The Secret to Microsoft’s Success

Microsoft (MSFT) was founded by Bill Gates and Paul Allen in 1975 and incorporated six years later. The multinational corporation proved to be a leader in technology and software development. Best known for its Windows operating systems software and Office applications suite, the company also developed tablets and Xbox. In 2025, Microsoft Teams helps individuals meet, chat, collaborate, and conduct business.

Key Takeaways

• Microsoft was founded by Bill Gates and Paul Allen in 1975.
• The company is known as one of the world’s largest tech companies and a leader in software development.
• Microsoft developed Windows, Office, and Xbox.
• As of 2025, Satya Nadella serves as CEO of Microsoft.

Innovation

When Microsoft began, it was considered an innovative company. Its founders and their unorthodox culture flew in the face of a formal, understated business world with limited use for computers. Bill Gates and Paul Allen licensed their BASIC programming language interpreter to a company called MITS, creator of the Altair 8800, the first “personal computer.” The machine was used mainly by hobbyists.

Microsoft was added to the Dow Jones Industrial Average (DJIA) in 1999, joining another technology giant, IBM. Before its popularity waned in 2011, nearly 95% of the world’s internet market used Microsoft’s Internet Explorer. Microsoft shifted its focus to cloud technology, and Microsoft’s Azure cloud computing system had the second-highest market share globally in 2025, second only to Amazon Web Services. 

In 2022, incorporated artificial intelligence (AI), partnering with OpenAI. In 2024, 60% of Fortune 500 companies used the AI-focused Microsoft 365 Copilot to automate business workflows and processes. 

Leadership

Bill Gates resigned as the company’s CEO in 2000 and vacated his seat as chair on the board of directors in 2020. Under the leadership of Chief Executive Officer (CEO) Satya Nadella, who took the reins in 2014, the company moved into services and cloud computing.

In 2024, Microsoft’s revenue was $245 billion, up 16% year-over-year, and it posted over $109 billion in operating income, up 24%. Its 33% profit margin is larger than that of Alphabet (GOOG) and Apple (AAPL).

Important

In 2016, Microsoft acquired LinkedIn for $26.2 billion.

Product Line and Services

As of 2024, Microsoft offered the following products and services through various engineering segments:

• Cloud and Microsoft AI: Targets IT professionals, developers, software vendors, and consumers with the Azure AI platform, online experiences, cloud infrastructure, AI cognitive services, and other business applications.
• Experiences and Devices: End-user experiences across products, services, and devices, including Microsoft 365, Windows, Microsoft Teams, and Surface devices.
• LinkedIn: A service that helps professionals grow their network and connect to businesses that hire and offer educational opportunities.
• Gaming: Develops hardware, content, and services across platforms to help grow the user base through game experiences and social interaction.

Who Are Microsoft’s Competitors?

In 2025, some of Microsoft’s competitors include Apple, Amazon, Oracle, IBM, and Alphabet (Google).

Is Skype a Microsoft Product?

Microsoft is retiring Skype in May 2025 to focus on Microsoft Teams. Users will have access to many of the same features in Skype, such as one-on-one calls and group calls, messaging, and file sharing.

Who Has Served as CEO of Microsoft?

As of 2025, Satya Nadella is Microsoft’s CEO. Microsoft has had two previous CEOs, Bill Gates and Steve Ballmer.

The Bottom Line

Microsoft is synonymous with Windows, Microsoft Office, Microsoft Teams, and Xbox. Founded in 1975, the company celebrates 50 years in 2025. In its first year, the company posted a revenue of $16,000. In 2024, Microsoft’s revenue was $245 billion.