Microsoft Corporation
Microsoft Corporation, a software company, was started by Bill Gates and Paul Allen in 1975 when MITS (Micro Instrumentation and Telemetry Systems) produced the first widely available personal computer in kit form, called the Altair 8800. This computer came with assembly language, making the computer difficult to use. Gates and Allen wrote a version of Beginners' All-purpose Symbolic Instruction Code (BASIC), the first computer language for personal computers, specifically for that machine and sold this software for the Altair. This version worked so well that it became the foundation of almost all personal computers at that time, including Apple products. With this modest start Microsoft paved the way for the development of two more languages, Microsoft FORTRAN (FORmula TRANslation) and Microsoft COBOL (COmmon Business Oriented Language), and sales of other successful software programs in the budding personal computer market.
The second generation of personal computing occurred when IBM entered the market in 1980. IBM asked Microsoft to develop operating system software, the computer's "nervous system," for its new personal computer based on an Intel microprocessor (the computer "brain"). Although Microsoft had focused almost exclusively on application software, it agreed to the deal, then bought the operating system from neighboring Seattle Computer Products and renamed it MS-DOS (for Microsoft Disk Operating System).
IBM's popular personal computer, produced with a microprocessor by Intel and utilizing MS-DOS, inspired the production of IBM clones. This in turn stimulated the creation of software and peripheral products throughout the computer industry. Microsoft and Intel products literally set the standard for the personal computer industry, thus ensuring a strong future for both companies.
Microsoft Word (introduced in 1983), Excel (1987), and PowerPoint (a product of Forethought, Inc., which was acquired in 1987 by Microsoft) were other successful applications. Combining these products into Microsoft Office, along with its operating systems, languages, business software, hardware, and computer how-to books helped Microsoft reach $140 million in sales and 900 employees on its tenth anniversary.
The CD-ROM (compact disc-read only memory), introduced in 1987, offered another opportunity for the company. Microsoft's Bookshelf, a collection of ten general-purpose applications, was the first CD-ROM for personal computers. In 1990, Microsoft became the first personal computer company to reach one billion dollars in sales in a single year.
Introducing Microsoft Windows
Computer speed and memory increased with the advent of internal hard drives in personal computers and expanded capacity of microprocessor chips.
This allowed the development of more complex software programs, such as Microsoft Windows.
Introduced in 1985, Windows did not arrive without cost and controversy. First, it functioned in a way so similar to Apple Computer's Macintosh operating system that Apple sued Microsoft for copyright infringement. Also, IBM considered Windows to be in direct competition with IBM's OS/2, a project IBM was developing with Microsoft. This led to the severing of the IBM-Microsoft partnership.
The early Microsoft Windows applications, up to version 3.1, were programs developed to operate in conjunction with MS-DOS. These programs were designed to make it possible for users to run multiple unrelated software applications at once. Windows evolved from software applications into a series of operating systems called Windows NT, Windows 95, Windows 98, Windows 2000, Windows ME, and Windows XP, which was introduced late in 2001.
Microsoft and Apple Computer, Inc.
In addition to its early partnership with IBM, Microsoft also had longstanding ties to Apple Computer, Inc. An early believer in Apple, Microsoft developed software applications (although not the Apple operating system) for the Apple II and later contributed significantly to software applications developed for the successful Macintosh line. In 1997, Microsoft helped bring a troubled Apple Computer, Inc. back into the market after agreeing to invest in Apple and develop Microsoft Office, Internet Explorer, and other applications specifically for Apple's Macintosh. As part of that deal, Apple agreed to drop the copyright infringement lawsuit that had been proceeding against Microsoft for many years.
Microsoft as a Monopoly?
The Windows operating system and Internet Explorer, Microsoft's World Wide Web browser, became so widely used that competitors claimed that Microsoft had become a monopoly. The Justice Department of the United States, along with the attorneys general of nineteen states and the District of Columbia, filed a lawsuit against Microsoft in 1998.
In April 2000, a court determined that Microsoft had violated the Sherman Antitrust Act. In his conclusions, U.S. District Judge Thomas Penfield Jackson found that "…Microsoft's share of the worldwide market for Intel-compatible PC operating systems currently exceeds ninety-five percent…" and that "Microsoft enjoyed monopoly power." He stated that Microsoft "used anticompetitive methods to achieve or maintain its position." In addition Microsoft was found to have attempted to monopolize the Internet browser market through anticompetitive acts, especially by its practice of integrating Internet Explorer with its Windows 95 operating system, thereby discouraging or prohibiting the use of other web browsers. Jackson ordered that Microsoft be split into two companies.
Although that remedy was reversed by the U.S. Court of Appeals in 2001, the appeals court agreed with both Jackson's monopoly ruling and his findings that Microsoft illegally maintained its monopoly. In October 2001,
Microsoft agreed to terms to settle the lawsuit out of court.
Bibliography
Cusumano Michael A., and Richard W. Selby. Microsoft Secrets: How the World's Most Powerful Software Company Creates Technology, Shapes Markets, and Manages People. New York: The Free Press, 1995.
Edstrom, Jennifer, and Marlin Eller. Barbarians Led By Bill Gates. New York: Henry Holt and Company, 1998.
Jackson, Thomas Penfield, Judge, United States District Court for the District of Columbia. The United States of America v. Microsoft Corporation, Action No. 1232(TPJ), pp. 5–9.
Malone, Michael S. Infinite Loop: How Apple, the World's Most Insanely Great Computer Company, Went Insane. New York: Doubleday, 1999.
Schlender, Brent. "Bill Gates and Paul Allen Talk." Fortune 132, no. 7 (1995): 68.
