Fifty years ago, Bill Gates and his childhood friend Paul Allen founded a company called “Micro-Soft” in a strip mall in Albuquerque, New Mexico. Half a century later, the company has cemented its place among tech giants and ranks as the world’s second-largest company. Currently, the only company with a higher market cap is Apple, maker of the ubiquitous iPhone.
While Microsoft is reflecting on its past successes in honor of its 50-year anniversary this April, including Gates sharing the company’s original source code, the tech giant is also hustling to secure its place among the leaders of the artificial intelligence revolution. After largely missing the boat on smartphones and the shift to mobile devices, Microsoft is hoping to avoid a repeat of this mistake and instead dominate the fields of cloud computing and generative AI.
Microsoft still dominates office software and operating systems
Microsoft’s Windows operating system — originally called MS-DOS — runs the majority of the world’s computers. The company also made a name for itself by dominating the office software market, and it still reigns supreme today.
Once available on floppy disks and then CDs, the software can now be downloaded on any device thanks to the power of cloud computing. Even though its main competitor Google Docs is free for many to use, Microsoft Office products remain the standard for most offices around the world.
Attempts to diversify weren’t always home runs
The company has made moves to diversify beyond office software and operating systems throughout the years. For example, Microsoft launched Xbox consoles in 2001, introduced the Bing search engine in 2009, and acquired the LinkedIn social media website in 2016.
Despite these moves, Microsoft’s products and services often lag behind its competitors. PlayStations outnumber Xboxes almost two to one, Google Search continues to dominate Bing, and other social media websites like Facebook, Instagram, and YouTube outperform LinkedIn.
Microsoft now bids on AI and cloud computing
Microsoft is now working hard to future-proof its tech legacy through cloud computing and artificial intelligence. Its cloud platform Microsoft Azure is currently the second-largest by market share, though Amazon Web Services (AWS) still leads by a wide margin, and Google Cloud is also gaining in popularity.
The company has also made significant moves to strengthen its AI offerings. It invested its first $1 billion in OpenAI back in 2019, and over the years has invested a total of $14 billion. Microsoft has also developed its own in-house AI tools, such as Microsoft 365 Copilot.
However, the tech giant lacks its own proprietary silicon chips and relies on other companies to produce these essential AI model components. It remains to be seen whether Microsoft’s other AI investments will be enough to uphold its legacy for another 50 years — or if it will fall behind other AI companies.
