Microsoft
Microsoft Corporation is an American multinational technology company headquartered in Redmond, Washington. Founded on 4 April 1975 by Bill Gates and Paul Allen, it is among the largest companies in the world by revenue and market capitalisation, and its products, principally the Windows operating system, the Office productivity suite and the Azure cloud platform, are used by a very large proportion of the world's organisations.
| Microsoft Corporation | |
|---|---|
| Type | Public |
| Traded as | Nasdaq: MSFT; Dow Jones Industrial Average and S&P 500 component |
| Industry | Software, cloud computing, consumer electronics, video games |
| Founded | 4 April 1975, Albuquerque, New Mexico |
| Founder | Bill Gates, Paul Allen |
| Headquarters | One Microsoft Way, Redmond, Washington, United States |
| Area served | Worldwide |
| Key people | Satya Nadella (chairman and chief executive), Amy Hood (chief financial officer), Judson Althoff (chief executive of the commercial business) |
| Products | Windows, Office and Microsoft 365, Azure, Dynamics, Xbox, Surface, LinkedIn, GitHub, Copilot, Bing |
| Revenue | Approximately US$245 billion (fiscal 2024) |
| Employees | Approximately 228,000 |
| Website | microsoft.com |
Microsoft's history divides into three periods. From 1975 to 2000 it established and then defended a position in personal computing so dominant that it was found by an American court to be an unlawful monopoly. From 2000 to 2014 it remained extremely profitable while failing in almost every new category, most consequentially in mobile devices and in search. Since Satya Nadella became chief executive in 2014 it has been rebuilt around cloud computing and subscription software, and its market value has risen approximately tenfold, at times making it the most valuable company in the world.
Its partnership with OpenAI, begun in 2019 and extended repeatedly, gave it an early position in generative artificial intelligence that no competitor of comparable size held, and its Copilot products place that technology inside software already used by hundreds of millions of people.
History
Altair BASIC and the IBM contract, 1975 to 1985
Bill Gates and Paul Allen had known each other since Lakeside School in Seattle, where they had access to a teletype connected to a time-sharing computer and had taught themselves to program. In January 1975 Allen saw the Popular Electronics cover announcing the MITS Altair 8800 and telephoned the company claiming that they had a BASIC interpreter for it, which they did not. They wrote one in eight weeks on a simulator of the Intel 8080 running on a Harvard computer, Allen flew to Albuquerque to demonstrate it, and it worked on the first attempt.
Micro-Soft was founded on 4 April 1975. Gates wrote his Open Letter to Hobbyists in February 1976, objecting that most users of Altair BASIC had not paid for it and arguing that software required payment if it was to be worth writing, a position then contentious and now universal.
The company moved to Bellevue, Washington, in 1979 and to Redmond in 1986.
The decisive event came in 1980, when IBM required an operating system for the personal computer it was developing in Boca Raton. Microsoft did not have one; it acquired 86-DOS from Seattle Computer Products for approximately US$75,000 and licensed it to IBM as PC DOS. The critical term was that the licence was not exclusive: Microsoft retained the right to sell the same product to anyone, as MS-DOS.
IBM's personal computer, launched in August 1981 with an open architecture, was copied by Compaq and then by a very large number of manufacturers, all of whom required an operating system, and all of whom bought it from Microsoft. The company therefore captured the standard IBM had created, and the arrangement is generally regarded as among the most consequential commercial decisions of the twentieth century.
Microsoft listed on 13 March 1986 at US$21 a share, creating a considerable number of fortunes among its employees and making Gates the youngest self-made billionaire to that date.
Windows, Office and dominance, 1985 to 1998
Windows 1.0 was released in November 1985 and was poor. Windows 2.0 and 3.0 improved, and Windows 3.0, released in May 1990, was the first commercially successful version, selling several million copies and establishing the graphical interface on the personal computer.
Windows 95, released on 24 August 1995 with an advertising campaign of unprecedented scale including the Rolling Stones' "Start Me Up", introduced the Start menu and the taskbar and sold very large numbers. Windows NT, developed under Dave Cutler from 1988, provided the architecture on which every subsequent version has been built.
Microsoft Office, assembled from Word, Excel and PowerPoint and sold as a suite from 1990, displaced WordPerfect and Lotus 1-2-3 within a few years. The bundling was decisive: a customer could buy three programs for less than the price of two competitors' products, and the competitors, each strong in one category, could not match it.
The company also acquired or built Internet Explorer, Encarta, Visual Studio, SQL Server and a very large number of other products, and its practice of entering a category, bundling its product with Windows or Office and displacing the incumbent became the industry's characteristic complaint against it, expressed in the term embrace, extend and extinguish, which appeared in internal documents disclosed during litigation.
United States v. Microsoft, 1998 to 2004
The Department of Justice and twenty states sued Microsoft in May 1998, alleging that it had maintained its operating system monopoly by unlawful means, principally by bundling Internet Explorer with Windows in order to destroy Netscape, whose browser threatened to become a platform on which applications could run independently of the operating system.
The trial before Judge Thomas Penfield Jackson was damaging. Gates's videotaped deposition, in which he was evasive and combative over the meaning of ordinary words, was played in court and reported extensively. Internal emails described the intention to cut off Netscape's air supply. Jackson found in November 1999 that Microsoft held monopoly power and had abused it, and ordered in June 2000 that the company be divided into an operating systems business and an applications business.
The Court of Appeals reversed the break-up in June 2001, principally because Jackson had given interviews to journalists during the proceedings in breach of judicial ethics, while upholding the substance of the monopolisation findings. A settlement approved in 2002 required Microsoft to disclose interfaces, to permit manufacturers to install competing software and to submit to a technical committee, and ran until 2011.
The European Commission pursued separate proceedings, fining Microsoft €497 million in 2004 over the bundling of Windows Media Player and the withholding of server interoperability information, €899 million in 2008 for non-compliance, and €561 million in 2013 for failing to display the browser choice screen it had agreed to.
The cases' practical effect on Microsoft's conduct is debated; their effect on the company's attention during the period in which Google and Apple built the next platforms was substantial, and several accounts, including Gates's own, identify the distraction as a cost greater than the penalties.
The Ballmer years, 2000 to 2014
Steve Ballmer became chief executive in January 2000, having joined in 1980 as the company's thirtieth employee and Gates's Harvard contemporary. Gates remained chief software architect until 2006 and chairman until 2014, and moved progressively to the Bill and Melinda Gates Foundation.
The period is conventionally described as a lost decade, which is inaccurate financially and accurate strategically. Revenue grew from approximately US$23 billion to US$78 billion and operating income roughly trebled, and Windows and Office produced enormous and reliable profits throughout. The share price, however, was essentially unchanged for thirteen years, because the market concluded that the company had missed every new market that mattered.
Mobile. Microsoft had a mobile operating system before Apple and Google, in Windows CE and Windows Mobile, and lost the category entirely. Ballmer's recorded laughter at the iPhone's announcement in 2007, and his observation that it had no chance of obtaining significant market share because it had no keyboard and cost US$500, became the standard illustration of incumbent misjudgement. Windows Phone, introduced in 2010 and genuinely well designed, arrived too late to attract developers, and the acquisition of Nokia's handset business in 2014 for approximately US$7.2 billion was written off almost entirely within two years, with 18,000 redundancies.
Search. Microsoft entered search seriously only after Google had established itself, and Bing, launched in 2009, has held a small share ever since despite sustained investment.
Products. Windows Vista, released in 2007, was widely regarded as a failure of performance, compatibility and user interface, and damaged the brand sufficiently that Windows 7 was marketed substantially as a correction. Windows 8, released in 2012 with an interface designed for touchscreens and imposed on desktop users, was worse received still. The Zune music player, the Kin telephones and Microsoft's tablet efforts before Surface all failed.
Two things went right. Xbox, launched in 2001 and followed by the Xbox 360 in 2005, established Microsoft in video games and remains a substantial business, though the 360's red ring of death hardware failure cost the company approximately US$1.15 billion in warranty provision. And Azure, announced in 2008 and launched in 2010, was begun under Ray Ozzie and Satya Nadella early enough that the company was not hopelessly behind Amazon Web Services when cloud computing became the industry's centre.
Satya Nadella and the recovery, 2014 to 2026
Satya Nadella became chief executive in February 2014, having joined in 1992 and having run the server and tools business and then the cloud division.
His changes were as much cultural as strategic. He described the company's problem as a know-it-all culture that needed to become a learn-it-all one, drew on Carol Dweck's work on growth mindset, and reduced the internal competition that stack ranking, the practice of forcing managers to rate a proportion of their staff as underperforming, had institutionalised and which had been abolished shortly before his appointment.
The strategy was stated as mobile-first, cloud-first, and in practice amounted to accepting that Windows would not be the centre of the company. Office was released for the iPad within weeks of his appointment, a decision his predecessors had resisted because it weakened Windows. Microsoft embraced Linux, which Ballmer had called a cancer, to the point that Azure now runs more Linux than Windows and that Nadella stated publicly that Microsoft loves Linux. The Windows division was subordinated, and the company was reorganised around Azure and around subscription software.
The financial result was among the largest value creations in corporate history: the share price rose approximately tenfold between 2014 and 2024 and the market capitalisation exceeded US$3 trillion.
Acquisitions were central. Mojang, the maker of Minecraft, was bought in 2014 for US$2.5 billion; LinkedIn in 2016 for US$26.2 billion; GitHub in 2018 for US$7.5 billion, which placed the repository on which most of the world's software is developed inside a company developers had regarded with suspicion; Nuance Communications in 2021 for approximately US$19.7 billion, principally for its clinical speech recognition; ZeniMax in 2021 for US$7.5 billion; and Activision Blizzard in October 2023 for US$68.7 billion, the largest acquisition in the history of the technology industry, completed after a twenty-month regulatory contest in which the American Federal Trade Commission sued unsuccessfully to block it and the British Competition and Markets Authority initially prohibited it before accepting a restructured transaction under which cloud streaming rights were transferred to Ubisoft.
OpenAI. Microsoft invested US$1 billion in 2019, becoming that organisation's exclusive cloud provider and obtaining a licence to its technology, and extended the arrangement with approximately US$10 billion in January 2023 and further commitments subsequently. The partnership gave Microsoft early access to the models underlying ChatGPT, which it deployed as Copilot across Windows, Office, GitHub, Dynamics and Azure, and it made Azure the platform on which a very large proportion of the industry's generative artificial intelligence workloads run.
The relationship has been unusual and periodically unstable. Microsoft holds no equity in the conventional sense but is entitled to a very large share of OpenAI's profits until defined thresholds; it supported Sam Altman's reinstatement during his removal by OpenAI's board in November 2023, having briefly offered to employ him and any staff who followed; and the restructuring of OpenAI in 2025 into a public benefit corporation converted Microsoft's interest into an equity holding of approximately 27 per cent while loosening the exclusivity that had bound the two together. Microsoft has simultaneously built its own models, recruited the Inflection AI team including Mustafa Suleyman in 2024, and taken capacity from other providers, and OpenAI has contracted for computing from Oracle and others.
The early years in detail
Bill Gates and Paul Allen met at Lakeside School in Seattle, where a mothers' club had bought time on a computer at a nearby company. They were banned from the system for a period for exploiting bugs, and were subsequently employed to find more. Their first venture, Traf-O-Data, built a machine to process traffic counter tapes for municipalities, earned approximately US$20,000 and failed when the state of Washington began offering the service free, but the experience of writing an 8008 simulator proved decisive: the same approach allowed them to develop Altair BASIC without an Altair.
Gates left Harvard after his second year, initially on leave, and never returned. Allen worked at Honeywell in Boston before joining him in Albuquerque. The partnership was formalised with Gates holding 60 per cent, subsequently 64, a division Gates justified by the greater quantity of code he had written and which Allen described in his memoir as a source of lasting grievance.
Allen was diagnosed with Hodgkin's lymphoma in 1982 and left the company in 1983 after overhearing Gates and Steve Ballmer discussing diluting his holding, an episode he described and Gates acknowledged with regret. He retained his shares, which made him among the wealthiest people in the world, and devoted his life to investment, to the Allen Institute for Brain Science and for Artificial Intelligence, to the Seattle Seahawks and Portland Trail Blazers, to the Experience Music Project and to the funding of SpaceShipOne, the first privately financed crewed spaceflight.
Microsoft's early business was interpreters and compilers sold to hardware manufacturers, and it supplied BASIC for the Apple II, the Commodore PET, the TRS-80 and a very large number of other machines. Its first international subsidiary was opened in Japan in 1978 under Kazuhiko Nishi, whose relationship with the company was substantial and whose MSX standard was widely adopted in Japan and Europe.
The IBM relationship and OS/2
The contract that made Microsoft also produced the partnership that nearly destroyed it.
Having supplied PC DOS, Microsoft agreed in 1985 to develop OS/2 jointly with IBM as the successor operating system, while continuing its own Windows work. The two companies' approaches were incompatible: IBM wanted a product that ran on its own hardware and that demonstrated its architectural authority, and measured progress by lines of code written, an arrangement Microsoft's engineers found absurd; Microsoft wanted a product that ran everywhere.
The partnership dissolved between 1990 and 1991, after Windows 3.0 succeeded commercially and Microsoft concluded that it did not need OS/2. IBM continued alone, released OS/2 2.0 in 1992, which was technically superior to Windows 3.1 in several respects, and failed to obtain applications or manufacturer support. The episode is the standard case study of an incumbent losing a platform to its own supplier, and it left IBM with a lasting sense of grievance that surfaced in its testimony during the antitrust proceedings.
Microsoft's own operating system work meanwhile continued in two lines: the DOS-based consumer versions through Windows 95, 98 and Me, and the NT line under Dave Cutler, which converged with the consumer line in Windows XP.
The browser wars
Netscape Navigator, released in 1994, was the first widely used web browser and was regarded within Microsoft as an existential threat, on the analysis set out in Gates's 1995 memorandum "The Internet Tidal Wave": if applications ran in a browser, the operating system beneath it would become a commodity.
Microsoft's response was to develop Internet Explorer, licensing its basis from Spyglass on terms providing a royalty per copy sold, and then to give it away, which produced litigation that Spyglass settled for US$8 million. Internet Explorer was bundled with Windows, could not be removed, and was included in the agreements manufacturers signed to obtain Windows at competitive rates. Netscape's share fell from above 80 per cent to negligible within four years, and the company was sold to AOL in 1998.
The conduct was the centre of the antitrust case. Microsoft's defence, that the browser was an integrated feature rather than a separate product, was rejected, and the finding that it had used the operating system monopoly to win an adjacent market is the case's core holding.
Internet Explorer subsequently stagnated, with no substantive release between version 6 in 2001 and version 7 in 2006, during which it accumulated security vulnerabilities and rendering behaviours that web developers spent a decade working around. Mozilla Firefox, released in 2004 from Netscape's open-sourced code, and Google Chrome, released in 2008, took the market. Microsoft replaced Internet Explorer with Edge in 2015 and rebuilt Edge on Google's Chromium engine in 2019, an acknowledgement that maintaining an independent rendering engine was no longer worth the cost and which left the web substantially dependent on a single implementation controlled by a competitor.
Enterprise sales and licensing
A very large proportion of Microsoft's revenue is sold not as products but as agreements. Enterprise Agreements commit an organisation to license a defined set of products for all its users over three years, at discounts reflecting the commitment, and the arrangement has several consequences.
It produces predictable revenue and deep relationships: a chief information officer negotiating such an agreement is committing the organisation's software estate for years. It creates substantial switching costs, since the agreement covers products whose replacement would have to be coordinated. And it permits bundling of a subtle kind: adding a new product to an existing agreement at marginal cost is far easier than persuading the customer to buy it separately, which is how Teams displaced Slack, how Defender has taken security share, and how Power BI has taken business intelligence share.
Competitors' complaints about this practice have been made continuously since the 1990s and have moved from antitrust authorities' attention to their active investigation, principally in the European Union and, since 2024, in the United States.
The company's field organisation, comprising tens of thousands of salespeople and a very large partner ecosystem of resellers and systems integrators, is among the largest enterprise sales operations in existence and is a genuine asset independent of the products.
Infrastructure
Microsoft operates one of the world's largest computing infrastructures, comprising more than sixty announced data centre regions on six continents, connected by a private network including substantial subsea cable capacity.
Its capital expenditure on this has risen from approximately US$15 billion a year before 2020 to more than US$80 billion, driven by artificial intelligence, and the company has contracted for very large quantities of electricity, including nuclear capacity through an agreement to restart a reactor at Three Mile Island and commitments to fusion developers whose technology does not yet exist.
The infrastructure includes custom silicon, the Maia accelerator and Cobalt general-purpose processor announced in 2023, intended to reduce dependence on Nvidia and on Intel; the Open Compute Project contributions the company makes alongside Meta Platforms; and sustainability measures including underwater data centre trials and hydrogen fuel cell backup power.
Timeline
Key dates include the founding on 4 April 1975; the Open Letter to Hobbyists in February 1976; the IBM contract and MS-DOS in 1981; the Microsoft Mouse in 1983 and Paul Allen's departure; the Macintosh applications from 1984 and Windows 1.0 in November 1985; the public offering on 13 March 1986; Windows 3.0 in May 1990 and Office in the same year; the dissolution of the OS/2 partnership in 1991 and the founding of Microsoft Research; Windows NT in 1993; the Internet Tidal Wave memorandum and Windows 95 in 1995; Internet Explorer's bundling and the decline of Netscape from 1996; the Department of Justice suit in May 1998; the break-up order in June 2000 and its reversal in June 2001; Ballmer's appointment in January 2000 and Windows XP in 2001; the Trustworthy Computing memorandum in January 2002 and the antitrust settlement; Xbox in 2001 and Xbox 360 in 2005; the European fines of 2004, 2008 and 2013; Windows Vista in 2007 and the iPhone in the same year; Azure announced in 2008 and launched in 2010; Windows Phone in 2010 and the Nokia acquisition in 2014; Surface in 2012 and Windows 8; Nadella's appointment in February 2014 and Office for iPad; the Minecraft acquisition in 2014, LinkedIn in 2016 and GitHub in 2018; the OpenAI investment in 2019 and its extension in 2023; the Activision Blizzard agreement in January 2022 and its completion in October 2023; the Bing integration of OpenAI technology in February 2023 and the Copilot products that followed; the Storm-0558 intrusion in 2023 and the Cyber Safety Review Board report in April 2024; the Secure Future Initiative; and the OpenAI restructuring in 2025.
Products
Windows
Microsoft Windows runs on approximately 70 per cent of the world's personal computers and is the company's oldest continuing product. Windows 10, released in 2015, was described at launch as the last version, a positioning the company abandoned with Windows 11 in 2021, whose hardware requirements, including a Trusted Platform Module, rendered a very large number of working machines ineligible and prompted substantial criticism. Support for Windows 10 ended in October 2025, an event the industry expected to drive personal computer replacement and which has driven it less than hoped.
Windows Server, Windows Embedded and the Xbox system software share the underlying NT architecture.
Microsoft 365 and Office
Office, sold as a perpetual licence from 1990, was converted to a subscription as Office 365 from 2011 and renamed Microsoft 365, a transition that is among the most successful business model changes any software company has made: recurring revenue replaced a replacement cycle that had lengthened to the point where customers upgraded every five or six years, and the subscription includes cloud storage, Teams and, latterly, Copilot.
Teams, introduced in 2017 as a response to Slack and bundled with Microsoft 365, grew enormously during the pandemic and reached several hundred million users. Slack complained to the European Commission in 2020 that the bundling was unlawful, and Microsoft unbundled Teams globally in 2024 and offered commitments the Commission accepted in 2025, an outcome that echoes the browser and media player cases of twenty years earlier.
Azure
Microsoft Azure is the second largest public cloud platform after Amazon Web Services, providing computing, storage, networking, databases, analytics and artificial intelligence services. Its growth has been the principal driver of the company's value since 2014, and its advantage over Amazon in the enterprise market derives substantially from Microsoft's existing relationships: an organisation already buying Windows Server, Office and Dynamics under an enterprise agreement can add Azure to the same contract.
That advantage has also been the subject of complaint. Cloud competitors and European trade bodies have argued that Microsoft's licensing terms make it considerably more expensive to run Windows Server and SQL Server on a competitor's cloud than on Azure, a practice the company has partially modified under regulatory pressure and which produced settlements with European complainants in 2024.
Azure hosts a very large proportion of the world's generative artificial intelligence workloads, including OpenAI's, and the company's capital expenditure, which has risen toward US$80 billion a year, is directed principally at the data centres and accelerators this requires.
Gaming
The Xbox business comprises the Xbox Series consoles, the Game Pass subscription, which provides a catalogue for a monthly fee and which Microsoft has promoted as the model for the industry's future, and, following the ZeniMax and Activision Blizzard acquisitions, one of the largest collections of game development studios in the world, including Bethesda, id Software, Blizzard, Infinity Ward, Treyarch, Mojang and a considerable number of others.
The strategy has been contested. Microsoft has argued that it is third in console hardware behind Sony and Nintendo and must compete on services and content; competitors and regulators argued that acquiring Call of Duty, the largest game franchise in the world, would permit foreclosure. Microsoft gave binding commitments to keep the franchise on PlayStation, and has subsequently released its titles on competing platforms more widely than expected, while raising Game Pass prices and reducing studio headcount, including the closure of several studios in 2024.
Other products
Surface devices, introduced in 2012, established the detachable tablet and laptop category and demonstrated what Windows hardware could be, at the cost of competing with the manufacturers Microsoft depends on. Dynamics 365 supplies enterprise resource planning and customer relationship management, competing with SAP and Salesforce. GitHub hosts the majority of the world's open source software. LinkedIn is described separately. Bing and the Edge browser hold small shares of their categories. HoloLens, an augmented reality headset, was substantially wound down after a difficult American army contract.
Windows in detail
The versions
Windows 1.0 (1985) and 2.0 (1987) were graphical shells over MS-DOS with tiled and then overlapping windows, the latter prompting litigation from Apple which alleged copying of the Macintosh interface and which Microsoft won in 1994, principally because a 1985 licence had permitted the use of specific visual elements.
Windows 3.0 (1990) and 3.1 (1992) were the first commercially successful versions, selling tens of millions of copies and establishing the platform on which the application software industry was built.
Windows 95 (1995) integrated MS-DOS, introduced the Start button, the taskbar and long file names, and was launched with a campaign of a scale not previously seen for software, including the illumination of the Empire State Building. It also bundled Internet Explorer, the decision at the centre of the antitrust case.
Windows NT (1993), developed by a team under Dave Cutler recruited from Digital Equipment Corporation, was a new operating system with a proper kernel, memory protection and portability across processor architectures, and its lineage runs through Windows 2000, XP, Vista, 7, 8, 10 and 11; every version since 2001 is an NT system.
Windows XP (2001) merged the consumer and business lines, was exceptionally durable and remained in widespread use for more than a decade after release, to the company's considerable frustration; support ended in 2014 and a very large number of machines, including cash dispensers and medical equipment, continued to run it.
Windows Vista (2007) was slow, incompatible with a great deal of existing hardware, and imposed a security prompt that users found intolerable; it damaged the brand severely. Windows 7 (2009) corrected it and was very well received. Windows 8 (2012) imposed a touchscreen interface on desktop users and removed the Start button, and was worse received than Vista. Windows 10 (2015) restored the Start menu, was offered as a free upgrade, and was described as the last version of Windows, on the model of continuous updating rather than periodic replacement.
Windows 11 (2021) required hardware features including a Trusted Platform Module and a recent processor, rendering a very large number of functioning computers ineligible, a decision defended on security grounds and criticised as producing avoidable electronic waste.
Windows Phone and the mobile failure
Microsoft had shipped Windows CE from 1996 and Pocket PC and Windows Mobile thereafter, and held a leading share of the small smartphone market before 2007. The iPhone and Android destroyed that position within three years.
Windows Phone 7 (2010) and 8 (2012) were built from scratch with a distinctive interface of typographic tiles that was widely praised on its merits. The problem was the ecosystem: developers would not write applications for a platform with few users, and users would not adopt a platform without applications, and no amount of subsidy broke the circularity. Microsoft acquired Nokia's handset business in 2014 for approximately US$7.2 billion, wrote off essentially the entire amount in 2015, and withdrew.
The consequence is the central strategic fact of the company's modern history: the most used computing device in the world runs an operating system Microsoft does not control, distributes applications through stores it does not operate, and is defended by companies whose interests are opposed to its own. The Azure and Microsoft 365 strategy is in substantial part an answer to it.
Developer tools and open source
Microsoft began as a developer tools company, selling BASIC, and its relationship with software developers has been among its most durable assets and, for a period, among its greatest liabilities.
Visual Studio, Visual Basic, which made Windows programming accessible to a very large number of people who were not professional programmers, C# and .NET, designed under Anders Hejlsberg from 2000, and SQL Server constituted a comprehensive and proprietary stack that worked well and locked its users to Windows.
The change under Nadella was substantial and, to developers who remembered the 1990s, surprising. .NET Core was released as open source and made to run on Linux and macOS. Visual Studio Code, released in 2015, became the most widely used code editor in the world within a few years, is open source and runs everywhere. TypeScript, also by Hejlsberg, added static typing to JavaScript and has been adopted by a very large proportion of large web projects. Windows Subsystem for Linux allows a Linux environment to run inside Windows. The company became the largest corporate contributor to GitHub by number of contributors before acquiring it, and it joined the Linux Foundation and the Open Invention Network, pledging its patents against Linux having previously asserted them.
The acquisition of GitHub in 2018 was received with alarm by a substantial part of the developer community and has been managed carefully: the service has been operated with considerable independence, its free tier was expanded rather than reduced, and the principal subsequent controversy concerned Copilot's training on public repositories rather than the platform's operation.
Microsoft Research
Microsoft Research, founded in 1991 by Nathan Myhrvold with Rick Rashid from Carnegie Mellon, employs approximately a thousand researchers across laboratories in Redmond, Cambridge in England, Bangalore, Beijing, New York, Montreal and Amsterdam, and publishes in the manner of a university department.
Its contributions include work on programming languages, including the F# and Haskell communities it has supported; verification and formal methods, including the Z3 theorem prover and the SLAM driver verification tools that substantially reduced Windows crashes; computer vision and the Kinect sensor; machine translation and speech recognition, where it reported human parity on conversational speech recognition in 2016 and on Chinese to English translation in 2018; the ImageNet-winning ResNet architecture in 2015, developed at Microsoft Research Asia by Kaiming He and colleagues and among the most cited papers in the field; quantum computing, pursued through topological qubits, an approach that is more difficult and, if it works, more robust than the alternatives, and which produced a contested Nature retraction in 2021 and a further claimed advance in 2025; and DNA data storage.
Microsoft Research Asia, established in Beijing in 1998, has been among the most productive computer science laboratories in the world and has trained a very large proportion of the senior artificial intelligence researchers now working in Chinese companies, a contribution the company has found politically awkward as relations between the countries deteriorated, and which led it to open a laboratory in Vancouver in 2024 to which some staff were relocated.
Bing and search
Microsoft has competed in search since MSN Search in 1998 and has never held more than a small share. Bing, launched in 2009, obtained a ten-year agreement to power Yahoo's search, has been the default in Windows and Edge, and holds roughly three per cent of global search and rather more in the United States.
Its significance changed in February 2023, when Microsoft integrated OpenAI's technology into Bing before Google responded, an event that caused the latter to declare an internal emergency and which Nadella described, with unusual directness, as an opportunity to make Google dance. The share gain that followed was negligible, which established that the obstacle to competing in search is distribution and habit rather than quality, the same conclusion the American court reached in the Google antitrust case.
The search business is also the basis of Microsoft's advertising operation, which is substantial in absolute terms and small relative to Google's or Meta's, and which was enlarged by the acquisition of Xandr from AT&T in 2022.
Office and productivity in detail
Word was released for MS-DOS in 1983 and for Macintosh in 1985, where it established itself before its Windows version succeeded. Excel was released for Macintosh in 1985 and for Windows in 1987, and displaced Lotus 1-2-3 by being better suited to the graphical interface that Lotus was slow to adopt. PowerPoint was acquired with Forethought in 1987 for US$14 million and has had a cultural influence disproportionate to its commercial importance, having become the standard medium of corporate and governmental communication and the subject of a considerable critical literature, including Edward Tufte's essay arguing that its structure damages reasoning.
Outlook, Access, OneNote, Publisher and Project complete the traditional suite, and SharePoint, OneDrive, Teams, Power BI and the Power Platform, a set of low-code tools allowing non-programmers to build applications, constitute the modern one.
The suite's position is among the most entrenched in commercial software. Its file formats are the de facto standards for documents, spreadsheets and presentations; the skills required to use it are held by several hundred million people; and the cost of changing, which includes retraining, macro conversion and the incompatibility of documents exchanged with other organisations, exceeds any saving from a competitor. Google Workspace has taken a substantial share in education and in smaller companies and has made little progress against large enterprises.
Hardware
Microsoft's hardware history is long and mixed. It produced the Microsoft Mouse from 1983, keyboards, the SideWinder game controllers and the Natural Keyboard, an ergonomic design of 1994 that sold in very large numbers.
Xbox (2001) was begun by a small internal group concerned that Sony's PlayStation 2 would become the entertainment device in the living room and would displace the personal computer, and Ballmer approved a budget of several billion dollars. The Xbox 360 (2005) preceded its competitors to market and sold well, and was afflicted by the red ring of death, a hardware failure affecting a very large proportion of early units and costing approximately US$1.15 billion to remedy. Kinect (2010), a depth camera permitting control without a controller, sold eight million units in sixty days, a record, and was abandoned as a game device while its sensor technology found use in robotics and in HoloLens. The Xbox One (2013) was announced with always-online requirements and restrictions on used games that the company reversed within weeks after a hostile reception.
Surface (2012) began with the ARM-based Surface RT, which could not run existing Windows applications, was poorly received and produced a US$900 million write-down, and recovered with the Surface Pro 3 in 2014, which established the detachable form that competitors including Apple subsequently adopted. The range now includes laptops, a studio desktop and, since 2024, ARM-based Copilot Plus machines using Qualcomm processors.
HoloLens (2016) was a genuinely advanced augmented reality headset with no consumer market, sold to enterprises and to the United States Army under the Integrated Visual Augmentation System contract, which encountered persistent difficulties in field testing and which was substantially transferred to Anduril in 2025.
Zune (2006) was a competent music player released five years after the iPod, and its failure is the standard example of entering a category after the market has been decided.
Microsoft and China
Microsoft has operated in China longer and more deeply than most American technology companies. Microsoft Research Asia, opened in 1998, became among the most productive computer science laboratories in the world and trained a generation of Chinese researchers.
Its commercial position has been constrained by software piracy, which was near-universal in China for two decades and which Gates observed at the time was preferable to the alternative of a different standard becoming established, since pirated users would eventually become paying ones. Bing is the only Western search engine permitted in China, subject to filtering, and LinkedIn operated there until 2021, both as described elsewhere.
The deterioration of relations has affected the company directly. It has moved some research staff from Beijing to Vancouver, has faced American scrutiny of its Chinese operations and Chinese scrutiny of its American character, and its cloud business there operates through a licensing arrangement with 21Vianet rather than directly, as Chinese law requires.
Philanthropy and the Gates Foundation
The Bill and Melinda Gates Foundation, established in 2000 and funded by Bill Gates's Microsoft shareholding and by a very large commitment from Warren Buffett in 2006, is the largest private foundation in the world, with an endowment in the tens of billions of dollars and annual disbursements exceeding US$7 billion.
Its principal work has been in global health: the eradication of polio, in which it is among the largest funders; malaria, tuberculosis and HIV; vaccine development and delivery through Gavi, which it helped to create; and agricultural development. Independent assessments credit it with a substantial contribution to reductions in child mortality, and its critics argue that the concentration of such influence over global health policy in a private institution accountable to nobody is itself a problem, that its preference for technological interventions has crowded out health system strengthening, and that its education work in the United States, particularly its support for the Common Core standards and for teacher evaluation measures, was less successful and was conducted with less humility.
Gates announced in 2025 that the foundation would spend its entire endowment and close by 2045, accelerating its giving substantially.
Microsoft itself operates one of the larger corporate giving programmes, matching employee donations without limit, providing software to non-profit organisations at nominal cost, and committing to skills training for very large numbers of people.
Brand and culture
Microsoft's logo has changed five times, the current four-coloured squares dating from 2012. Its products carry brands of unusual longevity: Windows since 1985, Office since 1990, Xbox since 2001 and Azure since 2010.
Its cultural position has moved further than that of any comparable company. In the 1990s it was the object of genuine hostility among developers and technologists, expressed in the terms Microserfs, the Evil Empire and, in the case of the browser wars, in an antipathy that shaped an entire generation's professional identity. By the 2020s it was the company whose editor developers used, whose repository hosted their code, whose cloud ran their services and whose operating system they ran Linux inside.
The change was deliberate and was achieved principally by ceasing to fight the things it had lost: Linux, the web, open source and, eventually, the personal computer as the centre of computing. It is among the clearest instances of a large company altering its strategic posture successfully, and it is the reason the company's third period has been the most valuable.
Dynamics and business applications
Microsoft Dynamics supplies enterprise resource planning and customer relationship management software, assembled principally from acquisitions between 2000 and 2002: Great Plains Software for US$1.1 billion, Navision for approximately US$1.45 billion, and the earlier Solomon and Axapta products, which were rationalised into Dynamics 365 from 2016.
The business is smaller than SAP's or Salesforce's and grows faster than either in percentage terms, because it is sold into an installed base that already holds Microsoft agreements and because it integrates with Office, Teams and Azure in ways competitors cannot match. Salesforce's founder Marc Benioff, who began his career at Oracle, has made Microsoft's bundling a recurring public complaint.
The Power Platform, comprising Power Apps, Power Automate, Power BI and Power Pages, permits people who are not programmers to build applications and automate processes, an approach usually called low-code. Power BI in particular has taken very substantial share in business intelligence from Tableau, acquired by Salesforce, and from Qlik, principally on price and on inclusion in existing licences.
Consumer services
Microsoft's consumer businesses beyond Windows and Xbox have generally been unsuccessful, and the list of discontinued services is long.
MSN, launched in 1995 as an online service intended to compete with AOL and repositioned repeatedly as a portal, survives as a news aggregator. Hotmail, acquired in 1997 for approximately US$400 million and among the first web-based email services, became Outlook.com and remains substantial. MSN Messenger was the dominant instant messaging service in much of the world during the 2000s and was discontinued in favour of Skype, acquired in 2011 for US$8.5 billion, which was itself progressively displaced by Teams and closed in 2025.
Encarta, a multimedia encyclopaedia sold on CD-ROM from 1993, was among the products that established the medium and was discontinued in 2009, having been rendered obsolete by Wikipedia, a development the company had not anticipated and which is among the clearest instances of a free collaborative product displacing a commercial one.
Zune, Groove Music, Microsoft Band, Cortana as a consumer assistant, Windows Live in its several forms, and Mixer, the game streaming service closed in 2020 after an expensive attempt to compete with Twitch, complete the principal list.
The pattern is consistent and is the mirror of the company's enterprise strength: Microsoft succeeds where the buyer is an organisation with a procurement process and fails where the buyer is a person with a preference.
Windows and the personal computer industry
Microsoft's relationship with the manufacturers that ship Windows has been among the most consequential commercial arrangements in technology and among the least visible.
The manufacturers, principally HP, Dell, Lenovo, Acer and Asus, compete with one another on components they do not control, running an operating system they license from a single supplier whose terms are broadly the same for all of them, which reduces them to assemblers with thin margins. The arrangement, described in the antitrust proceedings, was enforced through per-processor licences requiring payment for every machine shipped whether or not it ran Windows, a practice prohibited by the 1994 consent decree, and subsequently through volume discounts and marketing funds.
Microsoft's own hardware has complicated the relationship, since Surface competes directly with its licensees, and the company has managed it by keeping volumes modest and by positioning Surface as a demonstration of what Windows machines can be.
The arrival of ARM-based Windows machines using Qualcomm processors from 2024 is the most significant change to the arrangement in three decades, since it introduces a second processor architecture, reduces dependence on Intel and follows Apple's demonstration that the change produces substantial improvements in battery life. Its success depends on whether the emulation of x86 software is good enough that users do not notice, which is the same problem Apple solved twice and which Microsoft's two earlier attempts, with Windows RT in 2012 and Windows on ARM in 2018, did not.
Artificial intelligence
Microsoft's position in generative artificial intelligence derives from the OpenAI partnership and from the distribution it possesses.
Copilot is the brand applied across the company's products. GitHub Copilot, released in 2021 and the first widely used generative coding assistant, suggests code as a developer types and is used by many millions of programmers; it has also produced litigation from developers alleging that training on public repositories infringed their licences. Microsoft 365 Copilot places a model inside Word, Excel, Outlook, PowerPoint and Teams. Copilot in Windows, in Bing, in Dynamics and in security products extends the same approach.
The commercial question is whether customers will pay for it. Microsoft 365 Copilot is sold at approximately US$30 per user per month on top of existing subscriptions, which would be a very large increase in revenue per user if adopted broadly, and adoption has been slower than the company projected, with customers reporting that the value varies considerably by role and task.
The company has also built its own models, released the small Phi family openly, developed its own accelerators, Maia and Cobalt, to reduce dependence on Nvidia, and established a consumer artificial intelligence division under Mustafa Suleyman. Its relationship with OpenAI has moved from exclusive partnership toward something closer to a large investment in a company that is also a competitor, a position it shares with several firms in the field.
Accessibility
Microsoft has invested substantially in accessibility and is generally assessed as the leading large technology company in the field.
Windows has included screen magnification, narration and high-contrast modes for three decades, and the Narrator screen reader has improved considerably since 2015. The Xbox Adaptive Controller, released in 2018, is a configurable device allowing players with limited mobility to connect switches, buttons and mounts of their own choosing, and its packaging was itself designed to be opened by someone with limited dexterity; it is widely cited as an exemplary piece of inclusive design. Seeing AI, an application describing the visual world for blind users, Immersive Reader, which assists people with dyslexia, and live captioning and translation across Teams and PowerPoint extend the same work.
The company's AI for Accessibility programme funds external developers, and it has published its inclusive design methodology publicly, on the argument that designing for people with permanent impairments produces products better for everyone, since a person using one hand and a person carrying a bag face the same interface problem.
The commercial motive is genuine and is not the whole explanation: accessibility is a procurement requirement for governments and large organisations, which are Microsoft's principal customers, and the company's early investment in it has been a competitive advantage in those markets.
Corporate affairs
Leadership
Bill Gates was chief executive from 1975 to 2000, chairman until 2014 and a director until 2020, and has since devoted his attention to the Gates Foundation, to which he and Melinda French Gates have committed the great majority of their wealth and which is the largest private foundation in the world, principally funding global health, including work on malaria, polio eradication and vaccines.
Steve Ballmer was chief executive from 2000 to 2014, remains among the company's largest individual shareholders, and bought the Los Angeles Clippers in 2014 for US$2 billion.
Satya Nadella has been chief executive since 2014 and chairman since 2021. Paul Allen left the company in 1983 after a diagnosis of Hodgkin's lymphoma and a dispute with Gates over equity, and devoted the remainder of his life to investment, philanthropy, sports team ownership and the Allen Institute for Brain Science; he died in 2018.
Employees and culture
Microsoft employs approximately 228,000 people, with its largest concentration in the Redmond area, where its campus houses tens of thousands, and substantial operations in India, principally Hyderabad and Bengaluru, in Ireland, in Israel, in China through Microsoft Research Asia, and in a very large number of other countries.
Its culture before 2014 was characterised by internal competition, formalised in stack ranking, which required managers to distribute ratings across a curve regardless of actual performance and which is widely held to have damaged collaboration between divisions. Its abolition and Nadella's emphasis on growth mindset are the most cited elements of the cultural change, and the company's employer reputation improved markedly.
It has conducted redundancies in most years since 2023, including approximately 10,000 in January 2023 and comparable numbers in 2024 and 2025, concentrated in gaming, sales and middle management, conducted while reporting record profits, which has been the principal internal criticism of the period.
Finances
Microsoft reported revenue of approximately US$245 billion in fiscal 2024 with operating income above US$109 billion and margins exceeding 44 per cent, figures unusual for a company of that size. Its revenue is divided roughly evenly between productivity and business processes, intelligent cloud and personal computing, with Azure the fastest-growing component.
It holds AAA credit ratings from both major agencies, one of only two American companies to do so. It pays a dividend, which it has increased annually since 2004, and repurchases shares substantially, and its capital expenditure has risen very steeply, exceeding US$80 billion annually, to build artificial intelligence capacity.
Security
Microsoft's products are the principal target of the world's cyber attacks, because they are the software most organisations run, and its security record has been the subject of repeated and severe criticism.
Trustworthy Computing. In January 2002 Bill Gates sent a memorandum to every employee stating that security must take precedence over new features, halting Windows development for several months while the entire codebase was reviewed. The Security Development Lifecycle that followed reduced vulnerability counts substantially and was adopted as a model across the industry, and the memorandum is among the more consequential internal documents in corporate history.
Recent failures. The company's record since 2020 has been poor. The SolarWinds compromise of 2020, in which Russian intelligence inserted code into a widely used management product, involved Microsoft products at several points and the company disclosed that source code had been viewed. The Hafnium exploitation of on-premises Exchange servers in 2021 affected tens of thousands of organisations. The Storm-0558 intrusion of 2023, in which Chinese state actors obtained a signing key and used it to forge authentication tokens and read the Exchange Online mailboxes of American government officials including the Secretary of Commerce and the ambassador to China, produced a report by the United States Cyber Safety Review Board in April 2024 which found that the intrusion was preventable, that Microsoft's security culture was inadequate and required an overhaul, and that the company's public statements about the cause had been inaccurate and had not been corrected. In January 2024 the company disclosed that Russian actors had read the email of senior executives and of its security staff.
The company responded with the Secure Future Initiative, announced in November 2023 and expanded in 2024, which it describes as the largest security engineering effort in its history, involving approximately 34,000 engineers, tying executive compensation to security outcomes and reordering priorities so that security takes precedence over new features, a formulation deliberately echoing the 2002 memorandum.
The structural criticism, made by security researchers and by American legislators, is that an organisation supplying the software and the identity infrastructure of most of the federal government, and also selling that government the security products that protect it, has an incentive structure that does not reward the elimination of the vulnerabilities its security business addresses.
Competition and regulation
Microsoft competes with Amazon and Google in cloud computing; with Google in productivity software, browsers and search; with Apple in operating systems, devices and increasingly in silicon; with Salesforce, SAP and Oracle in enterprise applications; with Sony and Nintendo in games; with CrowdStrike, Palo Alto Networks and others in security, where its bundling of security products with Microsoft 365 licences has been the subject of competitor complaint; and with OpenAI, Anthropic and Google DeepMind in artificial intelligence, one of which is also its partner.
Its regulatory position is considerably more comfortable than that of the other large American technology companies, which is a deliberate achievement. Having been the subject of the defining antitrust case of the 1990s, it has since positioned itself as the cooperative incumbent: it supported European privacy legislation, published principles committing to permit competitors' software on its cloud, endorsed regulation of artificial intelligence, and declined to join its peers in opposing several measures.
The approach has limits. The European Commission opened proceedings over the bundling of Teams, resolved by unbundling and commitments in 2025; cloud licensing complaints have produced settlements with European providers; the Federal Trade Commission opened a broad antitrust inquiry into the company's software licensing, cloud and artificial intelligence practices in late 2024; and the Activision acquisition was the most contested technology transaction of the decade.
Criticism
Historic conduct
The findings of United States v. Microsoft and the European decisions established that the company maintained its position by means that were unlawful, and the terms in which its internal documents described the intention, including cutting off a competitor's air supply, remain the most quoted evidence of predatory intent in any technology antitrust case.
Licensing and lock-in
Enterprise customers have complained consistently about the complexity of Microsoft's licensing, which is sufficiently intricate that an industry of consultants exists to interpret it, and about audits, in which the company examines a customer's deployment and presents a bill for the difference. The cloud licensing terms described above are the current form of the same complaint.
Tax
The company has been the subject of transfer pricing disputes in several jurisdictions, including a proposed US$28.9 billion assessment by the Internal Revenue Service in 2023 relating to the allocation of profit between 2004 and 2013 through arrangements involving Puerto Rico, which the company is contesting.
Labour and contracting
Microsoft employs a very large number of people through contractors, including content moderators, data labellers and support staff, whose conditions have been the subject of litigation, and its Xbox studio closures and repeated redundancies during a period of record profitability have been criticised internally and externally.
Environmental
The company committed in 2020 to be carbon negative by 2030 and to remove by 2050 all the carbon it has emitted since its founding, among the most ambitious commitments made by any corporation. Its emissions have since risen by roughly a third, entirely because of the construction and operation of data centres for artificial intelligence, and the company has acknowledged that the target has become considerably harder. It has contracted for very large quantities of nuclear power, including an agreement to restart a reactor at Three Mile Island, and for carbon removal on an unprecedented scale.
Notable people
Bill Gates founded the company, wrote a substantial proportion of its early code, and directed its strategy for twenty-five years. His conduct during the antitrust period, including the deposition, damaged his public standing considerably, and his subsequent philanthropy has substantially restored it, while attracting its own criticism. He has remained a public figure on climate, pandemic preparedness, in which his 2015 warning about an unprepared world was widely recirculated in 2020, and global development.
Paul Allen named the company, identified the Altair opportunity and led its early technical work. Steve Ballmer joined as employee number thirty from Procter and Gamble, built the sales organisation and the enterprise business, and was chief executive for fourteen years. Satya Nadella has led the company since 2014.
Others of consequence include Dave Cutler, the architect of Windows NT and, later, of Azure's hypervisor, among the most accomplished systems programmers in the industry; Anders Hejlsberg, who created Turbo Pascal and Delphi at Borland and C#, .NET and TypeScript at Microsoft; Charles Simonyi, who brought the concepts behind Word and Excel from Xerox PARC and later became a space tourist; Jim Allchin, who led Windows for a decade; Ray Ozzie, the author of Lotus Notes who succeeded Gates as chief software architect and wrote the memorandum that began Azure; Amy Hood, chief financial officer since 2013 and among the more highly regarded holders of that office; Phil Spencer, who leads gaming; and Brad Smith, the president and vice chair, who has directed the company's legal and public policy posture since 2015 and whose approach of cooperative engagement with regulators is the reason Microsoft's political position differs from that of its peers.
Kai-Fu Lee founded Microsoft Research Asia before moving to Google, which produced litigation over his non-compete agreement. Nathan Myhrvold founded Microsoft Research and subsequently Intellectual Ventures, a patent licensing firm widely criticised within the industry.
Governance and shareholders
Microsoft is incorporated in Washington state and listed on the Nasdaq. It has a single class of shares, no controlling shareholder and a conventional board, which distinguishes it from most large American technology companies and which has been a reason for its comparatively comfortable relations with institutional investors.
Bill Gates has reduced his shareholding steadily since 2000, principally through transfers to his foundation, and holds a small percentage. Steve Ballmer remains among the largest individual holders. The largest institutional holders are the index managers.
Shareholder resolutions at the company's meetings have concerned artificial intelligence and misinformation, the use of its technology by immigration and defence agencies, a report on the risks of its data centre water use, and executive compensation, and none has passed.
The board separated the chairman and chief executive roles in 2014, appointing John Thompson as independent chairman, and recombined them in 2021 when Nadella became chairman, a reversal governance organisations criticised and which the board justified by the company's performance.
Employee activism
Microsoft has faced employee objection to particular contracts, in a pattern common to large technology companies since approximately 2018 and less intense at Microsoft than at Google.
Employees petitioned against the company's contract to supply HoloLens to the United States Army in 2019, against its work with United States Immigration and Customs Enforcement, and, from 2024, against the supply of Azure services to the Israeli military, in a campaign that produced sit-ins at the Redmond campus, the dismissal of several employees and an external review the company commissioned which concluded in 2025 that it had found no evidence that its technology had been used to harm people in Gaza, a conclusion critics regarded as narrowly framed.
Brad Smith's public position, that the company will supply technology lawfully to governments and will decline particular applications rather than particular customers, has been consistent and has satisfied neither those who want it to withdraw from such work nor those who consider such objections improper.
Assessment of the antitrust legacy
United States v. Microsoft occupies a peculiar position in the history of competition law. The government proved its case, obtained a break-up order, lost it on appeal for reasons unconnected with the merits, and settled for conduct remedies that most observers regarded as weak.
The conventional assessment, made by economists and by participants including the companies that followed, is that the case nonetheless mattered a great deal, because it changed Microsoft's behaviour during the years in which Google and then Apple and Amazon built their positions. A Microsoft not under a consent decree and not watching every product decision for antitrust exposure might have responded differently to search, to mobile and to the web. The counter-argument, made by Gates among others, is that the company simply failed at those things and that the litigation is an excuse.
The case has been cited continuously in the current proceedings against Google, Apple, Amazon and Meta Platforms, both as authority for the proposition that a monopolist may not use one market to protect another and as a cautionary example about remedies: the judgment that the government obtained was undone by a procedural failure, and the remedy it settled for did not restore competition in browsers, which was restored instead by a competitor with a better product.
Reception
Microsoft's public standing has moved across the full available range. It was admired in the 1980s as the company that had made computing accessible, resented in the 1990s as a monopolist that crushed better products, dismissed in the 2000s as an irrelevance that had missed the internet and the telephone, and regarded since about 2018 as a well-run company that recovered.
Among developers the change has been most marked and was achieved by specific acts rather than by presentation: releasing .NET as open source, building Visual Studio Code, supporting Linux on Azure, acquiring GitHub without damaging it, and ceasing to assert patents against open source. Each of these cost the company something and each addressed a specific grievance.
The criticisms that remain are those of scale rather than of conduct: that an organisation supplying the operating system, the productivity software, the identity system, the cloud and the security products of most large institutions represents a concentration of dependency whose failure would be very serious, a proposition the CrowdStrike incident of July 2024 demonstrated incidentally when a third party's faulty update to software running on Windows disabled several million machines worldwide and halted airlines, hospitals and broadcasters.
Assessment
Microsoft has been among the most valuable companies in the world for most of the past thirty years, a position no other technology company has sustained, and it has held it under three chief executives pursuing substantially different strategies.
Its first period established a platform monopoly and defended it in ways a court found unlawful. Its second period earned very large sums from that position while failing at almost everything new, which is the ordinary fate of incumbents and which the antitrust proceedings did not cause but did not help. Its third, under Satya Nadella, is among the more remarkable corporate recoveries on record: a company widely regarded as obsolete in 2013 became the most valuable in the world by accepting that its historic product was no longer the centre of computing and organising itself around what was.
Its present position rests on two things that may not both hold. The first is the enterprise relationship, which is genuinely durable: organisations that run Windows, Office, Active Directory and Azure together are not easily moved, and the bundling that makes this so is also what attracts regulatory attention. The second is the artificial intelligence position, which rests on a partnership with a company whose interests are diverging from its own, on capital expenditure at a scale that assumes demand it cannot yet demonstrate, and on customers paying for Copilot in numbers that have so far not materialised.