Microsoft owner and founder Bill Gates poses outdoors with Microsoft's first laptop in 1986. Joe McNally/Getty ImagesMicrosoft is celebrating its 50th birthday this week. I've been a keenly interested observer for most of that history. I started writing about Microsoft technologies as a full-time job more than three decades ago, and I was an enthusiastic early adopter of the company's products for a decade before that. Thinking back on that history brings back a flood of memories.When one talks about Microsoft, it's tempting (and easy!) to focus on the numbers and the milestones. Revenue. Gross margins and profits. The number of employees and partners. And, of course, the stock price. You will be bombarded with timelines and charts this week, I guarantee. Also: Microsoft's free AI skills training 'Fest' starts soon - how to sign upThose numbers are important, of course, but for me they're mostly markers, small flags thrown down to mark the ebb and flow of a company that has genuinely changed the world as we know it. Officially, Microsoft plans to blow out those birthday candles on April 4, 2025. That's an arbitrary date, frankly, because Microsoft's early days were not exactly well organized. The company did a lengthy series of history videos in 2009 that chronicled each year of its existence starting in 1975, and that date is nowhere to be found in the opening episode. Anyway, that series ended abruptly with a segment on 1999, accompanied by this apology: 1999 is the Series finale because we may try and do something a bit different for the last decade which would include the years 2000 to 2009. Maybe go a bit more indepth. We haven't decided and they have not been shot yet. They did not ever pick up this project again, for reasons that might become obvious as you continue reading. Microsoft made a lot of billionaires, almost-billionaires, and multi-millionaires in their first decade or two. Why? Well ... If you bought $1000 worth of stock as part of Microsoft's IPO in 1986, that stock is worth $5 million today. Even if you weren't able to buy shares until the end of that day, after they had risen 70% above the opening price, you would still have $1.4 million today. [Full disclosure: During the many years I have covered Microsoft I have not owned shares in any individual tech companies, including Microsoft.] Now think of the thousands of Microsoft employees who were granted stock shares as part of their compensation package in those early years and then stayed at the company for a decade or more. I've done the math, and the number of zeroes gets very large very quickly. Also by Ed Bott: How to upgrade your 'incompatible' Windows 10 PC to Windows 11 in 2025But enough about money. In those 50 years, Microsoft has also had a tremendous cultural impact, not to mention the transformation of the global economy that was enabled by the company's software. It's convenient to divide the company's history into four distinct eras, one as a startup and then three as a public company. Each of those three public eras coincides with the tenure of the three Microsoft CEOs: Bill Gates, Steve Ballmer, and Satya Nadella. But it's a mistake to think that each of those individuals deserves sole credit (or blame) for what happened while they were occupying the office of the CEO. Let's start at the beginning. Paul Allen and Bill Gates in 1984. Photo by © Doug Wilson/CORBIS/Corbis via Getty Images1975-1985: Preparing for takeoffWhen 19-year-old Bill Gates and 22-year-old Paul Allen decided to turn their Altair BASIC program for the MITS Altair 8080 into a commercial product, they were dealing with a small but passionate market of enthusiasts. Steve Wozniak and Steve Jobs were members of one of those enthusiast groups, the Homebrew Computer Club, and they wouldn't sell their first Apple 1 for another year. At the end of 1975, the brand-new company (which Gates referred to as Micro-Soft) reported total sales of just over $16,000. That's roughly $96,000 in 2025 dollars, which isn't bad for a couple of college dropouts who had hired exactly one employee that year. The next few years were a struggle, but within a decade, the company was booking more than $100 million in revenue per year. By then, the company had moved to Seattle, and the number of employees had risen to more than 1,000. When IBM launched the first PC in 1981, Microsoft's headcount began to boom. Chart by Ed Bott/ZDNETMicrosoft's early products were programming languages for hobbyists using machines like the MITS Altair 8080. They were nerds writing code to help other nerds write code. But the real accelerant, the booster rocket that turned Microsoft from a collection of misfits in Albuquerque, New Mexico, into a global juggernaut in the Pacific Northwest, was the 1981 launch of the IBM PC. Just look at the chart above to see what an impact that contract had on hiring. This story has been told a million times, so I won't repeat it here. (The Wikipedia article on MS-DOS has a solid recap.) Every IBM PC included a copy of PC-DOS, which Microsoft had adapted from 86-DOS, which in turn was a clone of Digital Research's CP/M, ported to run on Intel's 8086 processors. Microsoft received a royalty from IBM for every copy of PC-DOS it shipped. Crucially, the deal with IBM allowed Microsoft to continue selling its own variant of the operating system, MS-DOS, which meant more licensing revenue from clone makers like Compaq and Leading Edge. Also: It's back! Microsoft and IBM open source MS-DOS 4.0And the clone-makers took full advantage of their ability to undercut IBM's high prices. Full disclosure: I bought a Leading Edge Model D in 1986, paying more than $2000 for an IBM PC clone that had a 30MB hard drive. (Yes, 30MB. That is not a typo.) That was a tiny fraction of what the same machine would have cost had it carried an IBM logo. Adjusted for inflation, that would be equivalent to more than $5,300 today. Over the course of its first decade, Microsoft shipped Word and Excel, which brought in a spectacular amount of revenue to supplement the torrent of dollars that were coming in with MS-DOS. What's remarkable to remember about this time is the role of Apple. Through the years, Microsoft and Apple have squared off over and over again, but in those early days, Microsoft made huge sums of money selling its application software to people who had bought one of those first Macintosh models.Also: The Mac turns 40: How Apple's rebel PC almost failed again and againExcel came out for the Mac in 1985. It didn't make it to the PC until 1987. I vividly remember being at a backyard dinner party in 1986 when a good friend could not stop raving about the absolute awesomeness of Excel on his new Mac. "Life-changing," he called it. Although the companywide revenue numbers might seem ridiculously small to an observer in 2025, the cost to individual users was staggering. Just how expensive was productivity software in those days? If you grumble at the thought of paying $10 a month for a software subscription, prepare for some sticker shock. WordPerfect? $495Microsoft Word for MS-DOS? $395Lotus 1-2-3? $495dBase III+ $695Microsoft Pascal cost $195. Borland's Turbo Pascal was an unbelievable bargain at only $69.95. Anyway, if you wanted the top three PC/MS-DOS applications of the era -- WordPerfect, 1-2-3, and dBase -- you would be paying nearly $1700, which would be about $4500 in 2025 after adjusting for inflation. That's nearly as much as the underlying hardware cost. What a time to be alive. Display boxes at the launch of Microsoft's Windows 95 operating system software, sold at midnight on August 23, 1995, in London, England. Richard Baker / In Pictures via Getty Images1986-1999: The 'rocket ship' yearsMicrosoft's initial public offering on March 13, 1986, was a big deal, the "IPO of the year," according to lead underwriter Goldman Sachs. By modern standards, the IPO seems downright modest, raising $61 million for the company ($163 million in 2025 dollars). Demand was enormous, and the company began a growth curve that was staggering. By the end of 1987, Gates was a billionaire, with most of that wealth attributable to a stock price that was skyrocketing thanks to licensing revenue from MS-DOS and PC-DOS and a growing collection of apps that would later become Microsoft Office. When financial analysts talk about "hockey stick growth curves," this is what they mean. From 0 to 20 billion in 24 years? That's fast and furious. Chart by Ed Bott/ZDNETThe decade became a series of big wins. In its 1990 annual report, Microsoft noted the enormous growth of the PC market: "In 1980, approximately 1 million people used personal computers. By 1990, that number had grown to 50 million." More than 90% of them were PCs running Microsoft's operating system and Microsoft desktop applications like Word and Excel. Also: Dell turns 40: How a teenager transformed $1,000 worth of PC parts into a tech giantThat was also the year Microsoft founded its corporate consulting group and expanded its work with system integrators, cementing its status as the preferred computing services provider of big corporations worldwide.Apple's Macintosh was a modest success at that point, having sold 5 million or so units. But with Steve Jobs having been forced out of Apple, the company was floundering. Meanwhile, Microsoft was turning Windows into an unstoppable force, reaping huge successes with Windows 3.1 in 1991 and then creating a cultural event with the release of Windows 95. I don't need to recap the history of Windows here, because I already did that 10 years ago: "30 years of Windows: 10 milestones that changed the face of computing." Windows 95 and Windows NT 4 were built for different customers but shared a user interface. Credit: MicrosoftFrom a modern perspective, those early releases might seem cringeworthy. But they allowed businesses to get work done, and that was what mattered. As former Apple CEO John Sculley said years later, "People said, 'Well, maybe the IBM PC isn't as easy to use or is not as attractive as the Macintosh, but it actually does something which we want to be able to do – spreadsheets, word processing and database..." In 1988, Apple filed a copyright infringement lawsuit against Microsoft and Hewlett-Packard, alleging that Gates and Company had stolen the "look and feel" of the Macintosh operating system. The case dragged on for six years, with Apple losing all claims except for a ruling that the trash can icon was protected. And that's why you move deleted files into a Recycle Bin on the desktop of a Windows PC. And then there was Internet Explorer, which was hastily cobbled together and released as part of an add-on pack for Windows 95. It was added to Windows in 1996 and began gobbling market share from what had been the dominant browser of the time, Netscape Navigator, whose IPO in 1995 defined that decade as Microsoft had defined the 1980s. Also: How Netscape lives on: 30 years of shaping the web, open source, and businessIE grew its share in the web browser market from 0 to 86%, using Microsoft's familiar tactics of bundling software with OEM PCs. But the company was big enough by this time that antitrust authorities were taking notice. In 1994, Microsoft had signed a consent decree with the US Department of Justice, agreeing not to tie other Microsoft products to the sale of Windows. Microsoft argued that Internet Explorer was a feature, not a product. The DOJ disagreed, filing an antitrust lawsuit in 1998 that had a profound impact on the company's growth. By the end of the decade, Microsoft was still generating huge revenue and profits, but there were dark clouds on the horizon. Steve Ballmer, CEO of Microsoft holds a new Compaq pocket PC at the CompUSA store in San Francisco, October 4, 2001. Jeff Christensen/WireImage/Getty Images2000-2014: The lost yearsIf the previous two decades had been a relentless succession of victories for Microsoft, the turn of the millennium flipped a switch that turned all of that momentum upside down. And it all started at the beginning of 2000 when new CEO Steve Ballmer took over. At the beginning of 2000, I had a quiet conversation with a colleague who had been a Microsoft partner for more than a decade and had built a thriving business. He was selling all of his Microsoft stock, he said, because the company was going nowhere for the next decade. This chart says he made a good call. If you bought Microsoft stock at the beginning of FY 2000 and held it for 15 years, you would have had a tiny loss to show for it. Chart by Ed Bott/ZDNET Data courtesy of macrotrends.netIf you bought Microsoft stock at the beginning of its fiscal year 2000 and held it for a decade and a half, your holding would have been underwater. At the beginning of fiscal year 2015, you still wouldn't have caught up. Even the biggest triumph of that decade, the merging of the consumer and business operating systems into Windows XP, was clouded by disaster. The launch party was held in New York City in October 2001, a month after the 9/11 attacks, and the celebration was subdued. In fact, that entire decade-and-a-half was a series of what business schools euphemistically call challenges. The company lost its antitrust lawsuit. An appeals court threw out the judge's order that the company be broken up, and the company wound up signing a settlement that significantly hampered its ability to compete in the crucial market for online software and services for the next decade. That opened up huge opportunities for Google and a resurgent Apple, which they exploited fully. How effective was their competition? I wrote in 2010 when the consent decree expired: [W]e now live in an era where, arguably, three companies have effective monopolies in different corners of the technology industry. Microsoft still has an overwhelming share of the PC market, although that share is under attack as alternative devices begin to do what used to require a PC. Google has a stranglehold on search and online advertising and is doing all it can to extend that monopoly into new markets. Apple has a Microsoft-like share of the market for digital music and portable devices and is reportedly under antitrust scrutiny by two agencies of the United States government. Meanwhile, Microsoft was struggling with Windows. In January 2002, after a series of widespread, high-profile, and highly embarrassing security incidents that affected Windows customers and Microsoft itself, Bill Gates wrote his now famous "Trustworthy Computing" memo. It took years for that effort to pay off in tangible terms, and the disruption was probably the key factor in Microsoft's decision to scale back its ambitious Longhorn upgrade and instead turn it into ... Windows Vista. How'd that work out? For Apple, it was the opportunity of a lifetime. Remember the "Get a Mac" ads, where John Hodgman as the frumpy PC and Justin Long as the cool Mac skewered every flaw in the Windows ecosystem? ZDNET Editor-in-Chief Jason Hiner nailed the five reasons Vista failed way back in 2008. Also: If your Windows 10 PC can't be upgraded, you have 5 options before time runs outMicrosoft recovered with Windows 7, then delivered the biggest failure in its long history of operating systems: Windows 8. That was a bold gamble to combine PCs and tablets, and it was such a spectacular miss that its chief architect, Steven Sinofsky, was given the choice to leave or be fired just days before the product launched. It lasted three years, and its successor, Windows 10, brought back the Start menu while tossing out nearly every aspect of the touch-centric Windows 8 interface. No discussion of this period would be complete without a thorough dissection of Microsoft's long, expensive, and unsuccessful effort to crack the mobile market. It started with Windows Mobile and turned into a full-court press to make the Windows operating system scale to run on mobile devices as well as it did on PCs. And in the most disastrous move of all, Ballmer green-lighted a deal to pay €5.44bn ($7.2 billion) for Nokia's devices and services business in 2013; less than 15 months after the deal was complete, the company folded the business, taking a $7.6 billion writedown, plus a $750m to $850m restructuring charge. It was an ignominious end to Steve Ballmer's tenure, for sure. It didn't help that he had to struggle through the dot-com collapse and the 2008 financial crisis, but still... Satya Nadella, chief executive officer of Microsoft Corp., speaks during an event in San Francisco, California, on Thursday, March 27, 2014. David Paul Morris/Bloomberg via Getty Images2015-2025: To the cloud!When New Year's Day 2015 rolled around, Satya Nadella had been CEO of Microsoft for less than a year. When he took over, the company's market capitalization was approximately $269 billion. When I checked just now, the market cap had risen to $2.9 trillion. That's reminiscent of the early days, isn't it? Maybe we can get back to that Ballmer guy and give him a share of the credit for that huge gain. After all, he's the one who promoted Nadella into a leadership role reporting directly to him. Ballmer was also in charge for the years when Microsoft was investing billions of dollars into its cloud businesses, Azure and Microsoft 365. Those investments paid off big time, as this chart shows. Microsoft's investment in cloud services has paid off handsomely in revenue terms Chart by Ed Bott/ZDNETGive Nadella credit for ruthlessly killing off unprofitable businesses and focusing the company on cloud services. We already talked about Windows Phone, which was on life support at the start of 2014 and flatlined soon after. Internet Explorer was still hanging around, absorbing development resources. It's now defunct, except in a well-hidden, heavily sandboxed mode for a few edge cases (sorry) that enterprise customers insisted on. Xbox, on the other hand, seems to be doing just fine, with a steady pulse and no signs of slowing down. Also: Microsoft's new AI agents aim to help security pros combat the latest threatsWindows is still a profitable business for Microsoft, but it's no longer the core of the company. Perpetual licenses of Office are also declining, replaced by Microsoft 365 subscriptions.The pandemic gave an unexpected boost to the PC business, but it's unclear how long that can go on. An increasing amount of personal business is being done on smartphones, a business that Microsoft is involved in only tangentially, and corporations are making PCs last longer, because most of their workloads are now being done in the cloud. Dimas Ardian/Bloomberg via Getty ImagesMicrosoft's future: AI and beyond What technology will define the next era of Microsoft's existence? Conventional wisdom says that AI is the way, and that's certainly the direction the company is taking with its insistence on putting a Copilot in every product. You can draw a throughline from Clippy, the Office assistant that was the butt of a million jokes in the 1990s, to Cortana, the smart assistant that was supposed to be Microsoft's answer to Siri, to the AI-driven Copilot.Also: How to remove Copilot from your Microsoft 365 planMicrosoft has been working with OpenAI since 2019, when it invested $1 billion in the company, and it's poured at least another $12 billion into the partnership since then, despite having an awkward competitive relationship with its partner. And that's just a down payment. The real investment comes in building massive data centers to handle those computer-intensive workloads. Earlier this year, Microsoft reported that it was planning to spend a staggering $80 billion in fiscal year 2025 building those data centers.Those are some gigantic bets, and there's no assurance they'll pay off.If history teaches us anything, it's that the future is unpredictable, and the biggest changes will come from events that no one saw coming. Just for grins, though, I asked Microsoft's Copilot for Windows what it thought.Hey, Copilot, can you predict the future of Microsoft?I can't predict the future, but I can offer some educated insights based on trends and Microsoft's strategic direction. Under Satya Nadella's leadership, Microsoft has successfully transformed into a cloud-first company, with Azure as a major driver of growth. Its investments in AI, productivity tools, and gaming (like Xbox and the acquisition of Activision Blizzard) suggest the company will continue expanding across multiple sectors. Additionally, with its focus on sustainability and integrating AI technologies into its products, Microsoft is positioning itself as a leader in innovation and ethical tech development. Of course, market dynamics and unforeseen challenges could always impact its trajectory, but Microsoft seems well-equipped to adapt and thrive. That sounds like a fairly safe bet. But after decades of watching this company, the one thing I know for certain is that nothing is certain. And there are no safe bets.Get the morning's top stories in your inbox each day with our Tech Today newsletter.