Microsoft

Microsoft Corporation is an American multinational technology conglomerate headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, the company played a pivotal role in the personal computer revolution, with software products like Windows. Over time, Microsoft expanded into internet services, cloud computing, video gaming, and other technology sectors, becoming the largest software maker globally and one of the most valuable public companies.

Initially focused on developing and selling BASIC interpreters for the Altair 8800, Microsoft dominated the personal computer operating system market with MS-DOS in the mid-1980s, followed by the introduction of Windows. Its 1986 initial public offering (IPO) and subsequent rise in stock value led to the creation of three billionaires and around 12,000 millionaires among its employees. Since the 1990s, Microsoft has diversified beyond operating systems, with significant expansions in various fields.

IndustryInformation technology
FoundedApril 4, 1975; 49 years ago in Albuquerque, New Mexico, U.S.
Headquarters

One Microsoft Way,

Redmond, Washington , U.S.
Founders
  • Bill Gates
  • Paul Allen
Area servedWorldwide
Key people
  • Satya Nadella (chairman & CEO)
  • Brad Smith (vice chairman & president)
  • Bill Gates (technical adviser)
Products
  • Software development
  • Computer hardware
  • Consumer electronics
  • Social networking service
  • Cloud computing
  • Video games
  • Internet
  • Corporate venture capital
Brands
  • Windows
  • Microsoft365
  • Teams
  • Visual Studio
  • Xbox
  • Dynamics
  • Surface
Services
  • Edge
  • Azure
  • Bing
  • LinkedIn
  • Viva Engage
  • Microsoft365
  • OneDrive
  • Dynamics365
  • Outlook
  • GitHub
  • Microsoft Store
  • Windows Update
  • Game Pass
  • Xbox network
RevenueIncrease US$245.1 billion (2024)
Number of employees
228,000 (2024)
Divisions
  • Microsoft Engineering Groups
  • Microsoft Digital Crimes Unit
  • Microsoft Press
  • Microsoft Gaming
  • Microsoft AI
Subsidiaries
  • Microsoft Japan
  • Microsoft India
  • Microsoft Egypt
  • GitHub
  • LinkedIn
  • Metaswitch
  • Nuance Communications
  • RiskIQ
  • Skype Technologies
  • Xamarin
  • Xandr

Steve Ballmer succeeded Bill Gates as CEO in 2000, overseeing major acquisitions such as Skype Technologies in 2011, and a stronger focus on hardware. This included the release of Microsoft’s first in-house personal computer line, Surface, in 2012, as well as the formation of Microsoft Mobile through Nokia. Under Satya Nadella’s leadership starting in 2014, the company shifted focus to cloud computing with Azure and made a large acquisition of LinkedIn for $26.2 billion in 2016. Nadella’s leadership also saw the expansion of Microsoft’s video gaming division, including the creation of the Microsoft Gaming division in 2022 and the acquisition of Activision Blizzard for $68.7 billion in 2023.

Microsoft has been a market leader in the IBM PC-compatible operating system and office software suite markets since the 1990s. Its major software products include the Windows operating systems, the Microsoft 365 productivity suite, the Azure cloud platform, and the Edge web browser. The company’s flagship hardware products include the Xbox video game consoles and the Microsoft Surface series of touchscreen personal computers. Other notable products include the Bing search engine, digital services through MSN, mixed reality technology via HoloLens, cloud computing through Azure, and software development tools like Visual Studio.

Considered one of the Big Five American technology companies alongside Alphabet, Amazon, Apple, and Meta, Microsoft reached a market cap of $1 trillion in April 2019, becoming the third U.S. public company to do so. Despite its success, Microsoft has faced criticism for monopolistic practices and its software has been subject to criticism regarding ease of use, security, and robustness.

History of Microsoft

1972–1985: Founding

The origins of Microsoft date back to childhood friends Bill Gates and Paul Allen, who shared an interest in computer programming. In 1972, they co-founded Traf-O-Data, a business that sold rudimentary computers to track and analyze automobile traffic data. Gates went on to attend Harvard University, while Allen pursued a degree in computer science at Washington State University before dropping out to work at Honeywell.

In January 1975, Popular Electronics published an article about Micro Instrumentation and Telemetry Systems' (MITS) Altair 8800 microcomputer, which sparked an idea in Allen to create a BASIC interpreter for the device. Gates contacted MITS and claimed to have a working interpreter, which led to a successful demonstration of the software in Albuquerque, New Mexico. MITS agreed to distribute the interpreter, which became known as Altair BASIC.

On April 4, 1975, Gates and Allen founded Microsoft, with Gates serving as CEO. The name "Micro-Soft" was a combination of "micro-computer" and "software." In 1977, the company established its first international office in Japan through an agreement with ASCII Magazine. Microsoft relocated its headquarters to Bellevue, Washington, in January 1979.

In 1980, Microsoft ventured into the operating system business with Xenix, a version of Unix. However, it was MS-DOS that solidified Microsoft's dominance in the software industry. In November 1980, IBM contracted Microsoft to provide an operating system for its new personal computer (IBM PC). Microsoft purchased 86-DOS, a CP/M clone, from Seattle Computer Products and rebranded it as MS-DOS. IBM released the IBM PC in 1981, and although IBM rebranded MS-DOS as IBM PC DOS, Microsoft retained ownership of the operating system.

                   Subject:Altair,1974                          

With MS-DOS gaining popularity, Microsoft became the leading vendor of operating systems for IBM-compatible personal computers. The company expanded into new markets with the launch of the Microsoft Mouse in 1983 and the establishment of a publishing division called Microsoft Press.

In 1983, Paul Allen resigned from Microsoft after being diagnosed with Hodgkin's lymphoma. He later claimed in his memoir that Gates sought to dilute his ownership in the company when he fell ill, believing he was not working hard enough. After leaving Microsoft, Allen invested in various sectors, including sports teams, commercial real estate, neuroscience, private space flight, and more.

1985–1994: Windows and Office

Microsoft released Windows 1.0 on November 20, 1985, as a graphical extension for MS-DOS, marking the beginning of its foray into graphical user interfaces. This release came despite the company's simultaneous work with IBM on the development of OS/2, a separate operating system. The company's growth continued as it moved its headquarters to Redmond, Washington, on February 26, 1986, and went public on March 13, 1986. The initial public offering (IPO) resulted in a surge in stock prices, creating several billionaires and around 12,000 millionaires among its employees.

In 1987, Microsoft released its version of OS/2 for original equipment manufacturers (OEMs), but it was Microsoft's MS-DOS that cemented the company's dominance in the market. Microsoft also began working on Windows NT, which was a modular, 32-bit operating system released in July 1993, marking the start of the company's shift towards more advanced, stable OS solutions.

In 1990, Microsoft introduced Microsoft Office, bundling together essential productivity applications like Microsoft Word and Microsoft Excel, which became widely popular and helped establish Microsoft as a leader in office software. That same year, Windows 3.0 was released, with a more refined user interface and better support for Intel's 386 processors, further solidifying Microsoft's presence in the operating system and application software markets.

By 1994, the U.S. Department of Justice's Antitrust Division started investigating Microsoft for anti-competitive practices, particularly its dealings with OEMs and its licensing terms for MS-DOS, which were seen as monopolistic.

1995–2007: Foray into the Web, Windows 95, Windows XP, and Xbox

In 1995, Microsoft released Windows 95, which brought a revolutionary new user interface, including the iconic Start Button, and offered 32-bit compatibility, similar to the Windows NT system. Windows 95 was widely successful, backed by an extensive marketing campaign. It also marked the launch of Internet Explorer as the default web browser for Windows, although it faced legal challenges for bundling Internet Explorer with the OS, a move that was seen as an anti-competitive practice.

The same year, Microsoft expanded its business into the world of web-based services with the launch of MSN and ventured into the hardware market with the release of Windows CE, an operating system designed for smaller devices like personal digital assistants (PDAs). Additionally, Microsoft and NBC collaborated to launch the 24/7 news channel MSNBC in 1996.

As Microsoft moved into new areas, it faced legal challenges. In 1997, the U.S. Justice Department filed a motion claiming Microsoft violated agreements related to the bundling of Internet Explorer with Windows. These legal challenges were just the beginning of a series of antitrust issues.

In 2000, Steve Ballmer succeeded Bill Gates as CEO, while Gates took on the role of Chief Software Architect. The company also began to focus more on digital rights management and security, joining the Trusted Computing Platform Alliance to improve software security, though it faced criticism for its approach to digital rights management.

In 2001, Microsoft entered the video game market with the release of the Xbox console, a powerful competitor to the PlayStation and Nintendo systems. The Xbox 360 followed in 2005, continuing Microsoft's commitment to gaming hardware.

Additionally, the company continued its expansion into hardware with products like the Zune digital media player in 2006, and the Surface tablet in 2007, which later became a key part of Microsoft's hardware line.

In 2004, Microsoft settled with the U.S. Department of Justice following antitrust cases related to its monopolistic practices. The company was fined and required to produce new versions of Windows XP without the bundled Windows Media Player.

Through these years, Microsoft grew not only as a software company but also became increasingly involved in hardware, gaming, and digital media, setting the stage for its dominance in the tech industry.

Between 2007 and 2011, Microsoft saw significant changes and releases in both its software and hardware offerings, as well as expansions into new markets. Key developments included:

Windows Vista and Office 2007

  • Windows Vista was released in January 2007, focusing on security, new features, and a redesigned user interface (Aero). This release also saw Microsoft Office 2007 with its "Ribbon" interface, which was a major shift from the previous versions.

Legal and Financial Challenges

  • Microsoft faced legal challenges, such as a €899 million fine from the European Union in 2008 over non-compliance with a 2004 antitrust ruling, involving unreasonably high charges to competitors for server information.

Azure and Retail Expansion

  • Microsoft entered the cloud computing market with the Azure Services Platform in October 2008.
  • In 2009, Microsoft began opening retail stores, with the first opening in Scottsdale, Arizona, on the same day as the release of Windows 7, a more refined version of Vista focused on usability.

Mobile Operating System Struggles

  • In 2010, Microsoft launched Windows Phone OS, which used a new minimalist interface. Despite this, Microsoft struggled to compete with Apple and Android in the smartphone market.

2011–2014: Windows 8, Xbox One, and Surface Devices

  • In 2012, Windows 8 was released with a new interface designed for both PCs and tablets, marking a shift towards a more touch-friendly operating system. The same year, Microsoft launched the Surface tablet, its first device with in-house hardware.
  • Microsoft also entered the gaming console market with the Xbox One in 2013, which introduced upgraded Kinect motion-sensing technology.
  • In 2014, Microsoft acquired Nokia's mobile unit for $7 billion, marking an attempt to strengthen its mobile hardware offerings.

2014–2020: Windows 10, Edge, and HoloLens

  • Satya Nadella became CEO in 2014, succeeding Steve Ballmer. Under Nadella, Microsoft shifted focus towards cloud computing and subscription-based services.
  • Windows 10 was released in 2015 with the aim of unifying various devices under one platform. Microsoft Edge, the new web browser, was launched as a replacement for Internet Explorer.
  • HoloLens, Microsoft's mixed-reality headset, was introduced in 2016 and continued to evolve as a tool for gaming, education, and business.
  • Microsoft made significant moves into open-source software, including acquiring GitHub in 2018 for $7.5 billion and embracing Linux through its cloud services.

These years were marked by strategic acquisitions, product innovations, and shifts in business focus, particularly with cloud computing and hardware like the Surface and Xbox. Despite some struggles in the mobile sector, Microsoft continued to evolve under Nadella's leadership, emphasizing a more integrated, service-driven future.

1. Acquisitions

Affirmed Networks

Acquired for $1.35 billion in March 2020.

ZeniMax Media (Bethesda)

Acquired for $8.1 billion in March 2021, strengthening Xbox Game Studios.

Nuance Communications

Purchased for $16 billion, completed in March 2022, bolstering AI and healthcare.

Activision Blizzard

Acquired for $68.7 billion in January 2022, aimed at expanding Microsoft's gaming portfolio and metaverse efforts.

Clipchamp & Takelessons

Acquired to expand Microsoft's presence in video editing and online education markets.

OpenAI Partnership

Involved multi-billion dollar investments in 2023, further integrating AI tools like GPT-4 into Microsoft’s products.

2. Product and Services Launches

Xbox Series X and S

Launched in November 2020, part of Microsoft's gaming strategy.

Windows 11

Released in October 2021 after an announcement in June 2021.

Azure Quantum

Public preview launched in February 2021, offering quantum computing services.

3. Investments and Partnerships

Azure Quantum Elements

Launched in June 2023 for molecular simulations using quantum computing.

Global AI Infrastructure Investment Partnership

In September 2024, Microsoft partnered with BlackRock to invest in AI infrastructure with a fund that could reach up to $100 billion.

G42 & Southeast Wisconsin AI Hub

Investments in AI development in 2024, including a $1.5 billion partnership with the Emirati firm G42 and $3.3 billion in Wisconsin for AI infrastructure.

4. Employee Layoffs

10,000 Layoffs

Announced in January 2023 amid restructuring efforts.

Mixed Reality and Azure Layoffs

Announced in June 2024 as part of adjustments to their business model.

5. Security and Outages

July 2024 Global IT Outage

A major service disruption caused by a flawed cybersecurity software update impacted global businesses and services.

Corporate Affairs

Company Ranking and Market Position

  • Microsoft was ranked No. 14 in the 2022 Fortune 500 rankings by total revenue.
  • In 2022, it was the world's largest software maker by revenue according to Forbes Global 2000.
  • Microsoft reached a trillion-dollar market cap in April 2019, becoming the third U.S. public company to achieve this milestone.
  • As of 2024, Microsoft holds the third-highest global brand valuation.
  • Microsoft is one of only two U.S.-based companies with a prime credit rating of AAA.

Board of Directors

The company's board of directors consists largely of outsiders, as is typical for publicly traded companies. As of December 2023, the board includes:

  • Satya Nadella
  • Reid Hoffman
  • Hugh Johnston
  • Teri List
  • Sandi Peterson
  • Penny Pritzker
  • Carlos Rodriguez
  • Charles Scharf
  • John W. Stanton
  • John W. Thompson
  • Emma Walmsley
  • Padmasree Warrior

Board members are elected annually during the shareholders' meeting by majority vote. The board oversees operations through four committees:

  • Audit Committee: Handles accounting, auditing, and reporting.
  • Compensation Committee: Approves compensation for executives and employees.
  • Governance and Nominating Committee: Manages corporate affairs and board nominations.
  • Regulatory and Public Policy Committee: Deals with legal/antitrust matters, privacy, trade, digital safety, AI, and environmental sustainability.

Key Events Regarding Board Members

  • Bill Gates' Departure (2020): On March 13, 2020, Gates announced his departure from Microsoft's board to focus on philanthropy, marking a significant shift in the tech industry.
  • Sexual Harassment and Gender Discrimination Review (2022): In January 2022, Microsoft’s board of directors began reviewing its sexual harassment and gender discrimination policies in response to past allegations involving Bill Gates and other corporate executives.

Chief Executives

  • Bill Gates (1975–2000): Co-founder and the first CEO of Microsoft.
  • Steve Ballmer (2000–2014): Led the company through its expansion into new markets and its IPO.
  • Satya Nadella (2014–present): Current CEO, credited with driving the company’s focus on cloud computing and artificial intelligence.

Financial Overview

Initial Public Offering (IPO)

  • Microsoft went public in 1986, launching its IPO with an opening stock price of $21.
  • By the end of the trading day, the stock price had closed at $27.75.
  • Due to nine stock splits by July 2010, any original IPO shares would have multiplied by 288, meaning the effective price for IPO buyers today would be approximately 9 cents per share.

Stock Performance

  • Peak Price in 1999: Microsoft’s stock price reached its highest point in 1999 at around $119 per share (or $60.93, adjusted for splits).

Dividends

  • Microsoft began offering dividends on January 16, 2003, initially paying $0.08 per share for that fiscal year.
  • The dividend increased to $0.16 per share the following year.
  • In 2005, Microsoft switched to quarterly dividends, starting with $0.08 per share per quarter and a one-time special payout of $3 per share in the second quarter of the fiscal year.
  • The company has continued to increase its dividend payouts over the years.

Credit Ratings and Bond Issuance

  • AAA Credit Rating: Both Standard & Poor’s and Moody’s Investors Service have rated Microsoft with the highest credit rating of AAA.
  • In February 2011, Microsoft issued a $2.25 billion corporate bond with favorable borrowing rates, lower than government bonds, reflecting its strong financial position.

Challenges and Competition

  • Apple Surpasses Microsoft (2011): In Q1 2011, Apple surpassed Microsoft in quarterly profits and revenues for the first time in 20 years, due to a slowdown in PC sales and significant losses in Microsoft’s Online Services Division (which includes its search engine, Bing).
    • Microsoft's Profits: $5.2 billion on $14.5 billion in revenues.
    • Apple's Profits: $6 billion on $24.7 billion in revenues.
  • Microsoft's Online Services Division faced continuous losses from 2006 onward, including $726 million in losses for Q1 2011 and $2.5 billion in losses for the year 2010.

This financial context highlights Microsoft's enduring financial strength, despite periods of competition and challenges.

Microsoft and the U.S. Government

Microsoft has been involved in sharing information about reported software bugs with U.S. intelligence agencies before public fixes are released. The company has stated that it runs several programs to facilitate this sharing. In May 2013, Microsoft was identified as a participant in the NSA's PRISM program, a massive electronic surveillance operation, which began in 2007. However, Microsoft publicly denied voluntary participation in the program, clarifying that it only provides customer data when required by a legally binding order or subpoena and only for specific accounts or identifiers.

During the first half of 2013, Microsoft received data requests affecting between 15,000 and 15,999 accounts. The company emphasized its commitment to customer privacy and data protection, describing government surveillance as a "persistent threat" alongside malware and cyberattacks. This led to a program aimed at improving encryption and transparency, which included opening the first Microsoft Transparency Center in July 2014. The center allowed participating governments to review source code for key products and ensure there were no back doors.

Microsoft has also advocated for stronger privacy regulations from the U.S. Congress to protect consumer data. In April 2016, the company filed a lawsuit against the U.S. government, arguing that secrecy orders violated the rights of both Microsoft and its customers by preventing the company from disclosing government-issued warrants. Microsoft claimed that the government’s indefinite ban on informing users about data requests was unconstitutional under the Fourth Amendment. The lawsuit was dropped in October 2017 after the U.S. Department of Justice changed its data request policies, allowing Microsoft to notify users about government access to their information.

In 2022, Microsoft, alongside Amazon, Google, and Oracle, shared a $9 billion contract with the U.S. Department of Defense for cloud computing services.

Corporate Identity and Culture

Microsoft has cultivated a distinct corporate identity, underscored by its commitment to providing developers with tools, resources, and community engagement. Technical references for developers, articles, and resources are available through the Microsoft Developer Network (MSDN). MSDN offers subscriptions, including more expensive options that grant early access to beta versions of Microsoft software. In addition, Microsoft launched community sites like Channel 9 in 2004, which includes a wiki and forum for developers and users. Another site, On10.net, launched in 2006, provides videocasts and services for developers. Historically, free technical support was provided through online Usenet newsgroups, monitored by Microsoft employees.

"Eating Your Own Dog Food" and Corporate Jargon

Microsoft is known for its unique internal lexicon, one example being the expression "eating your own dog food." This phrase refers to the company's policy of using pre-release and beta versions of products internally to test them in real-world situations. The term is often shortened to just "dog food" and can be used as a noun, verb, and adjective. Another notable phrase, FYIFV or FYIV ("Fuck You, I'm [Fully] Vested"), is used by employees to signal financial independence, implying they have the freedom to avoid work at will.

Stance on H-1B Visas and Employment Practices

Microsoft has been an outspoken advocate for expanding the H-1B visa program, which allows U.S. companies to hire foreign workers in specialized fields. Bill Gates has publicly criticized the cap on H-1B visas, arguing it hinders Microsoft’s ability to recruit skilled employees. Critics of H-1B visa expansion argue that it could lead to job losses for U.S. citizens as foreign workers may accept lower wages.

LGBT Rights and Parental Leave Policies

Microsoft has demonstrated progressive policies towards its employees, particularly regarding LGBT rights. The company received an 87% rating on the Human Rights Campaign Corporate Equality Index from 2002 to 2004 and achieved a 100% rating from 2005 to 2010 after implementing policies supporting gender expression.

In terms of employee welfare, Microsoft has made strides in parental leave policies. In 2015, the company introduced a policy allowing 12 weeks of paid parental leave, with an additional 8 weeks for the parent who gave birth. In 2018, Microsoft expanded this policy to require all companies providing subcontractors to offer 12 weeks of paid parental leave for each employee. This policy builds on the 15 days of paid vacation and sick leave that were already offered annually.

Headquarters

Microsoft's corporate headquarters, informally known as the Microsoft Redmond campus, is located at One Microsoft Way in Redmond, Washington. The company moved to this campus on February 26, 1986, just weeks before its public debut. Since then, the campus has expanded significantly and now encompasses over 8 million square feet (750,000 square meters) of office space, housing around 30,000–40,000 employees. In addition to the Redmond campus, Microsoft also has offices in Bellevue and Issaquah, Washington, and plans for further expansion, including the renovation of its Mountain View, California campus. Microsoft also maintains an East Coast headquarters in Charlotte, North Carolina.

In April 2024, Microsoft announced plans to open a cutting-edge artificial intelligence hub in Paddington, London. The division will be led by Jordan Hoffman, who previously worked for DeepMind and Inflection.

Flagship Stores

Microsoft's retail stores are a key part of its strategy to connect with consumers. The company opened its flagship retail location on Fifth Avenue in New York City on October 26, 2015. The five-story glass storefront spans 22,270 square feet and coincided with the launch of the Surface Book and Surface Pro 4. Another flagship store opened on November 12, 2015, in Sydney's Pitt Street Mall. Microsoft had been seeking a flagship store since 2009 as part of its broader retail expansion.

Philanthropy

In 2015, Microsoft established Microsoft Philanthropies, an internal charitable organization aimed at extending the benefits of technology to underserved populations worldwide. The initiative focuses on several key areas, including:

  • Donating cloud computing resources to university researchers and nonprofit organizations.
  • Expanding global broadband access.
  • Funding international computer science education through the YouthSpark program.
  • Supporting U.S. technology education from kindergarten through high school.
  • Contributing to global child welfare and refugee relief organizations.

COVID-19 Response

During the COVID-19 pandemic, Microsoft actively contributed to relief efforts. Company president Brad Smith announced the donation of essential supplies to Seattle, including:

  • 15,000 protective goggles
  • Infrared thermometers
  • Medical caps
  • Protective suits

Further aid and resources were promised as the crisis continued.

Response to the Russian Invasion of Ukraine

Following the Russian invasion of Ukraine in 2022, Microsoft began closely monitoring cyberattacks from Russian government-backed hackers. In June 2022, the company released a detailed report concluding that state-sponsored Russian hackers had engaged in strategic espionage targeting:

  • Governments
  • Think tanks
  • Businesses
  • Aid organizations

These cyberattacks were primarily directed at 42 countries that had shown support for Ukraine.

Logo

Microsoft's original "Pac-Man Logo," designed by Scott Baker, was adopted on February 26, 1987. The logo, which featured the Helvetica italic typeface with a slash between the "o" and "s," emphasized the "soft" part of the name and conveyed a sense of motion and speed. An internal campaign to k

 

eep the old logo, which had a green, uppercase font and a fanciful "O" (nicknamed the "blibbet"), was unsuccessful.

In 2002, Microsoft introduced a new logo in the U.S. with the tagline "Your potential. Our passion." This logo, associated with the 2008 slogan, lasted until August 23, 2012, when a new corporate logo was unveiled. The new logo reflected Microsoft's shift towards a tile-centric modern interface, in line with the design of Windows Phone, Xbox 360, Windows 8, and th

e upcoming Office Suites. The logo featured four squares with colors representing Microsoft's major products: Windows (blue), Office (orange), Xbox (green), and Bing (yellow). This logo marked the end of the "Pac-Man Logo," which had been in use for over 25 years.

 

 

 

June 25, 1982 – February 26, 1987: Third Microsoft logo.
February 26, 1987 – August 23, 2012: Microsoft "Pac-Man" logo, designed by Scott Baker.
980–June 25, 1982: Second Microsoft logo.
ca. 1975 – 1980: First Microsoft logo.
August 23, 2012–present: Fifth and current Microsoft logo.

Controversies

Microsoft has faced significant criticism and controversies across multiple areas related to its business practices and corporate behavior:

Product Quality and Employment Practices

  • Criticized for the ease of use, robustness, and security of its software.
  • Accused of employing permatemp workers, long-term temporary employees denied benefits.
  • Allegations of forced retention tactics where employees could be sued for attempting to leave.
  • Known for overworking employees, leading to burnout. The company was described as a "Velvet Sweatshop", a term from a 1989 Seattle Times article, later adopted by employees.

Tax Avoidance

  • In 2020, a Microsoft subsidiary in Ireland declared £220 billion in profits but paid no corporation tax due to being tax-resident in Bermuda.
  • Also in 2020, ProPublica reported Microsoft shifted over $39 billion in U.S. profits to Puerto Rico to avoid taxes, paying "nearly 0%". The IRS later audited the company, which resisted through lobbying efforts.
  • In 2023, the IRS alleged Microsoft owed $28.9 billion in back taxes due to profit misallocation.

Antitrust and Anticompetitive Behavior

  • Microsoft's "Embrace, Extend, and Extinguish" strategy involved extending widely used software standards with proprietary elements, disadvantaging competitors.
  • Repeated accusations of monopolistic practices and vendor lock-in.

Recent Antitrust Cases:

  • 2020: Salesforce filed a complaint with EU regulators over the bundling of Teams with Office 365.
  • 2024: The European Commission issued a statement of objections against Microsoft for bundling Teams with Office 365 and Microsoft 365, giving Teams an unfair market advantage.

Privacy and Surveillance

  • Microsoft was the first company identified as participating in the NSA's PRISM surveillance program (2013 leaks by The Guardian and The Washington Post). The program authorized secret data access without warrants, which Microsoft denied.

Diversity and Workplace Activism

  • Civil rights leader Jesse Jackson criticized Microsoft for a lack of diversity but later praised the appointment of two women to the board in 2015.
  • October 2024: Microsoft fired two employees who organized a vigil at its Redmond HQ for Palestinians killed in Gaza, citing the event was unauthorized and linked to the "No Azure for Apartheid" movement.

FTC Investigations

  • November 2024: The U.S. Federal Trade Commission (FTC) launched an antitrust probe into Microsoft's cloud computing, AI, and cybersecurity practices. This included scrutiny of Microsoft's bundling of services and its investments in OpenAI, citing concerns over market dominance and regulatory evasion.

References

  • Altair 8800 microcomputer (no date) National Museum of American History. Available at: https://americanhistory.si.edu/collections/object/nmah_334396 (Accessed: 10 January 2025).
  • Carton, A. et al. (2024) The Microsoft Logo History & Evolution: From 1975 to 2025, Designhill. Available at: https://www.designhill.com/design-blog/the-microsoft-logo-history-evolution/ (Accessed: 10 January 2025).
  • Microsoft Redmond campus - wikimapia (no date) Microsoft Redmond Campus - Redmond, Washington. Available at: https://wikimapia.org/12150/Microsoft-Redmond-Campus (Accessed: 10 January 2025).
  • MITS ALTAIR8800 (no date) User documentation for emuStudio. Available at: https://www.emustudio.net/documentation/user/altair8800/ (Accessed: 10 January 2025).
  • Steve Jobs once called Microsoft Products ‘third-rate’: Apple co-founder’s Old Video Goes Viral (no date) The Economic Times. Available at: https://economictimes.indiatimes.com/magazines/panache/steve-jobs-once-called-microsoft-products-third-rate-apple-co-founders-old-video-goes-viral/articleshow/111887876.cms?from=mdr (Accessed: 10 January 2025).
  • TOI Tech Desk / TIMESOFINDIA.COM / Updated: Apr 1, 2024 (no date) Microsoft is removing this 30-year-old software from windows: How you’ll be affected, alternatives and more - times of India, The Times of India. Available at: https://timesofindia.indiatimes.com/technology/tech-news/microsoft-is-removing-this-30-year-old-software-from-windows-operating-system-how-youll-be-affected-alternatives-and-more/articleshow/108855365.cms (Accessed: 10 January 2025).
 

 

     

 

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