Summary
Highlights
The story of Microsoft began with two high school teenagers, Bill Gates and Paul Allen, and their friends at Lakeside School in Seattle. They developed an interest in computers, specifically the teletype Model 33, and found ways to use expensive computer time for free by exploiting bugs. After being banned, they formed the Lakeside Programmers Club, offering to fix bugs for companies, with their first client being the very company that banned them, Computer Center Corporation.
Gates and Allen later started Traf-O-Data, a venture using the newest Intel processor to turn traffic data into reports. This project was short-lived as both went off to university. In 1975, upon seeing the Altair 8800 microcomputer, they decided to create a BASIC programming language interpreter for it, even bluffing about having a working version. This interpreter, Altair Basic, became the first product of their new company, Micro-Computer Software, later known as Microsoft.
The success of Altair Basic propelled Microsoft into a multi-million-dollar company. In 1981, they famously secured a deal with IBM to provide the operating system for IBM's personal computer. Lacking an OS, they acquired 86-DOS from Seattle Computer Products for $75,000, renaming it MS-DOS. This made MS-DOS the dominant operating system, licensed to over 70 computer companies. However, in 1983, Paul Allen was diagnosed with Hodgkin's lymphoma and left the company, a significant setback amidst Microsoft's rapid growth.
Microsoft began developing a word processor (Word), a spreadsheet program (Excel), and a graphical user interface (Windows), aiming to compete with Apple. Windows 1.0, released in 1985, initially struggled. Microsoft's IPO in 1986 valued the company at $350 million, making Bill Gates a millionaire overnight. They acquired Forethought, known for PowerPoint, and packaged their software into Microsoft Works, which evolved into Microsoft Office, a cross-platform suite of applications.
By 1987, Bill Gates became the world's youngest self-made billionaire at 32. The release of Windows 95 in 1995 marked a revolutionary product with an unprecedented $300 million marketing campaign. Its success led to 1 million sales in four days and doubled the company's valuation. Microsoft expanded into new areas, launching MSNBC, Internet Explorer, investing in DreamWorks, acquiring Apple shares, and creating subsidiaries like MSN and Expedia.
Microsoft's aggressive tactics, packaging Internet Explorer with Windows and pressuring computer manufacturers, led to a 95-98% market share in operating systems and web browsers. This prompted the US government to file an antitrust lawsuit. The lengthy court case took a toll on Bill Gates, leading him to appoint Steve Ballmer as CEO, with Gates shifting to Chief Software Architect.
Under Ballmer and Gates' guidance, Microsoft launched Xbox, Windows XP, and programming languages like .NET and C#. However, they missed the mobile phone revolution. While Windows Mobile was released in 2003, Gates underestimated the market's growth. Apple's iPhone, launched in 2007, reshaped the industry. Microsoft's later entry with Windows Phone in 2010 was too late. Despite this, they released products like Windows Vista, 7, Bing, Xbox 360, Azure, and acquired Skype and Nokia.
By 2013, Microsoft, despite its size, was overshadowed by other tech giants. Steve Ballmer stepped down, and Satya Nadella became CEO. Nadella focused on cloud computing, spearheading acquisitions like Mojang (Minecraft), GitHub, and LinkedIn. Microsoft Azure experienced explosive growth, making Microsoft a leading cloud provider behind Amazon. This success, along with other businesses, allowed Microsoft to reclaim the title of the most valuable company in the world in 2019.
Paul Allen resigned from the Microsoft board in 2000 and pursued other ventures, including acquiring Ticketmaster, investing in real estate, and owning the Portland Trailblazers and Seattle Seahawks. He battled Hodgkin's lymphoma, which tragically returned in 2018, leading to his passing. The video concludes by highlighting the vast impact of Microsoft, from gaming to cloud computing, all stemming from the vision of two teenagers in a computer club.