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🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 14: Xbox By the middle of the 2000s, Microsoft was, by almost every financial measure, a colossus. Windows ran on more than nine of every ten personal computers on Earth. Office was the tax you paid to do knowledge work. Under Steve Ballmer, who had taken the CEO chair from Bill Gates on January 13, 2000, the company would go on to triple its sales and double its profits over fourteen years. And yet this is the decade that history remembers as the one Microsoft lost — a decade when the most valuable software company in the world watched the future get invented by other people, in categories it had every resource to own. The five-year winter of Windows Vista The trouble started at home. After Windows XP shipped in 2001, Microsoft set out to build its successor under the codename ...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 13: Developers, Developers, Developers By the late 1990s, Microsoft owned the desktop. Windows ran on nine of every ten PCs on Earth, and the company's profits looked unstoppable. But inside Redmond, a small band of engineers on the DirectX graphics team saw a threat hiding in plain sight — and it was shaped like a game console. Sony's PlayStation 2, unveiled in 1999, was more than a toy. Sony openly described it as a Trojan horse for the living room: a DVD player, an internet terminal, a home-entertainment hub that might one day make the family PC irrelevant. To four DirectX engineers — Seamus Blackley, Kevin Bachus, Ted Hase, and Otto Berkes — that was an existential problem. If the console became the center of the home, Windows would be locked out of the most important scr...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 12: United States v. Microsoft On January 13, 2000, the loudest man in software became its most powerful. Steve Ballmer — Bill Gates's Harvard classmate, hired in 1980 as Microsoft's first business manager and famously employee number 30 — took over as chief executive. Gates slid sideways into a new title, "chief software architect," but the message was unmistakable: the founder was handing the wheel to the salesman. And the salesman had a voice you could hear through a closed door. Ballmer inherited a company at the peak of its power and the depth of its danger. The antitrust trial was still smoldering. The web was rewriting the rules. And Windows itself was quietly split down the middle — a schism that Ballmer's first great product would finally heal. Two Windows, One Ker...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 11: The Internet Tidal Wave On the morning of April 3, 2000, a federal judge in Washington issued a ruling that read like a verdict on an era. Microsoft, he wrote, had used its monopoly over the personal computer to crush a rival and stifle a new kind of software. By the end of that trading day the company had shed roughly a seventh of its value, and the tremor rolled outward into a NASDAQ that was already beginning to wobble. The most powerful technology company on earth had just been told, in the plain language of antitrust law, that it was a lawbreaker — and for a while it looked as though the punishment would be to cut it in half. How Microsoft arrived at that morning, and how it slipped away from the guillotine over the following year, is one of the great courtroom dramas of the dig...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 10: Start Me Up By the spring of 1995, Microsoft was on top of the software world. Windows 95 was months from launch, Office was printing money, and the company's grip on the desktop looked unbreakable. And yet, on May 26, 1995, Bill Gates sat down and wrote a memo to his executive staff that read less like a victory lap than a fire alarm. Its title: The Internet Tidal Wave . “I have gone through several stages of increasing my views of its importance,” Gates wrote of the Internet. “Now I assign the Internet the highest level of importance.” He compared its arrival to the IBM PC of 1981 — the last technology shift big enough to remake the entire industry. And he named the company that had him worried: a fifteen-month-old startup called Netscape. A startup born o...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 9: Office By the summer of 1995, Microsoft had a problem most companies would kill for: everyone already knew the product was coming. Windows 3.0 and 3.1 had put a graphical face on the PC, but they still rode on top of MS-DOS like a coat of paint over an old house. The next release was different. Code-named "Chicago" and released to manufacturing on July 14, 1995, Windows 95 folded MS-DOS and Windows into a single product and swapped the old 16-bit, cooperatively multitasked plumbing for a 32-bit, preemptively multitasked core. It shipped with a new file manager called Windows Explorer, a taskbar, Plug and Play so hardware could mostly configure itself, and filenames that could finally run past the ancient eight-character limit to 255. But the feature people would remember wasn't under the h...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 8: 3.0 By 1990, Microsoft owned the ground beneath every PC. MS-DOS ran the machines, and Windows 3.0 had just turned the graphical desktop into a mainstream hit. But there was a different kingdom Microsoft did not yet rule: the software people actually opened once the computer booted. The spreadsheet on every accountant's screen was Lotus 1-2-3 . The document on every secretary's desk was WordPerfect . Those two programs were so dominant that, for most office workers, they simply were the personal computer. Microsoft wanted that kingdom. And it would take it not with a single better product, but with a bundle — and with impeccable timing. The incumbents who owned DOS Lotus 1-2-3, released in January 1983, was the first true "killer app" of the IBM PC. It was fast, it was reliable, ...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 7: The Youngest Billionaire By the late 1980s, Microsoft owned the plumbing of the personal computer. MS-DOS ran on tens of millions of machines, and the money was rolling in. But DOS was a stubborn thing — a blinking C:\> prompt that demanded you memorize commands and type them exactly right. Across the industry, everyone agreed the future was graphical, with windows and icons and a mouse. The only question was whose graphical future would win. Apple's Macintosh had shown what was possible back in 1984. Microsoft's own first two attempts at Windows, in 1985 and 1987, had landed with a thud — clunky, slow, and largely ignored. And Microsoft's official plan for the graphical future wasn't even Windows. It was OS/2, the operating system it was building hand-in-hand with IBM. Wind...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 6: Windows By the middle of the 1980s, Microsoft had a problem that most companies would kill for: it was making too many people rich on paper, and the law was starting to notice. Every year the company handed out stock options to engineers, and every year the roster of shareholders crept upward. Under U.S. securities rules of the era, once a private company passed roughly 500 shareholders of record it would be forced to report its financials publicly anyway — all the disclosure of being public, with none of the money. Bill Gates, who valued secrecy and hated the idea of answering to Wall Street, was cornered by his own success. If Microsoft was going to be exposed to the public markets, it might as well get paid for it. The Reluctant Debut Gates did not want to go public. He worried t...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 5: The Empire of DOS In the fall of 1982, Bill Gates walked the floor of COMDEX in Las Vegas and stopped at a booth run by a company called VisiCorp. On the screen was something called Visi On — a graphical interface for the IBM PC, with a mouse, on-screen menus, and multiple programs sharing the same display. It was clumsy and slow, but Gates saw past that. The command line that had made Microsoft rich, the blinking C:\ prompt, suddenly looked like the past. The future was a screen full of pictures, and Microsoft did not own a single pixel of it. That moment set off one of the longest, most public, and most stubborn bets in the company's history. Microsoft would spend three years, burn through a team lead, miss deadline after deadline, and earn open ridicule from the trade press ...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 4: The Deal of the Century By the summer of 1982, IBM had done something it did not fully understand: it had created a standard. The IBM PC, launched the previous August, was selling faster than anyone at the company had dared to forecast. But IBM had built its machine out of off-the-shelf parts and a published technical reference manual, and it had licensed its operating system, MS-DOS, from a scrappy outfit in Seattle on terms that let Microsoft resell that same software to anyone. IBM thought it was buying a product. It had actually opened a door — and a young company in Houston was about to walk right through it. The clean room in Houston Compaq Computer Corporation was founded on February 16, 1982 by three senior managers from Texas Instruments — Rod Canion, Jim Harris, and ...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 3: An Open Letter to Hobbyists In the summer of 1980, the most powerful computer company on Earth needed a favor from a startup that had fewer than forty employees. IBM — a company so synonymous with computing that people simply called it "Big Blue" — had decided to build a personal computer. And it had decided to build it fast. The project was code-named "Project Chess," run out of a skunkworks in Boca Raton, Florida, under an engineer named Don Estridge. To hit its punishing deadline, IBM broke every one of its own rules. Instead of designing every chip and writing every line of code in-house, as was the company's custom, it would buy off-the-shelf parts and license software from outsiders. In July 1980, an IBM team flew to Seattle to talk to a small software house that had mad...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 2: We Have BASIC By the end of 1975, Micro-Soft had a hit. Altair BASIC was the software that made a hobbyist's blinking box of switches feel like a real computer — you could type a program, run it, and watch it work. There was just one problem, and to Bill Gates it was an infuriating one: almost nobody was paying for it. MITS, the Albuquerque company selling the Altair 8800, was shipping roughly a thousand machines a month. And yet paid copies of BASIC were selling in the low hundreds. The software was everywhere and the money was nowhere. Somewhere between the factory and the living room, thousands of copies were slipping through the cracks — passed hand to hand on rolls of punched paper tape, entirely for free. The tape that got away The leak had a specific origin story. In ...

🎬 Prefer to watch? Here's the 60-second version: Watch on YouTube ▶ 💻 The Rise of Microsoft — a 20-part series. See all parts »  |  « Part 1: Two Kids and a Teletype In the last part we left two friends from Seattle’s Lakeside School scattered across the country: Bill Gates grinding through his freshman year at Harvard, Paul Allen writing code for Honeywell a subway ride away in Boston. They had spent their teens hunting free computer time on machines the size of refrigerators. What they lacked was a machine of their own — and a reason to build a company. In the first weeks of 1975, a newsstand handed them both. A magazine cover changes everything The January 1975 issue of Popular Electronics carried a photograph of an unassuming metal box covered in toggle switches and blinking lights: the Altair 8800, built by a small Albuquerque outfit called MITS — Micro Instrumentation and Telemetry Systems. Priced at ju...