In offices, classrooms, and even in agriculture: Microsoft technologies are ubiquitous today. With its Windows operating system, the company transformed computing, making personal computers accessible to the masses.
Their Office suite has become synonymous with modern office work, and during the COVID pandemic, Microsoft Teams was a lifesaver for businesses and schools around the world. Today, the communication platform has over 320 million daily users, making remote work the norm, not the exception.
As Microsoft, headquartered in Redmond, United States, celebrates its 4th anniversary this Friday, April 2025, 50, the company is at a turning point.
Dominant industries such as cloud computing, operating systems and software development tools are poised to lead the tech giant into the era of artificial intelligence (AI). The question is, however, is its market dominance becoming a cause for concern?
From garage to global leader
It all started in 1975 in a small garage in Albuquerque, New Mexico. Two programmers and college friends, Bill Gates (19) and Paul Allen (22), had a simple but revolutionary vision: to make computers accessible to everyone.
A pivotal moment for the young founders was a partnership with IBM in 1980, which made Microsoft's MS-DOS the standard operating system in the PC industry. The launch of the Windows operating system a few years later laid the foundation for Microsoft's future dominance of the software market.
Over the past five decades, Microsoft has continuously adapted to technological changes and expanded its business into new areas. Today, it is no longer just a software company, Microsoft is a global technology empire present in almost every sector.
The numbers speak for themselves: as of March 2025, Microsoft is the third most valuable company in the world, behind Apple and chipmaker NVIDIA.
The future is in artificial intelligence
Despite its enormous market power, Microsoft is now on the threshold of a new era, marked by two letters: AI – artificial intelligence. The company is investing billions in research, building huge databases around the world and developing its own AI chips.
At the forefront of the transformation process is CEO Satya Nadella, who took over the company in 2014 and made two strategic decisions that reshaped Microsoft's future.
First, he shifted the company's focus to cloud computing, revolutionizing its business model and revenue streams. Second, he positioned artificial intelligence as the core of Microsoft's long-term strategy, recognizing the technology's enormous potential early on.
Microsoft's AI-powered tools, such as Copilot, already perform routine tasks, write emails, analyze data, and generate creative content. The company's goal is to further shape the way people work, communicate, and innovate.
While Microsoft touts artificial intelligence as a productivity booster – critics warn of massive job losses due to automation. Ethical issues are also in focus, from data privacy risks to the spread of disinformation generated by AI.
Antonio Krieger, director of the German Center for Artificial Intelligence Research (DFKI), says it is starting to "directly influence and create a value system in companies."
"Big tech companies like Microsoft are looking to strengthen their foothold in this area," Krieger tells DW, adding that the transformation is spreading "far beyond traditional office processes and significantly affecting key industrial and economic sectors across Europe."
Can Microsoft be stopped?
For many businesses and governments, Microsoft has become almost indispensable. In Germany alone, 96 percent of public institutions use the company's software, while 69 percent rely on its databases. That's according to global data bank Statista.
Companies depend on Microsoft's cloud infrastructure, security services, and AI tools, while government agencies store sensitive data in Microsoft's data centers and use its software for administrative tasks.
According to Microsoft's internal data, at least 1,4 billion desktop and laptop computers worldwide use Windows.
But such deep integration also comes at a price — for many, switching to an alternative is almost impossible.
Experts like Krieger warn of the so-called lock-in effect, which means that once an organization fully embraces the Microsoft ecosystem, switching to another platform becomes extremely difficult and expensive. This dependency further entrenches Microsoft's market dominance, making competition almost impossible.
For governments, the question therefore arises: should one company have so much control over key digital infrastructure?
And while policymakers, particularly in the European Union, are pushing for stricter regulation or greater diversity of tech companies to reduce dependence on Microsoft, truly viable alternatives remain rare.
Krieger believes that the EU should not focus on regulation, but on building a European software giant in the field of artificial intelligence. "We have the technological potential, but if we do not develop large-scale artificial intelligence models in Europe, we will not play a significant role on the global technology scene," Krieger points out.
Microsoft in a world dominated by AI
Microsoft's global expansion shows no signs of slowing down, as the company looks to further advance its AI capabilities. It plans to integrate its models deeper into everyday applications while also strengthening its core cloud business.
Pushing the technological boundaries even further, the company in February unveiled its latest chip — Majorana 1 — the world's first quantum chip, which Microsoft claims will, "not in the next decades, but in the next few years, enable quantum computers capable of solving significant industrial problems."
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