Microsoft was founded in Albuquerque, New Mexico in 1975 by Bill Gates and Paul Allen, under the company name Micro-soft, to develop and sell BASIC interpreterss. The name "Micro-soft" (short for microcomputer software) was used by Bill Gates in a letter to Paul Allen for the first time on November 29, 1975. "Microsoft" became a registered trademark on November 26, 1976.
As the popularity of Microsoft BASIC grew, other manufacturers adopted its syntax to maintain compatibility with existing Microsoft BASIC implementations. Because of this, Microsoft BASIC became a de facto standard and the product dominated its market.
In late 1980, International Business Machines needed an operating system for its new home computer, the IBM PC. Microsoft licensed Quick and Dirty Operating System, from Tim Paterson's Seattle Computer Products in order to sell it to IBM as the standard operating system for the IBM PC. Microsoft subsequently purchased all rights to QDOS for $50,000, and renamed it MS-DOS (for Microsoft Disk Operating System). It was released as IBM PC-DOS 1.0 with the introduction of the PC in 1981. In contracting with IBM, however, Microsoft had retained the rights to license the software to other computer vendors as MS-DOS. The early 1980s saw a flood of IBM PC clones, and Microsoft were quick to leverage its position to dominate the operating system market.
Software running on PC hardware was not necessarily technically better than the mainframe software that it replaced, but it was much less expensive. Microsoft's success rode on the PC boom.
Microsoft, now highly profitable, diversified into a wide variety of software products including:
Some of these products were successful, and some were not. In most cases, early versions of Microsoft software were buggy and inferior to competitors, but later versions improved rapidly and eventually overwhelmed their competition by offering more features for a lower price. The best example of this is probably that of