Microsoft: A History Of The Software Giant Co-founded By Bill Gates, Its Products And Services, Jobs, Layoffs, And More

Microsoft is the company that launched the Windows operating system and ubiquitous office productivity programs like Word, Excel, and Powerpoint.

David Ryder/Getty Images

• Microsoft is a software company known for products like Windows, Microsoft 365, and Xbox.
• Microsoft is one of the largest software companies in the world by market cap.
• Microsoft was co-founded by Bill Gates, and the company is now led by CEO Satya Nadella.

Microsoft is one of the world's largest software companies, with annual revenues nearing $250 billion in recent years. Among its many products and platforms are the programs Microsoft Word and Microsoft Excel, used by private citizens and corporations all over the world, and the Windows operating system, the most widely-used computer OS by a vast margin.

The company was founded in Albuquerque, New Mexico, in 1975 by Bill Gates and Paul Allen, with the latter leaving Microsoft in 1983 following a diagnosis of Hodgkin disease. Gates would stay on as CEO of the company until 2000, when he voluntarily stepped down, largely to focus on his charitable work with the Bill and Melinda Gates Foundation.

Gates was replaced by Steve Ballmer as the new Microsoft CEO, serving until he was in turn replaced by Satya Nadella in 2014. Under Nadella's guidance, the company has grown ever more profitable, though there have also been many massive layoffs across Microsoft.

Here's a look in greater detail at Microsoft's history, its many products and services, its financial successes and stumbles, and the foundation its profits helped create.

Microsoft's history

William Henry Gates III, better known as Bill Gates, had a preternatural talent with software, writing his first programs while a young teenager growing up in Seattle, Washington. By the time he graduated high school and went off to Harvard, Gates had already formed a business partnership with his friend and Microsoft co-founder Paul Allen.

Bill Gates and Paul Allen were computer whizzes in high school, and eventually formed Microsoft together.

Doug Wilson/Corbis via Getty Images

This was a data analysis venture called Traf-O-Data that employed computers in parsing through information collected by roadway traffic counters. Traf-O-Data was not a business success, but it was the precursor to the Microsoft Corporation, which Allen and Gates founded in the spring of 1975.

Initially based in Albuquerque, as Gates and Allen had been working for the New Mexico-based company Micro Instrumentation and Telemetry Systems, the Microsoft headquarters moved to Bellevue, Washington, in early 1979, seeing its founders return to a location near their childhood turf.

The following year, 1980, was a pivotal one for Microsoft because the technology giant IBM awarded the company a contract that saw a Microsoft operating system used in the vaunted IBM Personal Computer, or PC. This was MS-DOS, the premier OS for several years, supplanted only by Windows, released in 1985, and one of the first graphic interface operating systems the world had ever seen.

Windows would become the dominant computer operating system over the next few decades, during which Microsoft also released software that would become wildly successful, such as the aforementioned Word and Excel, as well as PowerPoint.

The iconic Windows 95 operating system cemented Microsoft's position as a global tech giant.

Brooks Kraft LLC/Sygma via Getty Images

Microsoft also developed its an email platform, known as Outlook, and even created a search engine named Bing, and so much more.

Microsoft's software

Microsoft released Microsoft Office — today rebranded as Microsoft 365 — in 1990, and soon the word processing and spreadsheet software therein included (namely Word and Excel) would become all but essential for office employees, students, writers, accountants, and myriad other people around the world.

But Microsoft hardly stopped with these more basic programs. The company would also develop OneDrive, a cloud data storage platform, Microsoft Azure, an advanced cloud computing service that lets you use powerful computers remotely, and Microsoft Copilot, the company's foray into the new and rapidly expanding world of artificial intelligence.

Many companies rely on Microsoft software, such as Teams, which helps people communicate, stay on schedule, and share files and documents, while many individuals rely on the advanced web browser Microsoft Edge to enhance the efficacy of their online searches.

Microsoft's software is so commonly used, and expertise in its programs have become so valuable, that the company even offers Microsoft certifications for IT specialists and developers who work with platforms like Microsoft 365 and Azure.

Beyond work and productivity software, services, and platforms, there is another arena in which Microsoft plays an outsized role: gaming.

Microsoft in the gaming world

Microsoft has been in the video game world since 1979, when "Microsoft Adventure" was released. It was a text-based problem-solving game with a feel not unlike a "Dungeons & Dragons" session.

Throughout the 1980s and into the 1990s, the company would churn out many video games, but few were mainstream successes save for the many versions of "Microsoft Flight Simulator," which was first released in 1982.

It wasn't until Microsoft got into the console gaming world that true gaming success arrived. Designed to compete with Sony's successful PlayStation video game console, the Xbox was first released in 2001 and would become one of the most popular gaming platforms on the planet.

Microsoft released the Xbox as a rival to Sony's Playstation, garnering immediate success.

Jeff Christensen/AFP via Getty Images

Now in its fourth generation of console, the Xbox's most popular games include the franchises "Call of Duty," "Grand Theft Auto," and "Fortnite," to name but a few.

Microsoft has added to its success and reach in the gaming world beyond its own original creations as well; it has also acquired heavy hitters in the space. For example, in September of the year 2014, Microsoft bought Mojang, maker of the popular gaming property "Minecraft," for $2.5 billion.

And then, in October 2023, the software juggernaut bought the gaming giant Activision Blizzard for the staggering sum of $68.7 billion. These were not Microsoft's only acquisitions, of course.

Microsoft acquisitions over the years

While Microsoft had acquired many other brands, products, and companies before the year 1997, that year marked its first major and highly visible move of the kind when Microsoft bought the popular email platform Hotmail for a $500 million, which is nearly a billion dollars today.

Hotmail was eventually rolled into Microsoft Outlook, though you can still get and use a Hotmail email address today.

In 2011, Microsoft made another powerful move when it acquired the video chat platform Skype, this time in a multibillion-dollar move.

In 2016, the software company laid out a hefty $26.2 billion to buy LinkedIn, the widely used professional networking and social media platform.

Microsoft acquired LinkedIn for a whopping $26.2 billion.

Smith Collection/Gado/Getty Images

And in 2018, Microsoft acquired GitHub, a code developing platform, for the tidy sum of $7.5 billion. All of these acquisitions involve huge numbers, of course, as does the wealth of Microsoft's founder and the endowment of the charitable organization he established with his then-wife, Melinda Gates.

Bill Gates and the Bill and Melinda Gates Foundation by the numbers

At last check, Bill Gates' net worth was around $106 billion, making him, the former richest person in the world, not even in the top 10 richest list. He ranked 14^th richest, per Forbes, as of late 2024.

Gates has given tens of millions of dollars away, largely to his own nonprofit organization, the Bill and Melinda Gates Foundation, which is focused on issues ranging from endemic diseases in developing nations to safe water supply issues and combatting hunger.

Married for 27 years prior to a divorce in the summer of 2021, Bill and Melinda Gates sat together on the board of their eponymous foundation for many years and even for three years following the marital split, though Melinda Gates finally departed the foundation in June 2024.

Melinda Gates gave up her seat on the board of the Bill and Melinda Gates Foundation several years after the couple divorced.

Denis Balibouse/Reuters

The foundation, which has offices in multiple countries across four continents, employs more than 2,000 people and has an endowment of more than $75 billion. According to data sourced from the Bill and Melinda Gates foundation itself, in recent years it has offered charitable support between $7 and $8 billion, and the foundation had issued more than $77 billion in grant payments since its inception through the year 2023.

That's all an impressive amount of money, to be sure, and given for noble causes, but it pales in comparison to the profits of the Microsoft Corporation, profits that are often maintained thanks to harsh rounds of employee layoffs.

Microsoft finances, revenues, careers, and layoffs

Microsoft went public with its IPO in 1986 at a price of $21 per share. In the decades since, Microsoft stock pricing has swelled exponentially, and the company's total market cap — which is the entire value of a company's outstanding shares — reached an astonishing $3 trillion dollars by late 2024.

For a bit of perspective, that is larger than the annual gross domestic product of almost every nation on earth — were Microsoft's market cap placed on the scale with GDP, it would rank between France and Germany.

For the 12-month period ending in June 2024, Microsoft earnings were around $245 billion — in a one-year period, to be clear, the company generated nearly a quarter of a trillion dollars. It's no wonder, then, that Microsoft careers are highly sought after.

But jobs, though often lucrative, are also often tenuous. Microsoft's layoffs are often notorious for their size. For example, in the early fall of 2024, the company cut 650 workers from its gaming division only a few months after slashing 1,900 employees from its Activision Blizzard and Xbox departments.

In 2023, the company cut a huge swath of its labor force, dropping 10,000 workers. This was not the biggest layoff, though: between 2014 and 2015, the company axed nearly 20,000 employees. This was following the problematic acquisition of the telecom company Nokia, which also saw the exit of then-CEO Steve Ballmer.