Microsoft Corporation
CorpDigest
Microsoft Corporation
Company History
Founded 1975 in Redmond, Washington
Last reviewed: 2026-06-03 · By Swet Parvadiya
Microsoft Corporation was founded in 1975 in Albuquerque, New Mexico (later relocated to Redmond, Washington) by Bill Gates and Paul Allen to write programming languages for early microcomputers. The company operates in software, cloud computing, and artificial intelligence and is led by CEO Satya Nadella (since February 2014). Revenue model: Microsoft earns from cloud infrastructure and platform services (Azure), productivity subscriptions (Microsoft 365), enterprise applications (Dynamics 365, LinkedIn), gaming (Xbox, Activision Blizzard, Game Pass), Windows OEM licensing, search advertising (Bing), developer tools (GitHub, VS Code), and security products. The model is predominantly subscription and consumption-based, creating highly predictable recurring revenue. Microsoft reported $281.7B in FY2025 revenue (up 15%) with $101.8B net income (36% margin). Q3 FY2026 showed accelerating growth: revenue $82.9B (up 18%), Microsoft Cloud $54.5B (up 29%), AI business up 123% YoY, EPS $4.27 (up 23%). Trailing twelve-month revenue is $318.3B. Commercial remaining performance obligation reached $627B (up 99% YoY). Market capitalization is approximately $3.13 trillion (NASDAQ: MSFT). The company employs approximately 228,000 people. Competitive position: Microsoft's advantage is the most comprehensive enterprise technology platform in the world — Azure + Microsoft 365 + Entra identity + Defender security + GitHub + LinkedIn + Dynamics + Copilot AI — creating switching costs, data gravity, and procurement simplicity that point-solution competitors cannot match. The exclusive OpenAI cloud partnership provides unique AI differentiation. Strategic direction: Embedding AI Copilots across every enterprise product, scaling Azure AI infrastructure ($80B+ annual capex), growing the $627B commercial backlog, expanding gaming through Activision Blizzard content, and maintaining the enterprise platform lock-in that makes Microsoft the default choice for corporate IT.
Bill Gates co-founded Microsoft in 1975 and served as CEO until 2000, remaining a central strategic figure as chairman and later technology adviser. His most important contribution was recognizing that software could be licensed repeatedly across hardware ecosystems. The IBM PC operating-system deal showed that instinct: Microsoft supplied IBM while retaining rights that let MS-DOS spread through the wider PC market. Gates also drove the company's intense focus on Windows, Office, developer platforms, and enterprise licensing. He was famously demanding, deeply involved in product reviews, and willing to use Microsoft's platform power aggressively, which helped build the company and also contributed to antitrust scrutiny. After stepping back from day-to-day leadership, Gates shifted much of his attention to philanthropy through the Bill & Melinda Gates Foundation, while his Microsoft legacy remained embedded in the company's licensing DNA. The modern subscription and cloud model is different in delivery, but it still reflects Gates' core insight: control the software layer that customers build around.
Paul Allen co-founded Microsoft and was crucial to its earliest technical and strategic decisions. He helped develop Altair BASIC, gave the company its original name, and participated in the operating-system opportunity that led to MS-DOS. Allen left active management in the early 1980s after being diagnosed with Hodgkin lymphoma, though he remained a major shareholder for many years. After Microsoft, he became an investor, philanthropist, sports-team owner, and backer of science, space, music, artificial intelligence, and cultural institutions through Vulcan Inc. His lasting influence on Microsoft is easy to understate because he exited daily operations early, but the company might not have existed without his ability to see the Altair as a commercial signal rather than a hobbyist curiosity. Allen represented the imaginative technical side of Microsoft's founding: the belief that small computers would become general-purpose tools if software could make them useful.
Microsoft acquired LinkedIn to integrate professional networking data into its enterprise ecosystem. The goal was to enhance customer relationship management, recruitment tools, professional advertising, and sales intelligence. It also gave Microsoft a major professional identity graph outside Windows and Office.
Microsoft acquired GitHub to rebuild trust with developers, strengthen its open-source posture, and place itself closer to the software development workflow. The acquisition also created a natural bridge between code repositories, developer tools, GitHub Enterprise, GitHub Actions, Copilot, and Azure.
Microsoft acquired Nuance to deepen its position in healthcare AI, speech recognition, clinical documentation, and conversational intelligence. The deal gave Microsoft specialized industry software that could run on Azure and support healthcare workflows.
Microsoft acquired ZeniMax Media, parent of Bethesda Softworks, to expand its first-party gaming portfolio. The deal added franchises such as The Elder Scrolls, Fallout, Doom, and other content that could strengthen Xbox and Game Pass.
Microsoft acquired Activision Blizzard to gain major gaming franchises, mobile exposure through King, and a larger content base for Xbox, PC, Game Pass, and cloud gaming. The strategic logic was to reduce dependence on console cycles and strengthen Microsoft's position in interactive entertainment.