Over the past 50 years, Microsoft has reshaped home computing, gaming, and office work industries, culminating in a $2.9 trillion empire as of 2025. Many people credit Bill Gates with the company’s current success, but there is one person whose efforts are often overlooked. That person is Steve Ballmer, the second CEO of Microsoft, responsible for the massive growth of the company.
So why is his tenure not looked upon so fondly? What happened during those years, and what pivotal role did he play in Microsoft’s success? Let’s find out.
From Assistant to CEO: How Steve Ballmer Started at Microsoft
If you’re still scratching your head on who the guy is, you may recognize him from videos laughing at the first iPhone , or yelling, “ Developers! Developers! Developers! ” among a crowd of hundreds. But don’t take him for a nobody, as the guy is the tenth-richest person in the world. He holds the highest stake in Microsoft at 4%, estimated to be valued at $120 billion.
Steve Ballmer sitting with Bill Gates (Image Credit: Microsoft)
To be honest, his time at Microsoft and how he became a part of the firm is intriguing. Steve Ballmer attended Harvard University and lived down the hall from Bill Gates. This might lead you to believe that Steve and Gates co-founded Microsoft, but this is not the case! He did not drop out of Harvard, but rather earned Magna Cum laude, later working as an assistant manager at P&G.
Steve later joined Microsoft after getting bored with the monotony of a 9-5 job, as the 30th employee of the company. He worked as Gates’ assistant and the company’s first manager , looking over jobs that developers didn’t want to do. Ballmer described his role as: “ I was Bill’s assistant, basically: chief cook and bottle washer “. He set up the accounting and the HR department, too.
However, he played a huge part in Microsoft’s deal with IBM , which changed the company’s future…
The Deal that Made Microsoft
In 1980, IBM, who were the pioneers of computing at the time, approached Microsoft looking for software for their upcoming personal computer. However, Microsoft didn’t have software of its own, and instead had to look elsewhere to fulfill its needs.
IBM Personal Computer (Image Credit: Ken Wolter/Shutterstock)
Gates recommended 86-DOS, which was built by a company called SCP (Seattle Computer Products). The idea was to take their OS and customize it to IBM’s needs. But there is a huge gaping flaw in this plan because IBM could directly get it from SCP. Why would they need a middleman?
That’s where Steve Ballmer stepped in. He played the role of a salesman convincing IBM to let them get the rights for 86-DOS and asked for a small fee and the permission to let them ship the software to other companies. The folks at IBM were thrilled, since Microsoft didn’t ask for a huge sum or royalty per copy as they expected. Little did they know that they had been bluffed.
Copy of MS DOS (Image Credit: DwiJarduk/Shutterstock)
Ballmer’s offer did not grant IBM exclusive rights to the software. This allowed Microsoft to market and distribute its software to other brands, calling it MS-DOS , which later turned into Windows. This skyrocketed the corporation from a small player to the status of a well-known brand.
The Wonder and Blunder Years
The deal cemented Steve Ballmer’s position as a key employee, climbing several executive ranks and earning an 8% ownership . He later became CEO after Bill’s retirement in 2000. During his time as the CEO, he tripled the revenue to nearly $78 billion and doubled the profits to $27 billion.
Image Credit: IB Photography / Shutterstock
Under his leadership, Microsoft released several successful products that we still cherish to this day. This includes Windows XP, Windows 7, Windows 10, Microsoft Office 365 products, a cloud hosting service called SkyDrive, which later became OneDrive, and expansion into enterprise-level services.
He even helped Microsoft dive into the gaming and home entertainment sector with Xbox, which launched in 2001. I don’t think that without Steve’s aggressive push, the console would have become as popular as it did. He also overlooked the acquisition of Skype and Nokia .
You might be tired of me praising the guy, waiting for me to mortify him for his mistakes. And the mistakes he made. The biggest one was how he couldn’t predict the smartphone revolution in time, mocking the iPhone because it lacked a physical keyboard and “ didn’t appeal to business customers “. He later tried to correct his mistakes with Windows Phones, but it was too late.
Steve Ballmer holding a Nokia Lumia 920 (Image Credit: Seattle Pi)
Apple’s iPhone was selling millions of units, while Nokia-branded Windows Phone kept seeing a steady decline in sales. Just to be shut down 2 years after Ballmer stepped down from his position.
Other failures under him include Windows Vista, Zune, and Bing, which didn’t see fruitful growth either. Even the stock market wasn’t on his side, as Microsoft’s stock fell almost 40% during his era, and it didn’t recover till his departure. At some point in 2011, even IBM’s stock took over Microsoft’s, which is why the shareholders later pushed him out of his position in 2014.
Was Ballmer the Bad Guy in All of This?
Steve Ballmer’s tenure was a rough one, filled with highs and lows. The guy propelled Microsoft and several of its products to success, but it couldn’t be denied that he wasn’t a visionary and more of an operator or manager. That is why he couldn’t get how big the smartphone industry will be in the future. Questioning the methods of visionary CEOs at the time.
His viral video of laughing at iPhone and comparing sales digits just goes to show that he was unable to see what changes are coming in the industry. Honestly, he reminds me of Lewis Litt from Suits. Here seemed like a silly fellow who had nothing but one intention in mind, to make Microsoft money, and that he did. He served 33 years at Microsoft and loved it like his own child.
A statement even his kids will agree with. The guy had a shy nature, and to overcome it, he became too overenthusiastic. Something I can personally relate to. But that doesn’t come off nicely when you are representing a corporation on a global level. In my eyes, Bill Gates might have engineered the company, but Steve fueled it to succeed.
With over 4 year of experience under the belt, I cover all facets of consumer tech, from smartphones to other consumer electronics, our favorite social media apps, as well as the growing realm of AI and LLMs. As an Apps and AI writer app Beebom, I provide my expertise in all these areas, weaving stories that help you get familiar with the tech around you. But you will find me playing NYT daily puzzles in my free time.
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Microsoft is celebrating its 50th anniversary at a time when technology is about to reshape the world. Founded by Bill Gates and Paul Allen in a small rented office in Albuquerque, Microsoft is now the world’s second most valuable company. Over the past 50 years, the software giant has faced many challenges, antitrust lawsuits, and fierce competition, but can it stay ahead in the next five decades? To understand what the next 50 years hold for Microsoft, read on.
What Microsoft’s History Tells Us About the Next 50 Years
Microsoft started as a small company in 1975, developing software for the Altair 8800 — an early personal computer. By 1980, Microsoft needed an operating system to power the IBM PC. So, it acquired 86-DOS and modified it to MS-DOS. MS-DOS became massively popular and by 1985, Microsoft launched its first graphical operating system called Windows 1.0.
Paul Allen and Bill Gates in 1981 | Image Credit: Microsoft
10 years later, in 1995, Microsoft released Windows 95 which was a huge commercial success. For the first time, Microsoft introduced the Start menu, Taskbar, and Windows Explorer. They are still part of the latest Windows 11 OS, even after 30 years.
Following that, Microsoft launched Windows XP, Xbox, and the Office suite, which expanded its footprint in the PC space. Now, 50 years later, Windows has a desktop market share of over 70% , maintaining its position as the dominant OS. In these last 50 years, Microsoft has diversified its business to cloud computing (Azure), gaming (Xbox), productivity (Microsoft 365), and its next big thing – Copilot AI.
Beyond being a consumer-centric company, Microsoft has become a massive corporation that provides its services to enterprise customers as well. In fact, today, Microsoft’s revenue mostly comes from Azure’s cloud infrastructure and AI services. Meanwhile, the remaining revenue comes from Microsoft 365, Windows, and Xbox.
The only major space where Microsoft doesn’t have a footprint is mobile. Windows Phone exited the smartphone OS market in 2020. Bill Gates recently admitted that losing the phone market to Android was his “greatest mistake”. Besides that, Microsoft in 2025 announced that it’s quitting the HoloLens hardware business completely, ending its Mixed Reality vision.
Microsoft’s Role in AGI Development
When Satya Nadella took over Microsoft as the CEO in 2014, the Redmond giant was not in good shape. Nadella ended several struggling projects like the Windows Phone. And focused on its server businesses like Azure cloud, AI, enterprise solutions, and developer relations. As a result, Microsoft has become the world’s second most valuable company by market cap, joining the $3 trillion club in market valuation recently.
The credit largely goes to Satya Nadella for transforming Microsoft in the last decade. Many credit Nadella’s leadership for striking a deal with OpenAI back in 2019. Microsoft invested $1 billion in OpenAI to support the development of AGI (Artificial General Intelligence) — an AI system capable of matching human capabilities.
Image Credit: OpenAI via YouTube
So far, Microsoft has invested close to $14 billion in OpenAI and has a 49% ownership stake in the company. This has put Microsoft at the forefront of AI development. The partnership allows Microsoft to exclusively access OpenAI’s latest breakthroughs and AI models. It can also commercialize OpenAI’s models. Thus, allowing the company to integrate the latest AI models into its products. Like Copilot, Microsoft 365, and Azure AI for enterprise offerings.
Not only that, the terms of the partnership say that OpenAI must use Microsoft Azure for all cloud infrastructure needs. Only recently, Microsoft relented and allowed OpenAI to purchase cloud resources from Oracle. Some reports also say that OpenAI has to share 75% of its revenue with Microsoft until the investment is recovered.
Image Credit: Beebom
It means that Microsoft has a huge financial influence over OpenAI’s operations. And in the future, Microsoft will gradually recover its investment while having access to the latest AI technologies. Having said that, the partnership also says that once OpenAI achieves AGI internally, Microsoft will lose access to OpenAI’s technologies.
To keep its lead in the AI race, Microsoft is putting its AI division in order. Microsoft is reportedly developing internal reasoning models to reduce its over-reliance on OpenAI. The company has already trained smaller models such as Phi for everyday use and Muse AI for generating gaming visuals.
Microsoft is also focusing on open-source models including China’s DeepSeek which shocked the world with its efficient training methods. Overall, Microsoft is currently a key player in AI development, leveraging its partnership with OpenAI and developing in-house AI models as well. Until AGI is achieved, expect Microsoft to continue its lead in the AI race.
Microsoft’s Next 50 Years: Future of Windows
While Windows doesn’t directly contribute major revenue for Microsoft through licensing, the platform serves as the foundational bedrock, powering its software, cloud, and enterprise services. On the consumer side, Windows 11 is the latest desktop OS by Microsoft, and it’s evolving into a great operating system. Microsoft is slowly but gradually improving the design language of Windows 11 to offer a consistent PC experience.
Image Credit: Microsoft
Microsoft is putting effort into making Windows 11 a more modular OS . We have already seen that Windows 11’s various elements such as the desktop shell, Taskbar, Notification Center, etc. are being decoupled from explorer.exe to make each component modular and updatable. Microsoft has already showcased Windows 10X (now canceled) which was based on a highly-modular Windows Core OS .
In the future, we might see different flavors of Windows running on various form factors such as foldable devices, tablets, and more. It’s being said that Windows 12 should come with a floating Taskbar and a new modular desktop interface, optimized for touchscreen devices.
Apart from UI/UX improvements, Microsoft is also adding a lot of AI features to Windows 11. Besides current AI features on Windows 11 such as Recall, Semantic Search, Cocreator, etc., the future of Windows lies in Agentic AI -driven integration. Copilot on Windows will be able to perform actions in real-time using the vision capability. Users will be able to voice chat with Copilot and ask it to perform actions on their Windows PCs.
To enable this, Microsoft is already preparing agentic frameworks for Windows like OmniParser, Magentic-One, AutoGen, and Windows Agent Arena to handle complex tasks. While some companies are bringing AI agents to the web browser, Microsoft is taking it to the OS level so that it can perform both system-level and web-based actions . Basically, in the future, you can expect that Windows will become an AI-driven operating system.
To leverage AI for gaming, Microsoft has already showcased its Muse AI model that can generate game visuals and controller actions. It’s quite possible that Generative AI will be tightly integrated into Xbox to enable features such as AI-assisted gameplay, environment generation, personalized experiences, and more.
Microsoft’s In-house Chips and Quantum Computing
Besides software, on the hardware side too, Microsoft is preparing for the future and reducing its reliance on Nvidia . In 2023, Microsoft announced its custom Azure Maia 100 chip for AI workloads. While Google has its own TPU for AI workloads, and Nvidia continues to sell GPUs for AI training and inference, Microsoft needed an in-house chip , hence, Maia 100 was born. It’s an AI accelerator that can run large-scale AI workloads on Azure’s cloud.
The company also announced an Arm-based Azure Cobalt CPU for general-purpose compute workloads, just like Google’s Axion CPU. Since Microsoft has a major cloud business, the chip is going to reduce datacenter costs for Microsoft and cut down dependency on external vendors like Nvidia and Intel.
Majorana 1 | Image Credit: Microsoft
Finally, in February 2025, Microsoft announced its first breakthrough in quantum computing . The company unveiled Majorana 1, a quantum computing chip for quantum computers. Unlike traditional qubits, Majorana 1 uses topological qubits which are said to be more stable and less prone to errors.
For this, Microsoft invented a new class of materials called “topoconductors”. Microsoft claims that Majorana 1 can scale up to 1 million qubits on a single chip. Overall, Microsoft is doing pioneering work in the field of quantum computing while also developing in-house chips to reduce reliance on external vendors.
And as a software-first company, Microsoft is entering the AI era with high expectations, which has the potential to transform its entire ecosystem including Windows, Xbox, Azure, and Microsoft 365. In the next 50 years, we expect Microsoft to lead the industry with fresh innovations, but can it outpace Google and Apple? Only time will tell.
Passionate about Windows, ChromeOS, Android, security and privacy issues. Have a penchant to solve everyday computing problems.
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