Paul Allen and Bill Gates went to the same school and founded the company Traf-O-Data together in 1971
 for the production of small computers with an Intel CPU for the measure of car traffic. They got a contract at MITS (Micro Instrumentation und Telemetry Systems) to provide BASIC for the Altair. In 1974 they designed the programming language BASIC for the Altair 8080 as Lakeside Programmers Group. Fortran and COBOL also were programmed for the Altair and the BASIC interpreter was ported for the TRS 80 from Tandy. The company Micro-Soft was founded in summer of 1975 to develop software for the IBM PC and port the programming language BASIC. Later followed beginning from 1977 Fortran and assembler, COBOL in 1978 and Pascal 1980. In 1978 Microsoft licensed a development licence for UNIX from AT&T. Because AT&T had protected the name of the operating system UNIX, Microsoft named the UNIX variant of her own as Xenix.


1980 the enterprise moves with now 38 employees to Seattle and reaches 8 million U.S. dollars sales volume. IBM searched for his microcomputers for an operating system which fits for the mass market. At first IBM consulted Digital Research without success and after that to Microsoft which had been strengthened by Steve Ballmer in meanwhile in organisation and finances. But Microsoft had no own operating system and bought therefore Q-DOS from Seattle Computer Products for 50,000 U.S. dollars. IBM licensed it under the name MS-DOS. The IBM PC became an overwhelming success. The sales volume and profit of Microsoft increased further in consequence this one. Bill Gates got a contract with SCO to bring out a UNIX variant for the IBM PCs. First with publication of 80286 processor this turned out well and Xenix was possible. Microsoft cared primarily about the OEM business and SCO was responsible for the customization and improvement of the UNIX derivative. In July 1987 Microsoft bought the company Forethought and integrated the software under the name Powerpoint into the own office applications. Since 1994 the slogan "Where Do You Want to Go Today?" was spread by advertizing.


Originally Windows used a monolithic kernel but was later changed to the micro kernel. Comparable under the different Windows versions is the uniform program interface in Visual C with largely uniform usability. Windows profits from an enormously high number of free and shareware of other developers. The Windows and general software development is controlled by Microsoft and follows one defined roadmap, the product life cycle is limited and updates as well as support for one fix time period availably. The support is realized directly by Microsoft or certified partner companies. The successful enterprise has the primary objective to offer operating systems in the form of Windows for customers(end-user), professional and server area (enterprise). The business model of Microsoft offers the same platform for end-users and enterprises with standard implementations for software developer.


At the final release the Windows .NET servers (Windows Server 2003) shall be available as a Web server version, standard server, enterprise as well as data center version. The enterprise and data center version being also designed for 64 bit on the Intel Itanium. For the information exchange the open standards XML (Extensible Markup Language), SOAP (XML based protocol of information in the web which is for the exchange structured and standardized) and UDDI (Universal Discovery Description and Integration) are included. In January 2002 Bill Gates announced in an internal mail the start of the "Trustworthy Computing" initiative. The central concept of Peter Biddle imagines a combination from hardware and software which provides a new security architecture with the project name palladium (renamed in NGSCB later). Well known manufacturers like Intel and AMD already support this initiative and work on the realization together. Important points are the secure communication between all hardware components, an integrated firewall, hidden memory areas for applications, encrypted files, proved signatures as well as different authorization and authentification services and DRM (Digital Rights Management). This concept needs a completely different computer design, the encoding and decoding shall be guaranteed by a co-processor. Windows with the code name Longhorn shall contain this technology and approximately come on the market in 2004. Microsoft gained about 7.8 billion dollars profit at a sales volume of 28.4 billion dollars in 2002. Microsoft has at the end of the year 2003 more than 49 billion dollars in cash plus company shares and investments. The market success of Microsoft products is guaranteed by long-term announcements, early available beta versions for programmers and professionals as well as marketing. Microsoft announced the consolidation of the previous 7 lines of business areas into 3 divisions in September 2005: Business division (formerly Information Worker, Microsoft Business Solutions), Entertainment & Devices (formerly Home and Entertainment, Embedded Devices) and Products & Services (formerly Windows Client, Server & Tools, MSN). Microsoft cancelled the support for Windows 98/SE/ME on July 11th, 2006, now there are no new updates or security fixes more available.


Bill Gates announced at the 2006-06-15 to draw back himself of the daily work and his leading role of Microsoft as of July 2008. For a smooth transition Ray Ozzie (Chief Software Architect) and Craig Mundie (Chief Research and Strategy Officer) already take main responsibilities of Bill Gates. Bill Gates talked in his last official speech on the Consumer Electronics Show (CES) 2008 to finish his main activity at Microsoft. Starting from July 2008 Bill Gates wants to be attended with his wife Melinda Gates to the Bill & Melinda Gates Foundation and for Microsoft only in the function as a chairman and adviser in central issues.
Microsoft reached an agreement together to improve the maintenance and cooperation of the different operating systems with several Linux distributors. The contract includes licence agreements, the work on the format exchange between OpenXML as well as Open Document format (ODF), and partly two-way safety against patent claims. Included companies are Xandros (since June 2006), Novell (Nov. 2006), Linspire (June 2007) and TurboLinux (Oct. 2007).


Microsoft works on a completely other operating system philosophy than Windows for quite a long time. The Singularity Project is build up from scratch for reliability. For this goal the programming tools has necessarily to be made adapted for the new system architecture. Under the development name Singularity all programmes shall run in isolated processes