Microsoft at present is one of the biggest technology corporations in the world. The company, which was started by two teenagers, is now valued at over $2 trillion. Microsoft started as a software and application development for personal computers; but they now provide email services, electronic game systems, computers, and also computer peripherals with offices in almost every country in the world. Its head office is, however, located in Redmond, Washington U.S.
Founding and Early Growth of Microsoft
The revolution of personal computers started in 1975 when two friends; Bill Gates and Paul Allen founded Microsoft. The company was first called Micro-Soft which represented microprocessors and software. Its first contract was to produce software for Altair 8800, an early version of personal computers. The company was first located in Albuquerque, New Mexico before moving to Washington in 1979. In 1987, Bill became the youngest billionaire when Microsoft went public.
Paul Allen quit his job as a programmer in Boston while Gates dropped out of Harvard University to startup Microsoft. In 1978, Microsoft sales topped $1 million and in 1979 they moved to Washington. Microsoft licensed its MS-DOS operating system to IBM for its first personal computer in 1981. When other computer companies saw the positive achievement of Microsoft, they started licensing for MS-DOS which didn’t have a graphic user interface rather, users had to type in a command to prompt action.
The Company First Went Public in 1986
Microsoft finally released an operating system called Windows in 1985 that had a graphical user interface, scroll bars, and other features. This time, users didn’t have to use commands to open a program. When Microsoft moved to Redmond, Washington, and went public in 1986, it was able to raise $61 million by selling its share for $21 per share. In less than a few years, Microsoft had become the world’s biggest personal computer software company. Microsoft sales increased exponentially in 1995 with the increase in the purchase of personal computers in homes and offices.
Microsoft launched Windows 95, which had so many innovations such as the Startup menu, and several other features. 7 million copies of the new window were sold in the first five weeks of its launch. With the launch of the internet in the late 1990s, Microsoft experienced another rapid growth, and it launched its web browser, Internet Explorer, which is now being gradually replaced by Microsoft Edge.
The Lawsuit Against Microsoft and Their Growth Afterward
However, in 1988, the US Department of Justice and 20 state attorney generals launched a lawsuit against Microsoft, accusing it of violating the antitrust laws. The department accused Microsoft of using its incumbent power to drive competitors out of business. But in 2001, Microsoft and the department of justice reached a settlement that imposed restrictions on its corporate practices.
Microsoft has had more notable success with its launch of Windows 7, 8, and finally Windows 10. It has also tried venturing into phone manufacturing but recorded little success. Microsoft successfully launched its first video game console in 2001, the game had a great time with over 24 million units sold by May of 2006. The Xbox 360 had about 84 million pieces sold by 2014, although its competitor Sony Computer Entertainment, the producer of the play station, seems to have more dominance in the gaming industry.
- Microsoft was founded in the year 1975 by Bill Gates and Paul Allen.
- The company’s first contract was to produce software for Altair 8800.
- They launched their first operating system called Windows in 1985.
- When Microsoft first went public in 1986, its shares sold for $21 and they raised $61 million.
- Institutional investors hold about 70.7% of Microsoft shares.
- The top institutional shareholders in Microsoft include Vanguard Group, BlackRock Inc., and State Street Corp.
- The top individual shareholders in Microsoft include Satya Nadella, Bradford Smith, and Jean-Philippe Courtois.
- While Paul Allen is now late, Bill Gates stepped down as Microsoft’s chairperson.
- Currently, the leadership of the company is vested in Satya Nadella who is the Chairman and CEO, Brad Smith who is the Vice Chairman and President, and Bill Gates who holds an advisory role as Technical Adviser.
Top Microsoft Shareholders and Shares They Own
Microsoft is jointly owned by institutional shareholders and individual shareholders, but institutional shareholders hold the majority of shares in the technology company to the tune of about 70.7%.
Vanguard Group Inc. – 640.2 million shares
Vanguard Group Inc. owns the majority of Microsoft shares by an institution to the tune of 640.2 million shares which represents about 8.4% of the company’s total shares. The company is a mutual fund and equity trust fund management company with global assets worth about $6.2 trillion.
BlackRock Inc. – 517.6 million shares
Second on the list is BlackRock Inc. which owns about 6.8% of Microsoft’s total shares representing over 517.6 million shares owned by the company. The American multinational investment company has a global asset of about $9.46 trillion under its management as of this writing.
State Street Corp. – 314.8 million shares
State Street Corp. is an American financial institution and bank holding company that owns about 314.8 million shares of Microsoft which represents about 4.2% of total Microsoft shares. As the second-largest custodian bank in the world, State Street Corporation has about $3.1 trillion under its management and about $38.8 trillion under custody and its administration.
Satya Nadella – 1,337,768 shares
Satya Nadella is one of the three top individual shareholders in Microsoft with about 1,337,768 shares which represents 0.02% of the company’s total shares. Satya Nadella is the present CEO of Microsoft; he took over from his predecessor Steve Ballmer in 2014. Before his appointment, he had already shown traits of success, he was the executive vice president of one of Microsoft’s fast-growing businesses, the Cloud and Enterprise group. He has rendered so much value and engineered successful projects such as the Windows 10 operating system and the Surface Book which increased patronage of the company’s products and services.
Bradford Smith – 845,058 shares
Bradford Smith has about 0.01% or 845,058 shares of Microsoft individual stocks. He is the president and chief legal officer of Microsoft. He joined Microsoft in 1993 after quitting his previous firm, Covington and Burling in Washington where he was a Partner. He is also on the board of directors at Netflix and other nonprofit organizations.
Jean-Philippe Courtois – 600,510 shares
Jean-Philippe Courtois owns 0.01% of Microsoft which represents about 600,510 shares of the company’s stocks. Jean-Philippe, who joined the technology company in 1984 today serves as the Executive Vice President and President of Microsoft Global Sales, Marketing, and Operations.
Other Microsoft Shareholders and Shares They Own
Reid G. Hoffman – 26,054 shares
Reid Garrett Hoffman is an internet entrepreneur and a venture capitalist who is also the co-founder of LinkedIn. He owns a total of 26,054 Microsoft stocks. Reid became a member of Microsoft’s board of directors when Microsoft acquired LinkedIn on June 13th, 2016 to the tune of $26.2 billion paid in cash.
Hugh F. Johnson – 5,033 shares
Hugh F. Johnson owns a total of 5,033 units of shares in Microsoft. Currently, he is the Vice Chairman and Chief Financial Officer of PepsiCo. He joined PepsiCo in the year 1987 and steadily grew through the ranks in various leadership positions to get to his current level.
Teri L. List-Stoll – 23,450 shares
Teri L. List-Stoll is an accountant and a graduate of Northern Michigan University. She joined Microsoft in October 2014 as an independent board member and now owns a total of 23,450 units of shares in the company. Currently, she is the Chief Financial Officer of Gap. Inc.
Sandra E. Peterson – 23,593 shares
Sandra E. Peterson is an American businesswoman who owns about 23,593 shares in Microsoft. She has a seat as one of Microsoft’s board of directors in addition to her other role as an operating partner at Clayton, Dubilier & Rice – an American private equity firm.
Penny S. Pritzker – 19,257 shares
Penny is an economics graduate from the prestigious University of Havard. She also has a Juris Doctor and MBA from Stanford University. Currently, she is the founder and Chairman of PSP Partners. Penny S. Pritzker joined Microsoft in November 2017 as an independent director. She now owns about 19,257 units of shares in Microsoft.
Charles W. Scharf – 41,601 shares
Charles W. Scharf has a bachelor’s degree from John Hopkins University in addition to an MBA he bagged from New York University. He joined Microsoft as an independent member of the board of directors in October 2014 and has been with the tech giant since then. His share total is 41,601 which makes him one of the top individual shareholders in the company. Currently, he serves as the CEO and president of Wells Fargo and Company.
Arne M. Sorenson – 4,326 shares
Arne M. Sorenson had a total of 4,326 units of shares in Microsoft. He equally invested in other companies like Marriott International Inc., Marriott’s Global Diversity and Inclusion Council, and Marriott’s Global Sustainability Council all of whom he co-founded. He however died on February 15, 2021, at the age of 62 but it has not been revealed who inherited his Microsoft shares.
John W. Stanton – 82,332 shares
John W. Stanton is a political science graduate from Whitman College. He also holds an MBA from Havard University. He joined Microsoft in July 2014 as an independent director and today he has about 82,332 shares of the company to himself. Aside from his directorship role in Microsoft, John is currently the chairman of Trilogy Partnerships.
John W Thompson – 92,363
John Wendell Thompson holds a business administration degree from Florida A&M University as well as a master’s degree from MIT Sloan School of Management. He joined Microsoft as an independent director in 2012 and currently owns 92,363 units of shares of the company. John was also the chairman of Microsoft from 2014 to 2021.
Emma N. Walmsley – 414 shares
Emma Walmsley has a master’s degree in Classic and Modern Languages from Oxford University. She has grown her career over the years by occupying several leadership positions in various companies and she is currently the CEO of GlaxoSmithKline and a member of its board since April 2017. Emma joined Microsoft as an independent director in December 2019 and is today listed as one of its individual shareholders with about 414 units of Microsoft shares to her name.
Padmasree Warrior – 14,718
Padmasree Warrior has a bachelor’s of science degree in chemical engineering from the Indian Institute of Technology which is located in New Delhi. In addition, she also has a master’s degree in the same discipline from Cornell University. Padmasree joined Microsoft in December 2015 as an independent director and is today the founder, president, and chief executive officer of Fable Group Inc. Her shares in Microsoft totals 14,718.
Amy E. Hood – 448,445
Last on the list is Amy E. Hood who has a total of 448,445 units of shares in Microsoft. She is a trained economist from Duke University who also has a master’s degree in business from Havard University. Amy joined Microsoft in 2002 and is presently an Executive Vice President and Chief Financial Officer at the company.
Summary of Microsoft Top Shareholders and Percentages of the Shares They Own
|S/N||Institution or Individual||Amount of Shares|
|1||Vanguard Group Inc.||640.2 million|
|2||BlackRock Inc.||517.6 million|
|3||State Street Corp.||314.8 million|
|7||Reid G. Hoffman||26,054|
|8||Hugh F. Johnson||5,033|
|9||Teri L. List-Stoll||23, 450|
|10||Sandra E. Peterson||23,593|
|11||Penny S. Pritzker||9,257|
|12||John W. Stanton||82,332|
|13||John W Thompson||92, 363|
|14||Emma N. Walmsley||414|
|16||Amy E. Hood||448,445|
What are the Founders of Microsoft Doing These Days?
Bill Gates Has Been Donating to Charities
Although Gates is the founder of Microsoft, he stepped down as the chairperson in the year 2000. Ever since then, he has been investing in other platforms, especially on any program that promises to enhance the living conditions of humans. He was the key sponsor of the Polio vaccine, a disease that ravaged a huge number of Asian countries. He is also one of the leading people sponsoring the eradication of malaria in Africa. He is championing these philanthropic moves with his wife through the Melinda and Bill Gates Foundation.
Although he left Microsoft and handed it over to his former schoolmate Steve Ballmer during the dot com fever, Bill Gates has been a smart investor. Microsoft isn’t his only source of revenue. He has learned from his friend Warren Buffet how to diversify his investment portfolio. And even though Microsoft skyrocketed due to the dot com bubble burst, Bill Gate still sold most of his Microsoft stocks. If he hadn’t sold it, most of it would have been diluted. Today, he owns only 1.3% of Microsoft’s shares which equals $20 billion. You may wonder if he has only $20 billion how come he is valued at 105 billion dollars and still one of the richest people in the world? Let’s review some of his major investing portfolios below.
- Berkshire Hathaway
Bill Gates has a huge stake in Berkshire Hathaway alongside his friend Warren Buffet. He owns 54 million shares in the company valued at $2 billion. Berkshire itself is a holding company that has invested in big companies such as the Bank of America, General Motors, Apple, Google, Goldman Sachs, and other top companies.
- Waste Management Inc
Bill Gates has about 18.6 million shares of Waste Management, Inc which is valued at $2 billion. The company renders environmental services to more than 21 million residential and industrial customers in the United States, Canada, and Puerto Rico. The company has a large truck fleet with more than 26,000 trucks in the waste industry.
- Canadian National Railway
Gates also has a whopping 17.1 million shares in the Canadian national railway company which is valued at $2 billion. The railway is the largest railway in Canada both in size and revenue generation which runs from Canada to the Pacific coast in British Columbia.
Paul Allen is Now Late
Paul Allen is the co-founder of Microsoft. He wrote the company’s software codes by day, while Bill Gates went through the codes by night to ensure there were no errors. There were no compilers back in those days to easily point where you made an error, so one had to compile manually by scrutinizing the codes line by line. While Gates was an energetic businessman, Paul Allen was the calm and peaceful negotiator in the early days of Microsoft. Paul Allen left Microsoft in the early 1980s due to a failed relationship with Gates and also his health condition; he developed lymphoma and had to go for treatment. He accused Gates and Steve Ballmer of planning to dilute some of his shares in the company.
Like Gates, Allen has donated $2 billion to a nonprofit organization and other research institutes that aim to advance science, technology, and education. He founded the Allen Institute for Brain Science in 2003 and also the Allen Institute for artificial intelligence in 2014. He also spends part of his wealth to sponsor organizations that help in ending elephant poaching and also helped sponsor institutes in Seattle that seek to preserve cultural ethics. Allen also acquired the Portland Trail Blazers of the National Basketball Association in 1988 and also the Seattle Seahawks. Sadly, he died on October 15, 2018. At the time of his death, he was worth $20.3 billion.