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Acquired · Microsoft · History

History

Microsoft was founded in 1975 (Albuquerque, New Mexico (incorporated); moved to Bellevue, then Redmond, Washington). The timeline below traces every inflection point Acquired identified — founding, leadership changes, strategic pivots, crises, cultural moments.

13 events6 decades covered1975 founded
History · other companiesNVIDIAGoogleAmazonMetaMicrosoftBerkshire HathawayTSMCQualcommAppleNetflixSpotifyDisney

The story

In 1975 Bill Gates and Paul Allen read a Popular Electronics cover story about the Altair 8800 microcomputer and cold-called the manufacturer. They sold an interpreter they hadn't yet written. The company was founded in Albuquerque to be near the Altair maker, MITS; within a year they were licensing BASIC to other manufacturers. The defining move came in 1980: IBM hired Microsoft to provide the operating system for its new personal computer. Gates didn't have one, so he bought QDOS from Seattle Computer Products for $50,000, renamed it MS-DOS, and crucially — kept the right to license it to other manufacturers. IBM built the PC; Microsoft built the ecosystem around it. By the time IBM clones flooded the market, every machine ran MS-DOS. That one licensing decision was the original flywheel.

Inflection points · grouped by decade

1970s

  • 1975Founding

    Microsoft founded in Albuquerque

    Gates and Allen found Microsoft after cold-calling MITS to sell a BASIC interpreter for the Altair 8800. They wrote it on a Harvard PDP-10, having never touched the Altair hardware.

    [Acquired Microsoft I]

1980s

  • 1980Strategic shift

    IBM deal — MS-DOS licensed non-exclusively

    Gates buys QDOS for $50,000 and licenses it to IBM as PC-DOS. Critically retains the right to license to other manufacturers. The IBM clone market makes Microsoft the operating-system monopolist.

    [Acquired Microsoft I]

  • 1985Product

    Windows 1.0 ships

    First graphical Windows release. Commercially modest, but it seeds the GUI world before Apple could build the Mac ecosystem to scale.

    [Acquired Microsoft I]

  • 1986IPO

    Microsoft IPO at $21/share

    Goes public on NASDAQ at a $350M valuation. Gates, Allen, and early employees become instant multimillionaires. The first day close gives Microsoft a market cap that looks absurd by the end of the decade.

    [Acquired Microsoft I + public record]

1990s

  • 1990Product

    Office + Windows 3.0 — the productivity bundle is born

    Word, Excel, and PowerPoint bundled as Microsoft Office. Windows 3.0 ships in the same year, providing the GUI platform. The two together create the productivity lock-in that endures 35 years later.

    [Acquired Microsoft I]

  • 1995Product

    Windows 95 + Internet Explorer — the browser wars begin

    Windows 95 is a cultural event; IE bundled into the OS to fight Netscape. The tactic kills Netscape and triggers the DOJ antitrust case. IE becomes the monopoly browser within three years.

    [Acquired Microsoft I]

  • 1998Crisis

    DOJ antitrust case — United States v. Microsoft

    Department of Justice sues for monopolistic bundling of IE with Windows. Judge Jackson orders the company broken up in 2000; appeals court reverses the breakup order in 2001 and a settlement is reached in 2001.

    [Acquired Microsoft I + public record]

2000s

  • 2000Leadership

    Gates hands CEO role to Steve Ballmer

    Bill Gates steps back from CEO; becomes Chairman. Ballmer, Gates's college friend and employee #30, takes over. Gates remains deeply involved in product decisions.

    [Acquired Microsoft I]

  • 2001Product

    Xbox launches — first hardware bet

    Microsoft enters the console market to defend the living room against Sony's PlayStation. Loses money on hardware for years. Builds the Xbox Live network and eventually a gaming business worth ~$15B+ annually.

    [Acquired Microsoft I]

  • 2008Strategic shift

    Azure launches — Microsoft bets on cloud

    Azure (initially Windows Azure) launches publicly. Ballmer's successor Satya Nadella will credit this bet as the foundation of Microsoft's comeback. At launch it is largely ignored by the market.

    [Acquired Microsoft Volume II]

2010s

  • 2014Leadership

    Satya Nadella becomes CEO

    Nadella replaces Ballmer. Pivots the company to cloud-first, mobile-first. Kills the Nokia acquisition strategy; bets all-in on Azure and Office 365. The stock begins its decade-long rise.

    [Acquired Microsoft Volume II]

2020s

  • 2023Strategic shift

    $10B OpenAI partnership + Copilot across Office

    Microsoft invests $10B in OpenAI and integrates GPT-4 as 'Copilot' across Office, Azure, and Windows. Arguably the most significant enterprise-AI distribution move in history: every seat already paying for Microsoft 365 gets an AI layer at the renewal price.

    [Acquired Microsoft Volume II + public disclosures]

  • 2024Strategic shift

    Acquired Microsoft Volume II episode

    Ben and David return to trace the Nadella decade: Azure's rise, the OpenAI bet, Copilot, and what it means for the $3T valuation.

    [https://www.acquired.fm/episodes/microsoft-volume-ii]