December 7 carries historic weight properly past the tech world, however for individuals who lined Microsoft within the ’90s, the date has one other resonance. Thirty years in the past at this time, Invoice Gates gathered greater than 200 journalists and analysts at Seattle Middle to declare that the corporate was going “all-in” on the web.
As managing editor for Microsoft Journal on the time, I used to be there, and I keep in mind it properly. Three many years later, I can’t assist however see the parallels to Microsoft’s present AI push.
The strikes that Microsoft kicked off that day to construct web connectivity into all its merchandise would reverberate all through the subsequent decade, serving to to put the inspiration for the dot-com increase years and arguably the eventual rise of cloud computing.
The discharge of Web Explorer 2.0 as a free, bundled browser, the internet-enablement of Microsoft Workplace, the whole revamping of the still-new MSN on-line service, Microsoft’s licensing of Java from Solar Microsystems and a concentrate on how the web is likely to be used commercially have been all items of the Microsoft plan unveiled that day.
“The web is the first driver of all new work we’re doing all through the product line,” Invoice Gates informed the assembled expertise press in 1995. “We’re onerous core concerning the web.”
Substitute the phrase “AI” for “web” and you’ve got a press release that present Microsoft CEO Satya Nadella may have made at any second within the final couple of years.
“Fifty years after our founding, Microsoft is as soon as once more on the coronary heart of a generational second in expertise as we discover ourselves within the midst of the AI platform shift,” Nadella wrote in his 2025 annual letter to shareholders. “Greater than any transformation earlier than it, this technology of AI is radically altering each layer of the tech stack, and we’re altering with it.”
Whether or not you’re utilizing the Microsoft Azure cloud platform; operating a Home windows 11 PC, pill, or laptop computer; spending time on LinkedIn; or utilizing Microsoft 365, one can find AI baked in.
Evaluating then and now, there are insights in each the similarities and the variations, and classes from Microsoft’s mid-’90s missteps and successes which might be nonetheless related at this time.
What’s the identical?
The problem of navigating the shift to a brand new technology of expertise in a big, fast-moving firm is the most important similarity between now and 30 years in the past.
Microsoft was rather a lot smaller in 1995, nevertheless it was nonetheless the dominant drive within the software program business of its day. When the corporate launched Home windows 95 in August of 1995, it got here with the primary variations of each Web Explorer and MSN. Inside 4 months, it needed to ship new, higher variations of these merchandise alongside an entire lot of different adjustments.
The push for fast change grew out of one thing the corporate had been telling its senior leaders for a number of months previous to the launch of Home windows 95: It needed to transfer quick and do extra if it was going to catch up in a race that it couldn’t afford to lose.
Gates’ well-known “web tidal wave” memo from Could 26, 1995 (which later grew to become an antitrust exhibit) spelled out each the menace and alternative — calling the web “a very powerful single growth to return alongside because the IBM PC was launched in 1981.”
Later within the memo, Gates acknowledged a major downside: Microsoft must clarify why publishers and web customers ought to use MSN as an alternative of simply organising their very own web site — and he admitted that the corporate didn’t have a terrific reply.
Quick ahead to March 2023, just a few months after Microsoft associate OpenAI launched ChatGPT, when Satya Nadella made the dimensions of the AI period clear in a speech on the way forward for work.
“In the present day is the beginning of the subsequent step on this journey, with highly effective basis fashions and succesful copilots accessible through probably the most common interface: pure language,” Nadella stated. “This can radically remodel how computer systems assist us suppose, plan, and act.”
After all, Microsoft CEOs have discovered rather a lot over the past 30 years, together with the significance of not stating the corporate’s shortcomings in memos that might find yourself being seen by the remainder of the world. Nadella provided nothing like Gates’ MSN admission. However his feedback concerning the measurement of the AI problem and alternative have been a direct parallel to the urgency that Gates expressed concerning the web 30 years in the past.
What’s totally different?
On the earth of PC working programs and software program, Microsoft within the Nineteen Nineties was king — with few rivals that got here even near the form of market share it loved. It was arguably late in making a bet-the-company pivot to the web, however doing so from a really robust place.
Thirty years later, amid the rise of synthetic intelligence, Amazon, Google, Nvidia, OpenAI, and Anthropic are a part of a extra advanced community of rivals and companions.
Again in 1995, the large competitors was perceived as coming from Netscape and different fast-moving web startups — and Microsoft was the behemoth battling the insurgents.
The New York Instances’ headline concerning the 1995 occasion summed up the framing: “Microsoft Seeks Web Market; Netscape Slides.” As The Seattle Instances put it, “Microsoft performs hardball — Sport plan for the Web: Crush the competitors.” Many others echoed the theme.
I noticed that aggressive dynamic first-hand on the press occasion, when by a stroke of luck I ended up sitting beside Invoice Gates at lunch. I recall him being a little bit irritated by questions concerning the Java licensing cope with Solar and the broader press curiosity within the Netscape/Microsoft narrative. He wished to concentrate on the broader impression of the day’s bulletins.
He confused, for instance, that the licensing by Microsoft of Solar’s Java programming language to be used with Microsoft’s Web Explorer browser was not likely a giant deal.
“Java you possibly can recreate trivially,” Gates informed me, disregarding the licensing deal as a routine enterprise determination, not a lot totally different than many others Microsoft made through the years.
The size can also be drastically totally different. For instance, my January 1996 cowl story for Microsoft Journal quoted Gates explaining how the “150 million customers of Home windows” would profit from the web integration it was endeavor throughout 20 new merchandise and applied sciences.
In at this time’s phrases, these numbers look tiny. In a weblog put up earlier this yr, Microsoft govt vp Yusuf Mehdi stated Home windows now powers greater than 1.4 billion month-to-month lively gadgets. That doesn’t embody Microsoft’s huge cloud computing enterprise, Microsoft 365, LinkedIn, Xbox, and its already-significant AI-attributable income from Copilot.
The funding hole is extra dramatic, even adjusted for inflation. Microsoft poured greater than $88 billion into capital expenditures final fiscal yr, a lot of it on AI infrastructure. In 1995, the corporate’s $220 million cope with NBC to launch MSNBC appeared like some huge cash.
That MSNBC deal, nevertheless, highlights one other essential distinction between the current and the previous. In 1995, nobody actually knew the place the web (and the online) was going to go. Fortunes have been made and misplaced attempting to foretell which enterprise fashions would work on-line.
Tim Bajarin, CEO of the consultancy Artistic Methods and a longtime business analyst, says Microsoft is healthier positioned now than it was in 1995. The distinction: we have already got the underlying structure for helpful AI purposes. That wasn’t true with the web again then.
“We didn’t see the worth proposition till we noticed the position of purposes constructed on a web-based structure,” Bajarin stated. “That’s what is considerably totally different.”
Classes for at this time
Microsoft’s AI push, Bajarin stated, will succeed provided that it delivers real worth — implementations that resolve actual issues and present clear return on funding.
Current headlines recommend not everyone seems to be satisfied. ‘Nobody requested for this’: Microsoft’s Copilot AI push sparks social media backlash, declared Germany’s PC-WELT journal. It’s the identical query Gates couldn’t reply about MSN in 1995: Why ought to anybody use this?
Maybe the most important lesson on the competitors entrance is that there isn’t any assure of longevity or relevance in tech. Solely one of many rivals listed within the December 1995 New York Instances story remains to be round – IBM – and it’s a vastly totally different firm than it was then.
There may be yet another lesson, about the price of success. Microsoft’s aggressive web push labored — nevertheless it additionally triggered a Division of Justice investigation that lasted from 1998 to 2001. Competing onerous is important. Competing too onerous has penalties.
However that’s a narrative for an additional decade.
