Microsoft turns 50: How it opened up Windows to the future

Bill Gates and Paul Allen started out with a passion that had global implications

For five decades, Microsoft has been an icon of technology: innovative, ruthless in its pursuit of leadership and absorbing the blows in an ever-evolving landscape. With Windows, it became a household name, and literally redefined the office with its eponymous suite of Word, Excel and PowerPoint.

Its influence was so large that it defined technology for multiple generations and, to this day, it can be argued that a good number of individuals have only known one personal computer system.

And not often do companies become symbols of their products. But some become synonymous, such as Facebook with social media, Amazon with e-commerce and Google with the internet.

Microsoft – before all of them – became that to personal computing, serving as our windows – pun definitely intended – to the world beyond that PC screen.

The company founded by childhood friends Bill Gates and Paul Allen has ridden the ups and downs of 50 years of rapidly evolving tech, with its PC operating system still used by more than 70 per cent of users worldwide, data from StatCounter shows.

Today, April 4, the company based in Redmond, Washington, celebrates its half century. And it all started with two techies and a magazine cover.

'Popular' choice

Microsoft was founded on April 4, 1975, but its roots began to take hold in January that year, when Mr Allen showed Mr Gates the cover story of that month's Popular Mechanics. Making it on to the magazine's cover was considered a hint that a new product was to be launched.

That issue's cover featured the Altair 8800 from Micro Instrumentation and Telemetry Systems, which would become the first successful microcomputer.

The pair developed a Basic – Beginners' All-purpose Symbolic Instruction Code – interpreter for the device, which eventually became the Altair Basic, in Albuquerque, New Mexico, Microsoft's first base.

The company moved to Bellevue, Washington, in 1979, before ultimately settling at its present headquarters in Redmond in 1985.

Microsoft took its name from microprocessors and software, and was sometimes written as the portmanteau Micro-Soft, according to the company. It also reportedly stood for “microcomputer software”.

Its turning point came in 1980, when Mr Gates and Mr Allen – both very skilled in computer programming – struck a deal to provide the operating system for IBM’s first personal computer.

That led to the development of one of the most iconic pieces of technology – Windows 1.0, which was released in 1985 and forever changed the way we compute.

Mr Gates and Mr Allen have been credited with pioneering the personal computing revolution. Mr Gates stepped down as Microsoft chairman in 2014 and has since served in an advisory capacity. He was the world's wealthiest person 18 times from 1995 to 2017, according to Forbes, with the dot-com bubble at the turn of the century playing a huge role. Today, he remains focused on his philanthropic endeavours.

Mr Allen, who stepped down from day-to-day duties in 1983 after being diagnosed with Hodgkin lymphoma, ultimately left the company in 2000. He went on to own a number of professional sports teams in the US. He died in 2018, when he was ranked the 44th wealthiest individual globally.

Windows to the future

Microsoft is, undoubtedly, best known for Windows, the most popular PC-operating system.

The first five releases of Windows, from 1.0 to 3.1, were based on MS-DOS, before it was split into two successors starting in 1993 – Windows NT, meant for professionals and including Windows 2000, and the more recognisable Windows 9x series, comprised of 95, 98 and Me. They were reunited with the 2001 release of Windows XP.

The current version is Windows 11. Its successor, expected to be Windows 12 (reportedly codenamed New Valley), is rumoured for release this year.

However, Windows, at certain points, became the bane of the company. Millennials and those older can remember Windows 95, which shifted how we interacted with PCs. Then came Windows Me – Millennium Edition – in 2000, which was panned for stability issues, thus earning the not-so-flattering moniker “Mistake Edition”.

Thankfully, Windows XP quickly patched things up. Windows Vista, released in 2006, was also criticised for its sluggishness, but it wasn't as lambasted as Windows Me, which has been ranked among the worst operating systems of all time.

In addition, Microsoft has been embroiled in a number of regulatory mishaps, most notably the 1998 antitrust case brought against it for allegedly monopolising the internet.

“It is clear that every challenge we have faced has served as a valuable lesson and a stepping stone towards sustainable growth … we understand the critical importance of earning and maintaining trust,” Naim Yazbeck, general manager of Microsoft UAE, told The National.

Despite the ups and downs, Microsoft maintained its status as one of the most valuable companies in the world and, in 2019, became the third US company to hit the trillion-dollar mark, after Amazon and Apple. As of Thursday, the company has a market capitalisation of $2.78 trillion, trailing only Apple.

As Mr Gates once said: “Your most unhappy customers are your greatest source of learning.”

Microsoft is also one of only two US companies with an AAA credit rating from S&P and an Aaa rating from Moody's, the other being the conglomerate Johnson & Johnson.

The what-ifs

Two Microsoft “what-if” episodes stand out. The first is its failure to keep in step with the smartphone race.

Microsoft was first involved with mobiles in 2000 when it debuted Windows Mobile on the Pocket PC. The company followed it up with the Windows Phone in 2010, and was the force behind the Nokia Lumia – later the Microsoft Lumia – which was a success in its own right.

But, strong competition came from Apple, which launched the iPhone in 2007, and Google, which rolled out Android in 2008.

Microsoft's chief executive in 2007, Steve Ballmer, mocked the iPhone, saying no one would buy it because it was expensive and was locked to Cingular Wireless at that time, and it would not appeal to business people because it had no keyboard.

He was clearly proved wrong: in the fourth quarter of 2011, revenue from iPhone beat Microsoft's total revenue. Microsoft ultimately waved the white flag and discontinued Windows Phone in 2013, unable to compete with the folks at Cupertino and Mountain View.

The second instance involves two botched attempts at gaming. After Microsoft witnessed the success of the Sony PlayStation in the 1990s, Mr Gates spoke to the Japanese tech giant's executives in 1998 to pitch a partnership and integrate Windows into the consoles. Reportedly, Microsoft saw PlayStation as a threat to its PCs.

Sony said no. Mr Gates, never one to back down, changed tactics and that led to the development of the original Xbox in 1998.

Fast-forward to 2021, and it was revealed by Bloomberg that Microsoft made a serious pitch to buy Nintendo, the maker of the Switch, in 1999. Nintendo's answer? They just “laughed their a**** off” at the proposal, according to Kevin Bachus, a former director at the Xbox team.

The instances are arguably on a par with another big what-if in gaming history – the unreleased Nintendo Play Station for which Sony and Nintendo joined forces.

The next 50 – and beyond

Without a doubt, artificial intelligence is a key driver of Microsoft's future. The company is heavily involved in generative AI with Copilot while investing big in OpenAI, in an increasingly crowded space with the likes of Google.

The company has also sought to broaden its partnerships through key investments: for instance, nearly a year ago today, it put $1.5 billion into Abu Dhabi artificial intelligence and cloud company G42, signifying its growing presence in emerging technology hubs such as the UAE.

In February, Microsoft also unveiled the Majorana 1 chip, made from a new state of matter, which it calls topoconductor. The chip is the result of one of the company's longest running research projects and it believes it will be a game-changer for quantum computing.

AI and quantum computing are part of the trends Microsoft chairman and chief executive Satya Nadella recently identified as focus areas for the company. This list also includes their economic impact and transformative effects, while adhering to legal and ethical standards.

Mr Nadella, who replaced Mr Ballmer in 2014, had told The National that AI's potential benefits will depend on the level of commitment and investment they are willing to put in, from government initiatives to widespread adoption.

The company believes that, through the next 50 years, the possibilities for technological advancement are “both exhilarating and boundless”, according to Mr Yazbeck.

Of course, there will always be challengers – something that is “inevitable and always welcome”, he added.