Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washington, United States. Its best-known software products are the Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. Microsoft ranked No. 21 in the 2020 Fortune 500 rankings of the largest United States corporations by total revenue;[2] it was the world’s largest software maker by revenue as of 2019. It is one of the Big Five American information technology companies, alongside Alphabet, Amazon, Apple, and Meta.
Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Windows. The company’s 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions, their largest being the acquisition of LinkedIn for $26.2 billion in December 2016,[3] followed by their acquisition of Skype Technologies for $8.5 billion in May 2011.[4]
As of 2015, Microsoft is market-dominant in the IBM PC compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android.[5] The company also produces a wide range of other consumer and enterprise software for desktops, laptops, tabs, gadgets, and servers, including Internet search (with Bing), the digital services market (through MSN), mixed reality (HoloLens), cloud computing (Azure), and software development (Visual Studio).
Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a “devices and services” strategy.[6] This unfolded with Microsoft acquiring Danger Inc. in 2008,[7] entering the personal computer production market for the first time in June 2012 with the launch of the Microsoft Surface line of tablet computers, and later forming Microsoft Mobile through the acquisition of Nokia’s devices and services division. Since Satya Nadella took over as CEO in 2014, the company has scaled back on hardware and has instead focused on cloud computing, a move that helped the company’s shares reach its highest value since December 1999.[8][9]
Earlier dethroned by Apple in 2010, in 2018 Microsoft reclaimed its position as the most valuable publicly traded company in the world.[10] In April 2019, Microsoft reached the trillion-dollar market cap, becoming the third U.S. public company to be valued at over $1 trillion after Apple and Amazon respectively. As of 2022, Microsoft has the fourth-highest global brand valuation.
Microsoft has been criticized for its monopolistic practices and the company’s software has been criticized for problems with ease of use, robustness, and security.
On March 26, 2020, Microsoft announced it was acquiring Affirmed Networks for about $1.35 billion.[128][129] Due to the COVID-19 pandemic, Microsoft closed all of its retail stores indefinitely due to health concerns.[130] On July 22, 2020, Microsoft announced plans to close its Mixer service, planning to move existing partners to Facebook Gaming.[131]
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.[132] 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.[133]
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.[134] 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.[135] On March 9, 2021, the acquisition was finalized and ZeniMax Media became part of Microsoft’s Xbox Game Studios division.[136] The total price of the deal was $8.1 billion.[137]
On September 22, 2020, Microsoft announced that it had an exclusive license to use OpenAI’s GPT-3 artificial intelligence language generator.[138] 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.[139] On November 10, 2020, Microsoft released the Xbox Series X and Xbox Series S video game consoles.[140]
In April 2021, Microsoft announced it would buy Nuance Communications for approximately $16 billion.[141] The acquisition of Nuance was completed in March 2022.[142] In 2021, in part due to the strong quarterly earnings spurred by the COVID-19 pandemic, Microsoft’s valuation came to near $2 trillion. The increased necessity for remote work and distance education drove demand for cloud computing and grew the company’s gaming sales.[143][144][145]
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.[146] It was released to the general public on October 5, 2021.[147]
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.[148] 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.[149]
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.[150] 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 the Dragon, Skylanders, and Overwatch.[151] 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”.[152][153] 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.[154] The deal is expected to close in 2023 followed by a review from the US Federal Trade Commission.[155][150]