As the company, founded with a vision of putting computers in every home and office, celebrates its 50th anniversary on Friday, it is looking to boost its fortunes by being a leader in the fast-developing field of artificial intelligence (AI).
"From a storytelling standpoint, they've been a boring company and a boring stock," eMarketer analyst Jeremy Goldman said of the Richmond, Washington-based behemoth.
"It's funny because they have a $2.9 trillion market cap, and that is huge," he continued, referring to Microsoft's value based on its share price.
The only company with a higher market cap is iPhone maker Apple.
Cloud computing is fueling Microsoft's revenue with the help of its ubiquitous Office software, now hosted online and no longer released in boxes of floppy disks or CDs.
"It's not a very sexy infrastructure, but it's a very valuable one," Goldman said of Microsoft's data centers and software at the foundation of its cloud-computing platform.
Amazon Web Services (AWS) and Google are Microsoft's cloud-computing rivals.
- 'Micro-Soft' -
Clouds were the stuff of weather forecasts rather than computing when Bill Gates and childhood friend Paul Allen founded what was first called "Micro-Soft" in 1975.
They launched the MS-DOS operating system that became known as "Windows" and went on to run most of the world's computers.
Microsoft Office programs including Word, Excel and PowerPoint became standard business tools, even fending off free Google Docs software.
"Microsoft had a lot of businesses that were weaker and challenged -- the perfect example is Office," Goldman said.
"That Office is still such a meaningful business for them says something about the way they were able to innovate."
Current chief executive Satya Nadella championed a Microsoft shift to making its software available on just about any device as subscription services hosted in the cloud.
The move likely saved Microsoft from seeing free services like Google Docs reduce their market share to zero, the analyst said.
- 'Achilles heel' -
Microsoft remains in the shadow of other US tech giants when it comes to offerings such as social networks, smartphones and the AI-infused digital assistants that have become woven into people's lives, but it is not for lack of effort.
Microsoft introduced Xbox video game consoles in 2001, steadily building up its stable of studios, making the blockbuster buy of Activision Blizzard two years ago and adding an online subscription service for players.
And despite its launch of the Bing search engine in 2009, Google still dominates that market.
Microsoft in 2016 bought career-focused social network LinkedIn, which has seen steady growth. But it still lacks the reach of Meta's Facebook or Instagram, or the influence of Elon Musk's X (formerly Twitter).
Microsoft is among those in the running to buy TikTok, which faces a ban in the United States if not sold by China-based ByteDance.
While Apple and Google have excelled at making it easy or even fun for users to engage with products, that has been an "Achilles heel" for Microsoft, according to Goldman.
"It's never been a strong suit of theirs," the analyst said.
- Mobile miss -
Known for a focus on sales rather than innovation, Steve Ballmer, who followed Gates as chief of Microsoft from 2000 to 2013, has been faulted for missing the shift to smartphones and other mobile computing devices.
His successor, Nadella, took over with a vow to make Microsoft a "mobile-first, cloud-first" company and Microsoft has since invested heavily in AI, taking a stake in ChatGPT-maker OpenAI and building the technology into offerings including Bing, though to little avail.
- Behind in AI? -
Independent analyst Jack Gold believes that despite those investments and efforts, Microsoft lags in AI because it lacks its own chips or foundation model.
"They are not as advanced in that as AWS and Google, so they're still playing a little bit of catchup in that space," Gold said of Microsoft.
Google Cloud's revenue growth is on pace to overtake Microsoft's Azure for second place in the market in two years, the analyst said.
Tech titan turns 50: Microsoft in numbers
Paris (AFP) Mar 31, 2025 -
Created in 1975 by childhood friends Bill Gates and Paul Allen, Microsoft today is one of the five Big Tech titans.
Ahead of its 50-year anniversary on April 4, a look back in numbers at some highs and lows:
- 365 -
Microsoft Office, the company's suite of software products containing Word, PowerPoint and Excel, was launched in 1989 and hit shelves a year later.
Over time it became the go-to home computer software across the world.
Two decades later the company rebranded it to the cloud-based Office 365, with a new licensing structure and payment via an online subscription-based system.
Released on the market in 2011, it also allowed consumers to pick and choose, allowing those not using Microsoft's operating system (Windows) -- Mac users for example have MacOS -- to buy and run 365 products.
The number 365, now synonymous with the company, underscored dynamism and flexibility, with products available anywhere, 365 days a year.
In Microsoft's latest quarterly figures published on January 29, the company said the number of users, or "consumer subscribers", of Office 365 was 86.3 million at the end of December 2024.
- 95 percent -
Microsoft's web browser Internet Explorer, first launched in 1995, reached its peak dominance of the market share in the early 2000s when it was the browser for up to 95 percent of world users, according to the web analytics site, WebSideStory.
But the browser was beleaguered with security issues, even prompting PC World magazine to dub version 6 as the "least secure software on the planet".
Internet Explorer's market share was progressively battered down as users turned increasingly to other browsers such as Google Chrome and Firefox.
In 2022, Microsoft finally retired Internet Explorer, replacing it with Microsoft Edge, which has a market share of 5.3 percent, far behind Chrome at 66.3 percent and Safari with 18 percent, according to Statcounter data for February 2025.
- Three months -
While the first fifty years of Microsoft is by and large a phenomenal success story, there have been a fair share of flops along the way too.
Chief among those was the Kin, Microsoft's foray into social networking on mobile phones.
In development for two years, it launched on the US market in 2010, sold by Verizon, but after only around three months the provider pulled it off the shelves due to dreadful sales.
The planned European launch was then scrapped and Kin took its place in the annals of Microsoft's worst flops in history.
Here, it joined other now-forgotten aborted products such as Zune, a portable music player snuffed out by the iPod, or Portrait, an early failed version of Skype.
- 70.5 percent -
Microsoft's flagship operating system, Windows, ran on 70.5 percent of the world's desktop computers in February 2025, far ahead of Apple Mac's OS X (15.8 percent), according to StatCounter.
This dominance over global PCs has contributed to Microsoft -- like the other four Big Tech companies Google, Apple, Facebook and Amazon -- drawing scrutiny from US and European antitrust investigators, sometimes resulting in hefty fines.
- $2,900 billion -
With Apple and Nvidia, Microsoft has one of the world's largest market capitalisations at around $2.9 trillion, as of the end of March.
- $80 billion -
One thing sure to feature in Microsoft's story to come is artificial intelligence.
It has made massive investments in the sector, one of the first tech giants to do so, and has earmarked $80 billion for AI between July 2024 and July 2025.
One of its key partnerships has been with OpenAI, the creator of ChatGPT.
However, the emergence in 2025 of China's AI startup model DeepSeek, trained at a fraction of the cost of OpenAI's systems, has stunned Silicon Valley.
Another area of key growth has been Microsoft's cloud-computing arm Azure, which has a market share of 21 percent, second behind Amazon Web Services (30 percent), according to Synergy Research Group.
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