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In Microsoft's business, innovation is the name of the game. The software giant has been a master of new product development. Often, Microsoft does not have "hit" products initially and usually takes two or three versions to create products that match its top competitors. Microsoft enters new markets with products that combine multiple functions that were once separate, and that are more accessible to broader sets of users.
When Bill Gates and Paul Allen founded Microsoft in 1975, they planned to make Basic and other programming languages for PCs that were just entering the market. There were no operating systems or application programs before 1977. The PCs that existed at this time needed programming languages to get the most out of their software. As the market expanded, Gates began to develop ambitions of dominating the PC software market. Microsoft got its big break in 1980 when IBM asked it to develop the operating system for its new PC. Microsoft acquired a rudimentary operating system for $75,000 and modified it to develop DOS. (It continued to developed upgraded versions of DOS through the mid-1990s).
In the 1980s, Microsoft also began work on a Graphical Uses Interface (GUI) and shipped Windows version 1.0 in 1985. After repeated failures, version 3.0, launched in June 1990, gained acceptance among users. Ironically, Microsoft's success in GUI was largely the result of developing applications for the Apple Macintosh. While other software vendors had ignored Macintosh, Gates took the strategic decision in 1984 to go ahead. Window resembled the Macintosh GUI in several ways.
In 1993, Microsoft launched Windows NT, an operating system for business-users and network servers. In 1996, the Windows CE for intelligent devices, such as hand-held computers, was launched. In 1997, Microsoft began work on an operating system that would unify desktops and servers. Microsoft wanted this system, Windows 2000 to take care of the stability and scalability problems associated with NT 4.0. But the project became very complicated and Microsoft decided to delete several lines of code and remove many features. Windows 2000 was finally launched in two versionsa desktop version for business users priced at $200 retail and $80100 for OEMs and a server version for running enterprises that sold for $1000 - $4000.
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