History of Microsoft

Hobbyists became entrepreneurs - some more successfully than others. Personal computers proliferated, with no standards and no preconceived notions of what these new machines could be or could do. It was an adventure shared by a virtual handful of enthusiasts...

World's First Minicomputer to Rival Commercial Models

While Hobbyists around the USA were trying to figure out how to piece together systems from parts found in electronics shops, MITS (Micro Instrumentation and Telemetry Systems) of Albuquerque, New Mexico, announced the MITS Altair 8800 on the cover of the 1st January 1975 issue of Popular Electronics.

The MITS Altair inspired a new generation of technology enthusiasts, including Bill Gates and Paul Allen, who were among the first of these early hobbyists to realize that the key to the future of personal computing lay in the unlimited potential of software.

"This is it!" says Paul Allen, waving a copy of Popular Electronics in his hand. "it's about to begin!" On the cover is a mockup of the MITS Altair, the first personal computer.

Dr. John G. Kemeny and Thomas Kurtz developed the BASIC language at Dartmouth in 1964. BASIC stood for "Beginner's All-Purpose Symbolic Instruction Code". Their objective: to create a simplified computer language for teaching students how to program. Gates and Allen recognized that the compact design of BASIC made it ideal for the limitations of the first personal computers, which had extremely restricted memory and processing power.

Allen, employed by Honeywell and his friend Bill Gates, a sophomore at Harvard, immediately set out to adapt BASIC for the machine, working in marathon 24-hour sessions.

Using the Altair's published specifications, Gates and Allen created a simulator on a DEC PDP-10 computer that allowed it to emulate the MITS machine. Working day and night, they created the first version of MICROSOFT BASIC for the Altair

Jan 2, Bill Gates and Paul Allen complete BASIC

Allen is going to deliver it to MITS president Ed Roberts in Albuquerque. Realizing he didn't have a way to load it into the computer, Paul Allen hand assembled a loader program for BASIC at 30,000 feet in the air, on the flight to New Mexico. Even though it had never been tested on an actual machine, it ran perfectly on the very first try.

They license BASIC to their first customer, MITS of Albuquerque, New Mexico, the manufacturer of the Altair 8800 personal computer. This is the first computer language program written for a personal computer.

Jan 3, Paul Allen joins MITS (Micro Instrumentation and Telemetry Systems) as Director of Software. , and Gates follows him later that year to form an informal partnership called Micro-soft, complete with hyphen.

The "MITS Mobile" travels through the western United States demonstrating the Altair and "Micro-soft" BASIC. It also unwittingly distributes copies of not-quite-ready-for-prime-time (i.e., pirated) BASIC.

March 7, The MITS Altair newsletter, Computer Notes, declares, "Altair BASIC -- Up and Running."

July 1, Bill Gates' and Paul Allen's BASIC officially ships as version 2.0 in both 4K and 8K editions.

July 22, Paul Allen and Bill Gates sign a licensing agreement with MITS regarding the BASIC Interpreter. Microsoft is not yet an official partnership. In fact, the name has not even been chosen.

Nov 29, In a letter to Paul Allen, Bill Gates uses the name "Micro-soft" to refer to their (60/40)(3) Partnership. This is the earliest known written reference.

Homebrew Computer Club meets for the first time (in Gordon French's garage) in Menlo Park, California.

The Computer Mart opens on Madison Avenue in New York. Zilog Z-80 chip is introduced.

Stats

Revenues: $16,005
Employees: 3 (Allen, Gates, and Ric Weiland)
MITS promotes Altair BASIC, the computer language developed by Gates and Allen for the Altair computer. Hobbyists are ecstatic, despite the fact that, even with BASIC, there is little you can actually do with the Altair.
The "MITS Mobile" travels through the western United States demonstrating the Altair and "Micro-soft" BASIC. It also unwittingly distributes copies of not-quite-ready-for-prime-time (i.e., pirated) BASIC.

1976

Steve Jobs and Steve Wozniak announce the Apple I personal computer, for only $666.66! (2) A price high but affordable for someone really wanting to buy his own computer.

Shugart introduces the 5.25-inch floppy disk drive at $390. Three computer magazines arrive: BYTE, Computer Graphics & Art, and Dr. Dobb's Journal of Computer Calisthenics and Orthodontia.

April Fools!
Apple Computer is formed with the introduction of the Apple I on April Fool's day 1976. Out of the garage and into the history books, Steve Jobs and Stephen Wozniak build the first single circuit board PC complete with video interface and 8K of RAM and a keyboard. The system incorporated some cost saving components including the MOS Technologies 6502 processor and dynamic RAM. Various potential investors were shown the prototype Apple I which was mounted on a piece of plywood with all components visible. A computer hobbyist group; the Homebrew Computer Club based in Palo Alto, California previewed one of the prototypes and its innovative features. A local computer dealer owner who agreed to sell the units required that they were assembled which was not the norm for customers buying computers at the time. Once displayed in his store, almost all the Apple I systems sold in the next ten months. 200 Apple I systems were built before the introduction of the Apple II. Jobs and Wozniak continued building systems out of their garage for two years before the move to the current Apple headquarters in Cupertino, California.

March 27, Twenty-year old Bill Gates gives the opening address at the First Annual World Altair Computer Convention (WACC) held in Albuquerque, New Mexico.

July 1, Microsoft refines and enhances BASIC to sell to other customers including DTC, General Electric, NCR, and Citibank.

November 1, Paul Allen resigns from MITS to join Microsoft full time.

November 26, The tradename "Microsoft" is registered with the Office of the Secretary of the State of New Mexico "to identify computer programs for use in automatic data processing systems; pre-programming processing systems; and data processing services including computer programming services." The application says that the name has been in continuous use since November 12, 1975.

Microsoft develops its first ad campaign, called "The Legend of Micro-Kid."

Although still an informal partnership, Microsoft moves to its first real offices in One Park Central Tower in Albuquerque. Gates returns to Harvard for the spring term, but finds time to direct Microsoft in its efforts to license BASIC to General Electric, NCR, Citibank, and others.

February 3, Bill Gates is one of the first programmers to raise the issue of software piracy. In his "An Open Letter to Hobbyists," first published in MITS newsletter "Computer Notes" and later in several other newsletters and magazines), Gates accuses hobbyists of stealing software and thus preventing "...good software from being written." "If you are STILL using Altair BASIC 1.1, you have a copy that was stolen in March 1975!"
He prophetically concludes with the line, "...Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software."

Stats

Revenues: $22,496
Employees: 7
MITS sponsors the World Altair Computer Convention (WACC) in Albuquerque, for Altair owners, dealers, programmers, and anyone interested in microcomputers. The convention features a 20-year-old as the keynote speaker: Bill Gates.

Microsoft develops its first ad campaign, called "The Legend of Micro-Kid."

1977

Digital Research markets CP/M (Control Program for Microcomputers) operating system, seeks to set standard.

Tandy Corporation announces TRS-80 Model 1 microcomputer.

Commodore Business Machines introduces Personal Electronic Transactor (PET) computer.

Apple Computer introduces Apple II.

Branching Beyond BASIC, Microsoft develops FORTRAN, COBOL, and Assembler, extending the capabilities of the PC into scientific and business realms.

July 1, The company ships its second language, (Microsoft's version of) FORTRAN, and begins offering BASIC on a single-copy basis.

Other First-generation machines that ran Microsoft BASIC included computers from Atari, Cromemco, and Texas Instruments, built around a mind-numbing range of processors that included the Z-80, 8080, 6800, 6809, 6502, and 68000. Because most machines had unique designs with proprietary (and usually primitive) operating systems, the Microsoft development team had to create a specialized version of each language for each computer.

With the introduction of inexpensive microprocessors such as the Intel 8080 and the MOS 6502, a few people began to dream of actually having their own computers.

With BASIC in demand, Microsoft branches out

February 3, A partnership agreement between Paul Allen and Bill Gates is officially executed. Their main product is still BASIC, but it's tied up with MITS, which has agreed to make a "best effort" to license it to other companies. In Bill and Paul's view, however, MITS is making less effort than it should.

The picture shows:
Starting from the top, left: Steve Wood, Bob Wallace & Jim Lane
Next row: Bob O'Rear, Bob Greenburg, Marc McDonald & Gordon Letwin
Next row: Bill Gates, Andrea Lewis, Marla Wood & Paul Allen

November 18, Arbitration decides the matter in Microsoft's favor, setting the company free to market BASIC to others. Within months, Microsoft licenses BASIC for the Commodore PET and TRS-80 computers, and begins negotiating with other companies. BASIC product. BASIC has been the subject of an extended legal dispute between the two companies.

Presidents

Bill Gates and Paul Allen shared the title of general partner until 1977, when Bill Gates became president and Paul Allen vice president of Microsoft Corp.

Stats

The BASIC Foundation for a company
Revenues: $381,715
Employees: 9
Microsoft's flat fee of $21,000 for what becomes Applesoft BASIC seems like a good idea at the time, until Apple sells more than a million machines with BASIC built in. Put your calculators away; it works out to 2 cents per copy.

1978

5.25-inch disk drives arrive for Tandy and Apple computer systems. 16-bit microprocessors are here. Intel introduces the 8086 chip. Al Gore coins the phrase "information highway." First COMDEX computer show in Las Vegas

Apple co-founder Steve Wozniak wrote Integer BASIC, the first language available for the machine. But it was quickly supplanted in popularity by Microsoft Applesoft BASIC.

The Personal Electronic Transactor -better known as the Commodore PET- had an integrated, self-contained design and was aggressively priced at less than $800. Microsoft developed its first 6502-based BASIC for the Commodore and sold the source code to Apple. The machine used a cassette recorder for loading and storing data.

Introduced in 1977 and licensed to Apple, Applesoft BASIC offered a richer set of programming commands as well as floating-point arithmetic, allowing for the development of the first generation of business-oriented applications. Applesoft BASIC was first made available on tape and disk, then provided in ROM on the popular Apple II Plus. In addition, the company offered the Applesoft Compiler for customers who wanted the faster performance possible with compiled code.

April 11, Microsoft announces its third language product, Microsoft COBOL-80.

November 1, Microsoft establishes its first international sales office in Japan. Microsoft appoints ASCII Microsoft, located in Tokyo, as its exclusive sales agent for the Far East. Organizing the new operation is Kazuhiko Nishi, founder and publisher of Japan's popular ASCII magazine

December 31, Microsoft's year end sales exceed $1 million dollars

Seattle natives Gates and Allen announce plans to return home and set up offices in Bellevue, Washington, becoming the first microcomputer software company in the Northwest. A meeting between Japanese computer magazine publisher Kay Nishi and Bill Gates prompts the establishment of ASCII Microsoft, a Japanese company that markets Microsoft products to original equipment manufacturers, dealers, and end users. Interestingly enough, although the products are in English, they sell well. Microsoft is still exclusively in the business of developing languages, and Microsoft BASIC is the language of choice for the entire burgeoning industry.

Beyond the BASICs: Microsoft introduces COBOL-80.

Stats

Revenues: $1,355,655
Employees: 13
Anticipating the success of the 16-bit processor, Microsoft begins development of simulators in order to speed and simplify code development.

International

The first international office is established when Microsoft forms a strategic partnership with Kazuhiko Nishi, founder of ASCII Corporation in Japan.

1979

January 1, Microsoft moves its offices to Bellevue, Washington from Albuquerque, New Mexico.
After moving to Bellevue, Microsoft continues to grow in employees, sales, and vision. Microsoft has a BASIC compiler for virtually every microcomputer on the market. However, the company recognizes that languages are only a part of the picture, which is why Microsoft makes its first foray into the mass-market possibilities of personal computers by forming the Consumer Products Division, created to develop and market retail products and to provide support for individual users.

Although titles such as Olympic Decathlon and Adventure are among the company's consumer hits, this effort is eventually folded back into the company, and the consumer market doesn't really take off for more than a decade.

April 4, Microsoft 8080 BASIC is the first microprocessor product to win the ICP Million Dollar Award. Traditionally dominated by software for mainframe computers, this recognition is indicative of the growth and acceptance of the PC industry.

June 18, Microsoft announces Microsoft BASIC for the 8086 16-bit microprocessor. This first release of a resident high-level language for use on 16-bit machines marks the beginning of widespread use of these processors.

November 29, Microsoft expands its service to the European market with the addition of a new representative, Vector Microsoft, of Belgium. Microsoft has already established contracts with ICL, Phillips, R2E, and several other OEMs.

First entry into the European market. Vector International, based in Haasrode, Belgium, signs on to represent Microsoft.

VisiCalc spreadsheet program wows industry at West Coast Computer Faire.

WordStar by MicroPro International seeks to become top word-processing program.

Get "On-Line" with the Source of CompuServe.

Stats

Revenues: $2,390,145
Employees: 28
By working closely with NEC and its PC-8001 computer, Microsoft extends its worldwide effort of working closely with computer manufacturers in the development of hardware.

International

First entry into the European market. Vector International, based in Haasrode, Belgium, signs on to represent Microsoft.

1980

Apple Computer goes public. 4.6 million shares, largest offering since Ford Motor in 1956. Novell, Inc. announces that it will develop network software. One million computers installed in the U.S.

April 2, Microsoft SoftCard -one of the company's first hardware products- made it possible to run programs designed for the CP/M operating system on the Apple II.
Microsoft announces the Microsoft Z-80 SoftCard, a microprocessor on a printed circuit board that plugs into the Apple II computer and allows owners to run thousands of programs available for the 8080/Z-80 class of computers with only minor modifications. Microsoft will provide BASIC, FORTRAN, and COBOL languages for the Z-80 SoftCard. (A version for the ill-fated Apple III was also available.) SoftCard was an enormous success in early-day computer terms, and Microsoft sold more than 100,000 units between 1977 and 1982.

Microsoft announces Microsoft XENIX OS, a portable operating system for 16-bit microprocessors. It is an interactive, multi-user, multi-tasking system that will run on Intel 8086, Zilog Z8000, Motorola M68000, and DEC PDP-11 series. All of Microsoft's existing system software (COBOL, PASCAL, BASIC and DBMS) will be adapted to run under the XENIX system, and all existing software written for UNIX OS will be compatible as well.

June 11, Microsoft hires Steve Ballmer. He will be responsible for establishing policies and procedures in the financial, organizational, and resource allocation areas.

Although the company grows by only two employees sales more than triple. Microsoft introduces the Pascal language, develops XENIX (enhanced version of the UNIX operating system), and begins to explore spreadsheet applications. It also releases its first hardware product, the Microsoft SoftCard, which allows Apple II users to run CP/M-80 (operating system from Digital Research -nope, no MS-DOS yet!) applications. The biggest of the big news, however, is still a big secret: a contract with IBM to develop languages for their first personal computer. Wow. But it gets better. They need an operating system too!

Stats

The Dawning of a Decade
Revenues: $7,520,720
Employees: 40
Steve Ballmer arrives from Procter & Gamble to serve as the first assistant to the president. Ballmer's arrival eases Bill Gates's administrative burden and allows the company to hire "lots of good people."

1981

The arrival of the 16-bit IBM personal computer in 1981 set in motion a new era of computing, as the personal computer industry quickly left behind its early 8-bit days.

Within a few years, the industry would coalesce around two primary operating systems: Microsoft MS-DOS and the Apple Macintosh.

A transition of significant proportions -from mainframe to personal computing- was also underway, supported by the evolving de facto standards that were beginning to emerge in the PC marketplace.

The original IBM Personal Computer was actually introduced with several options in operating systems, including the CP/M-86 from Digital Research and the UCSD P-System. But the IBM PC represented a new platform for computing, which -like all shifts in this industry- offered a shift in the paradigm of computing and allowed for the creation of new products with new capabilities. Building on the core of a product acquired from Seattle Computer Products, Microsoft took advantage of the technology breakthroughs represented by the IBM PC and, in the evolving versions of MS-DOS, provided a foundation for an entire generation of computing.

After months of maniacal hours by developers, the IBM personal computer debuts with Microsoft's Disk Operating System (MS-DOS). Other companies set out to clone this new hardware standard, negotiating with Microsoft for the rights to distribute MS-DOS (which IBM, under pressure from Bill Gates and company, has authorized). Because the clones are not strictly compatible, Microsoft creates a different MS-DOS for each machine. Newly incorporated Microsoft also rides the wave of the IBM PC with versions of BASIC, COBOL, and Pascal.

August 12, IBM introduces its Personal Computer, which uses Microsoft's 16-bit operating system, MS-DOS 1.0, plus Microsoft BASIC, COBOL, PASCAL, and other Microsoft products.
After months of maniacal hours by developers, the IBM personal computer debuts with Microsoft's Disk Operating System (MS-DOS). Other companies set out to clone this new hardware standard, negotiating with Microsoft for the rights to distribute MS-DOS (which IBM, under pressure from Bill Gates and company, has authorized). Because the clones are not strictly compatible, Microsoft creates a different MS-DOS for each machine. Newly incorporated Microsoft also rides the wave of the IBM PC with versions of BASIC, COBOL, and Pascal.

Steve Jobs of Apple visits Microsoft to give a sneak preview of the revolutionary Macintosh computer. Microsoft becomes the first major company to develop products for the Mac.

On June 25, 1981 Microsoft reorganizes into a privately held corporation with Bill Gates as President and Chairman of the Board, and Paul Allen as Executive Vice President. Microsoft becomes Microsoft, Inc., an incorporated business in the State of Washington.

Stats

Revenues: $16,000,000
Employees: 128

1982

The Microsoft Local Area Network (MILAN) is now fully functional, linking all of Microsoft's in-house development computers including a DEC 2060, two PDP-11/70s, a VAX 11/250 and many MC68000 machines running XENIX. This system will simplify e-mail delivery on-site.

In its first 16 months on the market, MS-DOS is licensed to 50 hardware manufacturers, but there is never any guarantee that it will become an industry standard. While promoting MS-DOS and working on enhancements to it, Microsoft also expands its international focus, opening Microsoft Ltd. In England, thus building the first truly global personal computer software company. Plus, Microsoft moves into the realm of business applications with the introduction of Multiplan, an electronic spreadsheet program.

June 28, Microsoft announces a new corporate logo, new packaging, and a comprehensive set of retail dealer support materials. The new logo for Microsoft Corporation, dubbed the "Blibbet," will be officially launched at Fall/COMDEX '82. The logo design is the name, Microsoft, with a distinctive letter "o" filled with horizontal lines.

A prototype Macintosh arrives at Microsoft to aid in development of applications for it.

On June 25, 1982, James Towne, 39, was appointed president and chief operating officer of Microsoft (July 6 1982 -- June 20 1983). In July, Towne took over all operating responsibilities from Bill Gates. Previously, Towne had been vice president and general manager of the instrument division at Tektronix Inc.

Stats

A Market Explodes
Revenues: $24,486,000
Employees: 220

1983

An essential decision in the early development of MS-DOS was to make it an open system, designed to run on multiple computers.

To stretch memory beyond the original 640K limits of the Intel 8086 chip set, Lotus, Intel, and Microsoft introduced the LIM/EMS standard for expanding memory.

Although competition grew fierce in the languages market -especially with the arrival of fire-sale-priced Borland Turbo Pascal at $49- Microsoft continued overall to be the industry leader in languages. Microsoft BASIC was enhanced and became GW-BASIC (for "gee-whiz"), used for everything from specialized programs to "quick-and-dirty" coding. The company also helped move the high-end market (where customers included several of our direct competitors) from Pascal to C with the release of the Microsoft C programming language.

The proliferation of systems running MS-DOS helped simplify software development and provided consumers with a single platform available across a wide range of feature sets and price points, helping to spark the growth of the entire industry.

If you wanted to test a new machine for IBM compatibility, one of the standard programs you'd run would be Microsoft Flight Simulator, a true-to-life simulation of what it's like to pilot a plane, developed in cooperation with Bruce Artwick of SubLogic. Flight Simulator logged in more than one million copies in a decade, making it a genuine highflyer.

Not even Microsoft bet the entire company on MS-DOS alone. The company also developed the XENIX operating system, a UNIX derivative designed to bring its multiuser capabilities to personal computers, announced in 1980. While the multiuser PC market was smaller, XENIX was still a relative success, outpacing all other versions of UNIX by a wide margin. Later Microsoft transferred its rights to XENIX to The Santa Cruz Operation.

The Microsoft Multiplan spreadsheet, the company's first application product, was ported across many different types of computers -a major issue in the early days of MS-DOS, when "IBM compatible" could mean anything from "will run the program" to "can read IBM disks but probably not do much more". While Lotus 1-2-3 surpassed Multiplan in domestic markets, Multiplan was the winner in almost every other country in which it appeared, helping to lay the groundwork for Microsoft's strong international presence.

Introduced in 1983 and costing $800, the Tandy/Radio Shack PC Model 100 redefined the concept of portability in personal computing. It included built-in text editing, spreadsheet, and communications programs. Microsoft worked closely with Tandy in the definition and development of the machine.

Hard disks started to become standard equipment on computers with the introduction of a 10-MB hard disk as an available option with the IBM PC XT.

September 29, While most customers still think of Microsoft as a technically oriented systems/language company, two products form this year set the groundwork that will eventually change the public's perspective of the company: Microsoft Word for MS-DOS 1.00
PC World subscribers receive a free demonstration floppy disk of Microsoft Word in the magazine's special Software Review. "This is the first time in the history of publishing that a magazine has featured a floppy-disk bind-in," said David Bunnell, Publisher of PC World.

November 10, Microsoft unveils Microsoft Windows, an extension of the MS-DOS operating system that provides a graphical operating environment. Windows features a window management capability that allows a user to view unrelated application programs simultaneously. It also provides the capability to transfer data from one application program to another.

Word is significant for its WYSIWYG (what you see is what you get) design, though WYSIWYG at the time means little more than on-screen italics, bold, and underline. Even so, Word produces output far superior to any other product of its kind to date. Windows is significant in providing a graphical interface for users of MS-DOS.

May 2, Microsoft introduces the Microsoft Mouse, a low-cost, hand-held pointing device for use with the IBM PC, as well as, any MS-DOS-based personal computer. The Mouse is used to quickly move or reposition a cursor on the screen. Two buttons are provided to select decision alternatives or commands from the screen.

December1, Microsoft announces that MSX-DOS, an 8-bit disk operating system for MSX microcomputers, will be available to 14 Japanese and one U.S. micro manufacturers next January. MSX-DOS is CP/M-80 2.2 compatible and runs all Microsoft's 8-bit software including the languages BASIC, COBOL-80, and FORTRAN-80, and Multiplan.

Presidents

• February 18, 1983 Paul Allen resigns as Microsoft's Executive Vice President, but remains on the Board of Directors.
• June 20, 1983. James Towne resignes as COO
• August 1, 1983 Microsoft announces that Jon Shirley, 45, has joined Microsoft as President and Chief Operating Officer and will be on the board from August 1, to June 30,. He is replacing James Towne. Shirley was previously with the Tandy Corporation

In August 1983, Jon Shirley, 45, joined Microsoft as president, chief operating officer and director. Prior to Microsoft, Shirley was vice president of computer merchandising at Tandy Corp. and had held a variety of positions in sales, merchandising, manufacturing and international operations. At Microsoft, Shirley provided the young company with the professional business acumen needed to steer it through the birth of the Windows operating system, the move to the Redmond campus and the initial public offering.

• Augus, in addition to his role as chairman of the board, Bill Gates assumed the title of executive vice president, responsible for all development activities.

Stats

Revenues: $50,065,000
Employees: 476
After recovering from a serious illness, Paul Allen leaves Microsoft to explore a variety of other pursuits - from technically oriented companies to the Portland Trailblazers basketball team.

International

Subsidiaries open in the three major European markets: France, Germany, and the United Kingdom. They are charged with selling into and developing the European market as a whole.

APAC region established with purchase of Wiser Laboratories Pty, Ltd. of Australia, giving us direct distribution in the region. First Microsoft e-mail message sent internationally. International head count at year's end: 42.

1984

January 24, Microsoft takes a leading role in developing software for the Apple Macintosh computer. The company ships Microsoft BASIC and Microsoft Multiplan simultaneously with the introduction of the Macintosh. Microsoft also announces that Word, Chart, and File will ship soon.
Microsoft's original software development work for Macintosh was code-named "SAND" for "Steve's Amazing New Device".

Recognizing early the limitations of the closed design of the Macintosh system, Microsoft for a while marketed MacEnhancer, which provided the ability to plug non-Apple printers, modems, and other devices into the Mac. Although Apple itself would eventually change its product design to allow the same kinds of capabilities, the MacEnhancer never took off.

Bill Gates attended the introduction of the Apple Macintosh computer on January 20, 1984, and appeared in the original Macintosh brochure standing alongside Mitch Kapor of Lotus and Fred Gibbons of Software Publishing.

SAND was a fitting tribute to Apple's Steve Jobs, who oversaw the Macintosh project. Excited by the possibilities of a commercially viable machine with a graphical user interface, Microsoft made an early and major commitment to Macintosh development and has consistently been among the most successful of all software companies in development for the Macintosh marketplace. The company shipped two products -BASIC and Multiplan- on the same day the Macintosh was introduced, followed closely by Word, Chart, and File.

Originally explored in the 1960's and 1970's at the Stanford Research Institute and at Xerox PARC in Palo Alto, California, graphical user interfaces began to appear in commercial systems in the early 1980's. Xerox itself was among the first, with its Star system. Apple introduced both Lisa ("Local Integrated System Architecture") and Macintosh computers. But these early systems were hampered by hardware constraints and too slow to satisfy many of the early, inflated user expectations.

The Microsoft Excel spreadsheet for the Macintosh not only advanced the state of the art in a way that re-enthused the dwindling customer base for the Macintosh, but also provided the essential technology basis for the Windows versions of Microsoft Excel a few years later, which reset the counter for the spreadsheet industry on the PC-compatible platform.

Microsoft has the software for it

Having worked closely with Apple during the development of the Macintosh, Microsoft is positioned to be the leading developer of applications for the machine, offering BASIC, Multiplan, File, Word, and Chart. Organizationally, Microsoft separates its systems and applications groups and creates a hardware and peripherals division. Work continues on Windows, but May, September, and year-end dates all slip as product definition and development go through constant evolutions and reevaluations.

March 22, Microsoft Press introduces its first two titlesCary Lu's "The Apple Macintosh Book," and Peter Norton's "Exploring the IBM PCjr Home Computer,"at the 1984 West Coast Computer Faire.

April 1, Microsoft announces the creation of a new Hardware and Peripherals Division under the direction of William Roland. This division will be dedicated to developing and marketing hardware products that complement Microsoft's software product line.

July 31, Microsoft announces a new Key Dealer Program designed to generate corporate sales in major U.S. markets. The dealers will provide their corporate clients with comprehensive post-sales training and support.

August 14, Microsoft announces that IBM has chosen Microsoft XENIX and MS-DOS for its new generation personal computer, the IBM PC AT. The new PC sets a standard in multi-user systems by endorsing XENIX. In addition, IBM continues to support MS-DOS. Both operating systems support the Intel APX-286(80286) microprocessors chosen for the new IBM microcomputer.

September 24, Microsoft announces that Francis J. Gaudette is joining Microsoft as Vice President of Finance and Administration. In his new position as Chief Financial and Administrative Officer Gaudette will report directly to Jon Shirley, President.

Stats
Mac Attack
Revenues: $97,479,000
Employees: 608
Microsoft Press, a one-year-old division, introduces its first books: Cary Lu's The Apple Macintosh Book and Peter Norton's Exploring the IBM PCjr Home Computer.

International

The number-one selling software product in France is Microsoft Multiplan (French version, naturellement).

Microsoft links its campus-wide e-mail system to all Microsoft subsidiaries. Frank Gaudette is hired as chief financial officer.

1985

Pronounced "gooey", a GUI, or graphical user interface, enables users to connect with their computers in an interactive, intuitive way.

Seeing early the limitations of character-based interfaces and recognizing that advances in hardware performance would make possible a shift in the computing paradigm to a graphical user interface, Microsoft began development of Windows in the early 1980's.

The result? The most popular user interface in the history of computing, now running on more than 75 million machines worldwide. And still growing by millions of new users every month.

A wide selection of mini-applications shipped as part of the original Windows package, including:

• MS-DOS Executive
  Calendar
  Cardfile
  Notepad
  Terminal
  Calculator
  Clock
  Reversi (a strategy game)
  Control Panel
  PIF (Program Information File) Editor
  Print Spooler
  Clipboard
  RAMDrive
  Windows Write
  Windows Paint

From the Start, Windows was designed to work seamlessly with the Microsoft Mouse. But the desire to make the program usable by the broadest base of users determined that Windows would also be controllable via keyboard commands.

"Windows will instantly deliver you a more productive present. And a leap into the future." [From original Windows advertising]

Real-world metaphors -such as toolbars, menus, and icons- help the user understand the computer on human terms.
Character-based technology was simple but it could be fast, because to the computer the screen appeared as a small character grid, typically 80-by-25 blocks of pixels (and the original PC even had a 40-character mode, displayable on a television). Graphical interfaces demand more computing horsepower because the computer must control every single pixel individually instead of in blocks -a VGA screen, for example, sets up a 640-by-480 grid, or more that 300,000 individual pixels.
Although it exceeded the company's internal expectations, Windows 1.0 was more a critical success than a commercial one. Nevertheless, it set Microsoft firmly on the path to graphical user interfaces and committed the company to an industry leadership role in the definition of what a GUI should be.
Many early customers of Windows were more interested in its task-switching capabilities -the ability to work with more that one program at a time- than in its graphical features.

Microsoft celebrates its tenth anniversary by shipping the first retail version of the Windows graphical environment. Cost in the U.S. is $99. But there are no more than a handful of programs that run on Windows, so market acceptance is slow. This, coupled with Macintosh sales that are stuck in a holding pattern, leads some industry observers to wonder if graphical user interfaces are really as inevitable as Microsoft is predicting. Apple Macintosh sales begin to pick up after Microsoft Excel for the Macintosh is premiered at Tavern on the Green in New York.

August 12, Microsoft celebrates its 10th anniversary with sales figures for the fiscal year of 1985 of $140 million. The company has 900 employees and a diverse product line including industry standards like operating systems, languages, business software, hardware, and computer "how-to" books.

September 3, Microsoft announces that it has selected the Republic of Ireland as the site of its first production facility outside the U.S. The Ireland facility, located at Sandyford, County Dublin, will be a Duplication and Distribution Center for Microsoft software products to be sold in the European market.

November 20, Microsoft announces the retail shipment of Microsoft Windows, an operating system, which extends the features of the DOS operating system. Windows provides users with the ability to work with several programs at the same time and easily switch between them without having to quit and restart individual applications.

Stats

Revenues: $140,417,000
Employees: 910

Microsoft ships its one-millionth unit of Multiplan.

International

Ireland selected as the location of first production facility outside the United States. Manufacturing processes pioneered at the Dublin site are later imported to U.S. production facilities.

Microsoft builds its first overseas manufacturing facility in Ireland.

1986

In 1986 the company introduced Microsoft Works, which integrated word processing, spreadsheet, database, communications, and drawing functions into a single program.

SCSI (Small Computer Systems Interface) specification is accepted as an ANSI standard to become yet another acronym to add to your list. Pronounced "scuzzy", the specification is defined to allow printers, disk drives, and other peripherals the ability to distribute data independent of their host, allowing the computer to be freed up for more user-oriented tasks. Soon to follow is the concept of the SCSI "chain" where several peripherals are connected to one SCSI host adapter taking up only one slot in the computer.
This may sound somewhat complicated, but before SCSI the computer had to "learn" quite a bit about any peripheral you planned to attach and keeping up with current technology was a hopeless endeavor. With SCSI, minimal hardware and software engineering is necessary for new system designs and integration.
By adopting this standard, hardware manufacturers were able to create brand new products that didn't sacrifice compatibility with existing computers

March 13, Motivated by a desire to provide value to an increasing number of employee shareholders, Microsoft stock goes public at $21.00 per share, rising to $28.00 per share by the end of the first trading day. Initial public offering raises $61 million.

The company holds its first International Conference on CD-ROM technology.

February 26, During that same busy March, Microsoft moves to its new four-building corporate campus Buildings 1 through 4, in Redmond. surrounding "Lake Bill" in Redmond, Washington. As if that isn't enough, the company holds its first International Conference on CD-ROM technology.

Opening of Microsoft de Mexico is a double first: the first Latin American subsidiary for Microsoft and the first office established anywhere in Latin America by a U.S. software company.

Though IBM in the year 1917 - then still called Computing-Tabulating-Recording Company - already opened an office in Brasil, nearly 70 years earlier. (4) IBM then was not a software company.

December31, Microsoft announces that, at the end of 1986, Microsoft employees number 1,442. 1,162 are employed domestically, and 280 are employed internationally.

Microsoft receives the 1986 Washington State Governor's Export Award in the service firm category.

Microsoft Works, an integrated program with word processor, spreadsheet, database, and communications modules, is introduced for the Macintosh.

Stats

Revenues: $197,514,000
Employees: 1,442

International

Opening of Microsoft de Mexico is a double first: the first Latin American subsidiary for Microsoft and the first office established anywhere in Latin America by a U.S. software company.

1987

While the huge commercial success of Windows was still one version away, Microsoft Windows version 2.0 introduced a host of important technical advances.

"Save the Blibbet!" A year of firsts -first Windows application, first CD-ROM, first appearance of a new logo

Unlike the hyphen in Micro-soft that quietly faded away, some employees don "Save the Blibbet" buttons in support of the old Microsoft logo when the new one is introduced. The Blibbet, however, is memorialized only by the "Blibbet Burger" sold by the Marriott grills on campus. Microsoft and IBM announce a joint development agreement for OS/2 and release OS/2 version 1.0. Rather than adopting Windows, IBM insists on developing Presentation Manager, a separate graphical interface. Microsoft releases Microsoft Excel for Windows -its first application for the Windows operating system- and continues to explore new technologies shipping its first CD-ROM product: Bookshelf, a reference collection.

April 2, Microsoft announces Microsoft Operating System/2 (MS OS/2) a new personal computer operating system. It has been designed and developed specifically to harness the capabilities of personal computers based upon the Intel 80286 and 80386 microprocessors. It is planned for phased release to OEMs in the fourth quarter of 1987. This is the first product to be announced as a result of the Joint Development Agreement between IBM and Microsoft announced in August, 1985.

April 2, Microsoft announces Microsoft Windows 2.0, offering compatibility with existing Windows applications and a new visual appearance compatible with Microsoft OS/2 Presentation Manager. In addition to the new visual appearance, it uses a system of overlapping windows, rather than tiled windows. Windows 2.0 also includes significant performance enhancements and improved support for expanded memory hardware.

March 24, Microsoft combines it End-User and OEM support services into a single Product Support Services group in order to serve customers more effectively.

July 30, Microsoft announces that it has completed an agreement to acquire Forethought, Inc., an applications software company. Forethought develops and markets PowerPoint, a leading desktop presentation application, and is the exclusive distributor of FileMaker Plus, a top-selling database for Apple Macintosh systems. Under the agreement, Forethought becomes Microsoft's Graphics Business Unit which will be headed by Robert Gaskins.

September August 87 Microsoft announces the shipment of its first CD-ROM application, Microsoft Bookshelf, a collection of 10 of the most popular and useful reference works on a single CD-ROM disk. Bookshelf is the first general purpose application to bring the benefits of CD-ROM technology to personal computer users.

October 6, Microsoft announces Microsoft Excel for Windows. This first Windows application offers interactive, dynamic linking of sheets; one-step, automatic macro re-order; and sophisticated, high-resolution printed output. It also contains a completely integrated, on-sheet database management, and easily customizable graphs. Excel will run under Microsoft Windows 2.0 and Windows/386 at shipment, and will be available for OS/2 shortly thereafter.

Microsoft introduces LAN Manager, a LAN operating system that runs on both MS-DOS and OS/2.

Stats
Revenues: $345,890,000
Employees: 1,816
Windows 286 and Windows 386 are announces.

International

Microsoft Ireland ships its one millionth package. Arabic version of MS-DOS is introduced. International head count at year's end: 460.

1988

January 13, Microsoft and Ashton-Tate announce the Microsoft SQL Server, a relational database server software product for Local Area Networks (LANs). It is based on a field-proven relational database management system licensed by Microsoft from Sybase, Inc., and enhanced with technology from Microsoft and database technology from Ashton-Tate. First shipment is planned in the second half of 1988.

The Business Software Association is formed to combat software piracy. Computer virus by 23-year-old hacker infects more than 6,000 computers on the Internet. Installed base for MS-DOS reaches 30 million users.

Microsoft and IBM announce the delivery of the jointly developed Operating System/2 (OS/2) 1.1 with Presentation Manager. Presentation Manager is the graphical user interface (GUI) for the OS/2 operating system. This is the second major release of the Standard Edition of OS/2.

Microsoft becomes the top software vendor, and never looks back...

By only a small edge, Microsoft surpasses rival Lotus Development Corporation as the top software vendor. Microsoft hires Mike Maples from IBM to provide direction in the applications division. Maples reorganizes the group into five business units: graphics, analysis, data access, office, and entry. In another key business move, Microsoft's manufacturing and distribution division moves to a 260,000 square-foot facility -Canyon Park- in Bothell, Washington. To keep the ever-increasing number of customers happy and productive, the company establishes a new Product Support Services facility, handling more than 1,000,000 calls per month.

April August 88 Microsoft moves into the new Manufacturing and Distribution site in Canyon Park, in Bothell. The 245,000 sq. ft. facility houses not only Manufacturing staff, but the Warehouse and Distribution staffs which used to be at Parmac. Fulfillment and Export are also now located at Microsoft Campus North.

June 14, Microsoft appoints Mike Maples Vice President of the Applications Software Division. He will report to Jon Shirley, President.

Microsoft sells its one-millionth Mouse.

Stats
Revenues: $590,827,000
Employees: 2,793
Microsoft and Hewlett-Packard are sued by Apple Corporation. Apple alleges copyright infringement.

International

International operations make up 48 percent of Microsoft's annual sales. International Products Group (IPG) is set up in Ireland; Ireland ships it two millionth package.

1989

June 5, Microsoft announces the formation of the Multimedia Division, dedicated to the development and marketing of multimedia systems software and consumer products. The division will be headed by Min Yee, Vice President. Yee will also continue as Publisher of Microsoft Press. He will report to Jon Shirley, President.

August 1, Microsoft announces that The Microsoft Office will soon be available on CD-ROM. This is the first general business software for Macintosh systems to be made available on CD-ROM.

The first edition of Microsoft Office is released, on both standard disks and CD-ROM.

No one had predicted the lightning growth of Microsoft --we had expected the original four buildings to provide enough room for five years or more. But by 1989, Microsoft occupies almost the entire business park at the current site, a fact recognized by renaming it "Microsoft Place" and establishing "One Microsoft Way" as the official corporate address. The company now reaches far beyond the confines of the Redmond campus, with international operations accounting for more than half of annual sales. The consumer division is reestablished. Company president Jon Shirley announces his pending retirement.

IBM and Microsoft Expand Partnership

November 13, Microsoft and IBM broaden the scope of their development agreement by agreeing to jointly develop a consistent, full range of systems software offerings for the 1990s. These software offerings will include enhancements to MS-DOS, Microsoft OS/2, and Microsoft LAN (local area network) products, which will work with the Intel 386 and 486 microprocessors.

December27, Microsoft announces that Jon Shirley will retire as President and Chief Operating Officer on June 30, 1990. Shirley, who has been President since August, 1983, will continue to play a role in the management of the Company both as a member of the Board of Directors, and as a consultant for strategic projects.

Stats
Revenues: $804,530,000
Employees: 4,037
Microsoft Word for Windows begins shipping.    

International

Microsoft European Headquarters (EHQ) opens in Paris. International operations increase to 55 percent of annual sales.

The first edition of Microsoft Office is released, on both standard disks and CD-ROM.

Microsoft employees give $1 million to United Way.

Microsoft buys a minority share in The Santa Cruz Operation, the leading developer of UNIX.

1990

April 2, Microsoft announces the appointment of Michael R. Hallman as Company President and Chief Operating Officer. He replaces Jon Shirley who is retiring June 30, 1990. Hallman will also become a member of the Board of Directors. He was formerly with The Boeing Company.

April 9, Microsoft introduces Russian MS-DOS 4.01. MS-DOS is the first Microsoft product localized for the Soviet market. The Russian version brings the total number of foreign-language versions to 13, including versions in Arabic, Chinese, Hebrew, Japanese (Kanji), and Korean (Hangeul).

Featuring a major redesign of its user interface, Microsoft Windows version 3.0 was a number-one hit almost from the first day it arrived.

May 22, Microsoft announces the immediate, worldwide availability of Microsoft Windows 3.0, at the City Center Theatre in New York. This version offers dramatic performance increases for Windows applications, advances in ease of use and aesthetic appeal, and straightforward integration into corporate computing environments.

"Windows, Windows, Windows," as Steve Ballmer would say

Graphical computing begins to realize its full potential with the announcement of Windows 3.0 at a major New York event on May 22. Supported by the largest single marketing campaign in the company's history -more than $10 million over a six-month period- Windows 3.0 sells 100,000 copies in two weeks. Steve Ballmer excites everyone at the company meeting with a continual chant of "Windows, Windows, Windows." (His enthusiasm damages his vocal cords, but Steve is only silenced temporarily.) With revenues reaching $1.18 billion, Microsoft becomes the first software company to exceed the $1 billion sales mark -a fitting celebration for the company's fifteenth anniversary. Mike Hallman joins Microsoft as president.

July 25, Kicking off its 15th anniversary celebration, Microsoft, with revenues of $1.18 billion, becomes the first personal computer software company to exceed $1 billion in sales in a single year.

August 30, Microsoft announces the formation of a Consulting Services Group aimed at helping large corporate customers better use Microsoft products to build complex information systems. The group, Information Technology Integration Services (ITIS), is headed by Robert McDowell. The group's initial offerings will include: executive education, planning, design, custom development, and systems and applications support. (The group is later renamed Microsoft Consulting Services.)

September 17, Microsoft launches the Microsoft Windows Computing Marketing Program, the largest single marketing campaign in the Company's history to date.

November 12, Bill Gates unveils his vision of the future of computing in his keynote address,"Information at Your Fingertips,"at Fall/COMDEX '90.

Presidents

• June 30, 1990 Shirley retires from Microsoft on , but continue to play a role in the management of the company, both as a member of the board of directors and as a consultant for strategic projects. Shirley still remains on the board of directors.
• March 19, 1990, Michael R. Hallman, 44, is appointed president and chief operating officer, replacing Jon Shirley. Hallman, who joined Microsoft as president three months before Shirley's retirement, also becomes a member of the board of directors. Halman will serve Microsoft from April 2, -- March 1/92. Prior to Microsoft, Hallman spent two and a half years as president of Computer Services at The Boeing Co., where he was responsible for a staff of 13,000 and all of Boeing's computing and communications systems. Before joining Boeing, Hallman spent 20 years at IBM, where he held a variety of executive positions.

Stats

Revenues: $1,183,446,000
Employees: 5,635
Bill Gates demonstrates his vision of the future of computing with an interactive keynote address, "Information at Your Fingertips," at Fall COMDEX.

International

Microsoft adds distributors in Singapore, Indonesia, and Malaysia. MS-DOS 4.01 is the first product localized for the Soviet market. Thirteen foreign-language versions of MS-DOS are now available.

Opening of Far East Research and Development Center in Japan.

The new Advanced Technology group is established for research and product development.

The Federal Trade Commission begins investigating Microsoft for possible anti-trust violations.

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Disclaimer Though the editors of this history are careful to verify their facts, it is possible, e.g. through missing information, that we have made errors. Please contact us when you are of the opinion that you have found a mistake or missing information

Last Updated on February 13, 2008

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Footnotes & References