The United States military has always relied on having access to the best technologies. American tech companies were once eager to work with the defense establishment, but views have shifted. Recently, thousands of Google employees protested the company’s involvement in a Pentagon drone program. However, Microsoft has gone the opposite direction under CEO Satya Nadella, believing that not assisting the US military would be dangerous. This article explores how Microsoft leveraged its traditional strengths to build an extensive military empire.
Humble Beginnings
Microsoft’s military connections trace back to its origins in the 1970s personal computer revolution. While computers were mainly for scientific and office use, Bill Gates realized average consumers would soon want their own devices. Gates co-founded Microsoft and obtained an operating system called MS-DOS for IBM’s new personal computer.
Crucially, Microsoft retained rights to license MS-DOS to other companies, not granting IBM exclusivity. This positioned Microsoft perfectly to dominate the exploding PC software market in the 1980s and 1990s. By bundling Windows and Office on third-party computers, Microsoft became the world’s largest software company.
Windows for Warships
The US Navy debated operating systems for its vessels in the 1990s, seeking to use off-the-shelf PCs to automate tasks traditionally done manually by sailors. This “smart ship” initiative aimed to reduce crew workloads and improve readiness.
Sensing opportunity, Microsoft pitched the Navy on “Windows for Warships,” a customized version of Windows NT 4.0. The British Royal Navy still uses this Windows derivative to provide tactical data and torpedo controls on its submarines.
However, upgrading the Navy’s fleet with Windows brought setbacks. In 1998, a divide by zero error caused by an extra zero crashed systems on the USS Yorktown aircraft carrier, leaving it dead in the water for hours. Critics questioned putting Windows on warships, but the program continued.
Failing to Innovate
Microsoft dominated computing through the 1990s, becoming the world’s largest company. But it then grew complacent, failing to lead new tech trends.
Apple introduced the iPod in 2001, but Microsoft took five years to release the failed Zune music player. The iPhone launched in 2007, yet Microsoft’s Windows phone flopped three years later. And when Google launched search in 1997, it took Microsoft 12 years to offer a competitor in Bing.
Refocusing on the Enterprise
Lacking successes in consumer tech, Microsoft refocused on its core enterprise clients. Large organizations relied on Windows and Office, so Microsoft leveraged these relationships. When cloud computing emerged, Microsoft slowly improved its Azure platform and bundled cloud credits into enterprise deals, driving rapid adoption.
The US military needed centralized cloud services to manage its siloed data and computing contracts. In 2019, Microsoft bid for the crucial $10 billion JEDI cloud contract against Amazon Web Services (AWS), the market leader. Despite advantages, Microsoft was considered an underdog until alleged interference from President Trump due to his feud with Amazon CEO Jeff Bezos. Microsoft ultimately won JEDI, cementing its status as the military’s most trusted vendor. However, in 2021, JEDI was canceled and replaced with a $9 billion multi-vendor contract.
Persisting with Augmented Reality
In the early 2010s, Microsoft pursued augmented reality as the next computing platform. It released the Xbox Kinect in 2010 and HoloLens headset in 2016 aimed at enterprises. Selling to business aligned with Microsoft’s distribution strengths.
The military had explored augmented reality technology since the 1980s across projects like Land Warrior. In 2019, Microsoft won a $22 billion contract to provide HoloLens-based IVAS headsets to the Army, continuing its close military partnership.
However, IVAS has faced developmental challenges. Despite billions invested over decades, progress remains slow. But Microsoft and the Army remain committed to making IVAS work, given the potential to improve soldier effectiveness against Chinese and Russian rivals developing similar tech.
Microsoft’s Military Effectiveness
Microsoft co-founder Bill Gates ran the company ruthlessly to destroy competitors. Today, Microsoft leverages its enterprise focus and distribution strengths to partner with the military. It may not be flashy, but Microsoft provides reliable, specialized tools for the defense establishment’s unique needs.
As warfare becomes more digital, Microsoft understands the military’s desires better than most tech companies. The U.S. military already runs on Microsoft software, services and hardware. With technology certain to play an even greater role in national defense this century, Microsoft has made itself indispensable.