Microsoft has been at the center of computing for half a century, evolving into a tech giant as it embraced the internet-driven lifestyle.
Founded with the goal of putting a computer in every home and office, the company is celebrating its 50th anniversary on Friday. On this occasion, Microsoft aims to solidify its leadership in the rapidly evolving field of Artificial Intelligence (AI).
A Tech Titan’s Evolution
Regarding this Washington-based tech giant, eMarketer analyst Jeremy Goldman stated, “From a storytelling perspective, it has been a boring company and a boring stock.”
“It’s ironic because its market capitalization is $2.9 trillion, which is a huge deal,” he added, referring to Microsoft’s valuation based on its share price.
The only company with a higher market cap is Apple, the maker of the iPhone.
Cloud computing, supported by Microsoft’s ubiquitous Office software—now hosted online instead of being sold on floppy disks or CDs—has been a major driver of revenue growth.
“This may not be the most exciting infrastructure, but it is extremely valuable,” Goldman said about Microsoft’s data centers and cloud computing platform.
Its major competitors in cloud computing are Amazon Web Services (AWS) and Google.
The Birth of “Micro-Soft”
When Bill Gates and his childhood friend Paul Allen founded “Micro-Soft” in 1975, clouds were used for weather forecasting, not computing.
They launched the MS-DOS operating system, which later became known as Windows and eventually powered the majority of the world’s computers.
Microsoft Office programs, including Word, Excel, and PowerPoint, became essential business tools, outpacing even free alternatives like Google Docs.
“Microsoft had many businesses that were weak and challenged—Office is a prime example,” Goldman noted. “Yet, Office remains a crucial business for them, demonstrating how well they have been able to innovate.”
Under current CEO Satya Nadella, Microsoft embraced a cloud-based, subscription-driven model, ensuring its software was accessible on nearly any device. Analysts believe this move helped Microsoft avoid losing its market share to free alternatives like Google Docs.
Staying Competitive in a Changing Tech Landscape
While Microsoft may not dominate social media, smartphones, or AI-powered digital assistants like some other American tech giants, it is not for lack of effort.
In 2001, the company introduced the Xbox video game console, gradually expanding its gaming empire. This included the blockbuster acquisition of Activision Blizzard two years ago and the addition of an online subscription service for gamers.
Despite launching the Bing search engine in 2009, Microsoft has struggled to compete with Google in that domain.
The company acquired LinkedIn in 2016, which has shown consistent growth. However, it still lacks the widespread influence of Meta’s Facebook and Instagram or Elon Musk’s X (formerly Twitter).
Microsoft is also among the contenders looking to acquire TikTok, which could face a U.S. ban if its China-based parent company, ByteDance, is forced to sell.
According to Goldman, while Apple and Google have mastered the art of making products user-friendly and enjoyable, this has been Microsoft’s “weak spot.”
“That has never been their strong suit,” he said.
The Missed Mobile Opportunity
Former Microsoft CEO Steve Ballmer, who led the company from 2000 to 2013, is often blamed for missing the shift to smartphones and mobile computing.
Ballmer, known more for his focus on sales than innovation, failed to capitalize on the mobile revolution, leaving Microsoft lagging behind in that market.
His successor, Satya Nadella, has since repositioned Microsoft as a leader in cloud computing and AI, ensuring the company remains a dominant force in the tech industry as it enters its next chapter.