Microsoft
Microsoft
Microsoft
In 2018, Microsoft became the most valuable publicly Number of 221,000 (2023)
employees
traded company in the world, a position it has
repeatedly traded with Apple in the years since.[13] In Divisions Microsoft Engineering Groups
April 2019, Microsoft reached a trillion-dollar market Microsoft Digital Crimes Unit
cap, becoming the third U.S. public company to be Microsoft Press
valued at over $1 trillion after Apple and Amazon, Microsoft Gaming
respectively. As of 2024, Microsoft has the third- Microsoft AI
highest global brand valuation. Subsidiaries Microsoft Japan
Microsoft entered the operating system (OS) business in 1980 with its own version of Unix called
Xenix,[23] but it was MS-DOS that solidified the company's dominance. IBM awarded a contract to
Microsoft in November 1980 to provide a version of the CP/M OS to be used in the IBM Personal
Computer (IBM PC).[24] For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle
Computer Products which it branded as MS-DOS, although IBM rebranded it to IBM PC DOS. Microsoft
retained ownership of MS-DOS following the release of the IBM PC in August 1981. IBM had
copyrighted the IBM PC BIOS, so other companies had to reverse engineer it for non-IBM hardware to run
as IBM PC compatibles, but no such restriction applied to the operating systems. Microsoft eventually
became the leading PC operating systems vendor.[25][26]: 210 The company expanded into new markets
with the release of the Microsoft Mouse in 1983, as well as with a publishing division named Microsoft
Press.[15]: 232 Paul Allen resigned from Microsoft in 1983 after developing Hodgkin's lymphoma.[27] Allen
claimed in Idea Man: A Memoir by the co-founder of Microsoft that Gates wanted to dilute his share in the
company when he was diagnosed with Hodgkin's disease because he did not think that he was working
hard enough.[28] Allen later invested in low-tech sectors, sports teams, commercial real estate, neuroscience,
private space flight, and more.[29]
In 1990, Microsoft introduced the Microsoft Office suite which bundled separate applications such as
Microsoft Word and Microsoft Excel.[15]: 301 On May 22, Microsoft launched Windows 3.0, featuring
streamlined user interface graphics and improved protected mode capability for the Intel 386 processor,[35]
and both Office and Windows became dominant in their respective areas.[36][37]
On July 27, 1994, the Department of Justice's Antitrust Division filed a competitive impact statement that
said: "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."[38]
1995–2007: Foray into the Web, Windows 95, Windows XP, and Xbox
Following Bill Gates's internal "Internet Tidal Wave memo" on May 26, 1995, Microsoft began to redefine
its offerings and expand its product line into computer networking and the World Wide Web.[39] With a few
exceptions of new companies, like Netscape, Microsoft was the only major and established company that
acted fast enough to be a part of the World Wide Web practically from the start. Other companies like
Borland, WordPerfect, Novell, IBM and Lotus, being much slower to adapt to the new situation, would
give Microsoft market dominance.[40]
The company released Windows 95 on August 24, 1995, featuring
pre-emptive multitasking, a completely new user interface with a
novel start button, and 32-bit compatibility; similar to NT, it
provided the Win32 API.[41][42]: 20 Windows 95 came bundled
with the online service MSN, which was at first intended to be a
competitor to the Internet, and (for OEMs) Internet Explorer, a Web
browser. Internet Explorer has not bundled with the retail Windows
95 boxes, because the boxes were printed before the team finished
the Web browser, and instead were included in the Windows 95
In 1996, Microsoft released Windows
CE, a version of the operating
Plus! pack.[43] Backed by a high-profile marketing campaign[44]
system meant for personal digital and what The New York Times called "the splashiest, most frenzied,
assistants and other tiny computers, most expensive introduction of a computer product in the industry's
shown here on the HP 300LX. history,"[45] Windows 95 quickly became a success.[46] Branching
out into new markets in 1996, Microsoft and General Electric's
NBC unit created a new 24/7 cable news channel, MSNBC.[47]
Microsoft created Windows CE 1.0, a new OS designed for devices with low memory and other
constraints, such as personal digital assistants.[48] In October 1997, the Justice Department filed a motion in
the Federal District Court, stating that Microsoft violated an agreement signed in 1994 and asked the court
to stop the bundling of Internet Explorer with Windows.[15]: 323–324
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.[15]: 111, 228 [19] Various companies
including Microsoft formed the Trusted Computing Platform
Alliance in October 1999 to (among other things) increase security Microsoft released the first
and protect intellectual property through identifying changes in installment in the Xbox series of
hardware and software. Critics decried the alliance as a way to consoles in 2001. The Xbox,
enforce indiscriminate restrictions over how consumers use graphically powerful compared to its
software, and over how computers behave, and as a form of digital rivals, featured a standard PC's
733 MHz Intel Pentium III processor.
rights management: for example, the scenario where a computer is
not only secured for its owner but also secured against its owner as
well.[49][50] On April 3, 2000, a judgment was handed down in the case of United States v. Microsoft
Corp.,[51] calling the company an "abusive monopoly."[52] Microsoft later settled with the U.S. Department
of Justice in 2004.[31]
On October 25, 2001, Microsoft released Windows XP, unifying the mainstream and NT lines of OS under
the NT codebase.[53] The company released the Xbox later that year, entering the video game console
market dominated by Sony and Nintendo.[54] In March 2004 the European Union brought antitrust legal
action against the company, citing it abused its dominance with the Windows OS, resulting in a judgment of
€497 million ($613 million) and requiring Microsoft to produce new versions of Windows XP without
Windows Media Player: Windows XP Home Edition N and Windows XP Professional N.[55][56] In
November 2005, the company's second video game console, the Xbox 360, was released. There were two
versions, a basic version for $299.99 and a deluxe version for $399.99.[57]
Increasingly present in the hardware business following Xbox, Microsoft 2006 released the Zune series of
digital media players, a successor of its previous software platform Portable Media Center. These expanded
on previous hardware commitments from Microsoft following its original Microsoft Mouse in 1983; as of
2007 the company sold the best-selling wired keyboard (Natural Ergonomic Keyboard 4000), mouse
(IntelliMouse), and desktop webcam (LifeCam) in the United States. That year the company also launched
the Surface "digital table", later renamed PixelSense.[58]
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.[66][67] Azure Services Platform, the company's entry into the cloud computing market for
Windows, launched on October 27, 2008.[68] 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 an
extensive reworking of Windows.[69][70][71]
As the smartphone industry boomed in the late 2000s, Microsoft had struggled to keep up with its rivals in
providing a modern smartphone operating system, falling behind Apple and Google-sponsored Android in
the United States.[72] As a result, in 2010 Microsoft revamped their aging flagship mobile operating system,
Windows Mobile, replacing it with the new Windows Phone OS that was released in October that
year.[73][74] It used a new user interface design language, codenamed "Metro," which prominently used
simple shapes, typography, and iconography, utilizing the concept of minimalism. Microsoft implemented a
new strategy for the software industry, providing a consistent user experience across all smartphones using
the Windows Phone OS. It launched an alliance with Nokia in 2011 and Microsoft worked closely with the
company to co-develop Windows Phone,[75] but remained partners with long-time Windows Mobile OEM
HTC.[76] Microsoft is a founding member of the Open Networking Foundation started on March 23, 2011.
Fellow founders were Google, HPE Networking, Yahoo!, Verizon Communications, Deutsche Telekom
and 17 other companies. This nonprofit organization is focused on providing support for a cloud computing
initiative called Software-Defined Networking.[77] The initiative is meant to speed innovation through
simple software changes in telecommunications networks, wireless networks, data centers, and other
networking areas.[78]
In July 2012, Microsoft sold its 50% stake in MSNBC, which it had run as a joint venture with NBC since
1996.[87] 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.[88] On October 26, 2012, Microsoft launched Windows 8 and
the Microsoft Surface.[83][89] Three days later, Windows Phone 8 was launched.[90] 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.[91] On March 29, 2013, Microsoft launched a Patent Tracker.[92]
In August 2012, the New York City Police Department announced a partnership with Microsoft for the
development of the Domain Awareness System which is used for Police surveillance in New York City.[93]
In line with the maturing PC business, in July 2013, Microsoft announced that it would reorganize the
business into four new business divisions, namely Operating systems, Apps, Cloud, and Devices. All
previous divisions will be dissolved into new divisions without any workforce cuts.[97] On September 3,
2013, Microsoft agreed to buy Nokia's mobile unit for $7 billion,[98] following Amy Hood taking the role
of CFO.[99]
On January 21, 2015, Microsoft announced the release of their first Interactive whiteboard, Microsoft
Surface Hub.[108] On July 29, 2015, Windows 10 was released,[109] 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 smartphones by Gartner – in the
same timeframe 8 million Windows smartphones (2.5% of all smartphones) were made by all manufacturers
(but mostly by Microsoft).[110] Microsoft's share of the U.S. smartphone market in January 2016 was
2.7%.[111] During the summer of 2015 the company lost $7.6 billion related to its mobile-phone business,
firing 7,800 employees.[112]
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.[113] On January 24, 2017, Microsoft showcased Intune for Education at the BETT 2017
education technology conference in London.[114] Intune for Education is a new cloud-based application
and device management service for the education sector.[115] In May 2016, the company announced it was
laying off 1,850 workers, and taking an impairment and restructuring charge of $950 million.[112]
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.[116] In November 2016, Microsoft
joined the Linux Foundation as a Platinum member during Microsoft's Connect(); developer event in New
York.[117] The cost of each Platinum membership is US$500,000 per year.[118] Some analysts deemed this
unthinkable ten years prior, however, as in 2001 then-CEO Steve Ballmer called Linux "cancer".[119]
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.[120]
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.[121] In May 2018, Microsoft partnered with 17 American intelligence agencies to develop cloud
computing products. The project is dubbed "Azure Government" and has ties to the Joint Enterprise
Defense Infrastructure (JEDI) surveillance program.[121] On June 4, 2018, Microsoft officially announced
the acquisition of GitHub for $7.5 billion, a deal that closed on October 26, 2018.[122][123] On July 10,
2018, Microsoft revealed the Surface Go platform to the public. Later in the month, it converted Microsoft
Teams to gratis.[121] 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.[124][125][121]
In August 2018, Toyota Tsusho began a partnership with Microsoft to create fish farming tools using the
Microsoft Azure application suite for Internet of things (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.[126]
In September 2018, Microsoft discontinued Skype Classic.[121] On October 10, 2018, Microsoft joined the
Open Invention Network community despite holding more than 60,000 patents.[127] In November 2018,
Microsoft agreed to supply 100,000 Microsoft HoloLens headsets to the United States military in order to
"increase lethality by enhancing the ability to detect, decide and engage before the enemy." [128] In
November 2018, Microsoft introduced Azure Multi-Factor Authentication for Microsoft Azure.[129] In
December 2018, Microsoft announced Project Mu, an open source release of the Unified Extensible
Firmware Interface (UEFI) core used in Microsoft Surface and Hyper-V products. The project promotes the
idea of Firmware as a Service.[130] 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.[129]
On February 20, 2019, Microsoft Corp said it will offer its cyber security
service AccountGuard to 12 new markets in Europe including Germany,
France and Spain, to close security gaps and protect customers in political
space from hacking.[131] In February 2019, hundreds of Microsoft
employees protested the company's war profiteering from a $480 million
contract to develop virtual reality headsets for the United States Army.[132]
Apollo 11 astronaut Buzz
Aldrin using a Microsoft
2020–present: Acquisitions, Xbox Series X/S, and HoloLens mixed reality
headset in September 2016.
Windows 11
On March 26, 2020, Microsoft announced it was acquiring Affirmed
Networks for about $1.35 billion.[133][134] Due to the COVID-19 pandemic, Microsoft closed all of its
retail stores indefinitely due to health concerns.[135] On July 22, 2020, Microsoft announced plans to close
its Mixer service, planning to move existing partners to Facebook Gaming.[136]
On July 31, 2020, it was reported that Microsoft was in talks to acquire TikTok after the Trump
administration ordered ByteDance to divest ownership of the application to the U.S.[137] On August 3,
2020, after speculation on the deal, Donald Trump stated that Microsoft could buy the application, however,
it should be completed by September 15, 2020, and that the United States Department of the Treasury
should receive a portion if it were to go through.[138]
On August 5, 2020, Microsoft stopped its xCloud game streaming test for iOS devices. According to
Microsoft, the future of xCloud on iOS remains unclear and potentially out of Microsoft's hands. Apple has
imposed a strict limit on "remote desktop clients" which means applications are only allowed to connect to a
user-owned host device or gaming console owned by the user.[139] On September 21, 2020, Microsoft
announced its intent to acquire video game company ZeniMax Media, the parent company of Bethesda
Softworks, for about $7.5 billion, with the deal expected to occur in the second half of 2021 fiscal year.[140]
On March 9, 2021, the acquisition was finalized and ZeniMax Media became part of Microsoft's Xbox
Game Studios division.[141] The total price of the deal was $8.1 billion.[142]
On September 22, 2020, Microsoft announced that it had an exclusive license to use OpenAI's GPT-3
artificial intelligence language generator.[143] The previous version of GPT-3, called GPT-2, made
headlines for being "too dangerous to release" and had numerous capabilities, including designing websites,
prescribing medication, answering questions, and penning articles.[144]
On November 10, 2020, Microsoft released the Xbox Series X and Xbox Series S video game
consoles.[145]
In April 2021, Microsoft announced it would buy Nuance Communications for approximately $16
billion.[146] The acquisition of Nuance was completed in March 2022.[147] In 2021, in part due to the
strong quarterly earnings spurred by the COVID-19 pandemic, Microsoft's valuation came to nearly $2
trillion. The increased necessity for remote work and distance education drove demand for cloud computing
and grew the company's gaming sales.[148][149][150]
On June 24, 2021, Microsoft announced Windows 11 during a Livestream. The announcement came with
confusion after Microsoft announced Windows 10 would be the last version of the operating system; set to
be released in the third quarter of 2021.[151] It was released to the general public on October 5, 2021.[152]
In September 2021, it was announced that the company had acquired Takelessons, an online platform that
connects students and tutors in numerous subjects. The acquisition positioned Microsoft to grow its
presence in the market of providing online education to large numbers of people.[153] In the same month,
Microsoft acquired Australia-based video editing software company Clipchamp.[154]
In October 2021, Microsoft announced that it began rolling out end-to-end encryption (E2EE) support for
Microsoft Teams calls in order to secure business communication while using video conferencing software.
Users can ensure that their calls are encrypted and can utilize a security code that both parties on a call must
verify on their respective ends.[155] On October 7, Microsoft acquired Ally.io, a software service that
measures companies' progress against OKRs. Microsoft plans to incorporate Ally.io into its Viva family of
employee experience products.[156]
On January 18, 2022, Microsoft announced the acquisition of American video game developer and holding
company Activision Blizzard in an all-cash deal worth $68.7 billion.[157] Activision Blizzard is best known
for producing franchises, including but not limited to Warcraft, Diablo, Call of Duty, StarCraft, Candy
Crush Saga, Crash Bandicoot, Spyro, Tony Hawk's, Guitar Hero, and Overwatch.[158] Activision and
Microsoft each released statements saying the acquisition was to benefit their businesses in the metaverse,
many saw Microsoft's acquisition of video game studios as an attempt to compete against Meta Platforms,
with TheStreet referring to Microsoft wanting to become "the Disney of the metaverse".[159][160] Microsoft
also named Phil Spencer, head of the Xbox brand since 2014, the inaugural CEO of the newly established
Microsoft Gaming division, which now houses the Xbox operations team and the three publishers in the
company's portfolio (Xbox Game Studios, ZeniMax Media, Activision Blizzard). Microsoft has not
released statements regarding Activision's recent legal controversies regarding employee abuse, but reports
have alleged that Activision CEO Bobby Kotick, a major target of the controversy, will leave the company
after the acquisition is finalized.[161] The deal was closed on October 13, 2023.[162]
In December 2022, Microsoft announced a new 10-year deal with the London Stock Exchange for
products including Microsoft Azure; Microsoft acquired ~4% of the LSE as part of the deal.[163]
In January 2023, CEO Satya Nadella announced Microsoft would lay off some 10,000 employees.[164]
The announcement came a day after hosting a Sting concert for 50 people, including Microsoft executives,
in Davos, Switzerland.[165]
On January 23, 2023, Microsoft announced a new multi-year, multi-billion dollar investment deal with
ChatGPT developer OpenAI.[166]
At a November 2023 developer conference, Microsoft announced two new custom-designed computing
chips: The Maia chip, designed to run large language models, and Cobalt CPU, designed to power general
cloud services on Azure.[167][168]
On November 20, 2023, Satya Nadella announced the former (and again current) OpenAI CEO Sam
Altman and former (and current) president Greg Brockman will be joining Microsoft to lead a new
advanced AI research team.[169][170]
In January 2024, Microsoft became the most valued publicly traded company. Meanwhile, that month, the
company announced a subscription offering of artificial intelligence for small businesses via Copilot
Pro.[171][172]
On April 16, 2024, Microsoft made a significant investment of $1.5 billion in the Emirati AI firm G42,
according to reports from The New York Times. This move underscores Microsoft's commitment to
advancing artificial intelligence technology and its strategic partnership with G42 in the evolving global AI
landscape. [173]
On April 30, 2024, Microsoft unveiled plans to invest $1.7 billion in developing AI and cloud infrastructure
in Indonesia. The initiative aims to bolster the country's digital transformation efforts, with the establishment
of data centers and partnerships to drive innovation across various sectors, marking a significant step in
regional tech advancement. [174]
In May 2024, Microsoft announced a $3.3 billion investment to build an artificial intelligence hub in
southeast Wisconsin, tripling its initial proposal. This initiative, unveiled by President Joe Biden in Racine
County, includes constructing a data center, creating 2,300 construction jobs by 2025, and 2,000 permanent
jobs over time, alongside establishing an AI co-innovation lab at UW-Milwaukee to train up to 1,000
individuals by 2030.[175]
In June 2024, Microsoft announced it would be laying off 1,000 employees from the company's mixed
reality and Azure cloud computing divisions.[176][177]
In June 2024, Microsoft announced that they were building a "hyperscale data centre" in South East
Leeds.[178] In July 2024, it was reported that the company was laying off its diversity, equity, and inclusion
(DEI) team.[179][180]
On July 19, 2024, a global IT outage impacted Microsoft services, affecting businesses, airlines, and
financial institutions worldwide. The outage was traced back to a flawed update of CrowdStrike's
cybersecurity software, which resulted in Microsoft systems crashing and causing disruptions across various
sectors. Despite CrowdStrike's CEO George Kurtz clarifying that the issue was not a cyberattack, the
incident had widespread consequences, leading to delays in air travel, financial transactions, and medical
services globally. Microsoft stated that the underlying cause had been fixed but acknowledged ongoing
residual impacts on some Microsoft 365 apps and services.[181][182]
Corporate affairs
Board of directors
The company is run by a board of directors made up of mostly company outsiders, as is customary for
publicly traded companies. Members of the board of directors as of December 2023 are Satya Nadella, Reid
Hoffman, Hugh Johnston, Teri List, Sandi Peterson, Penny Pritzker, Carlos Rodriguez, Charles Scharf,
John W. Stanton, John W. Thompson, Emma Walmsley and Padmasree Warrior.[183]
Board members are elected every year at the annual shareholders' meeting using a majority vote system.
There are four committees within the board that oversee more specific matters. These committees include
the Audit Committee, which handles accounting issues with the company including auditing and reporting;
the Compensation Committee, which approves compensation for the CEO and other employees of the
company; the Governance and Nominating Committee, which handles various corporate matters including
the nomination of the board; and the Regulatory and Public Policy Committee, which includes
legal/antitrust matters, along with privacy, trade, digital safety, artificial intelligence, and environmental
sustainability.[184]
On March 13, 2020, Gates announced that he is leaving the board of directors of Microsoft and Berkshire
Hathaway to focus more on his philanthropic efforts. According to Aaron Tilley of The Wall Street Journal
this is "marking the biggest boardroom departure in the tech industry since the death of longtime rival and
Apple Inc. co-founder Steve Jobs."[185]
On January 13, 2022, The Wall Street Journal reported that Microsoft's board of directors plans to hire an
external law firm to review its sexual harassment and gender discrimination policies, and to release a
summary of how the company handled past allegations of misconduct against Bill Gates and other
corporate executives.[186]
Chief executives
1. Bill Gates (1975–2000)
2. Steve Ballmer (2000–2014)
3. Satya Nadella (2014–present)
Financial
When Microsoft went public and launched its
initial public offering (IPO) in 1986, the
opening stock price was $21; after the trading
day, the price closed at $27.75. As of July
2010, with the company's nine stock splits, any
IPO shares would be multiplied by 288; if one
were to buy the IPO today, given the splits and
other factors, it would cost about
9 cents.[15]: 235–236 [188][189] The stock price
Five year history graph of Nasdaq: MSFT (https://www.nas
peaked in 1999 at around $119 ($60.928,
daq.com/market-activity/stocks/msft) stock on July 17,
adjusting for splits).[190] The company began
2013.[187]
to offer a dividend on January 16, 2003,
starting at eight cents per share for the fiscal
year followed by a dividend of sixteen cents per share the subsequent year, switching from yearly to
quarterly dividends in 2005 with eight cents a share per quarter and a special one-time payout of three
dollars per share for the second quarter of the fiscal year.[190][191] Though the company had subsequent
increases in dividend payouts, the price of Microsoft's stock remained steady for years.[191][192]
Standard & Poor's and Moody's Investors Service 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.[193] 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.[194] 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.[195]
On July 20, 2012, Microsoft posted its first quarterly loss Sales by region (2023)[196]
ever, despite earning record revenues for the quarter and
Region Sales in billion $ share
fiscal year, with a net loss of $492 million due to a writedown
related to the advertising company aQuantive, which had United States 106.7 50.4%
been acquired for $6.2 billion back in 2007.[197] As of Other countries 105.2 49.6%
January 2014, Microsoft's market capitalization stood at
$314B,[198] making it the 8th largest company in the world by market capitalization.[199] On November 14,
2014, Microsoft overtook ExxonMobil to become the second 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.[200] In 2015, Reuters reported that Microsoft Corp had
earnings abroad of $76.4 billion which were untaxed by the Internal Revenue Service. Under U.S. law,
corporations do not pay income tax on overseas profits until the profits are brought into the United
States.[201]
The key trends of Microsoft are (as at the financial year ending June 30):[202][203]
Revenue Net income Total Assets
Year Employees[205]
in billion US$[204] in billion US$[204] in billion US$[204]
2005 39.7 12.2 70.8 61,000
In November 2018, the company won a $480 million military contract with the U.S. government to bring
augmented reality (AR) headset technology into the weapon repertoires of American soldiers. The two-year
contract may result in follow-on orders of more than 100,000 headsets, according to documentation
describing the bidding process. One of the contract's tag lines for the augmented reality technology seems to
be its ability to enable "25 bloodless battles before the 1st battle," suggesting that actual combat training is
going to be an essential aspect of the augmented reality headset capabilities.[206]
Subsidiaries
Microsoft is an international business. As such, it needs subsidiaries present in whatever national markets it
chooses to harvest. An example is Microsoft Canada, which it established in 1985.[207] Other countries
have similar installations, to funnel profits back up to Redmond and to distribute the dividends to the
holders of MSFT stock.
Ownership
The 10 largest shareholder of Microsoft in early 2024 were:[196] [208]
Shareholder name Percentage
BlackRock 5.6%
State Street Corporation 4.0%
Marketing
In 2004, Microsoft commissioned research firms to do independent
studies comparing the total cost of ownership (TCO) of Windows
Server 2003 to Linux; the firms concluded that companies found
Windows easier to administrate than Linux, thus those using
Windows would administrate faster resulting in lower costs for their
company (i.e. lower TCO).[209] This spurred a wave of related
studies; a study by the Yankee Group concluded that upgrading
from one version of Windows Server to another costs a fraction of
the switching costs from Windows Server to Linux, although Windows 8 Launch Event in
companies surveyed noted the increased security and reliability of Akihabara, Tokyo on October 25,
Linux servers and concern about being locked into using Microsoft 2012.
products. [210] Another study, released by the Open Source
Development Labs, claimed that the Microsoft studies were "simply
outdated and one-sided" and their survey concluded that the TCO of Linux was lower due to Linux
administrators managing more servers on average and other reasons.[211]
As part of the "Get the Facts" campaign, Microsoft highlighted the .NET Framework 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[212][213] the London Stock
Exchange announced in 2009 that it was planning to drop its Microsoft solution and switch to a Linux-
based one in 2010.[214][215]
In 2012, Microsoft hired a political pollster named Mark Penn, whom The New York Times called "famous
for bulldozing" his political opponents[216] as Executive Vice-president, Advertising and Strategy. Penn
created a series of negative advertisements targeting one of Microsoft's chief competitors, Google. The
advertisements, 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 advertising campaign,[217] while Google
employees have embraced it.[218]
Layoffs
In July 2014, Microsoft announced plans to lay off 18,000 employees. Microsoft employed 127,104 people
as of June 5, 2014, making this about a 14 percent reduction of its workforce as the biggest Microsoft layoff
ever. This included 12,500 professional and factory personnel. Previously, Microsoft had eliminated 5,800
jobs in 2009 in line with the Great Recession of 2008–2017.[219][220] In September 2014, Microsoft laid
off 2,100 people, including 747 people in the Seattle–Redmond area, where the company is headquartered.
The firings came as a second wave of the layoffs that were previously announced. This brought the total
number to over 15,000 out of the 18,000 expected cuts.[221] In October 2014, Microsoft revealed that it
was almost done with eliminating 18,000 employees, which was its largest-ever layoff sweep.[222] In July
2015, Microsoft announced another 7,800 job cuts in the next several months.[223] In May 2016, Microsoft
announced another 1,850 job cuts mostly in its Nokia mobile phone division. As a result, the company will
record an impairment and restructuring charge of approximately $950 million, of which approximately
$200 million will relate to severance payments.[224]
Microsoft laid off 1,900 employees in its gaming division in January 2024. The layoffs primarily affected
Activision Blizzard employees, but some Xbox and ZeniMax employees were also affected.[225] Blizzard
president Mike Ybarra and Blizzard's chief design officer Allen Adham also resigned.[226]
"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."[230]
During the first six months of 2013, Microsoft received requests that affected between 15,000 and 15,999
accounts.[231] In December 2013, the company made a 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".[232] 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, which 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."[233] Microsoft has also argued that the United States Congress should enact strong privacy
regulations to protect consumer data.[234]
In April 2016, the company sued the U.S. government, argued 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 United States Department of Justice (DoJ). The DoJ had "changed data request rules on alerting the
Internet users about agencies accessing their information."
Security challenges
On a Friday afternoon in January 2024, Microsoft disclosed that a Russian state-sponsored group hacked
into its corporate systems. The group, accessed "a very small percentage" of Microsoft corporate email
accounts, which also included members of its senior leadership team and employees in its cybersecurity and
legal teams.[235] Microsoft noted in a blog post that the attack might have been prevented if the accounts in
question had enabled multi-factor authentication, a defensive measure which is widely recommended in the
industry, including by Microsoft itself.[236]
Corporate identity
Corporate culture
Technical references for developers and articles for various Microsoft magazines such as Microsoft Systems
Journal (MSJ) are available through the Microsoft Developer Network (MSDN). MSDN also offers
subscriptions for companies and individuals, and the more expensive subscriptions usually offer access to
pre-release beta versions of Microsoft software.[237][238] In April 2004, Microsoft launched a community
site for developers and users, titled Channel 9, that provides a wiki and an Internet forum.[239] Another
community site that provides daily videocasts and other services, On10.net, launched on March 3,
2006.[240] Free technical support is traditionally provided through online Usenet newsgroups, and
CompuServe in the past, monitored by Microsoft employees; there can be several newsgroups for a single
product. Helpful people can be elected by peers or Microsoft employees for Microsoft Most Valuable
Professional (MVP) status, which entitles them to a sort of special social status and possibilities for awards
and other benefits.[241]
Noted for its internal lexicon, the expression "eating your own dog food" is used to describe the policy of
using pre-release and beta versions of products inside Microsoft to test them in "real-world" situations.[242]
This is usually shortened to just "dog food" and is used as a 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.[243]
Microsoft is an outspoken opponent of the cap on H-1B visas, which allows 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.[244] 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.[245]
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.[246]
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.[247] 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.[248]
Environment
In 2011, Greenpeace released a report rating the top ten big brands in cloud computing on their sources of
electricity for their data centers. At the time, data centers consumed up to 2% of all global electricity, and
this amount was projected to increase. Phil Radford of Greenpeace said, "We are concerned that this new
explosion in electricity use could lock us into old, polluting energy sources instead of the clean energy
available today,"[249] and called on "Amazon, Microsoft and other leaders of the information-technology
industry must embrace clean energy to power their cloud-based data centers."[250] In 2013, Microsoft
agreed to buy power generated by a Texas wind project to power one of its data centers.[251]
Microsoft is ranked on the 17th place in Greenpeace's Guide to Greener Electronics (16th Edition) that
ranks 18 electronics manufacturers according to their policies on toxic chemicals, recycling, and climate
change.[252] Microsoft's timeline for phasing out brominated flame retardant (BFRs) and phthalates in all
products was 2012 but its commitment to phasing out PVC is not clear. As of January 2011, it has no
products that are completely free from PVC and BFRs.[253]
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 solar panels on top of its
buildings at its Silicon Valley campus, generating approximately 15 percent of the total energy needed by
the facilities in April 2005.[254] 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 "Connector"
does not compete with the public bus system and works with it to provide a cohesive transportation network
not just for its employees but also for the public.[255]
Microsoft also subsidizes regional public transport, provided by Sound Transit and King County Metro, as
an incentive.[254][256] 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.[257]
Microsoft was ranked number 1 in the list of the World's Best Multinational Workplaces by the Great Place
to Work Institute in 2011.[258]
In January 2020, the company announced a strategy to take the company carbon negative by 2030 and to
remove all carbon that it has emitted since its foundation in 1975.[259][260][261] On October 9, 2020,
Microsoft permanently allowed remote work.[262] In January 2021, the company announced on Twitter to
join the Climate Neutral Data Centre Pact, which engages the cloud infrastructure and data centers
industries to reach carbon neutrality in Europe by 2030, and also disclosed an investment in Climeworks, a
direct air capture company partnered with Carbfix for carbon sequestration.[list 1] In the same year, it was
awarded the EPA's Green Power Leadership Award, citing the company's all-renewable energy use since
2014.[268]
In September 2023, Microsoft announced that it purchased $200 million in carbon credits to offset 315,000
metric tons of carbon dioxide over 10 years from Heirloom Carbon, a carbon removal company that mixes
calcium oxide from heated crushed limestone with water to form carbon hydroxide to absorb carbon
dioxide from the atmosphere to mineralize back into limestone while the released carbon dioxide is stored
underground or injected into concrete.[269][270] Despite spending spent more than $760 million through its
Climate Innovation Fund by June 2024 on sustainability projects—including purchases of more than 5
million metric tonnes of carbon dioxide removal with carbon offsets and more than 34 megawatts of
renewable energy—Microsoft's Scope 3 emissions had increased by 31% from the company's 2020
baseline, which caused the company's total emissions to rise by 29% in 2023.[271]
Headquarters
The corporate headquarters, informally known as the Microsoft
Redmond campus, is located at One Microsoft Way in Redmond,
Washington. Microsoft initially moved onto the grounds of the
campus on February 26, 1986, weeks before the company went
public on March 13. The headquarters has since experienced
multiple expansions since its establishment. It is estimated to
encompass over 8 million ft2 (750,000 m2 ) of office space and
30,000–40,000 employees.[272] Additional offices are located in Building 92, home to the Microsoft
Bellevue and Issaquah, Washington (90,000 employees Visitor Center.
worldwide). The company is planning to upgrade its Mountain
View, California, campus on a grand scale. The company has
occupied this campus since 1981. In 2016, the company bought the 32-acre (13 ha) campus, with plans to
renovate and expand it by 25%.[273] Microsoft operates an East Coast headquarters in Charlotte, North
Carolina,[274] where the construction of a data center led to the destruction of a historic black cemetery.[275]
In April 2024, it was announced that Microsoft would be opening a state-of-the-art artificial intelligence
'hub' around Paddington in London, England. It was announced that the division would be led by Jordan
Hoffman, who previously worked for Deepmind and Inflection. [276]
Flagship stores
On October 26, 2015, the company opened its retail location on Fifth Avenue in New York City. The
location features a five-story glass storefront and is 22,270 square feet.[277] As per company executives,
Microsoft had been on the lookout for a flagship location since 2009.[278] The company's retail locations
are part of a greater strategy to help build a connection with its
consumers. The opening of the store coincided with the launch of
the Surface Book and Surface Pro 4.[279] On November 12, 2015,
Microsoft opened a second flagship store, located in Sydney's Pitt
Street Mall.[280]
Logo
Microsoft's Toronto flagship store.
Microsoft adopted the so-called "Pac-Man Logo," designed by
Scott Baker, on February 26, 1987, with the concept being similar
to InFocus Corporation logo that was adapted a year earlier in 1986. Baker stated "The new logo, in
Helvetica italic typeface, has a slash between the o and s to emphasize the "soft" part of the name and
convey motion and speed."[281] Dave Norris ran an internal joke campaign to save the old logo, which was
green, in all uppercase, and featured a fanciful letter O, nicknamed the blibbet, but it was discarded.[282]
Microsoft's logo with the tagline "Your potential. Our passion."—below the main corporate name—is based
on a slogan Microsoft used in 2008. In 2002, the company started using the logo in the United States and
eventually started a television campaign with the slogan, changed from the previous tagline of "Where do
you want to go today?"[283][284][285] During the private MGX (Microsoft Global Exchange) conference in
2010, Microsoft unveiled the company's next tagline, "Be What's Next."[286] They also had a slogan/tagline
"Making it all make sense."[287] The Microsoft Pac-Man logo was used for 25 years, 5 months, and 28
days until August 23, 2012, being the longest logo to be used by the company.
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.[288] 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 (orange), Xbox
(green) and Bing (yellow).[289] The logo also resembles the opening of one of the commercials for
Windows 95.[290][291]
June 25, 1982 – February 26, February 26, 1987 – August 23,
1987: Third Microsoft logo. 2012: Microsoft "Pac-Man" logo,
designed by Scott Baker.[283][284]
Sponsorship
The company was the official jersey sponsor of Finland's national
basketball team at EuroBasket 2015.[293]
During the COVID-19 pandemic, Microsoft's president, Brad Smith, announced that an initial batch of
supplies, including 15,000 protection goggles, infrared thermometers, medical caps, and protective suits,
was donated to Seattle, with further aid to come soon.[296]
During 2022 Russian invasion of Ukraine Microsoft started monitoring cyberattacks originating from the
Government of Russia and Russia-backed hackers. In June 2022, Microsoft published the report on Russian
cyber attacks and concluded that state-backed Russian hackers "have engaged in "strategic espionage"
against governments, think tanks, businesses and aid groups" in 42 countries supporting Kyiv.[297][298]
Controversies
Criticism of Microsoft has followed various aspects of its products and business practices. Frequently
criticized are the ease of use, robustness, and security of the company's software. They have also been
criticized for the use of permatemp employees (employees employed for years as "temporary," and therefore
without medical benefits), the use of forced retention tactics, which means that employees would be sued if
they tried to leave.[299] Historically, Microsoft has also been accused of overworking employees, in many
cases, leading to burnout within just a few years of joining the company. The company is often referred to
as a "Velvet Sweatshop", a term which originated in a 1989 Seattle Times article,[300] and later became
used to describe the company by some of Microsoft's own employees.[301] This characterization is derived
from the perception that Microsoft provides nearly everything for its employees in a convenient place, but in
turn overworks them to a point where it would be bad for their (possibly long-term) health.
As reported by several news outlets,[302][303] an Irish subsidiary of Microsoft based in the Republic of
Ireland declared £220 bn in profits but paid no corporation tax for the year 2020. This is due to the
company being tax resident in Bermuda as mentioned in the accounts for 'Microsoft Round Island One, a
subsidiary that collects license fees from the use of Microsoft software worldwide. Dame Margaret Hodge,
a Labour MP in the UK said, "It is unsurprising – yet still shocking – that massively wealthy global
corporations openly, unashamedly and blatantly refuse to pay tax on the profits they make in the countries
where they undertake business".[303]
In 2020, ProPublica reported that the company had diverted more than $39 billion in U.S. profits to Puerto
Rico using a mechanism structured to make it seem as if the company was unprofitable on paper. As a
result, the company paid a tax rate on those profits of "nearly 0%." When the Internal Revenue Service
audited these transactions, ProPublica reported that Microsoft aggressively fought back, including
successfully lobbying Congress to change the law to make it harder for the agency to conduct audits of
large corporations.[304][305] In 2023, Microsoft reported in a securities filing that the U.S. Internal Revenue
Service was alleging that the company owed the U.S. $28.9 billion in past taxes, plus penalties related to
mis-allocation of corporate profits over a decade.[306]
"Embrace, extend, and extinguish" (EEE),[307] also known as "embrace, extend, and exterminate,"[308] is a
phrase that the U.S. Department of Justice found[309] that was used internally by Microsoft[310] to describe
its strategy for entering product categories involving widely used standards, extending those standards with
proprietary capabilities, and then using those differences to strongly disadvantage competitors. Microsoft is
frequently accused of using anticompetitive tactics and abusing its monopolistic power. People who use
their products and services often end up becoming dependent on them, a process is known as vendor lock-
in.
Microsoft was the first company to participate in the PRISM surveillance program, according to leaked
NSA documents obtained by The Guardian[311] and The Washington Post[312] in June 2013, and
acknowledged by government officials following the leak.[313] The program authorizes the government to
secretly access data of non-US citizens hosted by American companies without a warrant. Microsoft has
denied participation in such a program.[314]
Jesse Jackson believes Microsoft should hire more minorities and women. In 2015, he praised Microsoft for
appointing two women to its board of directors.[315]
In 2020, Salesforce, the manufacturer of the Slack platform, complained to European regulators about
Microsoft due to the integration of the Teams service into Office 365. Negotiations with the European
Commission continued until the summer of 2023, but, as it became known to the media, they reached an
impasse. Microsoft is now facing an antitrust investigation.[316]
In June 2024, Microsoft Corp. faced a potential EU fine after regulators accused it of abusing market power
by bundling its Teams video-conferencing app with its Office 365 and Microsoft 365 software. The
European Commission issued a statement of objections, alleging Microsoft's practice since 2019 gave
Teams an unfair market advantage and limited interoperability with competing software. Despite Microsoft's
efforts to avoid deeper scrutiny, including unbundling Teams, regulators remained unconvinced. This action
followed a 2019 complaint from Slack, which was later acquired by Salesforce. Microsoft's Teams usage
soared during the pandemic, growing from 2 million daily users in 2017 to 300 million in 2023. The
company has a history of antitrust battles in the US and Europe, with over €2 billion in EU fines previously
imposed for similar abuses.[317]
See also
List of Microsoft software
Microsoft hardware
List of mergers and acquisitions by Microsoft
Microsoft engineering groups
Microsoft Enterprise Agreement
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Bundled references
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External links
Official website (https://www.microsoft.com/)
Business data for Microsoft Corporation: Bloomberg (https://www.bloomberg.com/quote/MSF
T:US) · Google (https://www.google.com/finance/quote/MSFT:NASDAQ) · Reuters (https://ww
w.reuters.com/markets/companies/MSFT.O) · SEC filings (https://www.sec.gov/cgi-bin/brows
e-edgar?action=getcompany&CIK=789019) · Yahoo! (https://finance.yahoo.com/quote/MSF
T)
Microsoft companies (https://opencorporates.com/corporate_groupings/Microsoft) grouped at
OpenCorporates
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