Microsoft Turns 40

ON APRIL 4 1975, THE HISTORY OF MICROSOFT STARTED AND THE INFORMATION TECHNOLOGY REVOLUTION BEGAN. THREE REASONS WHY WE SHOULD CELEBRATE ALONG WITH BILL GATES

by Ferdinando Pennarola, Dept. of Management and Technology, Bocconi
Translated by Alex Foti

I collect historic covers of magazines with passion, and in my office
I keep a copy of Fortune dated August 26, 1991. Brenton Schlender was
the journalist who for the first time managed to interview Bill Gates
and Steve Jobs jointly, in the memorable occasion of the personal
computer's 10th anniversary. On the cover, Bill Gates was 35 years old
and Steve Jobs 36. Already then, the two visionary business leaders
were talking of forthcoming technologies that would let users edit
images on computer monitors, do videoconferencing, and transmit
digitized information across global computer networks. The IT
revolution had started and Microsoft was a prime mover of that
technological leap.

Two decades after, Gates stated: : «We dreamed of and made products we
would have liked to use ourselves." (Wall Street Journal, 2007). The
history of the 40 years of Microsoft is characterized by the boldness
of the vision projected into the future by the two founders who on
April 4, 1975 gave birth to Microsoft. The company was born almost
like an expedient to sign a contract whereby they committed themselves
to supply Basic interpreters to the company that made Altair 8800, the
mythical ancestor of the PC.

Microsoft: a name that evokes software and the adventure started four
decades ago by a 19-year-old Harvard student, Bill Gates, and a
22-year-old Honeywell employee, Paul Allen. Already the origins of
Microsoft are shrouded in the myth of America as land of
entrepreneurial opportunity, a place where two unexperienced
youngsters could be entrusted with the important business of supplying
major components for the Altairs 8800.

A second aspect was the licensing agreement with IBM which enabled the
launch of the first PC with the first operating system designed for a
personal computer in 1981. The contract said that Microsoft only
licensed its software for use on IBM computers, retaining ownership of
copyright and the possibility of signing similar license agreements
with other computer makers. IBM agreed, because profits were to be
made on hardware, not on marginal software designed for a small
machine. This historic passage set the foundations for the development
of the whole technology industry, which prospered around the
IBM-Microsoft binomial and that in few years saw the rise of the
IBM-clones, PCs that had different silicon shells but the same
operating system, Bill Gates' MS-DOS, running their circuits.

The two founders had to say in 1977: «In the future, we envision a
computer on every desk and in every home, with our software inside».
When they uttered this sentence, they realized that by implementing
this strategy Microsoft would become a big corporation. And so it was:
the first software company in the world, a dominant global market
player, whose primacy has never been seriously challenged by its
successors.

The third reason why Microsoft's anniversary is cause for celebration
is that its software products and solutions really have left an
indelible mark on everything in our lives. Because of compute
software, work, in all its dimensions, has experienced a
transformation comparable to the advent of electricity and other
technological revolutions. Private consumption has been reshaped by
the digitization of information about goods and services. Just to
provide an example, international relations and world governance
cannot do without digital tools for the drafting, sharing, and
circulation of documents.

Microsoft has created a world standard on which all human activities
are now based. Such a privileged position has inevitably exposed the
company to repeated waves attacks and criticism. And the issue clearly
involves all those of us who are PC users.