Unlock the Editor’s Digest for Free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Evolution of Microsoft: A Journey of Adaptation
When Bill Gates and Paul Allen founded Microsoft 50 years ago, it was to sell a version of the Basic computer language for the Altair, the first proto-PC. Their first product set the pattern for what was to follow. Microsoft’s fortunes soared, stagnated, and soared again with the tech industry’s periodic platform shifts. But the heart of its business always lay in providing developers with tools to build their applications and platforms to run them on.
Overcoming Existential Threats
Thirty years ago, when the company was at the height of its PC dominance and heading for a showdown with Washington over its anti-competitive tactics, the rise of the internet loomed as an existential threat. If developers could build their applications to run inside web browsers, as internet pioneer Netscape dreamt, then who would need to pay for Microsoft’s Windows? A PC running on the Linux open-source operating system would do just as well.
Adapting to the Cloud and Generative AI
In the event, Microsoft squashed Netscape — contributing to its antitrust woes. But it wasn’t the web that diluted its dominance over the tech world. Instead, smartphones took centre stage, pushing PCs to the sidelines and bringing a new generation of mobile app developers to the fore. The emergence of the cloud also eroded the importance of the PCs and PC-like servers Microsoft was focused on, leaving its stock price in a protracted lull.
Conclusion
Microsoft’s ability to adapt to changing platform shifts has been a hallmark of its success. Satya Nadella, who became CEO in 2014, has continued this tradition, breaking the company’s reliance on the PC and forging alliances with companies like OpenAI. While it is still too early to judge the full extent of the upheaval from generative AI, Microsoft’s ability to withstand this latest disruption will be crucial to its future success.
FAQs
Q: What was Microsoft’s first product?
A: Microsoft’s first product was a version of the Basic computer language for the Altair, the first proto-PC.
Q: How has Microsoft adapted to changing platform shifts?
A: Microsoft has successfully adapted to changing platform shifts, including the rise of the internet, smartphones, and the cloud.
Q: What is generative AI, and how is it affecting Microsoft?
A: Generative AI refers to a type of AI that can generate human-like language and is affecting Microsoft’s business by potentially commoditizing advanced AI technology and changing the way developers build applications.
Q: How has Microsoft’s stock price performed under Satya Nadella’s leadership?
A: Microsoft’s stock price has soared tenfold since Satya Nadella took over as CEO in 2014, lifting its stock market value to nearly $2.8tn.
