Microsoft Corporation


TABLE OF CONTENTS

MICROSOFT HISTORY 1
EARLY INFLUENCES 2
FIRST BUSINESS VENTURE 3
EDUCATION ATTEMPT 3
THE MOTIVATIONAL SIDE OF FEAR 4
A JAPANESE CONNECTION 5
IBM INFLUENCE 5
SURVIVAL OF THE FITTEST 6
A CRUCIAL DEAL 6
COMPETITION ERRORS 7
BIRTH OF WINDOWS 7
MISSION STATEMENT AND ANALYSIS 8
INDUSTRY AND COMPETITVE ANALYSIS 9
DOMINANT ECONOMIC CHARACTERISTICS 9
Market Differentiation 9
Pace of technological change 10
Advances to the Printed Word 11
DRIVING FORCES 12
The Internet 13
The Information Highway 14
KEY SUCESS FACTORS 14

Microsoft History

Historians categorize blocks of time with the discovery of certain raw materials
that humans utilized. The Bronze Age and the Iron Age were two periods in human
history that proved through the discovery of artifacts that humans learned to
harness these raw materials ingeniously. The Industrial Revolution of the late
nineteenth century brought the discoveries of the Bronze and Iron Ages to new
heights, and the advent of the locomotive, automobiles, cargo ships and
airplanes were the most evident by-products of such raw materials. Use of these
by-products from the earth\'s raw materials dramatically changed the world of
business and trade. With the subsequent invention of wire communications (i.e.,
tapping out Morse code and speaking over telephone lines), business and trade
grew exponentially. Wireless communications via the inventions of radio,
television, and motion pictures contributed greatly to the advances of the
Industrial Revolution. The need to find better ways of doing business to keep
the marketplace fresh and innovative has driven the human race toward the brink
of a new eraCthe Information Age. Unlike more tangible qualities of prior ages,
the Information Age offers less defined qualities. At the heart of this new age
is the advent of the personal home computer. Pumping life into this otherwise
material home appliance is software that incorporates the necessary commands to
access information stored within the computer\'s memory. The company that
offered the world its first software manufacturing company was Microsoft
Corporation (MSFT on the NASDAQ exchange). At the helm of this young, innovative
company are William Gates and Paul Allen, a pair of former high school chums who
envisioned a world of home computer technology years before such a dream became
even remotely possible.

Early Influences

Their story begins at Lakeside High, a private high school in Seattle,
Washington. The Mothers\' Club at Lakeside decided to purchase a computer
terminal for the kids with proceeds from bake sales and rummage sales. Students
at Lakeside became enthralled with this new toy. True to their innate curiosity,
Gates and Allen began to dabble farther into the workings of the computer; Gates,
for example, wrote his first computer program at the age of thirteenCa version
of Tic, Tac, Toe. Because the computer terminal was so slow, one game of Tic,
Tac, Toe took up most of a lunch break; if played on paper, a full 30 seconds
might have been required. Despite the simplicity of the program, it spawned the
creative genius in both young men to tackle more challenging programs in the
years ahead. Because the Mothers\' Club was unable to afford continued use of
computer time at $40 per hour, they decided to make it students\' responsibility
to purchase their own computer time. Most students complied by getting jobs
outside school. Gates and Allen became programmers in the summers for
compensation of computer time and $5000 in cash. In his 1995 book The Road
Ahead, Gates describes the mainframe computers of the early >70\'s as A. . .
temperamental monsters that resided in climate-controlled cocoons . . .
connected by phone lines to clackety teletype terminals. . . [email protected] (11) He went
on to explain that a personal home computer called the DPD-8 was actually
available from Digital Equipment Corporation. According to Gates it was A. . .
an $18,000 personal computer which occupied a rack two feet square and six feet
high and had about as much computing capacity as a wristwatch does today . . .
Despite its limitations, it inspired us to indulge in the dream that one day
millions of individuals could possess their own [email protected] (11-12)

In the summer of 1973, Paul Allen, who knew more about computer hardware than
Bill Gates, shared an article with Gates buried on page 143 in Electronics
Magazine. The article described the invention of the 8008 micro-processor chip
by a young company called Intel. Paul was surprised to receive the technical
manual for the chip in the mail simply upon request. Immediately, he went to
work analyzing its capabilities. Due to the lack of transistors, the 8008 chip
was very limited in