Microsoft’s Greatest Hits and Epic Fails: A 50-Year Wild Ride

It’s hard to believe Microsoft hit the big 5-0 this month.

It’s also equally astounding that we have been fighting Windows bugs and frozen screens for decades — and yell “Come on!” when it decides to do long software updates just before an important business presentation.

Microsoft is now one of the most valuable companies in the world, but there was a time when things were touch and go. Even Bill Gates, who co-founded Microsoft with Paul Allen on April 4, 1975, wasn’t sure if they’d make it.

“I was always running scared,” Gates said in an interview with Geekwire. However, by the late 1990s, “we were so successful that even I could say, ‘Ok, we might even make a few mistakes and not disappear.”

Then the internet arrived, promising a new era of disruption for a mature Microsoft — along with an antitrust lawsuit from the U.S. government seeking to break the company up due to its Windows operating system dominance.

“We had this schizophrenic thing — ‘Are we so obsolete that nobody should care about us? Or are we so dominant we have to be split into pieces? I mean, which one is it? Just tell me!’” said Gates, throwing his hands up.

Read more: Microsoft to Invest $80 Billion in AI-Focused Data Centers Amid ‘Golden Opportunity’

‘Developers, Developers, Developers!’

Gates, the company’s first CEO, would step down in 2000 to make way for Steve Ballmer, a former Harvard classmate. As CEO, Ballmer made some smart moves, diving into enterprise software and launching the Xbox gaming console and Microsoft’s Azure cloud business. All are big money makers.

But he also had some doozies: acquiring Nokia to boost a failing phone business and launching Bing. Ballmer also famously laughed at the iPhone.

“$500, fully subsidized with a (phone) plan? That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard,” he said in 2007, the year the iPhone launched.

Ballmer brought his trademark energy to work: He’s known for running on stage at Microsoft’s conferences screaming, “developers, developers, developers!”

In 2014, Satya Nadella, an Azure executive, took over from Ballmer as CEO. He got rid of the failed phone business — Windows Phone and Nokia — changed the culture to be more collaborative and is doubling down on artificial intelligence (AI).

Today, Microsoft has a market cap of $2.84 trillion (as of midday on April 9) as the second most valuable company in the world, after Apple.

Without further ado, here are Microsoft’s greatest hits and epic fails as the company celebrates half a century of existence.

See also: Senators Press Microsoft and Google Over AI Cloud Alliances Amid Antitrust Concerns

The Magnificent 5

1. Windows 95 — the launch heard around the world (literally a six-second chiming sound)

Microsoft paid the Rolling Stones a reported $3 million to use their song, “Start Me Up,” in the marketing campaign to launch Windows 95. People camped outside stores to get their copy. It was the first Windows with a “start” button and task bar.

But it also arguably gave birth to a generation of IT guys who are still telling employees with computer problems: “Did you try turning it off and on?”

2. Microsoft Office — the productivity machine that runs the world

Love it or hate it, Office has been the backbone of productivity since floppy disks were actually floppy. PowerPoint single-handedly created an entire genre of corporate torture in countless business meetings.

Word has processed more college essays, resumes and passive-aggressive office memos than all other software combined. Excel’s ability to calculate complex formulas saved accounting departments from nervous breakdowns.

There’s even a Microsoft Excel Championship — no, it’s not a marketing gimmick by the company. It’s an esport played by hundreds of Excel fans, created by a financial analyst from Latvia (not making this up).

3. Xbox — from zero to Halo hero

While Sony PlayStation and Nintendo were duking it out, Microsoft crash-landed into the gaming world with a giant black box and literally changed the game. Xbox Live basically invented online console gaming as we know it.

Xbox is the exclusive home of one of the biggest gaming hits ever: Halo. It has reportedly made as much as $10 billion for Microsoft. Not bad, Ballmer.

4. Azure — the money printing machine

While AWS got the early lead, Microsoft came back swinging. Azure is now the cloud platform your CEO pretends to understand and your IT department depends on. Azure transformed Microsoft from a has-been software company into a cloud computing juggernaut. Nadella essentially turned “boring enterprise solutions” into the buzziest part of Microsoft’s business solutions — like making accounting the most popular major at college.

5. OpenAI investment — bull’s eye on AI

Microsoft first invested in this tiny startup called OpenAI in 2019, with $1 billion. That’s a lot of money to give a startup. But three years later, it looked like a savvy bet when ChatGPT took the world by the proverbial storm. AI became a household word. Microsoft would invest a total of more than $13 billion in OpenAI and enjoy exclusive access to its pre-AGI foundation AI models as competitors scrambled to match them.

It’s Microsoft’s shrewdest move since coming up with CTRL+ALT+Delete.

Read more: Microsoft’s Q2 AI Business Soars but Cloud, Guidance Disappoint

The ‘What Were They Thinking’ Flops

1. Cippy — the annoying sidekick

“It looks like you’re writing a letter. Would you like help?” NO, CLIPPY, WE WOULD NOT.

Microsoft’s early, bumbling version of a digital assistant in the form of an overeager animated paperclip invaded our documents with the persistence of a telemarketer. Clippy was so disliked that Microsoft killed him off in 2001 — the only office supply that was both famous and infamous. One headline: “The Tragic Life of Clippy, the World’s Most Hated Virtual Assistant.”

2. Zune: The iPod killer that became a meme

Remember Zune? No? Exactly. Microsoft’s answer to the iPod arrived with a resounding thud. It wasn’t actually bad, but Zune landed at exactly the wrong time, launched in 2006 just as everyone was switching to smartphones. Now, it’s a meme.

Yet there still exists an enclave of Zune diehards — on Reddit.

3. Windows Vista: The OS that made everyone miss Windows XP

Among Microsoft’s Windows releases, Windows Vista is often considered the most reviled operating system version for business and home users — verified by an online vote. (Windows Millennium Edition was actually more hated, but it’s meant only for home users.)

“After the great success of Windows XP, Windows Vista was a fiasco,” according to a Howtogeek.com blog post. It not only came in six “confusing” editions — Starter, Home Basic, Home Premium, Business, Enterprise and Ultimate — but “ran sluggishly” on PCs and was a “memory hog.”

Who could forget the “dreaded” User Account Control prompts that would “pop up every few minutes to cover the screen” when using the computer? Thankfully, Windows 7 fixed Vista’s problems, according to the blog post.

4. Nokia acquisition — the $7.2 billion dumpster fire

In 2013, Microsoft bought Nokia’s phone division for $7.2 billion as it tried to revive its own handset ambitions. At the time, it had the Windows Phone mobile operating system and its Lumia line of Microsoft phones. But by then, mobile was a two-horse race between Apple’s iOS and Google’s Android.

Nadella ended Microsoft’s foray into mobile phones in 2017, which he later told Business Insider as something he regrets.

5. Bing — is an explanation even needed?

As Zune was Microsoft’s answer to the iPod, Bing was its rebuttal to Google Search. The results were similar: Microsoft fell flat. Google has an 89.7% global market share compared to Bing’s 4%, according to Statcounter.

Let Eddy Cue, Apple’s senior vice president of services, express how consumers feel about Bing.

During a deposition in the U.S. government’s antitrust lawsuit against Google, Cue was asked about the decision to choose Google Search over Bing to power iPhones and other iOS devices.

Cue said they wanted a revenue-sharing arrangement and Google had the best search engine while Bing was “inferior.” Google would bring more money to Apple over time.

But even if Microsoft matched Google, Apple would never switch. “I don’t believe there’s a price in the world that Microsoft could offer us,” Cue said.