Microsoft turned 50 in April 2025. Half a century is a long run for any technology company, and almost unheard of for one that still sits at the front of every major platform shift. From a two-person operation writing BASIC interpreters for hobbyist computer kits, Microsoft has become the platform on which most of the working world runs its email, its spreadsheets, its finance systems, its meetings and, increasingly, its artificial intelligence.
This article walks through the full timeline. It is the kind of context that helps make sense of where Microsoft is now and where it is likely to go next. Along the way we have flagged the UK milestones that often get missed in American-centric histories, and we have brought the story right up to date with the agentic AI announcements of 2025 and 2026 that most existing articles do not yet cover.
Key takeaways
- Microsoft was founded on 4 April 1975 by Bill Gates and Paul Allen in Albuquerque, New Mexico. The first product was a BASIC interpreter for the Altair 8800.
- The MS-DOS deal with IBM in 1981 made Microsoft the dominant force in personal computing. Windows, launched in 1985, cemented that position throughout the 1990s.
- Under Satya Nadella, who became chief executive in February 2014, Microsoft pivoted to cloud and subscription. Azure, Microsoft 365 and Dynamics 365 now sit at the centre of the company.
- 2023 brought Microsoft 365 Copilot and a multi-billion-dollar partnership with OpenAI. By 2026, the agentic era has arrived: Agent 365, the Frontier Suite and Copilot Studio multi-agent orchestration have moved AI from assistant to action-taker.
- Advantage has been a Microsoft partner since 1999, delivering Dynamics, Business Central, Power Platform and Microsoft 365 to UK SMEs for more than half of Microsoft's history.
Microsoft at a glance: a sortable timeline
Before the narrative, a reference. The table below covers every event mentioned in this article and a few more besides. Click any column header to sort.
| Year | Event | Era |
|---|---|---|
| 1975 | Bill Gates and Paul Allen found Micro-Soft in Albuquerque; Altair BASIC ships | Origins |
| 1976 | Hyphen dropped; company becomes Microsoft | Origins |
| 1979 | Microsoft relocates from Albuquerque to Bellevue, Washington | Origins |
| 1980 | Steve Ballmer joins as the company's 30th employee | MS-DOS era |
| 1981 | MS-DOS ships on the IBM PC | MS-DOS era |
| 1982 | Microsoft Limited incorporated in the UK on 24 March | MS-DOS era |
| 1983 | Microsoft Press founded; Word for MS-DOS released; UK, France and Germany subsidiaries connect to Microsoft email | MS-DOS era |
| 1985 | Windows 1.0 released; Microsoft moves to its Redmond campus | Windows era |
| 1986 | Microsoft IPO on 13 March; share price closes at $27.75 | Windows era |
| 1989 | Microsoft Office launches for Apple Macintosh | Windows era |
| 1990 | Windows 3.0 launches; Office for Windows follows | Windows era |
| 1993 | Windows NT 3.1 released; Microsoft enters server market | Windows era |
| 1995 | Windows 95 launches with Internet Explorer; "Start Me Up" marketing campaign | Windows era |
| 1997 | Microsoft Research Cambridge opens, the first MSR lab outside the US | Windows era |
| 1998 | US Department of Justice files antitrust lawsuit | Windows era |
| 2000 | Steve Ballmer becomes CEO; Bill Gates moves to Chief Software Architect | Internet era |
| 2001 | Windows XP and the first Xbox launch | Internet era |
| 2003 | Microsoft Business Solutions CRM 1.0 launches, the seed of Dynamics | Internet era |
| 2008 | Bill Gates steps back from day-to-day; Windows Azure announced | Cloud transition |
| 2010 | Azure becomes commercially available on 1 February; Windows Phone 7 launches | Cloud transition |
| 2011 | Office 365 launches as a cloud subscription | Cloud transition |
| 2014 | Satya Nadella becomes CEO on 4 February; Azure brand established | Nadella era |
| 2015 | Windows 10 launches; HoloLens revealed | Nadella era |
| 2016 | Microsoft acquires LinkedIn for $26.2 billion; Microsoft Cloud UK opens with datacentres in London, Cardiff and Durham on 7 September | Nadella era |
| 2017 | Microsoft 365 announced; Power Platform takes shape | Nadella era |
| 2018 | Microsoft acquires GitHub for $7.5 billion; Dynamics 365 Business Central launches | Nadella era |
| 2019 | Microsoft makes its first $1 billion investment in OpenAI | Nadella era |
| 2020 | Teams usage explodes during the pandemic; Microsoft 365 brand replaces Office 365 for many SKUs | Nadella era |
| 2023 | Microsoft 365 Copilot announced in March, generally available 1 November; £2.5 billion UK AI investment announced 30 November | AI era |
| 2024 | Copilot for Security launches; Copilot+ PCs unveiled; Mustafa Suleyman joins as CEO of Microsoft AI | AI era |
| 2025 | 50th anniversary; Microsoft Ignite reveals Agent 365, Microsoft 365 E7 and the Frontier Firm vision | Agentic era |
| 2026 | Agent 365 and Microsoft 365 E7 generally available on 1 May; Copilot embedded across Office for all subscribers | Agentic era |
1975 to 1980: from BASIC to a software industry
In January 1975, the cover of Popular Electronics magazine carried a photograph of the MITS Altair 8800, billed as the world's first minicomputer kit to rival commercial models. A 19-year-old Harvard student named Bill Gates spotted it on a newsstand in Harvard Square and showed it to his childhood friend Paul Allen. The two saw the same thing: a market for software written for these new machines, before anyone else had thought to write it.
They called MITS, claimed to have a working BASIC interpreter for the Altair, and were invited to demonstrate it. Over the following weeks, working from their Harvard dorm room, they wrote one. Allen flew to Albuquerque to present it. It worked first time on the actual hardware, which was the first time their code had ever touched a real Altair. MITS bought it.
On 4 April 1975, Gates and Allen formed Micro-Soft, a portmanteau of microcomputer and software, to license that BASIC interpreter. The hyphen was dropped the following year. Gates left Harvard. Allen left his job at Honeywell. They set up shop in Albuquerque to be close to MITS.
The company's earliest years were spent porting BASIC to every microcomputer that appeared, including the Commodore PET, the Apple II and the TRS-80. By 1979, Microsoft had grown to thirteen employees and revenue of around $2.4 million. The pair moved the operation back to Gates's hometown area, settling in Bellevue, Washington, in January 1979.
1980 to 1990: MS-DOS and the IBM deal that changed everything
In the summer of 1980, IBM came calling. The corporation that had defined business computing for two decades was preparing to enter the personal computer market and needed an operating system in a hurry. Microsoft did not have one. What it did have was the cheek to say yes.
Microsoft licensed a system called 86-DOS from a small Seattle company called Seattle Computer Products, paid $75,000 for the rights, then $50,000 more for outright ownership, and rebadged it as MS-DOS. The IBM Personal Computer launched on 12 August 1981 running PC-DOS, IBM's branded version of the same software. The genius of the deal was a clause Microsoft insisted on: it could license MS-DOS to any other manufacturer too.
That clause shaped the next twenty years. When Compaq released the first IBM-compatible PC clone in 1982, it ran MS-DOS. When every other clone-maker followed, they also ran MS-DOS. By the mid-1980s, Microsoft's operating system was on tens of millions of machines, and IBM had inadvertently created the conditions for Microsoft to overtake it.
Microsoft also began to expand internationally in this period. Microsoft Limited was incorporated in the United Kingdom on 24 March 1982, one of the company's earliest overseas subsidiaries. In December 1983, the UK, France and Germany operations became the first international subsidiaries to connect to Microsoft's internal email system, formalising them as part of the company's global operation. Microsoft UK has since grown into one of the largest parts of Microsoft's international footprint, with headquarters now at the Microsoft Campus in Thames Valley Park, Reading.
Other landmarks crowded the decade. The Microsoft Mouse appeared in May 1983. Word for MS-DOS launched in November 1983. Excel launched on the Macintosh in 1985, two years before reaching Windows. Microsoft moved to its now-iconic Redmond campus in February 1986. Just over a month later, on 13 March 1986, Microsoft went public at $21 a share, closing the first day at $27.75. The float made Gates a paper billionaire by 1987, the youngest in history at the time.
1990 to 2000: the Windows decade
Microsoft had been shipping a graphical interface called Windows since November 1985, but the first two versions were slow, ugly and largely ignored. Windows 3.0, released on 22 May 1990, was the version that landed. It sold ten million copies in its first two years. Windows 3.1, which followed in 1992, became the de facto operating system of business computing.
The same year as Windows 3.0, Microsoft bundled Word, Excel and PowerPoint into a single suite called Microsoft Office for Windows. Office for Mac had appeared the year before. The bundle undercut competitors who sold each application separately and locked customers into the Microsoft ecosystem.
Then came Windows 95. Launched on 24 August 1995 with a marketing campaign soundtracked by the Rolling Stones' "Start Me Up," it was the first version of Windows that people queued at midnight to buy. It introduced the Start menu, the taskbar and built-in TCP/IP networking. Internet Explorer 1.0 shipped on the same day as part of a separate Microsoft Plus! pack.
In June 1997, Microsoft Research Cambridge opened, the first MSR laboratory outside the United States. Founded by Cambridge computer scientist Roger Needham with an initial $80 million investment, it gave Microsoft a permanent research presence in the UK and remains an active part of Microsoft Research today.
The remainder of the decade was defined by the browser wars and the rise of the internet. Internet Explorer was bundled with Windows from version 4 onwards, which destroyed Netscape Navigator's market share and triggered the antitrust action that would dominate Microsoft's executive attention for years. The US Department of Justice filed suit in May 1998. Microsoft was found in 2000 to have violated the Sherman Antitrust Act. The remedy of breaking up the company was overturned on appeal in 2001, but the case left a chastened company more cautious about how it competed.
On the product side, Windows NT 3.1 arrived in 1993 and gave Microsoft a serious enterprise operating system. SQL Server 4.21 had launched in 1993; Exchange Server followed in 1996. Microsoft was no longer just a desktop software company.
2000 to 2010: the lost decade and the seeds of the cloud
The 2000s are often described as Microsoft's lost decade, and there is truth in that. Steve Ballmer succeeded Bill Gates as chief executive on 13 January 2000. The dot-com crash hit weeks later. Apple released the iPod in 2001 and the iPhone in 2007, both of which Microsoft underestimated. Google emerged from nowhere to dominate search and online advertising. Vista, released in 2007, was poorly received.
And yet the foundations of modern Microsoft were quietly being laid. Windows XP, launched on 25 October 2001, became one of the most beloved operating systems ever made and remained in widespread use for more than a decade. The first Xbox shipped in November 2001, taking Microsoft into the consumer hardware business; the Xbox 360 followed in 2005. SharePoint Portal Server 2001 brought enterprise content management into the Microsoft stack.
The most consequential launch of the decade was almost unnoticed at the time. In 2003, Microsoft Business Solutions released CRM 1.0. It was rebranded as Microsoft Dynamics CRM in 2005 and eventually became the customer engagement applications inside Dynamics 365. Microsoft had also been acquiring ERP companies through the late 1990s and early 2000s, picking up Great Plains, Navision and Axapta. These would become Business Central and Finance and Operations.
In October 2008, at the Professional Developers Conference, Microsoft announced Windows Azure. It was a clear admission that the future of enterprise computing was not on-premises servers but rented capacity in someone else's datacentre. Azure went commercially available on 1 February 2010. Amazon Web Services had a four-year head start, but Microsoft had something Amazon did not: tens of millions of existing enterprise customers and a salesforce that already had relationships with their CIOs.
2010 to 2020: the Nadella transformation
Steve Ballmer announced his retirement in August 2013. The board's choice of successor was a Microsoft veteran called Satya Nadella, who had spent more than two decades inside the company and had most recently led the cloud and enterprise division. He took over on 4 February 2014.
Nadella's tenure has been one of the most successful CEO transitions in corporate history. Microsoft's market capitalisation was around $300 billion when he took the job. It passed $1 trillion in 2019, $2 trillion in 2021 and $3 trillion in 2024. The transformation rested on three deliberate shifts. First, embrace cloud and subscription instead of perpetual licences. Second, work with rivals rather than against them, which is why iPad versions of Office shipped within Nadella's first quarter and why Linux runs natively on Windows 10. Third, place big bets on what comes next, which would shortly mean AI.
The decade saw a remarkable run of moves. Office 365 became the template for software-as-a-service in the enterprise. Microsoft 365 launched in 2017, bundling Office 365 with Windows 10 and Enterprise Mobility + Security. Microsoft acquired LinkedIn in December 2016 for $26.2 billion, then GitHub in October 2018 for $7.5 billion, then ZeniMax Media (parent of Bethesda) in 2021 for $7.5 billion. Dynamics 365 launched in 2016, unifying the CRM and ERP product lines, and Business Central followed in 2018 as the cloud version of NAV.
The UK got proper local cloud infrastructure in this period. On 7 September 2016, Microsoft opened Microsoft Cloud UK, with Azure regions in London (UK South) and Cardiff (UK West) and Office 365 from datacentres in London, Cardiff and Durham. Microsoft was the first global cloud provider to offer a complete cloud with UK data residency, which removed a barrier for public sector and regulated industries that had been waiting on local data sovereignty. The Ministry of Defence was an early customer at launch.
Power Platform took shape in this period too. Power BI launched in 2015. Power Apps and Power Automate followed in 2016. By 2018 they had been bundled with what is now Power Pages and Power Virtual Agents into a single low-code platform. Power Platform has become a major part of how Microsoft customers build the layer of small applications and automations that sits between the headline products.
One bet from this decade matters more than any other in retrospect. In July 2019, Microsoft announced a $1 billion investment in a small research lab called OpenAI. The two companies signed an exclusive deal for Microsoft to be OpenAI's preferred cloud provider and to commercialise its models. The investment has since grown to a reported $13 billion. Without it, the next chapter of Microsoft's story does not happen.
Then came the pandemic. In March 2020, the world moved to remote working. Microsoft Teams went from 32 million daily active users in early March 2020 to 75 million by April and over 250 million by 2022. Office 365 absorbed an enormous influx of new business. By the end of the decade, Microsoft was a different company: cloud-first, subscription-led, and quietly assembling the components of an AI platform.
2020 to 2024: the AI era begins
The launch of ChatGPT by OpenAI in November 2022 turned everything Microsoft had been quietly building into the most valuable corporate alliance in technology. Microsoft moved fast. In February 2023, Bing added an OpenAI-powered chat experience. In March 2023, Microsoft announced Microsoft 365 Copilot, an AI assistant embedded across Word, Excel, PowerPoint, Outlook and Teams, with grounding in the user's own organisational data via Microsoft Graph.
Microsoft 365 Copilot became generally available for enterprise customers on 1 November 2023, initially at $30 per user per month, with a minimum commitment of 300 seats. The minimum was dropped in early 2024 and Copilot became available to small and medium businesses on Business Premium plans. Copilot Studio, announced at Ignite 2023, gave organisations a low-code way to build their own copilots and agents.
2023 was also a milestone year for Microsoft in the UK. On 30 November 2023, Microsoft announced a £2.5 billion investment over three years to expand its AI datacentre infrastructure in the UK, the single largest investment in its 40-year history in the country. The commitment included bringing more than 20,000 advanced GPUs to UK datacentres by 2026, more than doubling Microsoft's UK datacentre footprint across London and Cardiff with potential expansion into northern England, and training more than one million people for the AI economy.
2024 was the year Copilot stopped being a single product and became a portfolio. Copilot for Security launched in April 2024, the first generative AI security product. Copilot+ PCs, a new class of Windows machines with neural processing units optimised for on-device AI, were unveiled in May 2024. Copilot for Sales and Copilot for Service brought role-specific Copilots to Dynamics 365 customers. GitHub Copilot Workspace previewed in April 2024. In March 2024, Microsoft hired DeepMind co-founder Mustafa Suleyman as CEO of a new division called Microsoft AI, bringing in much of his Inflection AI team.
Beneath the headlines, the platform was becoming agentic. Copilot Studio added autonomous agents in late 2024, capable of being triggered by events and running multi-step workflows without a human user typing prompts. The vocabulary of AI inside Microsoft shifted from assistant to agent to multi-agent system.
2025 to 2026: the agentic enterprise
Microsoft celebrated its 50th anniversary on 4 April 2025. The mood at the company was confident. Microsoft 365 Copilot had passed 90 per cent adoption inside the Fortune 500. Azure was the second-largest cloud platform in the world, with AI-related revenue growing faster than any other line of business. The questions at Microsoft Ignite 2025 in November were no longer whether AI would matter, but how to govern, scale and secure it.
The big announcements at Ignite 2025 set the agenda for the year that followed. Agent 365 was unveiled as a unified control plane for AI agents across the enterprise, regardless of whether those agents were built on Microsoft platforms or by other vendors. Microsoft 365 E7, the Frontier Suite, was announced as a new top-tier SKU bundling Microsoft 365 E5, Entra Suite, Microsoft 365 Copilot and Agent 365. Agent Mode was added to Word, Excel and PowerPoint, allowing users to delegate document creation to Copilot agents working iteratively. Work IQ became the intelligence layer that gives Copilot deep understanding of an organisation's people, roles, decisions and context.
Microsoft 365 E7 and Agent 365 became generally available on 1 May 2026. Microsoft also expanded Copilot Chat, the free tier available to all Microsoft 365 subscribers, with access to Word, Excel and PowerPoint agents and integration with Teams chats, channels and meetings. Copilot Studio added multi-agent orchestration through the open Agent-to-Agent (A2A) protocol and native support for the Model Context Protocol (MCP), allowing agents to draw on tools and data from outside the Microsoft ecosystem.
Three other moments deserve mention. In November 2025, Mustafa Suleyman set out a "humanist superintelligence" mission for Microsoft AI, explicitly distancing the company from the AGI race and committing to AI that is governed and human-centric. In December 2025, Microsoft announced pricing increases for Microsoft 365 commercial SKUs taking effect on 1 July 2026, reflecting the value of AI capabilities now bundled into the suite. And throughout 2025 and 2026, Microsoft expanded the range of AI models inside its products beyond OpenAI, adding Anthropic's Claude family (Sonnet 4.5, Sonnet 4.6 and Opus) as choices inside Copilot Studio.
UK milestones in Microsoft's history
Most Microsoft histories are written from a US perspective. For UK readers, the local timeline is worth setting out separately.
- 24 March 1982: Microsoft Limited incorporated in the United Kingdom (Companies House number 01624297), one of the company's earliest overseas subsidiaries.
- December 1983: Microsoft UK, alongside France and Germany, becomes one of the first three international subsidiaries to connect to Microsoft's internal email system.
- 1980s: Microsoft UK establishes its headquarters at Thames Valley Park in Reading, where it remains today.
- June 1997: Microsoft Research Cambridge opens, the first MSR laboratory outside the United States, founded by Roger Needham with an $80 million initial investment.
- 1999: Advantage Business Systems begins trading and signs its first Microsoft partner agreement, the start of more than 25 years working with the Dynamics product family.
- 7 September 2016: Microsoft Cloud UK opens, with Azure regions in London (UK South) and Cardiff (UK West), and Office 365 from datacentres in London, Cardiff and Durham. Microsoft was the first global cloud provider to offer a complete cloud with UK data residency.
- 30 November 2023: Microsoft announces a £2.5 billion investment over three years to expand UK AI datacentre infrastructure, the single largest investment in its 40-year history in the country.
- 1 May 2026: Microsoft 365 E7 and Agent 365 reach UK general availability, with Copilot embedded across Office apps for all UK Microsoft 365 commercial subscribers.
What comes next
Predicting Microsoft's next era is harder than describing the previous ones, but a few directions are already clear from the company's own announcements and investments.
The agentic enterprise is the immediate horizon. Agent 365 and the Frontier Suite are early bets on a world in which organisations run hundreds or thousands of AI agents alongside their human employees, and need governance, identity and observability for them. Microsoft's stated goal at Ignite 2025 was that every organisation should become a "Frontier Firm" with AI agents at the centre of how work happens. Whether that vocabulary endures or not, the underlying shift is real.
The model layer continues to diversify. Microsoft is no longer purely an OpenAI shop. Its own MAI Superintelligence Team, announced in November 2025, is developing in-house frontier models. Anthropic's Claude models are now first-class options inside Copilot Studio. The picture is one of a platform that runs the best model for the task, rather than a single-model architecture.
Cost and pricing have moved up the agenda. The Microsoft 365 pricing increase taking effect on 1 July 2026 is the first material rise in years and reflects the value of AI in the suite. For UK SMEs, the practical question is whether to extract enough value from the AI capabilities to justify the cost, which is a question of adoption and change management rather than technology.
And the platform keeps converging. Microsoft 365, Dynamics 365, Power Platform and Azure are increasingly one fabric rather than four product lines. Work IQ, Microsoft Graph and Dataverse provide the shared context. Copilot and agents provide the shared interface. The deeper that integration becomes, the more value comes from running on the full Microsoft stack rather than picking and choosing.
Working with Microsoft technology
Advantage has been a Microsoft partner since 1999. That covers Dynamics from its very earliest days as Great Plains and Navision, through the rebrand to Dynamics CRM and Dynamics NAV, into Dynamics 365 and Business Central, and now into the Copilot and Agent 365 era. We have worked with UK SMEs through every shift described in this article, which gives us a perspective on what really changes and what only sounds like it changes.
If your business runs on Microsoft, we can help you get more from it. Our work spans Dynamics 365, Business Central, Power Platform, Microsoft 365, Microsoft 365 Copilot, cyber security and the Advantage Edge portfolio of industry AI accelerators. We are based at The Whitechapel Building in London and work with finance directors and IT directors at organisations across the UK.
If you would like to talk about what the agentic era means for your business in practical terms, please get in touch or call us on 020 3004 4600.
Frequently asked questions about Microsoft's history
Short answers to the questions readers most often ask about Microsoft, its founders and its key product launches.
When was Microsoft founded?
Microsoft was founded on 4 April 1975 by Bill Gates and Paul Allen in Albuquerque, New Mexico. The company was incorporated as Micro-Soft, with the hyphen dropped the following year.
What was Microsoft's first product?
Microsoft's first product was Altair BASIC, an interpreter for the BASIC programming language built for the MITS Altair 8800 microcomputer. Gates and Allen demonstrated it to MITS in March 1975, and it became the foundation on which the company was built.
When did Microsoft come to the UK?
Microsoft Limited was incorporated in the United Kingdom on 24 March 1982, one of the company's earliest international subsidiaries. It became one of the first three overseas operations connected to Microsoft's internal email system in December 1983, alongside Microsoft Sarl in France and Microsoft GmbH in Germany. The UK headquarters is now at the Microsoft Campus in Thames Valley Park, Reading.
Who is the current CEO of Microsoft?
Satya Nadella has been chief executive of Microsoft since February 2014, succeeding Steve Ballmer. He also became chairman in June 2021. Bill Gates served as CEO from founding until January 2000, when Steve Ballmer took over.
When did Microsoft launch Windows?
Microsoft released Windows 1.0 in November 1985, but the breakthrough version was Windows 3.0 in May 1990, which sold ten million copies and established the platform's dominance. Windows 95, launched in August 1995, brought the operating system into the mainstream.
When was Microsoft Office launched?
Microsoft Office was first released for the Apple Macintosh in 1989, with the Windows version following in 1990. It bundled Word, Excel and PowerPoint into a single suite. Office moved to a cloud subscription model as Office 365 in 2011, which became Microsoft 365 in 2020.
When did Microsoft launch Azure?
Microsoft Azure was announced as Windows Azure at the Professional Developers Conference in October 2008 and became commercially available on 1 February 2010. It was renamed Microsoft Azure in 2014 and is now the second-largest cloud platform globally.
When did Microsoft Copilot launch?
Microsoft 365 Copilot was announced in March 2023 and became generally available for enterprise customers on 1 November 2023. It is now embedded across Word, Excel, PowerPoint, Outlook, Teams and Windows, with a free Copilot Chat tier available to all Microsoft 365 subscribers.
What is Microsoft Agent 365?
Agent 365 is Microsoft's governance and control plane for AI agents, announced at Ignite 2025 and made generally available on 1 May 2026 as part of the Microsoft 365 E7 Frontier Suite. It allows organisations to register, secure, observe and manage AI agents from any vendor across the business.
How big is Microsoft today?
Microsoft is one of the largest companies in the world by market capitalisation and reported annual revenue of more than $245 billion in its fiscal year 2024. Microsoft 365 has over 430 million users, and more than 90 per cent of Fortune 500 companies use Microsoft 365 Copilot.
