Microsoft Corporation -A tour towards Industry Development

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Leading developer of personal

Computer software systems and applications. The company also publishes books and multimedia titles, offers electronic mail services, distributes programming via the Internet, and manufactures computer pointing devices. It has sales offices throughout the world but does virtually all of its research and development at its corporate headquarters in Redmond, Wash., U.S.

In 1975 William H. Gates and Paul G. Allen, two boyhood friends from Seattle, converted BASIC, a popular mainframe programming language, for use on an early personal computer (PC), the Altair. Shortly afterward Gates and Allen founded Microsoft, deriving the name from the words "microcomputer" and "software." During the next few years they refined BASIC and developed other programming languages. In 1980 International Business Machines (IBM) asked Microsoft to produce the essential software, or operating system for its first personal computer, the IBM PC. Microsoft purchased an operating system from another company, modified it, and renamed it MS-DOS (Microsoft Disk Operating System). MS-DOS was released with the IBM PC in 1981. Thereafter, most manufacturers of personal computers licensed MS-DOS as their operating system, generating vast revenues for Microsoft; by the early 1990s it had sold more than 100 million copies of the program and defeated rival operating systems such as CP/M, which it displaced in the early 1980s, and later OS/2. Microsoft deepened its position in operating systems with its Windows graphical command program, whose third version, released in 1990, gained a wide following. By 1993, Windows 3.0 and its subsequent versions were selling at a rate of one million copies per month, and nearly 90 percent of the world's PCs ran on a Microsoft operating system. In 1995, the company released Windows 95, which for the first time fully integrated MS-DOS with Windows and effectively matched in ease of use Apple Computer's Macintosh OS. It also became the leader in productivity software such as word-processing and spreadsheet programs, outdistancing long-time rivals Lotus and WordPerfect in the process

As a result, by the mid-1990s Microsoft, which became a publicly owned corporation in 1986, had become one of the most powerful and profitable companies in American history. It consistently earned profits of 25 cents on every sales dollar, an astonishing record; net income topped $2.1 billion in the company's fiscal year ending June 30, 1996. However, its rapid growth in a fiercely competitive and fast-changing industry spawned resentment and jealousy among rivals, some of whom complained that the company's practices violated U.S. laws against unfair competition. Microsoft and its defenders countered that, far from stifling competition and technical innovation, its rise had encouraged both and that its software had consistently become less expensive and more useful. A U.S. Justice Department investigation concluded in 1994 with a settlement in which Microsoft changed some sales practices that the government contended enabled the company to unfairly discourage OS customers from trying alternative programs. The following year, the Justice Department successfully challenged Microsoft's proposed purchase of Intuit, the leading maker of financial software for the PC.

Partly because of its stunning success in PC software, Microsoft was slow to realize the commercial possibilities of network systems and the Internet. In 1993 it released Windows NT, a landmark program that tied disparate PCs together and offered improved reliability and network security. Sales were initially disappointing, but by 1996 Windows NT was hailed as the likely standard for PC networking, challenging Novell's NetWare. Microsoft did not move into Internet software until a new venture, Netscape, had captured the emerging market for Web browsers, a new class of programs that simplified the once-arcane process of navigating the World Wide Web. In a violent change of course, Microsoft began pursuing Netscape with imitative offerings, which in less than a year achieved sufficient acceptance to challenge Netscape's continued dominance of the Web. It dramatically expanded its electronic publishing division, created in 1985 and already notable for the success of its multimedia encyclopaedia, Encarta. It also entered the information services and entertainment industries with a wide range of products and services, most notably the Microsoft Network and MSNBC (a joint venture with the National Broadcasting Company, a major American television network).

b. Oct. 28, 1955, Seattle, Wash., U.S. in full WILLIAM HENRY GATES III , byname BILL GATES, American computer programmer and entrepreneur who cofounded Microsoft Corporation, the world's largest personal-computer software company. Gates wrote his first software program at the age of 13. In high school he helped form a group of programmers who computerized their school's payroll system and founded Traf-O-Data, a company that sold traffic-counting systems to local governments. In 1975 Gates, then a sophomore at Harvard University, joined his hometown friend Paul G. Allen to develop software for the first microcomputers. They began by adapting BASIC, a popular programming language used on large computers, for use on microcomputers. With the success of this project, Gates left Harvard during his junior year and, with Allen, formed Microsoft. Gates's sway over the infant microcomputer industry greatly increased when Microsoft licensed an operating system called MS-DOS to International Business Machines Corporation--then the world's biggest computer supplier and industry pacesetter--for use on its first microcomputer, the IBM PC (personal computer). After the machine's release in 1981, IBM quickly set the technical standard for the PC industry, and MS-DOS likewise pushed out competing operating systems. While Microsoft's independence strained relations with IBM, Gates deftly manipulated the larger company so that it became permanently dependent on him for crucial software. Makers of IBM-compatible PCs, or clones, also turned to Microsoft for their basic software. By the start of the 1990s he had become the PC industry's ultimate kingmaker.

Largely on the strength of Microsoft's success, Gates amassed a huge paper fortune as the company's largest individual shareholder. He became a paper billionaire in 1986, and within a decade his net worth had reached into the tens of billions of dollars--making him by some estimates the world's richest private individual. Acquisition of immense wealth before the age of 40 seemed to have little outward effect on Gates, whose greatest personal expenditures may have been a collection of expensive sports cars and the construction of a $50 million computer-controlled private complex on a bluff overlooking Lake Washington, a short daily commute from Microsoft headquarters in Redmond, Washington. With few interests beyond software and the potential of information technology, Gates at first preferred to stay out of the public eye, handling civic and philanthropic affairs indirectly through one of his foundations. Nevertheless, as Microsoft's power and reputation grew, and especially as it attracted the attention of the U.S. Justice Department's antitrust division, Gates, with some reluctance, became a more public figure. Rivals (particularly in competing companies in Silicon Valley) portrayed him as driven, duplicitous, and determined to profit from virtually every electronic transaction in the world. His supporters, on the other hand, celebrated his uncanny business acumen, his flexibility, and his boundless appetite for finding new ways to make computers and electronics more useful through software.

All of these qualities were evident in Gates's nimble response to the sudden public interest in the Internet. Beginning in 1995 and 1996, Gates feverishly refocused Microsoft on the development of consumer and enterprise software solutions for the Internet, developed the Windows CE operating system platform for networking noncomputer devices such as home televisions and personal digital assistants, created the Microsoft Network to compete with America Online and other Internet providers, and, through Gates's company Corbis, acquired the huge Bettmann photo archives and other collections for use in electronic distribution.

It remains to be seen whether Gates's extraordinary success will guarantee him a lasting place in the pantheon of great Americans. At the very least, historians seem likely to view him as a business figure as important to computers as John D. Rockefeller was to oil. Gates himself displayed an acute awareness of the perils of his prosperity in his 1995 best-seller, The Road Ahead, where he observed, "Success is a lousy teacher. It seduces smart people into thinking they can't lose."