition we only ever comply with orders for requests about specific accounts or identifiers. If the government has a broader voluntary national security program to gather customer data, we don't participate in it.
During the first six months in 2013, Microsoft had received requests that affected between 15,000 and 15,999 accounts. In December 2013, the company made statement to further emphasize the fact that they take their customers' privacy and data protection very seriously, even saying that "government snooping potentially now constitutes an "advanced persistent threat," alongside sophisticated malware and cyber attacks". The statement also marked the beginning of three-part program to enhance Microsoft's encryption and transparency efforts. On July 1, 2014, as part of this program they opened the first (of many) Microsoft Transparency Center, that provides "participating governments with the ability to review source code for our key products, assure themselves of their software integrity, and confirm there are no "back doors." Microsoft has also argued that the United States Congress should enact strong privacy regulations to protect consumer data.
In April 2016, the company sued the U.S. government, arguing that secrecy orders were preventing the company from disclosing warrants to customers in violation of the company's and customers' rights. Microsoft argued that it was unconstitutional for the government to indefinitely ban Microsoft from informing its users that the government was requesting their emails and other documents, and that the Fourth Amendment made it so people or businesses had the right to know if the government searches or seizes their property. On October 23, 2017, Microsoft said it would drop the lawsuit as a result of a policy change by the Department of Justice (DoJ). The DoJ had "changed data request rules on alerting internet users about agencies accessing their information." The new policy mandated defined periods of time for secrecy orders from the government. "Microsoft drops lawsuit after U.S. government revises data request transparency rules", VentureBeat, Reuters, October 24, 2017
Noted for its internal lexicon, the expression "eating our own dog food" is used to describe the policy of using pre-release and beta versions of products inside Microsoft in an effort to test them in "real-world" situations. This is usually shortened to just "dog food" and is used as noun, verb, and adjective. Another bit of jargon, FYIFV or FYIV ("Fuck You, I'm Fully Vested"), is used by an employee to indicate they are financially independent and can avoid work anytime they wish. The company is also known for its hiring process, mimicked in other organizations and dubbed the "Microsoft interview", which is notorious for off-the-wall questions such as "Why is a manhole cover round?".
Microsoft is an outspoken opponent of the cap on H1B visas, which allow companies in the U.S. to employ certain foreign workers. Bill Gates claims the cap on H1B visas makes it difficult to hire employees for the company, stating "I'd certainly get rid of the H1B cap" in 2005. Critics of H1B visas argue that relaxing the limits would result in increased unemployment for U.S. citizens due to H1B workers working for lower salaries. The Human Rights Campaign Corporate Equality Index, a report of how progressive the organization deems company policies towards LGBT employees, rated Microsoft as 87% from 2002 to 2004 and as 100% from 2005 to 2010 after they allowed gender expression.
In August 2018, Microsoft implemented a policy for all companies providing subcontractors to require 12 weeks of paid parental leave to each employee. This expands on the former requirement from 2015 requiring 15 days of paid vacation and sick leave each year. In 2015, Microsoft established its own parental leave policy to allow 12 weeks off for parental leave with an additional 8 weeks for the parent who gave birth.
Microsoft's main U.S. campus received a silver certification from the Leadership in Energy and Environmental Design (LEED) program in 2008, and it installed over 2,000 on top of its buildings in its Silicon Valley campus, generating approximately 15 percent of the total energy needed by the facilities in April 2005. Microsoft makes use of alternative forms of transit. It created one of the world's largest private bus systems, the "Connector", to transport people from outside the company; for on-campus transportation, the "Shuttle Connect" uses a large fleet of hybrid cars to save fuel. The company also subsidises regional public transport, provided by Sound Transit and King County Metro, as an incentive. In February 2010 however, Microsoft took a stance against adding additional public transport and high-occupancy vehicle (HOV) lanes to the State Route 520 and its floating bridge connecting Redmond to Seattle; the company did not want to delay the construction any further. Microsoft was ranked number 1 in the list of the World's Best Multinational Workplaces by the Great Place to Work Institute in 2011.
On August 23, 2012, Microsoft unveiled a new corporate logo at the opening of its 23rd Microsoft store in Boston, indicating the company's shift of focus from the classic style to the tile-centric modern interface, which it uses/will use on the Windows Phone platform, Xbox 360, Windows 8 and the upcoming Office Suites. The new logo also includes four squares with the colors of the then-current Windows logo which have been used to represent Microsoft's four major products: Windows (blue), Office (red), Xbox (green) and Bing (yellow). The logo resembles the opening of one of the commercials for Windows 95.