decades, it has been the dominant PC operating system

worldwide. In 2020, Windows had almost 83% market share by unit

shipments. While Google Chrome OS had 10%. And Apple's Mac OS

had 7%.

Bill Gates, his vision was to put a PC on every desk, in every

home. We've struck a chord with Windows where people feel like

it's their product. It's their operating system. From Solitaire

to its iconic Start button and startup sounds, productivity

apps, gaming and corporate computing. Windows changed the

way we use computers. The legendary Windows 95 help propel

the company to dominate the market in personal computing.

Microsoft has introduced many versions of Windows since its

inception, with some more memorable than others. Today,

there are more than 1.3 billion devices running Windows 10

worldwide on a monthly basis and roughly 800 million users every

day.

Many of its deployments, if not most are within corporations.

Where it gets becomes part of a corporate ecosystems,

corporations manage it and secure it and make it part of

their own.

Windows only makes up 14% of Microsoft's business, but

remains a critical part of it.

Windows has been a key piece of Microsoft's business almost from

the beginning. It wasn't just critical because it sold PCs.

Windows was critical because it sold office the graphical user

interface programs Word, Excel, PowerPoint, you know, that's why

it's been critical to their business and remains critical

today.

The company just announced the latest version Windows 11, we

take a look back over three decades of Windows and how it

came to dominate. Today, lots of things have operating systems,

computers, phones, TVs, even cars. An operating system or OS

allows users and applications to work with hardware without the

need to enter lines of code. Back in the 1980s, using a

computer It was very complex.

The motivation for Windows from the very beginning was to

improve it to remove those barriers to make it as

effortless as possible to get the most out of the technology

that you had available to you.

Windows was not the first OS Microsoft made. When it was

first getting started. It developed MS-DOS 1.0., short for

Microsoft disk operating system, for computer maker IBM.

Microsoft specified that IBM would not have exclusive rights

to the software, leaving open the opportunity for the company

to supply other hardware and computer makers the same OS.

Microsoft started to understand that interface design was

critical not just to Windows but to all of its applications.

Windows was not thought of as an operating system in the early

days, but a graphical user interface or GUI that would run

on top of MS-DOS. One of the first personal computers that

used a GUI was the Xerox star, which would be very influential,

according to Bill Gates, on both Microsoft and Apple's GUI

designs,

Bill really believed that this was the future for the company.

So there was heavy pressure to get this thing to market.

Microsoft released Windows 1.0 in November 1985,

it was a little bit clunky or quirky. Plus Windows had the

challenge that Jobs and Apple didn't have. They just had to

make it run on their hardware. We had to make it run on all

those different MS-DOS machines that were in the market at the

time.

Apple's Lisa was the first commercial PC to have a GUI and

in 1984, the company unveiled the Macintosh. At the time,

Microsoft created software specifically for new Macs,

including the first version of Microsoft Word. The two

companies made a confidential agreement in 1985 that allowed

Microsoft to use any of Apple's interface elements in its

software. After Windows 2.0 was released, Apple sued Microsoft

for copyright infringement. However, the court said Apple's

copyrights were covered by the existing agreement. Apple

appealed several times, but the court denied their petitions. At

the time, Microsoft was building another OSs in parallel with

IBM, which was called OS/2.

At that point from Steve's perspective was destined to be

the future in that Windows was kind of stepping stone to that,

but that Windows would not continue once they had completed

that joint project with IBM. Bill didn't quite see it that

way. But eventually the whole thing got terminated.

Then we really moved to the one that kicked it all off. And that

was Windows 3.0. That's when it really became serious.

Windows 3.0 was where users were introduced to Solitaire, which

was designed to help users learn how to drag and drop using a

mouse. It also could run multiple applications on top of

one another. Three months after 3.0 launched, 1 million copies

had shipped worldwide. And by 1993, there were 25 million

licensed users of Windows globally and 60% of PCs came

with Windows pre installed. The way

that Windows 3 took off and captured the attention and

people's excitement caused a fundamental reckoning inside

Microsoft of what our applications and operating

system strategy should be.

Then came Windows 95. The marketing campaign for Windows

95 is legendary. Microsoft paid the Rolling Stones for the

rights to use 'Start Me Up' to roll out its new feature the

Start button. People lined up for hours at electronic stores

to get their hands on it. When Windows 95 launched, Microsoft

had 75 million users of the latest version of Windows 3.

Microsoft generated $30 million dollars in revenue on the first

day it sold Windows 95. At the time, Windows was used on 80% of

all PCs with more than 100 million users worldwide.

It was really Windows 95 that solidified Windows and started

the move towards Windows being a dominant operating system. In

the early 90s, PCs are really just tools for using

spreadsheets or databases that wasn't something like an

everyday person would ever think what would I need a personal

computer for. We wanted to democratize computing,

Microsoft was becoming a dominant force in the PC

industry. Its main competitors at the time were Apple and IBM.

And despite not abandoning OS/2, IBM would sell computers with

Windows 95 pre installed.

You had two things occurring at one time that affected

Microsoft's revenue. Not only did you have a new version of

the operating system, but hardware had changed

significantly enough that enterprises and consumers

upgraded their hardware and their OS's. You got to remember

that every time a new PC is purchased, a certain amount of

money goes to Microsoft for that operating system.

Windows 95 offered lots of new features like faxing, messaging

and networking that previously required separate programs to

run.

We also were committed to it being worldwide, we were able to

ship Windows 95 simultaneously in eight languages. People

thought we were crazy. But we wanted to have that kind of

worldwide impact. That was very differentiated from the IBM more

enterprise focused view of the world, or the Apple, who we're

focused on the creative people in business.

Never underestimate the role the Windows played in selling the

other products. It's sold developer tools, it's sold

Office, it's sold Office. It pulled a lot of products with

it. And if you weren't making the changes that you needed to

make in the operating system, you were not going to sell those

other products and in fact, you are going to hamper their

development.

During the late 90s, technology was rapidly changing. Personal

computing and the Internet were becoming more widely used. Bill

Gates sent a memo titled The Internet Tidal Wave where he

said "I want to make clear that our focus on the internet is

crucial to every part of our business."

When the Internet came about, you know, we're very proud to

have that, in a sense be birthed on the Windows platform. That's

where the Internet started. Now many people use it on their

mobile phone, but it started there with Netscape and then

with our you know, Internet Explorer browser.

In the 1990s, Microsoft was under legal scrutiny for using

its dominant position to scare off competition. For much of

that decade, its share of Intel-compatible PC operating

systems was above 90%. When Microsoft launched Internet

Explorer, Netscape Navigator already dominated the internet

browser market. But in 1998, the US government accused the

company of using its dominance in computer software to drive

competitors out of business. The antitrust suit debated whether

Microsoft forced computer makers to exclude a Netscape browser on

their PCs. A judge ruled the company unlawfully tied Internet

Explorer to Windows and ruled the company needed to be split

up. It was around this time that Bill Gates stepped down as CEO

and Steve Ballmer took over, but in 2002, an appeals court threw

out the ruling, the company settled and agreed to a consent

decree and barred the company from entering into Windows

agreements that excluded competitors. It unveiled Windows

98, 2000, Me and XP in quick succession. These versions added

remote desktop, stronger security and graphic interface

updates. Today,

it really is actually the the end of the MS-DOS era. It's also

we would say the end of the Windows 95 era. Windows XP is

the most powerful, fastest, most reliable operating system we

have ever done. Together with Office XP, Windows XP will set a

new standard for business. He really was building the product

for the enterprise use, which ultimately became the foundation

for the Windows product itself, but it took a while. It really

took till XP, before the crossover could be fully made.

Microsoft made sure to pay attention to what business users

were asking for big companies that were deploying thousands of

Windows PCs. And once those companies are in Windows, and

they start building internal applications for Windows, many

employees get used to using those programs. All of that

makes a formidable base that companies are maybe reluctant to

leave. That is one piece of the enduring success of Windows.

Windows went through good and bad cycles, Vista interacted

differently with programs and previous versions of Windows.

Users experienced applications running at slower speeds,

problems with graphics and other hardware connection issues. That

whole management team got kicked out after the disaster of Vista.

And they put the people that had been in charge of Office in

charge of Windows. But then Windows 7 kind of fixed that.

8 was sort of Microsoft's new coke moment, they tried to

change the operating system, particularly as it's exposed to

the user too much. A lot of people just couldn't cope with

the degree of change that occurred.

A lot of the frustrations that we had with Windows 8, there was

no Start menu that was unfamiliar to people and

companies would say I need to train my employees. And you

know, the Windows 8 team, I give him credit for pushing the

boundaries, but they became too unfamiliar.

Windows 8 had a touch friendly design like a smartphone.

Microsoft did develop a mobile OS. But the company failed to

win a leadership position. In

hindsight, I give Apple and Google credit for investing

appropriately to capture the mobile opportunity at the right

time. By the time you know, we were all in on mobile. And the

same thing could be said of search by the way. By the time

we were all in on search, it wasn't five years to late, it

was really like two years to late. And that's a lifetime in

technology.

We constantly try and stay focused on the customers who use

the PC and use Windows but then along are coming mobile phones

and with the advent of these smartphones that could do web

browsing and phone calls. They became a platform. No, we missed

the phone wave. I mean, it's no no secret, right? We tried with

Windows Phone, I think we had a pretty good offering. You know

at that time, I would say hey, look, we didn't see the advent

of the mobile phone becoming a full computing platform.

In 2014 Satya Nadella replaced Steve Balmer as CEO,

Windows 10 ushers in an era of more personal computing in a

mobile first, cloud first world. In Windows 10, what they've done

is they've kind of blended the best of the old so we bring back

the start menu that folks were comfortable with on Windows 7,

they also brought Cortana to the PC. Cortana is kind of

Microsoft's answer to Siri. And then with Windows 10, our

challenge was to maintain the frontier of a technical question

to touch but make it more familiar,

which again, when you think about a billion users, it is a

challenge. Microsoft kept some of those touch friendly features

and features that worked well with a stylus. But ultimately,