This document provides a history of Microsoft from its founding in 1975 by Bill Gates and Paul Allen to its current position facing competition from Apple and Google. It details Microsoft's early successes with programming languages and its operating systems like DOS, Windows, and Windows 95 that drove its rise to dominance. The document also discusses Microsoft's legal battles, leadership changes, and challenges from rivals. It positions Microsoft as one of the founding giants of the modern computing industry that remains influential despite threats to its business.

1. Paul Bechtel
Mrs. Corbett
11/11/11
4th
Senior Project Paper
When computers were first invented it was unthinkable that they would ever come into
widespread use. They were enormous, loud, temperamental, extremely expensive, and on top of
all this, totally unnecessary in the life of a typical person. These issues made it obvious to anyone
paying attention that computers would forever be relegated to the scientific and mathematical
worlds, totally cut off from the mainstream consumer, but, as the technology was slowly
upgraded, people started seeing more and more computers, first in military installations, then in
government buildings, and even in their own offices. As in any new economic field, many
companies began to stake out claims in the rapidly developing computer industry. One of these
early adopters was a programming company that worked with the giant of the time, IBM, to
make one of the first commonly seen desktop computers, this company was called Microsoft,
and its impact on the world of computers has become legendary.
In the beginning, Microsoft was a dream shared by two childhood friends, Bill Gates and
Paul Allen. They had been united by a love of computers and computer programming for many
years, and in 1975, they got a chance to put this passion into effect. They read about a new
computer design coming onto the market known as a microcomputer. After looking at the
device’s specifications and design they realized something, they could improve it. The

2. microcomputer had a massive flaw, it couldn’t read any programs made in the BASIC
programming language, this language was one of the top three most used programming formats
at the time, and if the microcomputer didn’t support it then it could easily fail when released on
the market. Both Gates and Allen were intimately familiar with this style of programming, it was
designed specifically to be usable by new programmers and youths, so they had spent quite a bit
of time working with it. With this knowledge in hand the pair realized that could develop a
program, known as an interpreter, which would allow the microcomputer to run programs in the
BASIC format. Gates quickly made contact with the company that fronted the microcomputer,
MITS, and stated that he could make an interpreter for them. MITS accepted the offer, and when
given a demonstration of the program observed that it worked perfectly with the device it was
running on. MITS agreed to distribute the program and pay them a portion of the profit, with this
sudden victory Gates and Allen saw that they could become players in this burgeoning field, and
on April fourth, 1975 Microsoft was officially founded with Gates as the head.
Over the next few years the pair worked steadily at gaining capital for their fledgling
company, they quickly garnered a reputation for being excellent programmers and cunning
businessmen, and in only two years became an international presence, gaining an office in Japan
thanks to a deal with the Japanese magazine ASCII. In the year 1980 Microsoft began to make its
first major appearance in the computing industry, after five years of testing they released their
first two operating systems, Xenix, a polished version of the system Unix, and their crown jewel,
DOS, or, Disk Operating System. DOS was originally the brainchild of a programming group
known as Seattle Computer Products, a small firm that was ailing at the time, seeing the potential
in DOS, it was quickly purchased by Microsoft and retrofitted to work as the premier operating
system for industry giant IBM’s first personal computer. The computer and its operating system

3. were a smash hit, and many firms began to purchase their software exclusively from Microsoft,
catapulting it to the head of the programming pack.
Shortly after their newfound power was cemented the company lost its second-in-
command, Paul Allen, who resigned due to the onset of cancer. Gates marched ahead without his
long time partner and continued to oversee Microsoft’s rise to dominance. In this time, more
specifically the year 1984, the first iteration of the now famous Microsoft Windows operating
system was released as an add-on to DOS. This gave the users of DOS a graphical representation
of what was happening, rather than just endless lines of code, thus making programming that
much easier to comprehend.
Two years later Microsoft became a publically traded company on the stock market,
earning Microsoft billions of dollars within days. This newfound wealth, coupled with
Microsoft’s recent partnership with hardware giant IBM, resulted in an investigation by the U.S.
government. The two industry heads were suspected of combining their power to crush any new
market development, a serious crime by anyone’s standards. Though the investigation failed to
bring charges before either of the corporations it heralded the start of a long chain of federal
studies into Microsoft’s business practices. While and IBM and Microsoft were battling their
respective legal threats, they were also busy innovating their respective computing fields.
Microsoft released the fruit of their shared labor, a state-of-the-art operating system to replace
the aging DOS. This new framework, known as OS/2, was to be installed in computers while
they were still being assembled, a process which IBM greatly hastened, but, unbeknownst to
IBM, soon after Microsoft witnessed the successful launch of the OS/2 software they
immediately went to work on something better. Using knowledge and features gained from their
painstaking development of OS/2, Microsoft engineers were hard at work creating the next big

4. thing, a 32-bit operating system known as Microsoft Windows NT. This new operating system
had many improvements over OS/2, including several groundbreaking methods of handling
multiple programs that Microsoft had kept secret from its partner. Upon hearing word of the
new, Microsoft only operating system, IBM immediately broke its partnership with the software
giant. Microsoft was unfazed by the loss of its closest ally, and launched the system as planned
soon after. It became a critical success, in part due to the inclusion of the newly updated
Microsoft Word and Microsoft Excel programs, two pieces of software that quickly became
invaluable to office workers around the globe.
In 1995, Microsoft released one of their most famous operating systems to date,
Windows 95. This system, with its streamlined multitasking, groundbreaking start bar, and
innovative internet browsing program, Windows Explorer, can be seen as the seed of most
operating systems used today, and, if asked to look at it, it is likely the only old operating system
widely recognizable by the average computer user. The funds garnered by this extremely
lucrative bit of programming were enough to allow Gates, in partnership with NBC, to create a
new television station, MSNBC. S Microsoft’s legal troubles were still chasing them during this
time, and in the year 2000 Microsoft was referred to as an abusive monopoly by no less than the
U.S. Supreme Court, this same year brought more startling news, in the form of Bill Gates
stepping down as CEO of Microsoft, and giving his position to childhood friend Steve Ballmer.
Despite the decrease in pay grade, Gates continued to be active in Microsoft, giving himself the
position of Chief Software Architect. Further legal issues were raised overseas in the year 2004,
resulting in Microsoft having to pay $612 million dollars to the European Union due to an Anti-
Trust Investigation, later that same year Microsoft made the money back with the release of its

5. first gaming console, the Xbox, which, when introduced, was “on course to overtake that lead
consoles” (Taylor) and an even newer version of the Windows operating systems, Windows XP.
The next release of the Windows series was perhaps its greatest blunder in recent
memory, Windows Vista, as the system was called when not being referred to as “a disaster”
(Levy) or other such titles, was practically unusable upon release, due to a perfect storm of bugs,
bad design, and what “the biggest criticisms point at, performance” (Arar and McCracken). A
wave of hype preceded it’s release, reviewers calling it ”sleek” and “sexy” but despite this and
the unprecedented number of patches released to smooth out Vista’s poor performance, many
long-time Windows users were driven from the company and into the welcoming arms of Apple,
Windows’ main competitor, due to the “public-relations disaster” (Lyons) that was the Vista
release. The most recent incarnation of the Windows series, Windows 7, was released much
faster, that most of its predecessors, only two years after Vista the 7 “Pre-beta” (Arar) code was
released, due to the fact that it was not so much a completely new operating system as much as it
was a fully cleaned and polished version of Windows Vista. Windows 7 has so far shown itself
to be a reliable platform for most users, even being referred to as a “smash hit” (Lyons) and as
being “secure, stable, and speedy” (Reach and Calloway), but it barely put a dent in the number
of Apple users that were created by their bad experiences with 7’s first iteration.
Today, Microsoft faces stiff competition from two major competitors, Apple and Google.
Apple has consistently dominated the handheld gadget market, its Ipod and Iphone decimating
Microsoft’s Zune and Microsoft Phone in any sales category imaginable. Along with its
stranglehold on the gadget market, Apple has been making increasingly bold forays into
Microsoft’s home turf, the PC business. Apple’s various Mac computers are increasingly
common, on-the-go users valuing them for their lightness and portability. Meanwhile the search

6. giant Google has proved itself to have almost total power over any kind of online marketplace,
making it one of the few young companies that has slowed Microsoft’s “aggressive”
(Kolakowski) approach to the online marketplace. Its state-of-the-art searching system makes it
one of, if not the, most popular site available on the internet, and its internet browser, Google
Chrome, has shown up Microsoft’s aging Windows Explorer since its release. Despite these
threats and many more, Microsoft continues to stand tall in the computing industry, a founding
giant of the modern age. As one of the only constants in the constant turmoil that is modern
electronics, Microsoft is a brand that has proven its worth many times over, and is not likely to
leave the public eye anytime soon.
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