Finance•February 08, 2021•4 mins read
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It’s hard to remember a time when Microsoft wasn’t one of the most valuable companies in the world, but it wasn’t always the case. Before it had brands like Xbox, GitHub, and LinkedIn, the company was known primarily for PC operating systems. It wasn’t until the mid-1980s that things began to really change for the company. Nearly 35 years after Microsoft went public, the Knowledge Hub looks back at the history and brands that make up Microsoft.
History of Microsoft
Like all great origin stories, Microsoft started off with a humble beginning. Eventual founders Paul Allen and Bill Gates were in Boston working on software projects, when they read about the “Altair 8800 personal computer” in a magazine. At the time, Bill Gates was a pre-law student at Harvard University and Paul Allen was a programmer at Honeywell.
The pair knew early on that the rapidly dropping price of personal computers meant software sales could finally be profitable. Gates contacted MITS (Micro Instrumentation and Telemetry Systems), the maker of Altair, and offered to demonstrate a new interpreter programming language he and Allen had written for their computer. The only problem was, they hadn’t created it yet and they didn’t have an Altair system to develop or test one.
In just eight weeks, Gates and Allen finished their proposed program and pitched it to MITS in Albuquerque. Leading up to the pitch, the team had nearly forgotten to create a bootstrap program to start the software. In a remarkable photo finish, Allen wrote the bootstrap program during the flight to New Mexico. After their meeting, MITS agreed to distribute and market their software as Altair BASIC.
The success of Altair BASIC convinced Allen and Gates to create their own software company in 1975. The new company, dubbed “Micro-soft”, was a play on the words “microprocessor” and “software.” Like many other startups of its time, Microsoft was launched in a modest garage before moving to a proper headquarters in Bellevue, Washington several years later.
Microsoft’s big break came when it developed an operating system called MS-DOS for IBM’s first computer, which debuted in 1981. Microsoft licensed the operating system to IBM, but retained all rights to the software. This meant, for every IBM computer sold, a royalty was paid to Microsoft. Microsoft also retained the right to license MS-DOS to other computer manufacturers. IBM’s PC was the first personal computer to gain widespread adoption, largely due to its brand recognition and massive marketing campaign. IBM’s PC helped Microsoft make a fortune and established the company as the biggest software developer in the world by the late 80s.
In 1983, Paul Allen left Microsoft after being diagnosed with Hodgkin’s lymphoma, although he remained on the board of directors until 2000.
Two years later in 1985, Microsoft released a revolutionary new graphical interface for MS-DOS, called Windows. This operating system introduced many modern browsing features we enjoy today like multitasking, scroll bars, and drop-down menus. The affordability and usability of Windows helped usher in a new wave of PC users.
The next version of Windows, coined Windows 95, released with even more desktop features like the taskbar and “Start” button. Fans across the country lined up at stores at midnight to score a copy of the new operating system. In its first five weeks, Windows 95 sold 7 million copies worldwide.
How Big is Microsoft Today?
Microsoft has become one of the world’s biggest technology companies due to the foundational work of Allen and Gates. Earlier this year, Microsoft reported revenue of $143 billion USD for its fiscal 2020 year. But more astonishingly, Microsoft’s stock market capitalization is valued at $1.64 trillion USD. That’s TRILLION with a “T.”
To put this figure into perspective, if Microsoft was a country its market cap would be higher than the GDP of countries like Russia, Australia, or South Korea.
Who Owns Microsoft Today?
Although Paul Allen and Bill Gates co-founded Microsoft, the company has been publicly traded since 1986. As of recent public filings, Microsoft reports that their principal shareholders are The Vanguard Group, Inc. and BlackRock, Inc., owning 8.17% and 6.8% of Microsoft, respectively. Bill Gates still owns an estimated 1.3% shares of the company, valued at $16 billion.
Brands Owned by Microsoft
Over the years, Microsoft has expanded its business beyond just software sales. In the last two decades, it has developed brands and acquired companies in several industries including: social media, computer hardware, and gaming. The following are some of the most important brands at Microsoft.
Office
Microsoft’s Office suite set the gold standard for productivity applications when it first released in 1990. The first iteration of Office shipped with just three apps - Microsoft Word, Microsoft Excel, and Microsoft PowerPoint. Office 365 now features 30+ apps and services. Thanks to its ease of use, Office has become the default tool for millions of businesses small and large.
MSN
MSN, an abbreviation of “Microsoft Network,” launched in 1995 alongside Windows 95, as a dial-up internet service provider. After the death of dial-up, MSN would eventually become an online web portal for news, entertainment, and Windows applications.
Xbox
When Xbox launched in 2001, it faced steep competition from Nintendo and Sony, both of which were established gaming console companies. The gamble to take Microsoft into at-home gaming would pay off though, as Xbox’s focus on shooters and Xbox Live online play catapulted them to second place in console sales. A more powerful gaming console, the Xbox 360 was launched in 2005, followed by the Xbox One in 2013. Xbox’s latest console release is the Xbox Series X, which was released in November 2020.
Bing
Prior to launching Bing in 2009, Microsoft had over a decade of experience developing search engines. In 1998, it developed their first search engine with MSN Search and in 2006 it launched Live Search. However, both search engines consistently trailed behind Google and Yahoo! for the duration of their run. Microsoft hoped to change this dynamic with the rebrand of Live Search, as Bing. The release of Bing brought about several improvements to search engines. The tool features several benefits over Google, including advanced image search, instant search bar results, and Bing Rewards, which gives users points to redeem prizes for searching the web with Bing.
Azure
In 2010, Microsoft launched its own cloud computing platform called Azure. Azure provides on-demand computing power and data storage and frees up businesses from having to purchase and manage their own data center. Instead, they can host databases, directories, web servers, file storage, virtual machines, and much more directly from the cloud.
Skype
In 2011, Microsoft closed a deal to acquire Skype for $8.5 billion USD. Skype is a video telecommunications application that allows you to host video calls and voice chats between friends, family, or coworkers, on whatever device you choose. In March of 2020, Microsoft revealed that Skype powers over 40 million calls a day.
Surface
2012 marked the release of the Surface tablet and Microsoft’s first foray into computer hardware. The Surface was positioned as a tablet-based Windows experience, complete with Office Suite, a portable design and a keyboard cover for daily tasks. Today, the Surface line has expanded to also include laptops, desktops, headphones and a phone-tablet hybrid called “Surface Duo.”
Microsoft paid $26.2 billion for social media powerhouse LinkedIn in late 2016. LinkedIn is the largest online professional network and is used to find jobs, internships, connect, and strengthen professional relationships.
GitHub
In 2018, Microsoft acquired GitHub for $7.5 billion in stock. GitHub is a leading software development platform and is a popular resource for app developers and programmers. The platform is even used by tech giants Google and Apple. GitHub boasts a community of 50 million developers and 100 million code repositories, making it the largest global host of source code.
Recent Acquisitions by Microsoft
In September 2020, Microsoft shocked the gaming world when it bought ZeniMax Studios, the parent company of Bethesda Softworks. This $7.5 billion USD deal gives the Xbox brand access to some of gaming’s most revered series and characters. Xbox now owns the Dishonored, Doom, Fallout, and Elder Scrolls franchises. This is in addition to ownership of Halo, Gears of War, MineCraft, Forza, and Age of Empires. In total, Microsoft now owns 23 first-party gaming studios.
Rumored Acquisitions
During the summer of 2020, and prior to the acquisition of ZeniMax, it was rumored that Microsoft was shopping gaming giant SEGA. SEGA would provide access to an audience that Microsoft has failed to reach effectively - Japan. Historically, Japanese-based companies, Sony and Nintendo, have dominated Xbox in console sales for the Asia market. It was even reported that Microsoft was open to rebranding the next Xbox console as “SEGA Series X” in Japan to capitalize on the established brand. Despite the rumors, in September, Microsoft denied interest in acquiring SEGA.
After the White House threatened to ban TikTok, it was heavily speculated that Microsoft would acquire TikTok’s U.S. operations. However, this did not come to fruition as Oracle was chosen instead. Microsoft looked to improve upon the security vulnerabilities and disinformation tactics inherent to TikTok by taking over the computer code and algorithm that powers the app.
Conclusion
Will Microsoft continue to grow over the years, or will it finally hit a wall? Whatever direction Microsoft chooses to take next, it’s safe to assume they’ll continue to innovate and take risks. After all, it’s what got them to where they are today. They’ve shown us that with a little competition and an ambitious drive, there’s no limit to what a business can accomplish.
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FAQs
How many companies are owned by Microsoft? ›
Microsoft has acquired 212 companies, including 38 in the last 5 years. A total of 13 acquisitions came from private equity firms. It has also divested 18 assets. Microsoft's largest acquisition to date was in 2022, when it acquired Activision Blizzard for $68.7B.
What major company helped fuel Microsoft's success? ›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.
Is Google belong to Microsoft? ›Google is an American Multinational tech-based company that basically focuses on Internet-based products and services. Microsoft is an American Multinational tech-based company that basically focuses on developing and selling PCs, computer-based products, software, and services. Sergey Brin and Larry Page found Google.
Is Apple still owned by Microsoft? ›In 2003, Microsoft sold its entire stake for $550 million. Nearly quadruple your money in six years? Hard to beat. Yet had Microsoft held on to its Apple stock, today those shares would be worth over $120 billion.
What companies did Microsoft buy 2022? ›| Calendar Year | Press Release | Company |
|---|---|---|
| 2022 | June 14, 2022 | Miburo |
| 2022 | March 31, 2022 | Minit |
| 2022 | February 28, 2022 | Oribi* |
| 2022 | January 18, 2022 | Activision Blizzard |
Bill Gates still owns more than 1% of Microsoft's shares, worth around twenty billion dollars. Gates has a lot of his financial investments held by a family office known as Cascade Investments. He also has substantial real estate holdings and an extensive collection of collectibles.
What does Bill Gates own now? ›Later in his career and since leaving day-to-day operations at Microsoft in 2008, Gates has pursued many business and philanthropic endeavors. He is the founder and chairman of several companies, including BEN, Cascade Investment, TerraPower, bgC3, and Breakthrough Energy.
Who owns the most percentage of Microsoft? ›| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 8.22% | 611,594,390 |
| BlackRock Fund Advisors | 4.48% | 333,650,111 |
| SSgA Funds Management, Inc. | 3.97% | 295,509,547 |
| Fidelity Management & Research Co... | 2.44% | 181,253,642 |
According to Big Blues, Don Estridge, who headed the IBM PC project, said one reason the company went to Microsoft in the first place was that Microsoft's BASIC had hundreds of thousands of users, while IBM's BASIC, while excellent, had few users.
Who was Microsoft's biggest competitor? ›Microsoft's Competitors
The list includes well-known brands such as Apple (AAPL), Google (GOOG), SAP SE (SAP), IBM (IBM) and Oracle (ORCL), among others.
Which company is taken over by Microsoft to become the most valuable largest company? ›
Microsoft overtakes Apple to become the world's most valuable company - The Verge.
Is Microsoft bigger than Google? ›Microsoft is bigger than Google, Amazon and Facebook. But now lawmakers treat it like an ally in antitrust battles.
Do Microsoft make phones? ›Surface Duo
Mobile productivity powered by two 5.6" screens and a revolutionary 360° hinge.
- Microsoft Teams.
- Word.
- Excel.
- PowerPoint.
- Outlook.
- OneNote.
- OneDrive.
Bill Gates is leaving Microsoft's board, the company announced on Friday. Gates co-founded Microsoft in 1975 with Paul Allen, who died in 2018. Gates is among Microsoft's top shareholders, owning 1.36% of shares, according to FactSet.
Does Microsoft still own Facebook? ›Did you know that Microsoft initially bought 1.6% of the shares? Yes, it's true! In 2008 the former invested into the platform, paying $240 million. They now own only 1.3% of them as part of the shares have been dispersed.
Is Bill Gates still Microsoft shareholder? ›...
Who owns the most shares of Microsoft?
Microsoft is attempting to persuade regulators around the world to clear its $68.7 billion acquisition of Activision Blizzard — the biggest deal of its kind the gaming industry has ever seen.
What company is Microsoft trying to buy? ›The lawsuit asserts that because of Activision-Blizzard's weakened position resulting from the workplace harassment lawsuit from the California DFEH, that Microsoft negotiated with Kotick and Activision-Blizzard to buy the company at a reduced price.
Who have Microsoft just bought? ›Microsoft shocked the tech and gaming world on January 18th when it announced it would acquire Activision Blizzard in a $68.7 billion deal, by far the biggest ever in gaming.
How much would I have if I invested $1000 in Microsoft in 1986? ›
A $1,000 investment in Microsoft on the day of its initial public offering, or IPO, on March 13, 1986, would be worth more than $1.6 million today, according to CNBC calculations.
What does Jeff Bezos own? ›Besides Amazon, Bezos also owns other businesses. The most notable among them are aerospace company Blue Origin — founded in 2000 — and one of the world's leading newspapers, The Washington Post, which he bought in 2003 for USD 250 million (about SGD 337 billion).
How much of Amazon does Jeff Bezos own? ›Bezos presently owns just less than 10% of outstanding Amazon shares, according to Forbes. When he and his wife divorced, she received one-fourth of his then-16% stake in Amazon. Forbes reported in November that to that point in 2022, he had donated more than $400 million of stock to nonprofit organizations.
What phone does Bill Gates own? ›The billionaire, in a ask-me-anything session on Reddit revealed that he is a Samsung loyalist. Gates currently uses Samsung Galaxy Z Fold 4 and before this he used Galaxy Z Fold 3 as his primary phone.
Does Bill Gates own shares in McDonald's? ›Bill Gates added to his holdings in McDonald's Corporation by 10.13%.
Does Microsoft have a lot of debt? ›Microsoft long term debt for the quarter ending December 31, 2022 was $44.119B, a 8.58% decline year-over-year. Microsoft long term debt for 2022 was $47.032B, a 6.08% decline from 2021. Microsoft long term debt for 2021 was $50.074B, a 15.95% decline from 2020.
How many shares Bill Gates own in Microsoft? ›Bill Gates still owns more than 1% of Microsoft's shares, worth around twenty billion dollars. Gates has a lot of his financial investments held by a family office known as Cascade Investments. He also has substantial real estate holdings and an extensive collection of collectibles.
Is Microsoft bigger than Walmart? ›Walmart isn't a unicorn, and it's no longer sexy. But it is massive. With $482 billion in revenue, it sells more than Apple, Amazon and Microsoft put together, according to Fortune's annual ranking of companies by revenue, released yesterday (June 6). It's bigger than the No.
What is Microsoft main weakness? ›Unsuccessful acquisitions – Microsoft's fewer acquisitions like WebTV, LinkExchange, Massive, and Danger resulted in failures and divestitures. Such unprofitable investments are the biggest weaknesses of Microsoft.
Is IBM in decline? ›The revenues of IBM have seen a downward trend over the last decade. In 10 years, the sales of IBM declined by more than 40%. The decline can be associated with the company's weakening legacy business, the Kyndryl (KD) spinoff, and other divestments of non-core business.
Does NASA still use IBM? ›
The space agency powers down its last System Z machine, years after IBM stopped selling them for the mathematical calculation jobs for which NASA originally bought them.
Who is Microsoft rival? ›Microsoft Corporation
What is Microsoft's oldest product? ›Microsoft released its first product which is called the Altair BASIC. The company's first international office was founded on November 1, 1978, in Japan, entitled "ASCII Microsoft" (now called "Microsoft Japan"). Microsoft signs a contract with IBM to develop an operating system for IBM's first personal computer.
Does Amazon compete with Microsoft? ›For subscription services, Amazon competes with Netflix, Apple, and Google. In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.
What big companies did Microsoft buy? ›Microsoft has made fourteen acquisitions worth over one billion dollars: Skype (2011), aQuantive (2007), Fast Search & Transfer (2008), Navision (2002), Visio Corporation (2000), Yammer (2012), Nokia's mobile and devices division (2013), Mojang (2014), LinkedIn (2016), GitHub (2018), Affirmed Networks (2020), ZeniMax ...
Which company will overtake Apple? ›The no-brainer choice: Amazon
Although Microsoft is a legitimate choice to overtake Apple in market value in the next 18 years, it's e-commerce behemoth Amazon (AMZN -1.51%) that looks like the no-brainer selection to potentially become the world's largest stock by market cap.
With 600 billion U.S. dollars in revenue, Walmart topped the ranking of the hundred largest companies globally, followed by the Saudi Arabian oil company Aramco.
Does Bill Gates own any of Microsoft? ›Key Takeaways. Bill Gates still owns more than 1% of Microsoft's shares, worth around twenty billion dollars. Gates has a lot of his financial investments held by a family office known as Cascade Investments.
Is Microsoft owned by Bill Gates? ›Bill Gates founded the software company Microsoft Corporation with his friend Paul Allen. He also cofounded the Bill & Melinda Gates Foundation to fund global health and development programs.
Who is the parent company of Microsoft? ›Although Paul Allen and Bill Gates co-founded Microsoft, the company has been publicly traded since 1986. As of recent public filings, Microsoft reports that their principal shareholders are The Vanguard Group, Inc.
What products does Microsoft own? ›
- Global. Microsoft 365. Teams. ...
- Software Software. Windows Apps. AI. ...
- PCs & Devices PCs & Devices. Computers. Shop Xbox. ...
- Entertainment Entertainment. PC Game Pass. Xbox games. ...
- Business Business. Microsoft Cloud. Microsoft Security. ...
- Developer & IT Developer & IT. Azure. ...
- Other Other. Free downloads & security. ...
- View Sitemap.
Institutional investors hold a majority ownership of MSFT through the 72.30% of the outstanding shares that they control. This interest is also higher than at almost any other company in the Packaged Software industry.
Does Warren Buffett own any Microsoft? ›Buffett doesn't own any shares in Microsoft and has said in the past that this was in order to quell fears that he was participating in any insider trading.
How much of Apple does Bill Gates own? ›The Trust owns around 35 million shares in Berkshire Hathaway — or 2.69% of the total company. If 2.69% of the nearly $144 billion in Apple shares owned by Berkshire Hathaway are owned by the Gates Trust, the pair still owns $3.87 billion of Apple stock.
What island does Bill Gates own in Hawaii? ›| Nickname: The Pineapple Isle | |
|---|---|
| Location in the state of Hawaii | |
| Geography | |
| Location | North Pacific Ocean |
| Coordinates | 20°49′30″N 156°55′12″W |
Dell is owned by its parent company, Dell Technologies.
Who are Microsoft's biggest investors? ›The top shareholders of Microsoft are Satya Nadella, Bradford L. Smith, Jean-Philippe Courtois, Vanguard Group Inc., BlackRock Inc. (BLK), and State Street Corp.
Does Microsoft own any phones? ›Surface Duo
Mobile productivity powered by two 5.6" screens and a revolutionary 360° hinge.
Microsoft has made fourteen acquisitions worth over one billion dollars: Skype (2011), aQuantive (2007), Fast Search & Transfer (2008), Navision (2002), Visio Corporation (2000), Yammer (2012), Nokia's mobile and devices division (2013), Mojang (2014), LinkedIn (2016), GitHub (2018), Affirmed Networks (2020), ZeniMax ...
Does Microsoft own any gaming companies? ›As a result of the deal, Microsoft Studios now boasts the likes of id Software, who develop the Doom, Quake, and Rage franchises, Arkane Studios, who developed Prey, Dishonored, and the upcoming Redfall, as well as Machine Games, ZeniMax Online Studios, and Tango Gameworks.
What is Microsoft's biggest product? ›
Microsoft sells computing devices, cloud systems and services, software, and other products to consumers and businesses. The company's intelligent cloud segment is the largest source of profit, as well as the fastest-growing.