The Story of Microsoft - How a Computer Club Took Over The World.

The Story of Microsoft - How a Computer Club Took Over The World.

13.Jun.2021

The Story of Microsoft - How a Computer Club Took Over The World.there's a lot of people who are

forecasting that they'll be software

stores just like their record stores
today and that there'll be thousands and
thousands of those and I think I'd have
to agree with that
Microsoft odds are that if you have used
a computer played video games made a
video call or just gone on the Internet
then at some point in your life you have
used a Microsoft product it is this
ubiquity of its products in everyday
society that has led Microsoft to
becoming a trillion dollar company today
but like with most large companies this
story started out with very humble
beginnings in fact it started out with a
couple of teenagers in high school this
is the story of Microsoft 1968 lakeside
school Seattle for teenagers at this
school had drawn interest towards their
school's new computers one of these
computers was called the teletype model
33 they wanted to use this new machine
to build computer programs that could
potentially allow them to do things like
play tic-tac-toe or even make their own
class schedules the trouble was that you
needed to rent computer usage time which
was a hefty $40 an hour so instead of
paying that $40 an hour they decided to
exploit some bugs in these computer
systems in order to use the computers
for free and for a while things were
great and these students were able to
freely program whatever they wanted but
eventually the computer center
corporation caught them stealing
computer usage time and the company
immediately banned these students from
using their computer systems the four
students that were banned were named
Kent Evans Rick Weiland Paul Allen and
Bill Gates soon after they were banned
they decided to form their own group
called the lakeside programmers club in
order to make some money from their
programming abilities while helping
companies fix bugs in their computer
systems and the club's first customer
was the computer center corporation the
very same company that banned them the
previous year for exposing bugs in their
computer systems several years later a
17-year old Bill Gates and a 19-year old
Paul Allen made a new venture together
called truffaut data which used the
newest Intel processor to turn raw
traffic data into comprehensive and easy
to read reports the business didn't last
very long because Bill Gates left to
Harvard University to enroll in a
pre-law program and Paul Allen left for
Washington State University to pursue a
computer science degree in 1975 popular
electronics magazine featured a new
computer called the Altair 8800
microcomputer this was a revolutionary
product that was viewed as the first
commercially successful personal
computer now both Paul Allen and Bill
Gates had caught a glimpse of the Altair
issue of the popular electronics
magazine so the two called each other up
and discussed making a basic programming
language interpreter for the computer
and soon after this call ended they
ended up talking to the inventors of the
Altair who were MIT s where Gates and
Allen claimed to have a working
interpreter for the computer ready to go
even though this wasn't true at all but
MIT s was quite interested and wanted
this interpreter so Gates immediately
started working on the interpreter while
Paul Allen built a simulator for the
interpreter on the way to presenting
their product to MIT s the boot up
system for the interpreter still wasn't
ready so the last bit of code was
actually written on the way to the
meeting with MIT s and by the time they
arrived at the meeting with MIT s they
still hadn't run a full test of the
interpreter that they had just built so
during the actual meeting they ran their
first full test where it worked
perfectly after the meeting MIT s agreed
to sell gates and Alan's interpreter
product as Altair basic little did the
two college students know that this
would be the very first product that was
created by their newly named company
called microcomputer software known
today as Microsoft over the next couple
of years the success of the Altair basic
made Microsoft a multi-million dollar
company in 1980 Microsoft's revenue was
nearing 30 million dollars when they
decided to open up their first
international office in Japan
a year later Gates and Allen began
negotiating with the giant of the
computer industry IBM in order to try
and make Microsoft the main operating
system on IBM's upcoming personal
computer both sides agreed to a deal but
there was a problem
once again Gates and Allen did not have
an operating system ready before making
the actual deal so what they ended up
doing was buying out
operating system from a local computer
company called Seattle computer products
and as they bought this operating system
for $75,000 and promised to pay a small
royalty to the company as well the
operating system that Microsoft had
bought from Seattle computer products
was called 86-dos which was quickly
renamed by Microsoft to ms-dos about a
year later in 1981 IBM launched its
personal computer which became an
immediate success and made ms-dos the
dominant operating system in the world
and Microsoft didn't just license its
operating system to IBM it also licensed
the operating system to over 70 other
computer companies including Compaq
computers the only real computer company
that didn't use ms-dos at the time was
another medium-sized startup computer
company run by two other young men that
company was Apple computers now the
dominance of ms-dos ended up propelling
Microsoft's revenue and valuation
however there was one major setback in
1983 just as Microsoft passed 1 million
installs of ms-dos Paul Allen was
diagnosed with Hodgkin's lymphoma and
decided to leave the company allegedly
Bill Gates thought that Allen stock and
Microsoft should be diluted at the time
because he was not working hard enough
and would no longer be able to
contribute to the company regardless
Gates didn't have too much time to focus
on problems outside of Microsoft as the
company was working on a word processing
program called word a spreadsheet
program called Excel in a graphical user
interface called Windows now in 1983
Apple was the only major computer
company that had a graphical user
interface for its computers and
Microsoft knew they needed to make their
own so two years later Microsoft
released Windows 1.0 in order to compete
with Apple's operating system however
Windows 1.0 wasn't a complete product
and gained very little popularity at the
time and it would take many years before
Windows would begin to pay dividends for
the company both figuratively and
literally but we will come back to that
in a little bit on march 13th of 1986
microsoft had its initial public
offering where the company was valued at
350 a million dollars
this made Bill Gates net worth jumped to
about a hundred and fifty million
dollars overnight while making many of
his employees millionaires and after the
IPO Microsoft kept adding to its
software products lineup by acquiring
company called forethought who are known
for their one key product called
PowerPoint after the acquisition of
forethought Microsoft finally felt like
they had enough individual software
products to launch a package of these
products called Microsoft Works which
would later inspire what is known today
as Microsoft Office this package would
include Microsoft Word Excel PowerPoint
and a few other applications this
package was also the first Microsoft
product that was truly cross-platform
and was available on a variety of
computers like Apple computers describe
your ideal relationship with Apple well
we'll be selling our software
independently so the key thing is that
Apple gets a lot of consistent standard
machines out there quickly the success
of Microsoft Office along with the
growth of Windows and Microsoft as a
whole made Bill Gates a billionaire in
fact he became the world's youngest
self-made billionaire in history at 32
years of age in 1987 over the next
several years Microsoft would continue
to grow expand its product line and
release new versions of Windows every
single year and this all came to a head
in 1995 when Microsoft released Windows
95 to the public Windows 95 was viewed
as a revolutionary software product for
its time and it is known by many as the
birth of modern day operating systems it
was also responsible for one of the
largest marketing campaigns in computer
history Microsoft spent three hundred
million dollars leading up to the launch
of Windows 95 and some of their
advertisements were very unique to say
the least
for example they bought 1.5 million
copies of the times and were giving them
away for free they spent money to turn
the Empire State building's lights into
the colors of the windows 90
logo they hung a 328 foot banner from
the CN Tower in Toronto they created a
30 minute sitcom with Jennifer Aniston
and Matthew Perry while making Windows
95 a primary plot point of the sitcom
and they also spent quite a bit of money
licensing the song start me up from the
Rolling Stones and paying Jay Leno to
appear at one of the most memorable
product launches in history and all of
this marketing was a success as the
company sold 1 million copies of the
operating system within four days while
doubling the company's valuation over
the next couple of months
this explosion of capital allowed
Microsoft to start venturing out into
other areas during the 1990s for example
one year after the launch of Windows 95
Microsoft launched a news channel that
most of you probably don't know was 50%
owned by Microsoft the Microsoft
national broadcasting channel also known
as MSNBC was launched in 1996 they then
created an internet browser called
Internet Explorer as their standard
internet browser they invested five
hundred million dollars in a new and
unproven startup company called
DreamWorks they bought out nearly 10% of
Apple while making Microsoft products
available on Apple computers once again
the era of of setting this up as a
competition between Apple and Microsoft
is over as far as I'm concerned this is
about getting Apple healthy and this is
about Apple being able to make
incredibly great contributions to the
industry to get healthy and prosper
again and eventually they created a few
smaller subsidiaries like MSN and
Expedia in 1996 now during this time
when Microsoft was expanding into all of
these other areas their core software
business was still growing rapidly in
fact between 1996 and 1998 Microsoft's
valuation had nearly quadrupled to 261
billion dollars while making Bill Gates
the richest person in the world
however this all came at a cost you see
Microsoft was packaging its Internet
Explorer browser with all of its Windows
operating systems while allegedly
pressuring all other computer
manufacturers to conform to making
Windows its main operating system
this gave Microsoft between a 95% in a
98 percent market share of the operating
system market as well as having a
similar market share for its web browser
Internet Explorer and because of this
the united states government decided to
take Microsoft to court over its
monopoly like business practices the two
sides eventually reached a settlement
where Microsoft conceded that it had to
open up its Windows operating system to
third-party companies the court case
lasted several years and took a real
toll on the company CEO Bill Gates who
later anointed longtime Microsoft
employee Steve Ballmer as the new CEO of
Microsoft under the guidance of both
Steve Ballmer and Bill Gates who was now
the chief Software Architect Microsoft
launched the Xbox Windows XP and the
programming languages dotnet and c-sharp
which are used to program many websites
and modern-day video games at this point
Microsoft seemed invincible and had
their hands in nearly every industry
except one the mobile phone now today
you are probably using a phone that is
either running on iOS or Android and
these operating systems are relatively
new and weren't really created up until
2007 and 2008 but way back in 2003
Microsoft launched its mobile operating
system that was called Windows Mobile
and at the time people were predicting
that Microsoft could potentially start a
monopoly in the mobile phone market in a
similar way to how they created their
monopoly for the personal computer
operating system market but there were
two things that prevented this the first
of which was that Bill Gates and
Microsoft didn't think that the mobile
phone market would blow up as much as it
did in fact Bill Gates was saying at a
tech conference in 2007 how people
weren't going to have one single device
that would do everything that you needed
to do he thought you would have one
computer device for solely computer
tasks one gaming console for games one
tablet for fun one phone solely for
calling people or maybe browsing the web
and so on I don't think you'll have one
device I think you'll have a full screen
device that you can carry around and
then you'll have the device that fits in
your pocket
you'll have your living room which is
your 10-foot experience and that's
connected up to the Internet and there
you'll have gaming and entertainment
and then in your Daniel have something a
lot like you have at your desk work
meanwhile someone else thought a little
bit differently about the mobile phone
industry and that brings us to the
second reason as to why Microsoft did
not become a giant of the phone industry
Steve Jobs you see when Steve Jobs
returned to Apple in the late 1990s
Apple was a dying company and was weeks
away from going bankrupt but slowly with
several innovations such as the iPod
iTunes the power Macintosh the iMac and
the itouch apple had gained a
significant ground in the personal
computer and computer accessories market
so in the early to mid-2000s Windows was
no longer the only operating system
available on the market as Apple had a
resurgence and was able to take about a
10% share of the operating system market
and because of this resurgence Apple had
enough capital to invest in a new
product that could merge all of your
devices into one that was the iPhone
every once in a while
a revolutionary product comes along that
changes everything we're introducing
three revolutionary products of this
class these are not three separate
devices this is one device
[Applause]
and they are calling it iPhone today
Apple is going to reinvent the phone the
iPhone was released in 2007 and
immediately took the world by storm and
for the first time in nearly three
decades Microsoft no longer had the most
popular operating system in the world
nor did it have the most popular web
browser in the world this was because
the likes of iOS Android Safari and
Google Chrome had entered the industry
during that time now Microsoft
eventually tried to release its own
smartphone in 2010 call to be Windows
Phone
however they were three years too late
and the market was already saturated so
the phone was discontinued Bill Gates
and Steve Ballmer called missing the
smartphone market as their biggest
regret in business
however they were able to create other
products during that time for example
they released Windows Vista Windows 7
Bing Xbox 360 Xbox Live Microsoft
Surface Microsoft Outlook and Microsoft
Azure they also acquired some big
companies at the time like Skype and
Nokia now when 2013 came around
Microsoft was still worth hundreds of
billions of dollars but it was becoming
more of a backseat thought to the other
tech companies like Google Apple
Facebook Netflix and Amazon it was at
this point that Steve Ballmer decided to
step down as CEO and appoint Satya
Nadella
as the new CEO of the company and right
after he became CEO the company decided
to purchase a gaming company called
Mojang who are the creators of Minecraft
the company also decided to purchase the
programming platform github as well as
the social network LinkedIn now during
all of these acquisitions Satya was
laser focused on one part of Microsoft's
business
cloud computing you see Microsoft Azure
has grown at an insane rate over the
last few years
like really insane there have actually
been some quarters where a sure has
grown 100% in sales and it is the growth
of Azure that has made Microsoft one of
the leading cloud computing companies in
the world behind Amazon because of the
success of Azure along with Microsoft's
other businesses Microsoft was able to
reclaim the title of the most valuable
company in the world in 2019 but it
hasn't all been positive
Paul Allen resigned from the board of
Microsoft in 2000 and hadn't really
spent too much time at Microsoft past
this date however he did have several
other business ventures apart from
Microsoft like in 1997 he bought a young
startup company called Ticketmaster he
also invested several billion dollars
into real estate and purchased the
Portland Trailblazers and Seattle
Seahawks all of which grew Allen's net
worth by billions of dollars
unfortunately Allen's Lymphoma returned
in 2009 which was treated successfully
until it unexpectantly returned in 2018
where he finally succumbed to the
disease but his legacy will live on and
to think that all of this the gaming
systems the revolutionary operating
systems the battles with the United
States government the youngest
billionaire in history the internet
browsing revolution the cloud computing
giant a major cable network tablets
search engines word processors office
packages all of us was created from a
couple of teenagers in a computer Club
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