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'''Microsoft Corporation''', headquartered in [[Redmond, Washington|Redmond]], [[Washington]], is the world's largest [[software]] company, trading on the [[NASDAQ]] [[stock market]] under the symbol 'MSFT'. Microsoft develops, manufactures, licenses and supports a wide range of software products for various computing devices. Their best known product is the [[Microsoft Windows]] [[operating system]] family, which has achieved near ubiquity in the [[desktop computer]] market, leading to accusations of illegal [[monopoly|monopolistic]] business practices. The company was founded in [[Albuquerque, New Mexico]] in [[1975]] by [[Bill Gates]] and [[Paul Allen]] to develop and sell [[BASIC]] [[interpreter (computer software)|interpreter]]s under the company name Micro-soft.
'''Microsoft Corporation''', headquartered in [[Redmond, Washington|Redmond]], [[Washington]], is the world's largest [[software]] company. It trades on the [[NASDAQ]] [[stock market]] under the symbol 'MSFT'. Microsoft develops, manufactures, licenses and supports a wide range of software products for various computing devices. Its best known product is the [[Microsoft Windows]] [[operating system]] family, which has achieved near ubiquity in the [[desktop computer]] market. The company's aggressive business practices have been led to its being [[Microsoft antitrust case|found guilty]] of illegally leveraging its [[monopoly|monopoly power]] to defeat its competitors.


==History of Microsoft==
==History==
Formed in [[1975]], Microsoft started by selling a [[BASIC programming language|BASIC]] interpreter which quickly established a reputation for excellence. As the popularity of Microsoft BASIC grew, other manufacturers adopted Microsoft BASIC's [[syntax]] to maintain compatibility with existing Microsoft BASIC implementations. Because of this feedback loop, Microsoft BASIC became a ''de facto'' standard, and the company cornered the market. Later, in cooperation with a large number of companies, it tried to establish a home computer standard called [[MSX]] among the incompatible tangle of other home computers. It became fairly popular mainly in Japan and Europe, but with the increasing use of the IBM PC in the early nineties the home computers era came to an end, and so did MSX.


The name "Micro-soft" (for [[microcomputer]] [[software]]) was used by [[Bill Gates]] in a letter to [[Paul Allen]] for the first time on [[November 29]], 1975. "Microsoft" became a [[registered trademark]] on [[November 26]], [[1976]].
Microsoft was founded in [[Albuquerque, New Mexico]] in [[1975]] by [[Bill Gates]] and [[Paul Allen]], under the company name Micro-soft, to develop and sell [[BASIC]] [[interpreter (computer software)|interpreter]]s. The name "Micro-soft" (short for [[microcomputer]] [[software]]) was used by [[Bill Gates]] in a letter to [[Paul Allen]] for the first time on [[November 29]], 1975. "Microsoft" became a [[registered trademark]] on [[November 26]], [[1976]].


As the popularity of Microsoft BASIC grew, other manufacturers adopted its [[syntax]] to maintain compatibility with existing Microsoft BASIC implementations. Because of this [[vicious circle]], Microsoft BASIC became a ''de facto'' standard and the product dominated its market.
In late [[1980]], [[International Business Machines]] needed an operating system for its new home computer, the [[IBM PC]]. Microsoft licensed [[QDOS|Quick and Dirty Operating System]], from [[Tim Patterson]]'s [[Seattle Computer Products]] in order to sell it to IBM as the standard operating system for the IBM PC. Microsoft subsequently purchased all rights to QDOS for $10,000, and renamed it [[MS-DOS]] (for Microsoft [[Disk]] Operating System). It was released as IBM [[PC-DOS]] 1.0 with the introduction of the PC in [[1981]]. In contracting with IBM, however, Microsoft had retained the rights to license the software to other computer vendors as MS-DOS. The early [[1980s]] saw a flood of IBM PC clones, and Microsoft were quick to leverage their position to dominate the operating system market. (In the 1990s, Microsoft adopted exclusionary licensing, later determined to be illegal, under which the PC manufacturers were required to pay for an MS-DOS licence even when the system shipped with an alternative operating system.)


In late [[1980]], [[International Business Machines]] needed an operating system for its new home computer, the [[IBM PC]]. Microsoft licensed [[QDOS|Quick and Dirty Operating System]], from [[Tim Patterson]]'s [[Seattle Computer Products]] in order to sell it to IBM as the standard operating system for the IBM PC. Microsoft subsequently purchased all rights to QDOS for $10,000, and renamed it [[MS-DOS]] (for Microsoft [[Disk]] Operating System). It was released as IBM [[PC-DOS]] 1.0 with the introduction of the PC in [[1981]]. In contracting with IBM, however, Microsoft had retained the rights to license the software to other computer vendors as MS-DOS. The early [[1980s]] saw a flood of IBM PC clones, and Microsoft were quick to leverage its position to dominate the operating system market.
Software running on PC hardware was not necessarily technically better than the mainframe software that it replaced, but it was much lower cost, empowering billions of people to join the computing revolution. Microsoft's success rode on the PC boom.


Software running on PC hardware was not necessarily technically better than the mainframe software that it replaced, but it was much less expensive. Microsoft's success rode on the PC boom.
The now highly profitable and cash rich Microsoft diversified into a wide variety of software products including:
*[[compiler]]s and interpreters for [[programming language]]s
*[[word processor]]s, [[spreadsheet]]s and other [[office software]]


Microsoft, now highly profitable, diversified into a wide variety of software products including:
Some of these products were successful, and some were not. In most cases, early versions of Microsoft software were buggy, and inferior to competitors, but later versions usually improved rapidly. By the turn of the [[millennium]], many of Microsoft's software products dominated the market in their respective categories.
* [[compiler]]s and interpreters for [[programming language]]s
* [[word processor]]s, [[spreadsheet]]s and other [[office software]]


Some of these products were successful, and some were not. In most cases, early versions of Microsoft software were buggy and inferior to competitors, but later versions improved rapidly and eventually overwhelmed their competition by offering more features for a lower price. The best example of this is probably that of [[WordPerfect]], which in the early [[1990s]] appeared to have an unassailable dominance over the PC word processor market but eventually found itself in a distant second place. A notable failure on Microsoft's part was [[Microsoft Bob]], a short-lived program manager which was widely ridiculed in the press.
Microsoft has devoted huge amounts of effort to [[marketing]] in developing their products and services, as well as to the integration of their software products with one another in an attempt to create a seamless and consistent computing environment for the user.


Microsoft's focus on software usability was a large factor in its early successes. Some key aspects of this were:
==Microsoft products and organization==
Microsoft produces a wide range of software products. Many of these products were developed internally, while some were acquired and [[rebranding|rebranded]] by Microsoft for distribution. Products in this category include Microsoft Project, a project management package, [[Visio]], a charting package, and [[MS-DOS]] itself, the basis for the company's success.


* A common user interface: all Microsoft applications used the same menu commands, shortcuts, and procedures for similar tasks. This reduced the barrier to learning and using new software.
In April 2002, Microsoft re-organized into seven core business units, each with its own financial reporting to delegate responsibility and more closely track the performance of each unit.
* Backward compatibility: Microsoft made sure that older code and data would work on newer systems. In contrast, until about 1986, some major manufacturers of hardware-software combinations would periodically introduce new machines with new operating systems giving little or no compatibility with the previous ones. A common Microsoft demo was to show old [[Visicalc]] software running on the latest version of Windows.
* Interconnectedness: generally, and especially in Microsoft Office, data prepared with one Microsoft application can be brought into other Microsoft applications. A common example is creating a diagram in Excel and pasting it into a Word document.


Microsoft has devoted large amounts of money and effort to developing, integrating, and [[marketing]] its products and services. By the turn of the [[millennium]], many of Microsoft's software products dominated their markets.
===Client===
Microsoft's [[flagship]] product is the [[Microsoft Windows|Windows]] [[operating system]], produced in many versions, including [[Windows XP]] and [[Windows Server 2003]]. Almost all [[IBM PC compatible|IBM compatible]] [[personal computers]] are sold with Windows pre-installed. ''(See [[History of Microsoft Windows]].)''


==Products and organization==
Microsoft produces the [[Internet Explorer]] [[web browser]] with which is bundled [[Outlook Express]] - an email client. These products are included with the Microsoft Windows operating system. This formed the central point of the [[Microsoft antitrust case]] brought by the United States government in [[1998]].


Microsoft sells a wide range of software products. Many of these products were developed internally, while some were acquired and [[rebranding|rebranded]] by Microsoft for distribution. Products in this category include Microsoft Project, a project management package; [[Visio]], a charting package; and [[MS-DOS]] itself, the basis for the company's success.
The product which allowed Microsoft to generate its enormous wealth, however, was the [[MS-DOS]] operating system. All versions of Windows prior to [[Windows NT]] (for business systems) and [[Windows XP]] (for home systems) were based on an MS-DOS foundation.


In April 2002, Microsoft reorganized into seven core business units, each with its own financial reporting to delegate responsibility and more closely track the performance of each unit. [http://www.microsoft.com/mscorp/articles/business.asp] These business units are:
===Information Worker===
[[Microsoft Office]] is the company's line of [[office software]]. It includes [[Microsoft Word|Word]] (a word processor), [[Microsoft Access]] (a personal relational database) [[Microsoft Excel|Excel]] (a [[spreadsheet]]), [[Microsoft Outlook|Outlook]] (a Windows-only [[collaborative software]], mostly used with the [[Microsoft Exchange Server|Exchange]] server), and [[Microsoft PowerPoint|PowerPoint]] (presentation software). With the release of Office 2003, a number of other products were brought under the Office banner, including Microsoft [[Visio]], [[Microsoft Project]], [[Microsoft MapPoint]] and [[Microsoft OneNote]]. Microsoft also produces Microsoft Office for [[Apple Macintosh]] computers. The Mac version of Office includes the Mac-only [[Microsoft Entourage|Entourage]] instead of Outlook. Like Windows, Office has grown to near-monopoly status in many markets.


* ''Windows Client'' (managing the Windows client, server, and embedded operating systems)
===Server and Tools===
* ''Information Worker'' (managing the office software products)
[[Microsoft Visual Studio]] is the company's set of [[programming]] tools and [[compilers]]. It is GUI oriented and links easily with the [[Windows API]]s, but must be specially configured for non-Microsoft libraries. The current version is [[Visual Studio .NET]] 2003.
* ''Microsoft Business Solutions'' (managing the business services and process applications)
* ''Server and Tools'' (managing developer tools and integrated server software)
* ''Mobile and Embedded Devices'' (managing palmtop and phone devices)
* ''MSN'' (managing web-based services)
* ''Home and Entertainment'' (managing consumer hardware and software)


===Windows Client group===
[[Microsoft FrontPage]] is a [[WYSIWYG]] [[HTML editor]].


Microsoft's [[flagship]] product is the [[Microsoft Windows|Windows]] [[operating system]]. It has been produced in many versions including [[Windows XP]] and [[Windows Server 2003]]. Almost all [[IBM PC compatible|IBM compatible]] [[personal computers]] are sold with Windows pre-installed. ''(See [[History of Microsoft Windows]].)''
===Home and Entertainment===
When Microsoft released the [[Xbox]] in late [[2001]], the company entered the multi-billion dollar [[game console]] market dominated by [[Sony]] and [[Nintendo]].


Microsoft bundles the [[Internet Explorer]] [[web browser]] and the [[Outlook Express]] email client with Windows. The act of tying Internet Explorer with Windows helped to defeat [[Netscape Communications Corporation]]'s rival product [[Netscape Communicator]], and formed the central point of the [[Microsoft antitrust case]] brought by the United States government in [[1998]].
Microsoft sells [[computer games]] that run on Windows PCs, such as the [[Age of Empires]] and [[Microsoft Flight Simulator]] series. Microsoft develops and publishes [[video games]] for its [[Xbox]] video game console. In addition, all "third party" Xbox video game publishers such as [[Electronic Arts]] and [[Activision]] pay a licence fee to publish games for Microsoft's Xbox system.


===Information Worker group===
Microsoft produces a line of reference works, such as [[encyclopedia]]s and [[atlas (cartography)|atlas]]es, under the name [[Microsoft Encarta|Encarta]].


[[Microsoft Office]] is the company's line of [[office software]]. It includes [[Microsoft Word|Word]] (a word processor), [[Microsoft Access|Access]] (a personal relational database), [[Microsoft Excel|Excel]] (a [[spreadsheet]]), [[Microsoft Outlook|Outlook]] (Windows-only [[collaborative software|groupware]], mostly used with the [[Microsoft Exchange Server|Exchange]] server), and [[Microsoft PowerPoint|PowerPoint]] (presentation software). With the release of Office 2003, a number of other products were brought under the Office banner, including Microsoft [[Visio]], [[Microsoft Project]], [[Microsoft MapPoint]], and [[Microsoft OneNote]]. Microsoft also produces Microsoft Office for [[Apple Macintosh]] computers; the Mac version of Office includes the Mac-only [[Microsoft Entourage|Entourage]] instead of Outlook. Like Windows, Office has grown to near-monopoly status in many markets.
===MSN===
In the mid-[[1990s]], Microsoft began to expand its product line into the [[computer network|networked]] computer world. It launched its [[online service]] [[MSN]] (Microsoft Network) on [[August 24]], [[1995]], which was a direct competitor to [[AOL]]. MSN became an umbrella service for all of Microsoft's online services.


===Microsoft Business Solutions group===
In [[1996]], Microsoft and [[NBC]], an [[United States|American ]] broadcasting network, created [[MSNBC]], a combined 24-hour news television channel and online news service.


The Business Solutions Group was created in [[April 2001]] with the acquisitions of Great Plains. Subsequently, Navision was acquired to provide a similar entry into the European market. The Business Solutions group focuses on developing financial and business management software for companies.
At the end of [[1997]], Microsoft acquired [[Hotmail]], the original and most popular [[webmail]] service. It was rebranded MSN Hotmail and was used as a platform to boost [[Microsoft Passport|Passport]], a universal login service.


===Server and Tools group===
[[.NET Messenger Service|MSN Messenger]], an [[instant messaging]] client, was introduced in [[1999]] to compete with the popular [[AOL Instant Messenger]] (AIM).


[[Microsoft Visual Studio]] is the company's set of [[programming]] tools and [[compilers]]. It is GUI oriented and links easily with the [[Windows API]]s, but must be specially configured if used with non-Microsoft libraries. The current version is [[Visual Studio .NET]] 2003.
===Mobile and Embedded Devices===
Microsoft has attempted to leverage the powerful Windows brand into many other markets, with products such as [[Windows CE]] for [[Personal Digital Assistant|PDA]]s and their "Windows powered" Smartphone products.


The [[Microsoft .NET|.NET]] initiative is a major company-wide effort by Microsoft. It achieves this by using a proprietary extension of XML to link devices so that they can be controlled by computers. .NET has several aspects including:
Microsoft initially entered the Mobile market through Windows CE for handheld devices which today has developed into Windows Mobile 2003. Microsoft works with companies such as HP, Motorola and Dell in providing the operating system for these devices and reference designs.


*Easing the development of applications that use the Internet
Microsoft recently moved the embedded group and the mobile group under one team. The embedded group focus is on devices where the OS may not directly be visible to the end-user, e.g. appliances, cars. The company bought WebTV (subsequently renamed [[MSN TV]]), a television [[internet appliance]].
*Alleviating problems related to managing and installing multiple versions of complex software packages on the same system (see [[DLL-hell]])
*Providing a more consistent development platform for all Windows applications (see [[Common Language Infrastructure]], also known as CLI)


[[Microsoft FrontPage]] is a [[WYSIWYG]] [[HTML editor]].
===Business Solutions Group===
The Business Solutions Group was created in [[April 2001]], with the acquisitions of Great Plains. Subsequently, Navision was acquired to provide a similar entry into the European market. The Business Solutions group focuses on developing financial and business management software for companies.


===Mobile and Embedded Devices group===
===Other Areas===
Microsoft has created a number of training initiatives, based on multiple-choice exams, with the intention of creating a pool of low-cost employees with skills relating exclusively to Microsoft products. The best known of these is the [[MCSE]] qualification, which stands for "Microsoft Certified Systems Engineer". Another popular certification is the Microsoft Certified Solution Developer (briefly called MCSD.NET). This certification is a developer's qualification, aimed towards developers who can demonstrate with success their skills with Microsoft's development tools and architectures.


Microsoft has attempted to leverage the powerful Windows brand into many other markets, with products such as [[Windows CE]] for [[Personal Digital Assistant|PDA]]s and its "Windows powered" Smartphone products. Microsoft initially entered the Mobile market through Windows CE for handheld devices which today has developed into Windows Mobile 2003. Microsoft works with companies such as HP, Motorola and Dell in providing the operating system for these devices and reference designs.
Microsoft also produces a number of computing related hardware products including [[computer mouse|mouse]], [[keyboard]], [[joystick]], [[gamepad]]s.


Microsoft recently moved the embedded group and the mobile group under one team. The embedded group focus is on devices where the OS may not directly be visible to the end-user, e.g. appliances, cars. The company bought WebTV (subsequently renamed [[MSN TV]]), a television [[internet appliance]].
==Business culture==
===The software developer===
Microsoft has often been described as having a developer-centric business culture. A great deal of time and money is spent each year on recruiting young university-trained software developers meeting very exacting criteria. Resources are continuously invested in measures devised to keep them in the company, year after year.


===MSN group===
For instance, while many software companies often place an entry level software developer in a [[cubicle desk]] within a large [[office]] space filled with other cubicles, Microsoft assigns a private or semi-private closed office to every developer or developer duo. In addition, key decision makers at every level are either developers or former developers.


In the mid-[[1990s]], Microsoft began to expand its product line into the [[computer network|networked]] computer world. It launched its [[online service]] [[MSN]] (Microsoft Network) on [[August 24]], [[1995]] as a direct competitor to [[AOL]]. MSN became an umbrella service for all of Microsoft's online services.
In a sense, the software developers at Microsoft are considered the "stars" of the company in the same way that [[sales]] staff at [[IBM]] are considered the "stars" of their company.


In [[1996]], Microsoft and [[NBC]], an [[United States|American]] broadcasting network, created [[MSNBC]], a combined 24-hour news television channel and online news service.
===Canine nourishment===
Within Microsoft the expression "eating your own dog food" is used to describe the policy of using Microsoft products as internal tools, above everything else. It seems to be very difficult for management and support staff to get the permission to use software from Microsoft competitors. It seems to be difficult even for the software developers, who are the "stars" of the company, to use software tools made by the competition. This policy is justified by the need to make employees aware of the products.


At the end of [[1997]], Microsoft acquired [[Hotmail]], the first and most popular [[webmail]] service. It was rebranded MSN Hotmail and was used as a platform to boost [[Microsoft Passport|Passport]], a universal login service.
Many have noted that one of the effects of this policy is to constantly push the development of products which software developers find useful for their immediate needs (regardless of the perceived needs of the general market, as stated by others) given the great influence the developers as a whole (but not necessarily individually) have on corporate orientations.


[[.NET Messenger Service|MSN Messenger]], an [[instant messaging]] client, was introduced in [[1999]] to compete with the popular [[AOL Instant Messenger]] (AIM).
===Long term wariness===
Microsoft fosters a general attitude of long term strategic wariness in its managers. Everybody must be ready for anything the competition or the market can throw on the road in any number of years. In this frame of mind being the largest software company in the world is not seen as a form of safety or a guarantee of future success. For instance: Future competitors could rise from related industries which are not now in the software business in a very concentrated way. Giant hardware companies who tower over Microsoft could turn their attention to it in a few years from now and try to crush it. Consumers of vast segments of Microsoft software could decide they do not wish to upgrade anymore, or at least for a few more years than usual. Because of these imponderables, Microsoft managers must maintain an unending vigilance and do everything to sustain a dynamic expansion in new markets.


===Home and Entertainment group===
The [[Halloween document]]s, internal Microsoft memos which were leaked to the [[open source]] community beginning in [[1998]], indicate that Microsoft perceives [[open source software]] in general and the freely available [[Linux]] operating system in particular as a growing long-term threat to Microsoft's dominance of the software industry. In marked contrast to the company's public statements, which tend to downplay or ignore open source software, the Halloween documents acknowledge the technical superiority of Linux and outline a strategy of "De-commoditiz[ing] protocols & applications"; in other words, basing networks and documents around proprietary standards so that they can only interoperate with other computers which use Microsoft products. Opponents of Microsoft have dubbed this strategy [[embrace, extend and extinguish]].


When Microsoft released the [[Xbox]] in late [[2001]], the company entered the multi-billion dollar [[game console]] market dominated by [[Sony]] and [[Nintendo]]. The Xbox currently ranks second to Sony's [[PlayStation 2]] in market share.
==Public perceptions==
For a long time, Microsoft was widely seen as the "good guy" in the computer software market, providing an inexpensive alternative to the expensive systems provided by the major mainframe and [[UNIX]] vendors, and it was admired for the large amounts of [[money]] it made in doing so.


Microsoft sells [[computer games]] that run on Windows PCs, such as the [[Age of Empires]] and [[Microsoft Flight Simulator]] series. Microsoft develops and publishes [[video games]] for its [[Xbox]] video game console. In addition, all "third party" Xbox video game publishers such as [[Electronic Arts]] and [[Activision]] pay a license fee to publish games for Microsoft's Xbox system.
By the [[1990s]], the perception that Microsoft had become the "bad guy" had increased substantially. It was frequently accused of leveraging its market dominance in desktop computing in order to try to exploit its customers unfairly.


Microsoft produces a line of reference works, such as [[encyclopedia]]s and [[atlas (cartography)|atlas]]es, under the name [[Microsoft Encarta|Encarta]].
In recent years, Microsoft has been accused of anti-competitive business practices by the [[United States|US]] [[government]], the [[European Union]], and Microsoft's competitors; this has generated huge negative perceptions.


===Other offerings===
Microsoft has been called "[[Borg|the Borg]]" after the fictional race of aliens in the [[Star Trek]] universe. The name began to be used in reference to Microsoft soon after the Borg's first appearance in [[Star Trek: The Next Generation]]. It reflects the perception that Microsoft tends to acquire technology from competitors rather than developing it in-house, as well as to Microsoft's ability to adapt to and overwhelm its opponents' strategies by having vastly superior resources.


The product which allowed Microsoft to generate its enormous wealth was the [[MS-DOS]] operating system. All versions of Windows prior to [[Windows NT]] (for business systems) and [[Windows XP]] (for home systems) were based on an MS-DOS foundation.
Microsoft funds several think tanks, including the [[American Enterprise Institute]], the [[Center for Strategic and International Studies]], the [[Heritage Foundation]], the [[Cato Institute]] and the [[Alexis de Tocqueville Institution]]. [http://news.com.com/Linux+makes+a+run+for+government/2100-1001_3-950083.html] [http://news.zdnet.co.uk/software/linuxunix/0,39020390,39155268,00.htm]


In the early 1980s, in cooperation with a large number of companies, Microsoft created a home computer system named [[MSX]]. It became fairly popular in Japan and Europe, but the IBM PC became increasingly dominant through the late 1980s and the early 1990s, bringing an end to the MSX and many other systems like it.
==Advantages and disadvantages==
===Ease of use===
Usability has been an important aspect of Microsoft software that helped it gain its initial market share. In fact, some research contends that Microsoft's position in certain markets like Excel and Internet Explorer can be completely traced to better serving the customer needs. (Winners, Losers & Microsoft, ISBN 0945999844). Microsoft has provided better ease of use for its users through:
*Common user interface -- all Microsoft applications used the same menu commands, short-cuts, and procedures for similar tasks which reduced the barrier to learning and using new software.
*Backward compatibility -- Microsoft generally has done a better job at allowing older code and data to work on newer systems, in comparison with some major manufacturers of hardware-software combinations, until about 1986 periodically would introduce new machines with new operating systems giving little or no compatibility with the previous ones. For instance, a common Microsoft demo is to show [[Visicalc]] running on the latest version of Windows. On the other hand, programmers have to go through additional documentation on the evolution of the Microsoft OS and data standards, whenever they build a general application.
*Interconnectedness -- this applies especially to Microsoft Office, but, in general, the data of one Microsoft application has been more 'usable' by other Microsoft applications. A common example is creating a diagram in Excel and pasting it into a MS Word document.


Microsoft has launched the Next-Generation Secure Computing Base (formerly known as the [[Palladium operating system]], also known as [[Trusted Computing]]) as its solution to [[computer insecurity]]. Opponents have characterised it as another exercise in entrenching and extending Microsoft's monopoly, effectively allowing the company to control all uses of PC technology. In particular, they have accused Microsoft of using it as a way to combat the emergence of [[free software#Free Speech definition|free software]].
Critics claim that the apparent simplicity of the products prevents users from making full use of their computer and sometimes being frustrated by actions which should be simple to perform. Critics charge that this focus on [[Usability engineering|usability]] and automation has come at the expense of important security considerations . Microsoft's practice of designing and configuring software to make it easier to use and less intimidating to novices has facilitated the spread of these viruses and worms. For example, Windows operating systems released since [[1995]] hide [[file extension]]s by default, which can help malicious programmers trick unwitting e-mail recipients into opening dangerous file [[attachment]]s that masquerade as harmless files with innocuous extensions. Another example is that recent versions of Outlook and Outlook Express disable dangerous file types upon receipt, so that users cannot open them. (See discussion on security)
<!--
Microsoft software makes heavy use of software re-use. This is one of the main reasons the resources of most Microsoft software can be used from most other Microsoft software. This advantage can be misused, however, see below.


Microsoft has created a number of training initiatives, based on multiple-choice exams, with the intention of creating a pool of low-cost employees with skills relating exclusively to Microsoft products. The best known of these is the [[MCSE]] ("Microsoft Certified Systems Engineer") qualification. Another popular certification is the Microsoft Certified Solution Developer, briefly called MCSD.NET. This certification is a developer's qualification, aimed towards developers who can successfully demonstrate their skills with Microsoft's development tools and architectures.
Do they do this more than others?
-->


Microsoft also produces a number of computing related hardware products including [[computer mouse|mice]], [[keyboard]]s, [[joystick]]s, and [[gamepad]]s.
===Total cost of ownership===
While it is understood that the full cost of software extends far beyond the licensing of the software itself, there is an ongoing and unresolved debate regarding how to actually measure the cost of software acurately.
Microsoft supporters argue that the position and architecture of Microsoft software results in a lower "total cost of ownership" than competing Unix-based solutions.
*Microsoft software is also designed to be easy to configure, allowing companies to hire lower-paid non-expert systems administrators.
*There is a larger pool of trained and certified Microsoft administrators that will assist you in deploying and managing your system.
*The Microsoft ecosystem of software is designed to work well together since several products come primarily from the same vendor.


==Business culture==
Detractors argue that users do not own Microsoft software and that therefore Total Cost of Ownership comparisons with open source software do not compare like with like. Furthermore:
*Lower base staff competence, cheaper, less reliable software, and software that's easy-to-use, and easy-to-break means you will need to hire more staff.
*Microsoft shops are liable to security breaches, because reducing [[computer insecurity]] requires highly trained systems administrators, regardless of the operating system in use.


===Security===
===The software developer===
By [[2002]], several of Microsoft's networking- and Internet-related products had become the subject of intense criticism following several high-profile [[Computer insecurity|security]] lapses. Malicious programmers increasingly exploited weaknesses in Microsoft software by creating and distributing [[Computer worm|worms]], [[Virus (computing)|viruses]], and [[Trojan horse (computing)|Trojan horse]]s designed to spread across the Internet and waste computing resources or destroy data. These [[Computer security exploit|exploits]] targeted Microsoft's [[Outlook]] and [[Outlook Express]] e-mail programs, [[Internet Information Server]] (IIS) Web server, and [[SQL Server|SQL]] [[database]] server software.


Microsoft has often been described as having a developer-centric business culture. A great deal of time and money is spent each year on recruiting young university-trained software developers who meet very exacting criteria, and on keeping them in the company. For example, while many software companies often place an entry level software developer in a [[cubicle desk]] within a large [[office]] space filled with other cubicles, Microsoft assigns a private or semi-private closed office to every developer or pair of developers. In addition, key decisionmakers at every level are either developers or former developers.
Microsoft contends that its dominant position in several Internet-related software categories naturally subjects the company's products to more attacks, because the products themselves are so widespread. In addition, Microsoft contends that its security record on critical vulnerabilities has substantially improved and compared favorably to that of its competitors.


In a sense, the software developers at Microsoft are considered the "stars" of the company in the same way that [[sales]] staff at [[IBM]] are considered the "stars" of their company.
Critics counter that these attacks also target Microsoft products that do not hold commanding market shares, and suggest that this is because Microsoft products in general are fundamentally less secure than those of the company's competitors. This problem is compounded by the very ubiquity of Microsoft software. Once a working virus is released, it is almost certain to spread very widely because almost every computer it comes across is able to replicate and spread the virus. This effect has recently been dubbed the "Microsoft [[monoculture]]," by analogy to the problems associated with lack of [[biodiversity]] in an ecosystem. As an acknowledgement of the problem, the National Science Foundation on November 25, 2003 announced it had granted US$750,000 (Lemos, 2003) to computer scientists at Carnegie Mellon University and the University of New Mexico to further understand the causes and the (presumably) negative effects of the homogenization of the world's computing platforms (National Science Foundation, 2003).


==="Eating our own dog food"===
In [[January 2002]], Gates announced the Trustworthy Computing initiative, which he described as a long-term, companywide initiative to make the computing experience as trustworthy as other established experiences such as the telephone. Many people focussed on the aspect of trustworthy computing that focussed on the new emphasis on security and privacy in all of Microsoft's products. The initiative prompted the company to reevaluate and redesign several of its practices and processes, and delayed the release of [[Windows Server 2003]], the successor to the Windows 2000 Server family of operating systems. Reaction to the Trustworthy Computing initiative has been mixed, with observers lauding Microsoft's increased focus on security but charging that the company still has a lot of work to do.


Within Microsoft the expression [[eat one's own dog food|"eating our own dog food"]] is used to describe the policy of using Microsoft products inside the company. It can be very difficult for management, support staff, and even software developers to get permission to use software from Microsoft competitors.
Earlier versions of Microsoft products had a [[security stance]] of "permitted unless forbidden", which is hard to change, as much Microsoft software relies on this policy. This stance can be taken advantage of to cause security problems. For example, macros embedded in documents or HTML in email can run programs allowing an attacker to take over the user's computer. However, chief cause in the spread of viruses has been unskilled users failing to apply available patches, sometimes as much as nine months old. Windows XP Service Pack 2 attempts to address this by forcing users to automatically apply patches and making the system "secure by default" for example by enabling the firewall by default.


One of the effects of this policy is to push the development of products which software developers find useful for their immediate needs, regardless of the perceived needs of the general market.
Microsoft's licensing policy has helped somewhat in the ''success'' of virus distribution channels, because the first [[Service pack]] to Windows XP checked for known pirate keys.


===Long term wariness===
In [[February 2004]], the partial source code of Windows NT/2000 was leaked and widely distributed on filesharing networks. The archive contains source code for network protocols, parts of Internet Explorer, certificate handling and kernel code. The potential for hacks and exploits as a result of the leak is an obvious sign that Microsoft's security protocols to protect its intellectual property from abuse has failed. However, to date no known current exploits have been released based on the source code, and the code was widely considered to be of unexpectedly good quality.


Microsoft fosters a general attitude of long term strategic wariness in its managers, who are expected to be ready for any challenge from the competition or the market. In this frame of mind, being the largest software company in the world is not seen as a form of safety or a guarantee of future success; for instance, future competitors could rise from other industries, or computer hardware companies could try to become less dependent on Microsoft, or consumers could decide not to upgrade their software as often. Microsoft requires its managers to maintain vigilance and sustain a dynamic expansion in new markets.
===Network effects vs. vendor lock-in===
Microsoft early on defined itself as a platform company and understood the importance of attracting third-party programmers. It did so by providing development tools, training, extensive and proprietary [[API]]s in early versions, and partner programs. The solutions and plugins built by third-party programmers in turn led to more Microsoft sales.


==Controversy==
Now the ubiquity of Microsoft software allows the user to benefit from so-called [[network effect]]s. For example, the large installed base of [[Microsoft Word]] makes MS Word files the de-facto standard word-processor format, making it essential for most business users. In addition, more potential employees having training in MS Office than competing products. Hence using MS Office can result in reduced training requirements, especially in the case of temporary employment.


Microsoft has been the focus of much controversy in the computer industry, especially since the 1980s. Among the more frequently criticized areas are:
Microsoft software also represents a "safe" option for IT managers purchasing software systems, in that the ubiquity of Microsoft software allows them to claim that they are following accepted best practices. This is a particularly attractive option for IT managers with limited technical knowledge.


* Ease of use: Microsoft has been accused of allowing the user interface of its products to become inconsistent and overly complicated, requiring interactive "wizards" to function as an extra layer between the user and the interface.
The European Commission quotes Microsoft head of C++ development Aaron Contorer as stating in an internal Microsoft report for senior management:
* Security: Microsoft products are seen as overly vulnerable to [[computer virus]]es and malicious attacks.
* Business practices: Microsoft is believed to engage in unfair and anticompetitive business tactics. The findings-of-fact from a federal antitrust case have affirmed this, and Microsoft has lost other lawsuits in which competitors accused it of stealing code, making Microsoft operating systems incompatible with their products, or using predatory pricing and licensing tactics.
* Total cost of ownership: Microsoft software is seen as more expensive to purchase, use, and maintain than competitors' software. As the price of PCs has fallen, the price of Microsoft Windows has not.
* Open source: Microsoft has engaged in a broad campaign of [[FUD|fear, uncertainty, and doubt]] against [[open source]] software.


These and other issues are covered in [[Common criticisms of Microsoft]].
:"The Windows API is so broad, so deep, and so functional that most ISVs would be crazy not to use it. And it is so deeply embedded in the source code of many Windows apps that there is a huge switching cost to using a different operating system instead..."


==The future==
:"It is this switching cost that has given the customers the patience to stick with Windows through all our mistakes, our buggy drivers, our high TCO [total cost of ownership], our lack of a sexy vision at times, and many other difficulties [...] Customers constantly evaluate other desktop platforms, [but] it would be so much work to move over that they hope we just improve Windows rather than force them to move. In short, without this exclusive franchise called the Windows API, we would have been dead a long time ago."


The next version of Windows in development is code-named [[Windows Longhorn|Longhorn]], which will be an extension of and improvement on Windows XP and Windows Server 2003. Planned features include speech recognition, an enhanced user interface, and a database-oriented file system. Longhorn was initially to ship during 2003, but has since slipped to 2006.
==The monopoly question==
Microsoft's Windows product has an effective [[monopoly]] in the desktop operating systems market. Those who make this claim point out that, among other things, almost every PC sold has a copy of Microsoft Windows pre-installed. In a [[2003]] [[publication]], [[Dan Geer]] argued the prevalence of Microsoft products has resulted in a [[monoculture]]. This assertion has been responded to directly in a publication sympathetic to Microsoft, [http://www.mcpmag.com/columns/article.asp?EditorialsID=610 MCP Magazine].


Microsoft is working to leverage its current success in desktop operating systems into new markets such as media players, server software, handheld devices, web services, and video games, with varying degrees of success. Microsoft is now positioning PCs running Windows XP Media Center Edition as a home entertainment hub.
Some observers claim that the characterization of Microsoft as a monopoly leaves its competitors in a conflict:
*On the one hand, competitors reject this characterization as negating their own position. In a monopolized market, there exists only one provider of a product or service. Therefore, to competitors, calling Microsoft a monopoly is a defeatist strategy: it denies either their own existence, or their capacity to survive and to compete.
*On the other hand, competitors favor the characterization of Microsoft as a monopoly because such a characterization benefits them. First, it raises the potential for regulatory intervention. Second, the public relations benefits of being seen as an "underdog" may increase sales.


It is also looking to move towards a "subscription model" for licensing. Microsoft's current revenue scheme depends on users buying upgrades on a periodical basis, but this is becoming increasingly difficult, as many users continue to use older packages of its software. On a subscription basis, users would pay an annual fee for the use of Microsoft software.
Monopoly or not, there is no doubt that:
*In most mass-market desktop software application markets, Microsoft is a dominant player.
*This dominance attracts widespread resentment.
*This resentment is not restricted to its competitors.


Based on recent Microsoft management comments, it appears that Microsoft is attempting to move up-market, positioning its products and services as high-value rather than low-cost. Steve Ballmer was quoted as saying in 2002, "We are actually having to learn how to say, 'We may have a high price on this one, but look at the additional value and how that value actually leads to a lower cost of ownership despite the fact that our price may be higher.'" (Reported in ''VARbusiness'', July 15, 2002)
Critics of Microsoft have accused it of using its dominance in desktop operating system to try to leverage market share in other sectors of the computer market, such as web browsers (Internet Explorer), server operating systems (Windows NT), office software suites (Microsoft Office), and streaming media (Windows Media).


==See also==
After its bundling of the Internet Explorer web browser into its Windows operating system, Microsoft acquired an extremely large market share in the browser market. Partly as a result of this dominance, Microsoft was convicted by a [[USA]] federal court for abusing its monopoly in the desktop operating systems market (see [[Microsoft antitrust case]] for more details).


* [[History of Microsoft Windows]]
In [[2003]]-[[2004]], the [[European Commission]] investigated the bundling of media player software into Windows, a practice which rivals complained was destroying the market for their own products. Negotiations between Microsoft and the Commission broke down in March [[2004]], and the company was subsequently handed down a record fine of &euro;497 million ($613 million) for its breaches of [[EU]] competition law. The ruling is subject to appeal in the European courts. Separate investigations into alleged abuses of the server market were also ongoing at the same time.
* [[MSDN|Microsoft Developer's Network]]

* [[SCO v. IBM]]
Microsoft has in all of these cases depicted its actions as its response to customer demand.

Critics also decry Microsoft's perceived "[[embrace and extend]]" strategy of adding proprietary features to open, de facto standards, thereby using its market dominance to gain de facto ownership of standards "extended" in this way.

==The Future==
The [[open source]] movement is traditionally at odds with Microsoft for

*Microsoft's closed standards (e.g. [[NTFS]]) that reduce interoperability with open source software
*what is perceived as the selling of inferior (especially with regards to security, stability and overall quality of engineering) products at high prices by means of monopolistic practices.
*Microsoft's supposed spreading of [[FUD|fear, uncertainty, and doubt]] about open source and other competing software.

In recent years [[Linux]] has become a popular server OS, particularly for the low-margin, price-sensitive hosting market, with most low-end hosts hosting on the free OS.

<!--
This is confused: Apache != Linux. Find figures for *Linux* usage and put them back here
According to [[Netcraft]]'s measurements, the open source [[Apache HTTP Server|Apache]] server software is used on 67% of servers, while Microsoft's [[IIS]] software is used on 21%.
-->

With the increasing popularity of Linux, with [[Walmart]] selling a cheap consumer PC running [[Linspire|Lindows]] (now called Linspire), Microsoft [[CEO]] [[Steve Ballmer]] has stated that Linux is a "tough competitive force... It's non-traditional, it's [[free software#Free Speech definition|free]] and it's cheap. We have to educate people why what they pay for [our offerings] is more than offset by the value we deliver. We used to be the cheap guys. We were cheaper than Novell, cheaper than Oracle. We can't do that with this one." (Reported in CRN.com, June 17, 2002).

However, with $50 billion in cash reserves, it is unlikely that Microsoft will lose its position as a major player in the computer market anytime soon.

Microsoft is working to leverage its current success in desktop operating systems into new markets such as media players, server software, handheld devices, web services and video games, with varying degrees of success.

It is also looking to move towards a "subscription model" for licensing. Microsoft's current revenue scheme depends on users buying upgrades on a periodical basis, but this is becoming increasingly difficult, as many users fail to see the benefits of upgrades and continue to use older packages, such as Windows 98, Windows ME and Windows 2000 instead of the latest Windows XP and Windows Server 2003. Microsoft would like to switch to a subscription basis, whereby users pay an annual fee for software.

At the same time, Microsoft is engaging in a major [[public relations]] and [[brand]]ing exercise to try to combat the negative PR associated with the recent accusations regarding its business practices.

Microsoft is now positioning PCs running Windows XP Media Center Edition as a home entertainment hub.

Based on recent Microsoft management comments, it appears that Microsoft is attempting to move up-market, positioning its products and services as high-value, rather than low-cost. Steve Ballmer was quoted as saying in 2002 "We are actually having to learn how to say, 'We may have a high price on this one, but look at the additional value and how that value actually leads to a lower cost of ownership despite the fact that our price may be higher,'" (Reported in ''VARbusiness'', [[July 15]] [[2002]]).

===Microsoft .NET initiative===
The [[Microsoft .NET|.NET]] initiative is a major company-wide effort by Microsoft. It has several aspects including:
*Easing the development of applications that use the Internet
*Alleviating problems related to managing and installing multiple versions of complex software packages on the same system (see [[DLL-hell]]).
*Providing a more consistent development platform for all Windows applications (see [[Common Language Infrastructure]] [CLI]).

It will achieve this by using a proprietary extension of XML to link several different devices together to be controlled quickly and easily by other computers.

Furthermore, in regard to the name of the initiative and its components, critics also point out that not only are the terms ".net" and "CLI" in use to mean other things (Microsoft used CLI to stand for [[Common Language Infrastructure]]), but that Microsoft regularly overloads generic terms (e.g. "Windows", "Word", "DNS") to refer to its proprietary technology, and then attempts to control them using [[trademark law]] and [[patent law]].

===Microsoft Next-generation secure computing base initiative===
Microsoft has now launched the Next-Generation Secure Computing Base, recently renamed from [[Palladium operating system]] initiative. This effort is also called [[Trusted Computing]]. Microsoft presents this as their solution to [[computer insecurity]]. Opponents have characterised it as another exercise in entrenching and extending their monopoly, effectively allowing Microsoft to control all uses of PC technology. In particular, they have accused Microsoft of using it as a way to combat the emergence of [[free software#Free Speech definition|free software]].

===The future of Windows===
Microsoft has a number of new initiatives: .NET, [[Palladium operating system | Palladium]] and the "[[Windows Longhorn|Longhorn]]" operating system (Longhorn is the next home Windows release).

Microsoft intends that Longhorn will have many new features such as speech recognition and an enhanced user interface but it is likely that the operating system itself will be an extension of and improvement on Windows XP and Windows Server 2003.

Longhorn was initially to ship during 2003, but has since slipped to 2006. One of its key new features is a database-centric file system.


<!-- This should be a separate wikipedia list, including the year, exact title, and outcome. There are a lot more than the following.)
Microsoft and Lawsuits
* Microsoft vs. [[WordPerfect]]
* Microsoft vs. [[Stac Electronics]]
* Microsoft vs. [[Spyglass]]
* Microsoft vs. [[Netscape Communications Corporation|Netscape]]
* Microsoft vs. [[Sun_microsystems|Sun]]
* Microsoft vs. [[Sendo]]
* Microsoft vs. [[BeOS]] (and all other OS developers)
* Microsoft vs. [[Opera (browser)|Opera]]
* Microsoft vs. [[Apple Comuter]]
* Microsoft vs. [[USA]] (~1994?)
* Microsoft vs. [[USA]] (~1999?)
-->

==References==
*Charles, John. "Indecent proposal? Doing Business With Microsoft". IEEE Software. January/February 1998. pp. 113-117.
*Clark, Jim with Owen Edwards. Netscape Time: The Making of the Billion Dollar Start-up That Took on Microsoft. New York, Saint martin's Press, 1999
*Cusumano, Michael A.; Selby, Richard W. [http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=2VQCBE84TR&isbn=0684855313&itm=1 Microsoft Secrets: How the World's Most Powerful Software Company Creates Technology, Shapes Markets and Manages People]. New York: Free Press, 1995.
*Edstrom, Jennifer; Eller, Marlin. Barbarians Led by Bill Gates: Microsoft from inside: [http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=2VQCBE84TR&isbn=0805057544&itm=2 How the World's Richest Corporation Wields its Power]. N.Y. Holt, 1998.
*Lemos, Robert. (2003). ''U.S. funds study of tech monocultures''. Retrieved December 20, 2003, from http://news.com.com/2100-7355-5111905.html?tag=nefd_hed
*Moody, Fred. I Sing the Body Electronic: A Year With Microsoft on the Multimedia Frontier. New York: Viking, 1995.
*National Science Foundation. (2003). ''Taking Cues from Mother Nature to Foil Cyber Attacks''. Retrieved December 20, 2003, from http://www.nsf.gov/od/lpa/news/03/pr03130.htm

==See also==
*[[History of Microsoft Windows]]
*[[MSDN|Microsoft Developer's Network]]
*[[Halloween documents]]
*[[Microsoft antitrust case]]
*[[SCO v. IBM]]


==External links==
==External links==
===Microsoft sites===
*Microsoft web site: http://www.microsoft.com/
*Microsoft Network (MSN): http://www.msn.com/
*Microsoft Xbox: http://www.xbox.com/
*Microsoft Encarta encyclopedia: http://encarta.msn.com/
*Microsoft Investor Relations: http://www.microsoft.com/msft/

===Microsoft OSS ([[Open_source]]) projects===
*WiX The Windows Installer XML: http://sourceforge.net/projects/wix
* WTL (Windows Template Library): http://sourceforge.net/projects/wtl/
* See also the many [[shared source]] projects. (Not strictly open source)

===Discussions whether MS is monopolistic===
* http://wiki.ael.be/index.php/PatentPlayersMicrosoft
* http://wiki.ael.be/index.php/MsAntitrust
*[http://www.moraldefense.com/Campaigns/Microsoft/Antitrust_FAQ/default.htm FAQ on the Microsoft Antitrust case] by ''The Center for the Advancement of Capitalism'' (a pro-Microsoft site.)


* Microsoft web site: http://www.microsoft.com/
=== Alternatives to Microsoft systems ===
* Microsoft Network (MSN): http://www.msn.com/
*[http://www.opensource.org Open Source Intiative website.]
*[http://www.gnu.org Free Software Foundation.]
* Microsoft Xbox: http://www.xbox.com/
* Microsoft Encarta encyclopedia: http://encarta.msn.com/
*[http://microsoft.toddverbeek.com/ Just Say No to Microsoft] - A site offering alternatives to Microsoft products
* Microsoft Investor Relations: http://www.microsoft.com/msft/


[[Category:Software companies]]
[[Category:Software companies]]

Revision as of 13:20, 11 June 2004

File:Microsoft.JPG

Current Microsoft logo.

File:Mslogohistorical.png

Microsoft logo of 1984.

Usage of these images is restricted. Trademarks on this page belong to their owner.
See Wikipedia:Image use policy.

Microsoft Corporation, headquartered in Redmond, Washington, is the world's largest software company. It trades on the NASDAQ stock market under the symbol 'MSFT'. Microsoft develops, manufactures, licenses and supports a wide range of software products for various computing devices. Its best known product is the Microsoft Windows operating system family, which has achieved near ubiquity in the desktop computer market. The company's aggressive business practices have been led to its being found guilty of illegally leveraging its monopoly power to defeat its competitors.

History

Microsoft was founded in Albuquerque, New Mexico in 1975 by Bill Gates and Paul Allen, under the company name Micro-soft, to develop and sell BASIC interpreters. The name "Micro-soft" (short for microcomputer software) was used by Bill Gates in a letter to Paul Allen for the first time on November 29, 1975. "Microsoft" became a registered trademark on November 26, 1976.

As the popularity of Microsoft BASIC grew, other manufacturers adopted its syntax to maintain compatibility with existing Microsoft BASIC implementations. Because of this vicious circle, Microsoft BASIC became a de facto standard and the product dominated its market.

In late 1980, International Business Machines needed an operating system for its new home computer, the IBM PC. Microsoft licensed Quick and Dirty Operating System, from Tim Patterson's Seattle Computer Products in order to sell it to IBM as the standard operating system for the IBM PC. Microsoft subsequently purchased all rights to QDOS for $10,000, and renamed it MS-DOS (for Microsoft Disk Operating System). It was released as IBM PC-DOS 1.0 with the introduction of the PC in 1981. In contracting with IBM, however, Microsoft had retained the rights to license the software to other computer vendors as MS-DOS. The early 1980s saw a flood of IBM PC clones, and Microsoft were quick to leverage its position to dominate the operating system market.

Software running on PC hardware was not necessarily technically better than the mainframe software that it replaced, but it was much less expensive. Microsoft's success rode on the PC boom.

Microsoft, now highly profitable, diversified into a wide variety of software products including:

Some of these products were successful, and some were not. In most cases, early versions of Microsoft software were buggy and inferior to competitors, but later versions improved rapidly and eventually overwhelmed their competition by offering more features for a lower price. The best example of this is probably that of WordPerfect, which in the early 1990s appeared to have an unassailable dominance over the PC word processor market but eventually found itself in a distant second place. A notable failure on Microsoft's part was Microsoft Bob, a short-lived program manager which was widely ridiculed in the press.

Microsoft's focus on software usability was a large factor in its early successes. Some key aspects of this were:

  • A common user interface: all Microsoft applications used the same menu commands, shortcuts, and procedures for similar tasks. This reduced the barrier to learning and using new software.
  • Backward compatibility: Microsoft made sure that older code and data would work on newer systems. In contrast, until about 1986, some major manufacturers of hardware-software combinations would periodically introduce new machines with new operating systems giving little or no compatibility with the previous ones. A common Microsoft demo was to show old Visicalc software running on the latest version of Windows.
  • Interconnectedness: generally, and especially in Microsoft Office, data prepared with one Microsoft application can be brought into other Microsoft applications. A common example is creating a diagram in Excel and pasting it into a Word document.

Microsoft has devoted large amounts of money and effort to developing, integrating, and marketing its products and services. By the turn of the millennium, many of Microsoft's software products dominated their markets.

Products and organization

Microsoft sells a wide range of software products. Many of these products were developed internally, while some were acquired and rebranded by Microsoft for distribution. Products in this category include Microsoft Project, a project management package; Visio, a charting package; and MS-DOS itself, the basis for the company's success.

In April 2002, Microsoft reorganized into seven core business units, each with its own financial reporting to delegate responsibility and more closely track the performance of each unit. [1] These business units are:

  • Windows Client (managing the Windows client, server, and embedded operating systems)
  • Information Worker (managing the office software products)
  • Microsoft Business Solutions (managing the business services and process applications)
  • Server and Tools (managing developer tools and integrated server software)
  • Mobile and Embedded Devices (managing palmtop and phone devices)
  • MSN (managing web-based services)
  • Home and Entertainment (managing consumer hardware and software)

Windows Client group

Microsoft's flagship product is the Windows operating system. It has been produced in many versions including Windows XP and Windows Server 2003. Almost all IBM compatible personal computers are sold with Windows pre-installed. (See History of Microsoft Windows.)

Microsoft bundles the Internet Explorer web browser and the Outlook Express email client with Windows. The act of tying Internet Explorer with Windows helped to defeat Netscape Communications Corporation's rival product Netscape Communicator, and formed the central point of the Microsoft antitrust case brought by the United States government in 1998.

Information Worker group

Microsoft Office is the company's line of office software. It includes Word (a word processor), Access (a personal relational database), Excel (a spreadsheet), Outlook (Windows-only groupware, mostly used with the Exchange server), and PowerPoint (presentation software). With the release of Office 2003, a number of other products were brought under the Office banner, including Microsoft Visio, Microsoft Project, Microsoft MapPoint, and Microsoft OneNote. Microsoft also produces Microsoft Office for Apple Macintosh computers; the Mac version of Office includes the Mac-only Entourage instead of Outlook. Like Windows, Office has grown to near-monopoly status in many markets.

Microsoft Business Solutions group

The Business Solutions Group was created in April 2001 with the acquisitions of Great Plains. Subsequently, Navision was acquired to provide a similar entry into the European market. The Business Solutions group focuses on developing financial and business management software for companies.

Server and Tools group

Microsoft Visual Studio is the company's set of programming tools and compilers. It is GUI oriented and links easily with the Windows APIs, but must be specially configured if used with non-Microsoft libraries. The current version is Visual Studio .NET 2003.

The .NET initiative is a major company-wide effort by Microsoft. It achieves this by using a proprietary extension of XML to link devices so that they can be controlled by computers. .NET has several aspects including:

  • Easing the development of applications that use the Internet
  • Alleviating problems related to managing and installing multiple versions of complex software packages on the same system (see DLL-hell)
  • Providing a more consistent development platform for all Windows applications (see Common Language Infrastructure, also known as CLI)

Microsoft FrontPage is a WYSIWYG HTML editor.

Mobile and Embedded Devices group

Microsoft has attempted to leverage the powerful Windows brand into many other markets, with products such as Windows CE for PDAs and its "Windows powered" Smartphone products. Microsoft initially entered the Mobile market through Windows CE for handheld devices which today has developed into Windows Mobile 2003. Microsoft works with companies such as HP, Motorola and Dell in providing the operating system for these devices and reference designs.

Microsoft recently moved the embedded group and the mobile group under one team. The embedded group focus is on devices where the OS may not directly be visible to the end-user, e.g. appliances, cars. The company bought WebTV (subsequently renamed MSN TV), a television internet appliance.

MSN group

In the mid-1990s, Microsoft began to expand its product line into the networked computer world. It launched its online service MSN (Microsoft Network) on August 24, 1995 as a direct competitor to AOL. MSN became an umbrella service for all of Microsoft's online services.

In 1996, Microsoft and NBC, an American broadcasting network, created MSNBC, a combined 24-hour news television channel and online news service.

At the end of 1997, Microsoft acquired Hotmail, the first and most popular webmail service. It was rebranded MSN Hotmail and was used as a platform to boost Passport, a universal login service.

MSN Messenger, an instant messaging client, was introduced in 1999 to compete with the popular AOL Instant Messenger (AIM).

Home and Entertainment group

When Microsoft released the Xbox in late 2001, the company entered the multi-billion dollar game console market dominated by Sony and Nintendo. The Xbox currently ranks second to Sony's PlayStation 2 in market share.

Microsoft sells computer games that run on Windows PCs, such as the Age of Empires and Microsoft Flight Simulator series. Microsoft develops and publishes video games for its Xbox video game console. In addition, all "third party" Xbox video game publishers such as Electronic Arts and Activision pay a license fee to publish games for Microsoft's Xbox system.

Microsoft produces a line of reference works, such as encyclopedias and atlases, under the name Encarta.

Other offerings

The product which allowed Microsoft to generate its enormous wealth was the MS-DOS operating system. All versions of Windows prior to Windows NT (for business systems) and Windows XP (for home systems) were based on an MS-DOS foundation.

In the early 1980s, in cooperation with a large number of companies, Microsoft created a home computer system named MSX. It became fairly popular in Japan and Europe, but the IBM PC became increasingly dominant through the late 1980s and the early 1990s, bringing an end to the MSX and many other systems like it.

Microsoft has launched the Next-Generation Secure Computing Base (formerly known as the Palladium operating system, also known as Trusted Computing) as its solution to computer insecurity. Opponents have characterised it as another exercise in entrenching and extending Microsoft's monopoly, effectively allowing the company to control all uses of PC technology. In particular, they have accused Microsoft of using it as a way to combat the emergence of free software.

Microsoft has created a number of training initiatives, based on multiple-choice exams, with the intention of creating a pool of low-cost employees with skills relating exclusively to Microsoft products. The best known of these is the MCSE ("Microsoft Certified Systems Engineer") qualification. Another popular certification is the Microsoft Certified Solution Developer, briefly called MCSD.NET. This certification is a developer's qualification, aimed towards developers who can successfully demonstrate their skills with Microsoft's development tools and architectures.

Microsoft also produces a number of computing related hardware products including mice, keyboards, joysticks, and gamepads.

Business culture

The software developer

Microsoft has often been described as having a developer-centric business culture. A great deal of time and money is spent each year on recruiting young university-trained software developers who meet very exacting criteria, and on keeping them in the company. For example, while many software companies often place an entry level software developer in a cubicle desk within a large office space filled with other cubicles, Microsoft assigns a private or semi-private closed office to every developer or pair of developers. In addition, key decisionmakers at every level are either developers or former developers.

In a sense, the software developers at Microsoft are considered the "stars" of the company in the same way that sales staff at IBM are considered the "stars" of their company.

"Eating our own dog food"

Within Microsoft the expression "eating our own dog food" is used to describe the policy of using Microsoft products inside the company. It can be very difficult for management, support staff, and even software developers to get permission to use software from Microsoft competitors.

One of the effects of this policy is to push the development of products which software developers find useful for their immediate needs, regardless of the perceived needs of the general market.

Long term wariness

Microsoft fosters a general attitude of long term strategic wariness in its managers, who are expected to be ready for any challenge from the competition or the market. In this frame of mind, being the largest software company in the world is not seen as a form of safety or a guarantee of future success; for instance, future competitors could rise from other industries, or computer hardware companies could try to become less dependent on Microsoft, or consumers could decide not to upgrade their software as often. Microsoft requires its managers to maintain vigilance and sustain a dynamic expansion in new markets.

Controversy

Microsoft has been the focus of much controversy in the computer industry, especially since the 1980s. Among the more frequently criticized areas are:

  • Ease of use: Microsoft has been accused of allowing the user interface of its products to become inconsistent and overly complicated, requiring interactive "wizards" to function as an extra layer between the user and the interface.
  • Security: Microsoft products are seen as overly vulnerable to computer viruses and malicious attacks.
  • Business practices: Microsoft is believed to engage in unfair and anticompetitive business tactics. The findings-of-fact from a federal antitrust case have affirmed this, and Microsoft has lost other lawsuits in which competitors accused it of stealing code, making Microsoft operating systems incompatible with their products, or using predatory pricing and licensing tactics.
  • Total cost of ownership: Microsoft software is seen as more expensive to purchase, use, and maintain than competitors' software. As the price of PCs has fallen, the price of Microsoft Windows has not.
  • Open source: Microsoft has engaged in a broad campaign of fear, uncertainty, and doubt against open source software.

These and other issues are covered in Common criticisms of Microsoft.

The future

The next version of Windows in development is code-named Longhorn, which will be an extension of and improvement on Windows XP and Windows Server 2003. Planned features include speech recognition, an enhanced user interface, and a database-oriented file system. Longhorn was initially to ship during 2003, but has since slipped to 2006.

Microsoft is working to leverage its current success in desktop operating systems into new markets such as media players, server software, handheld devices, web services, and video games, with varying degrees of success. Microsoft is now positioning PCs running Windows XP Media Center Edition as a home entertainment hub.

It is also looking to move towards a "subscription model" for licensing. Microsoft's current revenue scheme depends on users buying upgrades on a periodical basis, but this is becoming increasingly difficult, as many users continue to use older packages of its software. On a subscription basis, users would pay an annual fee for the use of Microsoft software.

Based on recent Microsoft management comments, it appears that Microsoft is attempting to move up-market, positioning its products and services as high-value rather than low-cost. Steve Ballmer was quoted as saying in 2002, "We are actually having to learn how to say, 'We may have a high price on this one, but look at the additional value and how that value actually leads to a lower cost of ownership despite the fact that our price may be higher.'" (Reported in VARbusiness, July 15, 2002)

See also

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