This evergreen history article uses authoritative archives and official records. Exact dates are used when documented; gradual inventions and rollouts are described as periods rather than being assigned a misleading single birthday.
Quick facts
- Bill Gates and Paul Allen founded Microsoft in Albuquerque, New Mexico, in 1975.
- The name “Micro-soft” combined microcomputer and software.
- Microsoft’s operating system business expanded after IBM selected its software for the IBM PC in 1981.
- Windows, Office and enterprise software made Microsoft one of the world’s largest technology companies.
- Under CEO Satya Nadella, Microsoft increased its focus on Azure cloud services, subscriptions, open-source development and artificial intelligence.
Altair BASIC and the microcomputer opportunity
The January 1975 issue of Popular Electronics featured the MITS Altair 8800. Paul Allen and Bill Gates recognised that hobbyist microcomputers would need software. They contacted MITS and developed a BASIC interpreter, despite initially lacking an Altair machine.
The program became Microsoft’s first product. The company operated in Albuquerque because MITS was based there.
The Microsoft name and early software business
A July 1975 letter from Gates used the spelling “Micro-soft.” The partnership produced programming languages for multiple computer systems. Microsoft argued that software should be treated as a commercial product rather than copied freely, an issue Gates addressed in his 1976 “Open Letter to Hobbyists.”
The company moved to Bellevue, Washington, in 1979 and incorporated in 1981.
IBM PC and MS-DOS
IBM entered the personal-computer market in 1981 and needed an operating system. Microsoft licensed and adapted an existing system, which became PC DOS for IBM and MS-DOS for compatible computers.
A crucial business decision allowed Microsoft to license MS-DOS to many manufacturers rather than limiting it to IBM. As IBM-compatible PCs spread, Microsoft’s operating system became a common software platform.
Windows and graphical computing
Microsoft announced Windows in 1983 and released Windows 1.0 in 1985. Early versions ran on top of MS-DOS. Windows 3.0 in 1990 and Windows 3.1 in 1992 achieved broader commercial success.
Windows 95 integrated a new interface, long file names, stronger networking and the Start menu. Its launch became a mass-market cultural event and strengthened Microsoft’s dominance in desktop software.
Office and enterprise software
Microsoft combined Word, Excel and PowerPoint into the Office suite, first released for Macintosh in 1989 and Windows in 1990. Integration and file-format standards made Office central to business and education.
The company expanded into server operating systems, databases, developer tools and corporate support. Enterprise licensing produced recurring relationships with organisations worldwide.
Internet competition and antitrust
Microsoft initially underestimated the speed of the Web but shifted aggressively in the mid-1990s. Internet Explorer was bundled with Windows, leading to intense competition with Netscape.
The U.S. government and states brought an antitrust case alleging that Microsoft used operating-system power to restrict competition. The litigation shaped later debates about platform control, default software and interoperability.
Xbox, devices and online services
Microsoft entered console gaming with Xbox in 2001. Xbox Live demonstrated subscription-based online gaming. The company also developed Surface computers and acquired businesses including LinkedIn and game publishers.
Some consumer initiatives failed or remained limited, including the Zune music player and Windows Phone. These outcomes showed that desktop dominance did not guarantee success in every new market.
Azure and the Nadella era
Microsoft announced its cloud platform in 2008 and made Windows Azure commercially available in 2010. Satya Nadella became chief executive in 2014 and emphasised cloud services, cross-platform software and a growth mindset.
Office shifted toward Microsoft 365 subscriptions. Azure became a core infrastructure and platform business. Microsoft acquired GitHub in 2018, a symbolic move toward developers and open source.
Artificial intelligence and Copilot
Microsoft invested in AI research for decades and later formed a major partnership with OpenAI. Generative AI was integrated into search, coding, productivity and cloud services under the Copilot brand.
This strategy positions Microsoft as both an infrastructure provider and application company. It also brings questions about model safety, copyright, energy use, market concentration and dependence on cloud-scale computing.
Common misconceptions
- Microsoft did not invent the personal computer.
- MS-DOS was not created from nothing solely for IBM; Microsoft acquired and adapted an existing operating system.
- Windows was not instantly dominant with version 1.0.
- Microsoft is no longer only a Windows company; cloud, subscriptions, gaming and AI are major parts of its strategy.
Timeline: key years and locations
| Year | Location | Milestone | Why it mattered |
|---|---|---|---|
| 1975 | Albuquerque, New Mexico, USA | Microsoft founded around Altair BASIC | Begins commercial software for microcomputers. |
| 1979 | Bellevue, Washington, USA | Company relocates | Moves closer to the growing Pacific Northwest technology base. |
| 1981 | United States | Microsoft incorporates and IBM PC ships with PC DOS | Establishes the operating-system licensing business. |
| 1985 | Redmond area, Washington, USA | Windows 1.0 released | Starts Microsoft’s graphical operating-system line. |
| 1986 | NASDAQ, USA | Microsoft completes initial public offering | Funds growth and creates substantial employee wealth. |
| 1989–1990 | United States | Office suite launches | Builds an integrated productivity franchise. |
| 1995 | Worldwide | Windows 95 launches | Makes Windows a mass-market computing platform. |
| 2001 | United States | Xbox launches | Expands Microsoft into console gaming. |
| 2010 | Worldwide | Azure becomes commercially available | Begins Microsoft’s large-scale cloud era. |
| 2014 | Redmond, Washington, USA | Satya Nadella becomes CEO | Accelerates cloud, subscription and cross-platform strategy. |
| 2018 | United States | Microsoft acquires GitHub | Deepens its role in global software development. |
| 2020s | Worldwide | Copilot and generative AI expand | Integrates AI across products and cloud services. |