(Photo by Stephen Brashear/Getty Images)
As I sat at Microsoft's 50th anniversary event on Friday, watching all three of the company's CEOs—Bill Gates, Steve Ballmer, and Satya Nadella—on stage, I couldn't help but think about the company's past and its future. Nadella has focused the company on his AI Copilot strategy with a number of new features announced for the consumer versions. These changing aims can also be seen in the current roadmaps. But this is far from the first time the company has changed, or at least broadened its focus.
Always Pushing the Limit
At the event, Gates reflected on starting the company in 1975 in Albuquerque, New Mexico, when there was really no software industry. (He has often spoken of the impetus for starting the company: Paul Allen picked up a copy of Ziff-Davis' Popular Electronics with an Altair 8800 on the cover and brought it to his dorm room.)
At that point, Gates said, he and Allen were surprised that no one else understood a key fact about personal computers. The exponential improvement in chips would mean that the hardware and the computation would be basically free, but you would need software to use the computer in a helpful way. So they started a company to make that lucrative software.
From the beginning, Gates said, he knew Microsoft would not be a single-product business, as most of his competitors were. Instead, he said, "We were building a software factory, hiring the best, creating better tools, always pushing the limit."
(Credit: Bill Gates)Microsoft's first product was a BASIC language interpreter for the Altair, and soon the company began making BASIC software for nearly every computer in the nascent personal computing market. I first encountered Microsoft through its BASIC for the TRS-80 Model 1. By the time I first met Gates and visited Microsoft, the company had moved to Bellevue, Washington, (where it was still small enough to fit in a single building), and was selling a lot of different software. Most notable among them was DOS, originally produced for the IBM PC and later running on lots of machines.
Despite having a big vision of "a PC on every desk, and in every home, running Microsoft software," Gates told the crowd at the anniversary celebration that in the early days of the company, he and Ballmer were always the ones who were a little bit conservative about the forecast. Even though they wanted to create lots of different kinds of software, they took "a 'one step at a time' approach to it."
'There Was Chaos'
As Ballmer, who was second-in-command to Gates throughout the period, remembered it, "In 1980, there was no industry, there was chaos. Everybody was small until the entry of IBM in 1981, and then things got big and more professional, and it really took the better part of the next 20 years for software and personal microprocessor-powered devices to really take off. It was pretty cool."
A lot of momentous developments were in the works. I remember visiting Microsoft around that time and seeing an early version of software they then called Microsoft Interface Manager, later to be renamed Windows. (As far as I know, I'm the only person who wrote about it under the Interface Manager name.) The first version of Windows shipped in 1985 as an interface that ran on top of DOS, but it took until Windows 95 to really become the industry standard.
Microsoft moved to Redmond in 1986, and at the time the campus seemed huge for a software company. (It's many times bigger now.) The next 10 years are probably best remembered for Windows and the complicated relationship—and later competition—with IBM. I had numerous conversations with Microsoft executives about both the products and the relationship with the hardware behemoth.
Nadella teased Gates and Ballmer at the event about having to manage Jim Allchin (one of the lead developers of what would become Windows NT) and Brad Silverberg (who was in charge of Windows 95). I recall great product-focused conversations with both of them as well.
Fierce Competition
But I also remember it as the era when Microsoft's applications started to take off, with Microsoft Word competing with WordPerfect and Lotus's AmiPro; Excel competing with Lotus 1-2-3 and later Borland's Quattro; and PowerPoint competing with Harvard Graphics and later Lotus and WordPerfect programs. The competition at the time was fierce, and I fondly remember visiting each of these companies multiple times and seeing new versions. Microsoft's entries, of course, were later combined as Microsoft Office, which remains hugely popular to this day in its online version, Microsoft 365.
(Credit: David Ryder/Bloomberg via Getty Images)At the anniversary event, Ballmer called out the employees for not only being "super smart" and innovative, but also competitive. "You obviously can't miss out on innovation, but it's a competitive game,” he said. “It's like sports—at the end of the day, somebody wins and somebody loses. At Microsoft, there are no losers here, baby!"
That competitive edge was on full display in the 1990s. When the Web began to take off in the mid-1990s, Microsoft was originally seen as lagging behind Netscape Navigator. After it responded with new versions of Internet Explorer, Microsoft became the target of an antitrust lawsuit that seemed to consume the company. For a time, it seemed like Microsoft might get broken up, but it eventually settled.
In 2000, Ballmer replaced Gates as CEO. A lot happened in that period, including the introduction of the Xbox and, later, Microsoft's failures with a portable music player (the Zune) and Phones. But for me, the 2000s were the decade when Microsoft's enterprise products—such as Windows Server, SQL Server, Exchange, and the business versions of Office—became standards.
Nadella replaced Ballmer in 2014 after running Microsoft’s Cloud and Enterprise division. I think of his era, at least until recently, as being characterized by a strong move to the cloud, notably with the Office 365 (now Microsoft 365) applications and the emergence of Azure as one of the leading cloud platforms. Along the way, Microsoft has released dozens of Azure platform services, data and analytics tools, and security tools, among others.
'On the Verge of Something Even More Profound'
Now, of course, Copilot is front and center, and it was the focus of the event. (More on that in a later post.) Gates said, "Now the frontier is intelligence, and…we're on the verge of something even more profound than what came for those first 50 years."
For me, I still enjoy hearing about, and trying out, the latest in technology from Microsoft and its competitors. I’m excited by the possibilities of the new AI software, though I'm a bit skeptical about a lot of the claims and a bit worried about the potential downsides. I like much of the thinking behind Copilot and its competitors, but to me, most of the tools haven't quite lived up the hype yet. Still, it's early days.
Looking forward, the three CEOs were asked what they hoped the company would achieve by its 100th anniversary. Gates joked, "I hope Copilot's the CEO." Ballmer pointed out that it's very unusual for companies to stay important and relevant for a century. If Microsoft is still alive and well then, Ballmer said, it would be a testament not only to him, Bill, and Satya, but to the next three CEOs as well.
Nadella said that after 50 years, the company is still talking about the same issues as when it was first started, except with different technologies. "Tech has come and gone, but we're talking about the same thing, which is, how do you put software, how do you put intelligence, into everybody's hand so that they can do more?"