After a Quarter Century of Windows

Twenty-five years after Microsoft chairman Gates announced the first version of Windows, it remains dominant. Pundits weigh in.

Twenty-five years ago this week, a youthful Bill Gates stood on stage at New York's posh Helmsley Palace Hotel to announce the future of computing: the Windows 1.0 operating system.

Later that month, Gates would take the stage at the Comdex show in Las Vegas to proclaim that the future of computing was with Windows and the graphical user interface (GUI) that Windows introduced to PC users.

Gates turned out to be right on his initial premise, although it would be years before it achieved market momentum, and more years after that before Microsoft gained the dominance it enjoys today.

Today, Microsoft (NASDAQ: MSFT) is not only the largest software company on the planet, but it is also dominant worldwide.

It is also facing trends as precarious as it was a quarter century ago, as it struggles to convince customers and developers to look past the tepid response to Windows Vista and instead to embrace Windows 7 as well as Microsoft's emerging "cloud" computing initiative and its "Azure" development platform.

Take the comments by Ray Ozzie, Microsoft's chief software architect, at the PDC conference last month. He described the company's cloud initiative as the "fundamental transformation of the company toward services." If successful, it will change the future of Microsoft and long-term may doom the company's sacred cow – Windows.

With those two 1983 launch events, and others in later years, Gates and Microsoft almost single-handedly created the concept of vaporware, the practice of pre-announcing products before they were finished (although it could be argued that IBM originated the approach). Microsoft's embrace of the graphical user interface also started the wheels in motion for years of bad blood among itself, IBM and Apple (NASDAQ: AAPL).

Indeed, Apple eventually sued for copyright infringement over Windows. Although Microsoft won, the episode led to the conventional wisdom that Microsoft couldn't innovate but was great at copying other companies' work. (Microsoft, after all, had already quietly written the first applications for the then soon-to-be-unveiled Macintosh computer, which would make its debut with the famous '1984' ad during the 1984 Super Bowl a few months later.)

While Gates was right about the importance of GUI, he missed completely on two other pronouncements. First, he promised that Windows 1 would ship by April 1984. It actually took until late 1985 to ship – the vaporware label would come later after Microsoft began routinely promising software on deadlines executives must have known it couldn't meet. (Apple, meanwhile, shipped the first Macs in 1984 right on schedule.)

He also predicted that Windows would attain a 90 percent market share by the end of 1984. On that prediction, Gates was off by ten years or more, but Windows retains its dominance to this day. In fact, Web statistics tracking firm Net Applications latest figures show Windows (all versions) with 90.46 percent market share for operating systems.

It hasn't been easy.

"Windows had a difficult birth," Rob Enderle, principal analyst at the Enderle Group, told "At the time, people thought that GUIs were for children, but Microsoft eventually convinced the market that it was the future," Enderle said.

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Tags: Windows, services, Microsoft, Vista, Copyright

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