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Decade-Defining Brands: Microsoft


$19.75 billion in revenues - and that's only the first digital decade.


Bill Gates once said:

"When my friend Paul Allen and I started Microsoft 30 years ago, we had a vision of 'a computer on every desk and in every home,' which probably sounded a little too optimistic at a time when most computers were the size of refrigerators. But we believed that personal computers would change the world. And they have."

In 1975, the company employed 3 people (2 of them being Gates and Allen) and saw revenues of $16,005.

In 1990, Microsoft (MSFT) had 5635 employees and saw revenues of $1,183,446,000.

In 1999, at the end of "its" decade, Microsoft employed 31575 people and saw revenues of $19.75 billion.

Today, personal computers are nearly as ubiquitous as oxygen molecules, and over 90% of them run Microsoft Windows. To fully understand the reasons behind Microsoft's dominance, we must first understand why Microsoft owned the 1990s.

The seeds of Microsoft's ascendancy were actually sown in 1980, when IBM (IBM) asked Gates and company to write a software platform for its PCs. Microsoft agreed - as long as the company was permitted to retain the copyright for the code. IBM agreed, and MS-DOS was born.

Microsoft wasn't interested in going into the hardware business. They left that to the likes of Apple (AAPL). This freed the company to focus on integrated software that ran on commodity PC machines, while the computer manufacturers dealt with production, logistics and major capital expenditures. Microsoft made itself the most valuable link in the chain, and reaped rich rewards for its vision.

If one computer manufacturer dropped the ball, another was always ready to step in. If IBM failed to deliver, Compaq (HPQ) was all too happy to step in and take its place. The proliferation of hardware makers led to a healthy, rapidly expanding market for the PC. And in turn, a healthy, rapidly expanding market for Microsoft's products.

In 1990 -- the first year in which Windows was available -- over 4 million copies were distributed in 12 months, leading to the development of more than 1200 Windows-based applications from third parties. Six million more copies sold in 1991.

In 1993, Microsoft was named the "Most Innovative Company Operating in the US" by Fortune magazine. In a poll taken a short time later, Microsoft was named the most admired and respected company in America, followed by General Motors (GM), AT&T (T), and Wal-Mart (WMT).

At this point, Microsoft's software could be found almost everywhere: Copiers, cars, cash registers and ATMs.

When the company finally made a foray into hardware production, it proved to be an albatross: The Zune will never replace the iPod. In fact, unlike the 90s, the current decade has proven, comparatively speaking, to be something of a struggle.

But don't doubt Microsoft's ability to find its footing. Through success, failure and everything in between, the company that lorded over the 90s has made 4 billionaires and an estimated 12,000 millionaires out of company employees.

In Bill Gates' words, "The first digital decade has been a resounding success. There's nothing holding us back from going much faster and much further in the second digital decade."
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