The Cutting Edge: Microsoft

Bill Gates stepped down as chairman of the board of Microsoft Corporation on February 4, 2014, the company he founded with Paul Allen in 1975 (Curtis). Gates is now a member of the board of directors, founder and technology advisor. Satya Nadella, the former executive vice president at the helm of the company’s Cloud and Enterprise group, who governed the architecture and management of computing platforms, cloud computing services, and tools for developers, became chief executive officer. Gates brand-new role will be to assist Nadella to structure Microsoft’s new technological and product direction. Steve Ballmer, Nadella’s predecessor, stepped down as CEO, after fourteen years, and resigned from the Board of Directors (Curtis).

Microsoft – The Beginning

Gates enjoyed computer programming early on (Curtis). It was a passion he investigated further during his college years. Along with his childhood friend Paul Allen, Gates created a rendition of the BASIC software for the MITS Altair 8800, the first microcomputer. The company decided to disburse the software under the name Altair BASIC. MITS hired Allen, and Gates worked with him to advance the software. Microsoft was founded on April 4, 1975, with Gates as the CEO. During this period Gates had taken a leave of absence from his alma mater Harvard University, and ultimately never returned. The new company divested of its relationship with MITS at the end of 1976, despite working on software for numerous systems. The company, which started in Albuquerque, New Mexico, relocated to Bellevue, Washington in 1979. Gates was meticulous about the software that was delivered and actually reviewed the code, line by line, prior to its release (Curtis).

In 1980, International Business Machines (IBM) contacted Microsoft to request the creation of an operating system for its prospective PC (Miller). Gates bought 86-DOS from Seattle Computer Products, then adapted its inner workings for the personal computer. He thereafter gave the newly adapted system to IBM under the name PC DOS, and was paid $50,000. IBM was not given the copyright to the system, though, because Gates’ vision included the distribution of the system to other hardware companies. In 1985, IBM requested that Microsoft develop a new operating system called OS/2. Microsoft created the new operating system, while still selling their own option. This reality created direct competition between the two operating system versions, with Microsoft winning the competitive sales war between the two. In fact, it was not too long before Microsoft’s own operating system totally eclipsed that of IBM. With the advent of several versions of Windows in the 1990s, the company had conquered ninety percent of the marketplace for PCs (Miller). The IBM/DOS deal, was likely the single most significant circumstance that turned the little company that could, into the behemoth Microsoft Corporation is now ("30 Years Ago”). As a result of the IBM/DOS agreement, Microsoft began its meteoric rise as an influential leader in the computer industry, and Gates became known as the wizard pulling the software strings behind the curtains. The partnership between the two companies disintegrated in 1991. 

Microsoft reorganized its structure, incorporating in Washington. Bill Gates became the company’s president and chairman of the board (Markoff). During the early years, Gates acumen was legendary in terms of his business foresight and production capabilities, but not as astute when it came to interacting with his executives (Curtis). He developed a reputation as non-collaborative, verbally antagonistic, and castigating towards his managers, if they did not fully capture the company’s long-term interest at every turn.

Microsoft Windows

In 1985, Microsoft launched its highly successful Windows operating system (Curtis). The operating system was so successful, they are now in their 10th iteration of the software, and in 2015, convinced many of their end users, who were on a variety of older versions, to upgrade to the latest platform for free. The main Windows operating systems included Windows 1.0, Windows NT, Windows 95, Windows 2000 Professional, XP, Vista, 7, 8 and 10 ("List of all Windows OS”). Windows 10 has changed the functional approach to operating systems, where apps can span many product families with essentially the same code (Rowinski). There is minimal difference between the code for PCs and other devices, including Microsoft’s own Xbox. The objective is to have only one software ecosystem spanning devices and products. This transition makes developers’ efforts to maintain their accessory software more streamlined and less complicated to span multiple product families. It should not be lost on anyone that this concept will make it easier for Microsoft engineers to make overall changes, as well. Windows 10 will also help to transform the software into an "operating system as a service" model, which is Microsoft’s vision of the future (“The Definitive Guide”). 

Oh! The Internet is Important?

In 1995, Gates issued a memorandum, now referred to as the Internet Tidal Wave (“The Internet Tidal Wave.”). His executives received their copy on May 26th. The memo identified Netscape and its browser Netscape Navigator as Microsoft’s new competition. Gates admits that the company had missed the boat on grasping the significance of the Internet and all that it implied. He advised his executives that addressing the Internet was now Microsoft’s most important mission. The company pivoted and began its foray into computer networking and the Internet. That same year, Microsoft launched the Microsoft Network (MSN), which was created to compete with America Online (AOL) (“Microsoft Corporation”). In 1996, the company partnered with NBC, launching MSNBC a twenty four hour cable news station. MSNBC competitor was news channel CNN. Microsoft also ventured into the personal digital assistant market with the offering of Windows CE 1.0 operating system especially designed for handheld devices. The year 1996 was filled with another launch, that of Windows NT 4.0, which allowed the interconnection of the Windows 95 GUI and Windows NT (“Microsoft Corporation”).

Microsoft’s Internet catchup game started to pay dividends (“Microsoft Corporation”). Also in 1996, ActiveX, an interface for application programming, was one of the company’s biggest paydays. ActiveX aided Microsoft and other companies to activate controls in a variety of software languages, like JScript and VBScript, among others. In addition to ActiveX, Microsoft launched Microsoft SQL Server 6.5 which served as an aid to internet apps. In 1997, Internet Explorer 4.0 and Microsoft Office 97 were introduced. The release represented Microsoft’s triumph over competitor Netscape. The company bundled Internet Explorer (IE) with Windows and established an agreement with Apple Computers to bundle IE with the operating system for their Macintosh (“Microsoft Corporation”). 

The Justice Department Antitrust Lawsuit

In May 1998, the world discovered that the: Justice Department today charged Microsoft with engaging in anticompetitive and exclusionary practices designed to maintain its monopoly in personal computer operating systems and to extend that monopoly to internet browsing software. Twenty state Attorneys General and the District of Columbia filed a similar action today.

‘Consumers and computer manufacturers should have the right to choose the software they want installed on their personal computers,’ said Attorney General Janet Reno. ‘We are acting to preserve competition and promote innovation in the computer software industry’ ("Justice Department Files”).

The Department charged that Microsoft had engaged in anticompetitive behavior such as: attempting to convince Netscape not to compete and to arrange that Microsoft supply browsers for Windows systems and Netscape provide browsers for non-Windows systems, an arrangement Netscape refused to comply with ("Justice Department Files”); demanding that computer manufacturers install IE in order to get a license for their Windows 95 operating system ("Justice Department Files”);  continuing this behavior by requiring IE be bundled with their latest operating system at the time, Windows 98 ("Justice Department Files”); requiring manufacturers to not make changes to the boot up process established by Microsoft. This process established what a consumer would see when they turned their computer on. Thus manufacturers were prevented from showing Netscape in a more prominent position than that given to Netscape by Microsoft ("Justice Department Files”); signing anticompetitive contracts with the largest online internet providers to only allow them to be listed in Windows if they agreed to offer IE as a primary choice or as an exclusive choice through their distribution channels; not mention any other possibilities of browser options; and to use tools that make their sites look better when viewed through IE ("Justice Department Files”); signing anticompetitive agreements with internet content providers, using similar tactics as those used for online internet service providers ("Justice Department Files”); attempting to modify some agreements that are unlawful still ("Justice Department Files”); and acting on its fear that Netscape would become the browser of choices, so in everything they did, their goal was to crush Netscape ("Justice Department Files”).

Microsoft Planed a Lawsuit of its Own

In April 2016, Microsoft filed a lawsuit against the Justice Department alleging the unconstitutionality of the government’s requirements preventing technology companies from advising their customers when federal agencies access their data (Greene and Barrett). The lawsuit undertakes the issue of governmental information access limits for information that resides in the cloud. In light of the issues raised by Snowden, with respect to the National Security Agency, the topic is a timely one. Those on the side of the 4th Amendment say that if a person’s home or hard drive were searched, the person would be aware of it. Yet, now, the feds access cloud information continuously without the owner knowing about it. The lawsuit comes on the heels of demands made by the Justice Department in February requesting that Apple help them to access a terrorist’s iPhone passcode. The lawsuit against Apple was dropped because the government was able to secure access through the services of a third-party security company. The company says that it is the recipient of over 5,000 demands from the feds for access to customer information recently, and among those over 2,500 had gag orders attached, which stopped Microsoft from advising their clients that this action was taking place. The suit states that the government does far more information accessing on the cloud than it does for hard copy documents, Microsoft alleges, because the government feels that it can get to the information “. . . under a veil of secrecy” (Greene and Barrett).

The Microsoft Brand

The company appears on the Forbes Most Valuable Brands List as enterprise #3, with $407 billion in market capitalization, as of May 2016, and sales of $86.6 billion (“Microsoft”). The company is listed as #23 on the Forbes Global 2000 List.

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