Company Overview
Highlights
Microsoft is deeply invested in research & development; more than a third of the company's employees work in R&D.
In 1981, IBM included MS-DOS in its first PCs, giving Microsoft a toehold in the high-tech industry—one that it would leverage into industry domination over the years.
In July 2006, Bill Gates stepped down from his role as chief software architect to concentrate on charitable work through the Bill & Melinda Gates Foundation.
Microsoft, which was founded in 1975, is in its own words "the worldwide leader in software for personal computers." The software giant’s main business continues to be desktop applications and platforms, but in recent years it also has expanded rapidly in other markets, such as computer peripherals, software development tools, video game consoles, interactive TV, and Internet access. The company reorganized its corporate structure in 2005 in a streamlining effort, and now operates in three business units: Microsoft Platform Products and Services (Windows Client Group, Server and Tools Group, MSN), Microsoft Business (Information Worker Group, Microsoft Business Solutions), and Entertainment and Devices (Home and Entertainment Group, Mobile and Embedded Devices Group).
The company is focused on continuing growth in different areas, hoping to transform itself into a broader technology services and media company. It has partnered with Motorola to develop mobile phones that utilize Windows Mobile and Windows Media software, and in 2006 it launched its new digital entertainment brand, Zune, the first product of which will be an iPod competitor. In early 2008, Microsoft made an offer to acquire Yahoo! for $44.6 billion. But the highly publicized bid was rejected by Yahoo!’s board. In May 2009, Microsoft’s search engine woes took a turn for the better: the company announced it was re-branding and improving its existing LiveSearch product with the catchy URL Bing.com. Bing has been generating hype and could give Google’s search engine a run for their money.
Microsoft has a longstanding battle with Apple when it comes to personal PCs, which Apple has personified in their Apple vs PC commercials. Ultimately, Apple’s size and market share restrict its threat to Microsoft’s hold on the PC market. But still, Microsoft underestimates Apple’s growing potential: For the quarter ending in September 2008, Apple reported more cash than Microsoft and earns more than half of Microsoft’s profits and over three fourths its revenues.
In the enterprise software market, Microsoft continues to expand through acquisitions: In 2005, it purchased collaboration software maker Groove Networks, anti-virus security provider Sybari Software, email security developer FrontBridge Technologies, and identity management software provider Alacris; in 2006, it bought data transfer software developer Apptimum and content collection and organization provider Onfolio. And in 2008, Microsoft chat specialist Parlano and online mapping services provider Multimap.
The company's culture comes from the top, from former CEO Bill Gates, arguably the most famous nerd in the world. Gates is known for being brilliant but, at times, arrogant. He owns 10 percent of the company. Following his lead, Microsoft employees pride themselves on being "hardcore": on believing fully in the firm's vision for technology in the future and on being ruthless in competing with those who would block that vision. Sometimes that attitude backfires and hurt the firm’s public image – or more. In the past 10 years, the company has settled a number of antitrust investigations and lawsuits. In the most prominent of these, Microsoft agreed to license its operating systems and allow companies to bundle competing software with Windows. In 2007, the company also paid a $613 million fine after an anti-trust ruling from the European Union. As part of the ruling, the company also had to share communications code with rivals.