Microsoft’s Military Empire, Explained

weeks ago I was researching Google'swork with military drones when I noticedsomething really weird in the footagetake a look this Air Force officer isflying a 60 million dollar drone usingan Xbox controller this got me thinkingthis country has always relied on havingaccess to the best Technologies Americantech companies have largely turned theirbacks on the US military thousands ofGoogle workers now protesting Google'sinvolvement in a pentagon drone programbut Microsoft hasn't they've gone thecompletely opposite direction Nadellasaid if technology companies do not helpthe us we're in a whole load of troubleMicrosoft has used its traditionalstrengths to build a military Empire Iwanted to know how company best knownfor spreadsheets and Word Documents doit so I mapped out each of their majormilitary projects and the results werefascinating Microsoft is trying tocompletely change the nature of warfarebut it hasn't all gone exactly as theyplanned to understand how Microsoftbecame a key part of the US military'stechnology strategy you have tounderstand Bill Gatestoday he's a laid-back philanthropistworking on problems like Global Healthbut he ran Microsoft like a drillsergeant you never understood the firstthing about this back in the 1970scomputers were really only used in Labsor in offices that made sense they weremassive expensive machines designed tospeed up highly specific tasks thecompanies that dominated the market backthen believed that no average personwould ever want their own computer BillGates saw things differently well Ithink we will get one in every officeand in every home build your owncomputer kits we're growing inpopularity Indie hackers were startingto use computers at home and thetechnology was getting cheaper clearlythere was about to be a massiveAvalanche of technological progress thesnowball that triggered this Avalanchewas the Altair 8800 the Altair was oneof the earliest personal computers toModern Eyes it looks like an alienartifact it didn't have a screen or akeyboard you had to operate it using aseries of switches and lights on thefront panel it didn't even come fullyassembled but that didn't stop him frombuying it the Altair flew off theshelves Bill Gates and his old buddyfrom high school Paul Allen startedwriting software for the Altair theirfirst release was a version of the basicprogramming language that led Altairusers write and run their own simpleprograms became for the first generationof PCS the thing that unlocked the powerthat was there bill was obsessed withdetails he ran Microsoft like a generalin Wartime for Bill business was war andcompetitors had to be destroyed he wasgoing up against an absolute giant IBMbut giants can't move fast IBM was adecades-old bureaucracy at this pointeventually the success of the Altairmade IBM realize that they needed apersonal computer strategy the execsknew that they couldn't make abreakthrough product by just doingthings the old way so they created askunk work style r d lab in Florida theIBM team began work on their firstpersonal computer they needed a softwareas soon as they met Bill Gates they wereconvinced that he was the best optionbill was still really young but he knewmore about soft for development thanbasically anyone else at the time so thetwo parties formed an alliance bill andhis team would provide IBM with anoperating system but crucially itwouldn't be an exclusive deal we have tobe able to sell it to other outfits thedeadline to deliver was tight so insteadof trying to build everything fromscratch Bill bought an existingoperating system from a small companynamed Seattle computer productsMicrosoft Engineers modified thatoperating system and renamed it MS-DOSthis is short for the Microsoft DiskOperating System it was a clever movebut like a general pressing home hisAdvantage Bill didn't stop there IBMwanted to pay a fixed price for thesoftware license but that would havelimited Microsoft's upside and Bill knewthat so he went back and demanded aroyalty Arrangement this gave him aguaranteed income stream and setMicrosoft up perfectly to dominate therapidly growing PC software Market by1991 Microsoft was making more than 200million dollars a year from MS-DOS Billhad executed flawlessly but that wasjust the first stage of his quest fordominance the PC growth wave of the 80sand 90s meant that software became a keypart of how large organizations workedeventually one of the biggest of themall the United States military gave BillGates a callin the mid 90s the Navy had a big debateover what operating system should powertheir warships their ultimate goal wasto develop a smart ship system that usedoff-the-shelf PCS to automate tasks thatSailors had traditionally performedmanually if it worked the Navy stood toreduce the crew workload improve combatReadiness and ultimately create a saferoperating environment unix-based systemslike Linux were open source stable andflexible but the fact was that everyonein the Navy was already using Windows athome sensing his opportunity Bill Gatespitched the Navy on something he calledwindows for warships a bespoke versionof Windows NT 4.0 that would serve asthe standard operating system on Navyvessels windows for warships is stillwith us today and not just in the UnitedStates either the British royal Navystill uses a variant of Windows forwarships to provide tactical informationand torpedo controls across all of itsactive submarines but upgrading the USNavy's Fleet wasn't easy in practice in1998 the USS Yorktown aircraft carriersuffered a system failure that left itdead in the water for two and a halfhours and the new Windows operatingsystem was squarely to blame it was thekind of thing that was embarrassing inpeacetime but potentially fatal inWartime following the Yorktown debacleit became easy to question the decisionto go with Windows critics said it wasrushed and based more on politics thanengineering requirements the source ofthe problem was pretty simple too oneextra zero fed into just one applicationon the network created a divide by zeroerror that crashed everything it was abig setback for the windows for warshipsprogram but at the time Microsoft wasstill riding high it was the biggestcompany in the world military contractswere just a small share of its overallbusiness however struggling to deliverhigh quality products to the militarywas just part of the problemforeignwas like the world's worst rollercoaster Microsoft has the power today toexercise predatory and exclusionarycontrol we believe that courts willultimately find that all the Microsoft'sactions have been completely legal andgood for consumers at its peak in 1999Bill Gates presided over a 620 billiondollar Company by far the biggest in theworld just two years later Microsoft hadlost 60 percent of its value and worsestill the company was floundering thisis the end of an era there are arrogantdominance in the Computing industryturned into uncertain anxiety part ofthe problem was that the all-conqueringgeneral had handed over control of thecompany to Steve Ballmer what was once alaser focused strategy quickly becamefragmented and this wasn't just becauseof Balmer he was trying to makeMicrosoft succeed when the battlefieldconditions had changed Microsoft'soriginal Mission was to put a computerwith Windows into every home and theybasically done it but every companyneeds a second act and unfortunately forMicrosoft it took years for them to findnew Focus under balmer's leadershipMicrosoft lost its core identity betweenWindows Office the Xbox and variousdeveloper tools the company went fromnot really diversifying at all todiversifying way too much none ofMicrosoft's major initiatives were atthe Forefront of the next major Techwaves the PC growth wave that turnedMicrosoft into the world's biggestcompany was over the 2000s were an eradominated by consumer Internet andmobile devices and Microsoft didn't havea winner in either category Appleintroduced the iPod in October of 2001.it took Microsoft five years to releasethe Zune which flopped and wasdiscontinued in 2011. the iPhone waslaunched in June of 2007. it tookMicrosoft three years to release theWindows phone which also completelyflopped Google's search engine launchedin 1997. it took Microsoft 12 years toput out a competitive product and whenit did arrive it was Bing today Googlehas 92 market share in search Bay hasjust two percent all of these launcheswere reactions and none of them playedto Microsoft's strength the company thathad been such a fearsome leader became aMeek follower with the incredible andongoing success of Windows had leftMicrosoft with one key strengthDistributing to Enterprise customersMicrosoft was still trusted by theworld's largest corporations many ofwhich ran on Windows and word theyneeded to leverage those relationshipsnext time there was a major Tech Trendin the early 2010s virtual and augmentedreality technology looked like the nextbig thing so Microsoft got to work theyintroduced the Xbox Connect in 2010 andthe first hololens in 2016. butMicrosoft ultimately believed thataugmented reality was too cumbersome foreveryday consumers so unlike otherheadsets like the Oculus VR which wereaimed mostly at Gamers Microsoftpositioned the hololens as aprofessional device for largecorporations selling to largeEnterprises would leverage Microsoft'skey strengths and Enterprises don't comemuch bigger than the US militaryMicrosoft won a massive 22 billiondollar contract for a project called theintegrated visual augmentation system orivas this will see over a hundredthousand American soldiers equipped withaugmented reality headsets based on thehololens technology the ivass project isactually just the latest installment ofthe military's obsession with in realitythat dates back to the 1980s the Armyhad identified that technology wastransforming Battlefield intelligencesatellites and drones were generating somuch data that old Technologies justweren't keeping up but with the rightgear that raw data could be transformedinto useful information this earlythinking became a prototype Army projectcalled The Soldier's computer it was farfrom perfect the screen used for theheads-up display was the same one usedin Nintendo's Virtual Boy it was lowresolution and could only display thingsin red and the virtual boy was a bigflop with consumers and critics but forsome reason military officials weredetermined to succeed so they doubleddown and moved the soldiers computerproject to the US Army's Natick soldiercenter in Massachusetts there was nobetter place for the augmented realityattack to be put through its PacesProject's budget was increased with moremoney now on the line This looked likethe moment where this technology wouldeither prove its viability or becanceled entirely by the Department ofDefense in 1992 the soldiers computerwent into field testing but firsteverything was going smoothly soldierswere really happy about how the thermalimaging increased their sight range andthe ability to fire around corners whilestaying in cover was truly novel but thedrawbacks quickly became apparent firstoff the head mounted display wasextremely clunky data transfer lagged byup to 75 seconds that is if the systemjust didn't crash entirely the US ArmyResearch Institute published a reportwhich included some very honest opinionsfrom soldiers they called it junk theysaid it sucks and they all mentioned howpainful it was to wear I don't know whoever put it on a soldier's back it wasyou know walking the street hopping awall going through a door or coming outof a hatch we just wanted it to go awaywe didn't want anything to do with itthe package added about 40 pounds to asoldier's pack for comparison The MetaOculus Quest 2 weighs just over onepound and honestly people don't reallylike wearing the meta Oculus Quest 2that much if people aren't going to weara one pound VR headset soldiers aredefinitely not going to be cool withwearing a 40 pound VR rig but despitethis an enough people high up in themilitary still believed in the programso it survived and work continued eagerto move past earlier failures the dodrebranded the project and startedcalling it Land Warrior in 1996. theyeven approved a billion dollar budgetfor it the dod then appointed a colonelto act as an interface between theengineers building the product and thesoldiers who would actually use it buteven with all of this in place theproject still had one big flaw it justcouldn't get over in order to takeadvantage of the latest technology themilitary had switched to using consumerHardware as a foundation for the LandWarrior Project the gear didn't work inthe rain and it couldn't withstandelectromagnetic interference now thisisn't a problem for VR Gaming on yourcouch but it's a huge problem whenyou're a soldier in the middle of abattlefield trying to solve theseproblems blew out budgets by 1999spending on Land Warrior had increasedby 50 percent if a private company wasburning this much cash with nothing toshow for it the project would getscrapped investors would start askingtough questions but too many of themilitary's leaders had staked theirreputations on Land Warrior so failurejust wasn't an option now the main guydriving this whole Vision forward wasWilliam Owens Owens was a Navy Admiralwho served as the vice chairman of theJoint Chiefs of Staff during the ClintonAdministration in other words he had theear of the president Owens was thebiggest advocate in the armed forces forwhat he called network-centric Warfareand he actually laid out his entireVision in this great Charlie Roseinterview from the mid 90s I genuinelybelieve in the next five years therewill be a revolution in the way thisnation fights Wars and it will comeprimarily from the smart front end ofWar fighting that is the ability to useheight technology surveillance of a verylarge Battlefield a battlefield perhapsthe size of North Korea or Iraqand with the ability to see thatBattlefield 24 hours a day real time allweather we have never in the history ofWar fighting ever seen the battlefieldthat way that Vision was highlycompatible with the Army's new post-coldwar strategy of a smaller betterequipped fighting force by the time theUnited States invaded Iraq Land Warriorwas ready to be deployed in 2005 229 U.Sinfantry soldiers were fitted with LandWarrior headsets it had been almost 20years since the project began but it wasfinally getting traction and it had justfound a use case soldiers deployed inIraq used their Land Warrior gear todigitally Mark safe regrouping pointsbut soldiers still didn't really love itit still needed a lot of work by June2010 under the Obama Administration landWarrior was rebranded again to netWarrior the bulky pack and headgear wasgone and in its place a respect Androidphone secured to The Soldier's chestmobile technology had become good enoughto fulfill most of William Owen's Visionbut the Army still thought it neededmore to show for all its work and moneyspent so in 2019 they invited MicrosoftEngineers to a military base to teachthem about what soldiers needed from anaugmented reality headset that weekendmarked the birth of ivas you might thinkgiven the Decades of work that had goneinto the project and Microsoft's yearsof experience with augmented realitythat progress would be smooth but ivaswas plagued with problems from day oneit kind of felt like everything was backat square one but billions of dollarslater Microsoft and the Army aredetermined to make ivas work the projecthas huge potential to improve soldiersawareness and Effectiveness and besidesRussia and China are working on theirown ivas style programs so the UnitedStates is determined not to fall behindthe current plan is to get workinghololens headsets into the field by theend of 2023 But ultimately ibas mightnot even matter because Microsoft's workwith the military goes way deeperthe consumer Internet and mobile deviceTrends were both underpinned by a majorshift to the cloud when your phone orlaptop performs operations they'reusually not performing those locallyinstead those calculations are beingdone on a server in the cloud this timeMicrosoft was determined to ride the newwave their history with cloud computingdates back to 2006 and an experimentalproject to put Windows into the cloudbut businesses didn't want windows inthe cloud they wanted flexibility andthat's exactly what Amazon web servicesAWS delivered by the time Microsoftreleased the Azure cloud computingplatform in 2010 they were a long waybehind Amazon but they had one keyAdvantage Distributing the products theymade to Big customers Microsoft studiedAmazon's strategy very closely andimproved Azure once they had a solidproduct in place they started includingAzure credits in their Enterprise dealsthis drove rapid adoption from largecustomers who needed thousands of officelicenses just think about it you're acompany that's already buying lots ofWindows licenses for your employees andall of a sudden you have a bunch of freecloud computing credits of course you'regoing to go with Microsoft Azure overAWS which is going to cost you an armand a leg it wasn't long before Azurehit a 10 billion dollar run rate and itwas growing faster than AWS Azure wasthe biggest reason Microsoft's stockprice started climbing after being flatfor years Microsoft was finally riding amajor new tech wave large organizationseverywhere were closing down their datacenters and moving their hosting to thecloud and one of those largeorganizations was the US Department ofDefense years of small test projects hadleft the military with over 500different external cloud computingcontracts it was a mess that neededtidying the military had tons of data tosift through and centralizing it safelyand securely would allow for bettercoordination between different areas ofthe military this would ultimately leadto more effective performance on thebattlefield so the dod went looking fora cloud service provider to do this itlaunched The Joint Enterprise defenseinfrastructure project or Jedi Microsoftimmediately saw the opportunity Jediwasn't as flashy as ivas but it wasarguably more important it was anupfront 10 billion commitment withpotentially way more further down theroad Plus winning the Jedi contractwould cement Microsoft as the military'smost trusted vendor but despite a bunchof advantages Microsoft was still anunderdog AWS was bigger and Amazon hadjust won a 600 million dollar contractto provide cloud services for the U.Sintelligence Community the Jedi contractlooked tailor-made for AWS other Cloudproviders sensing that Amazon was thestrong favorite argued that the dodshould split up the contract so theywould at least have a chance of gettingsome of the business but the whole pointof Jedi was to centralize the military'sCloud systems dealing with multiplevendors just didn't make sense so everymajor cloud provider would have to Dukeit out during the bidding process fivecompanies made it to the starting lineAmazon Microsoft Google IBM and Oraclepretty quickly though three of themcrashed out Google said they wouldn't beworking with the military on ethicalground IBM and Oracle were eliminatedbecause they simply didn't have enoughcapabilities so ultimately it came downto a battle between Microsoft and Amazoneveryone thought that Amazon was goingto win everyone that is apart frompresident Trump you probably rememberthat one of Trump's least favoritepeople was Jeff Bezos Trump didn'treally care all that much about Amazonbut Bezos was also the owner of theWashington Post and Trump hated theWashington Post every hour we're gettingcalls from reporters on the WashingtonPost asking ridiculous questions and Iwill tell you this is owned as a toy byJeff Bezos Amazon says it's consideringits options after the pentagon'ssurprise decision to award a 10 billiondollar cloud computing contract toMicrosoft there was even a report thatTrump directly called secretary ofdefense General Mattis and ordered himto screw Amazon Amazon is making whatappears to be an unprecedented requestin his case against the government overthat 10 billion dollar Jedi contractAmazon is seeking to depose presidentTrump Secretary of Defense Mark esperand former Defense secretary JamesMattis in that case when Microsoft wonthe contract lots of people thought thatTrump tipped the scales so did Amazonlose the Jedi contract because of FoulPlay well not necessarily becauseMicrosoft was a solid Choice by thistime they'd already been doing businesswith the dod for decades in fact theyjust signed a five-year contract worthnearly a billion dollars to provideWindows 10 and Associated Hardware tothe military Microsoft was making moremoney from the American defenseestablishment than Amazon was plusBuilding Products specifically tailoredto Enterprise clients was what Microsoftexcelled at the dod was a big complexcustomer but they weren't looking foranything flashy they just wantedsomething that worked ultimately Jediended with a big anti-climax thePentagon is canceling a 10 billiondollar deal called Jedi with MicrosoftJedi was replaced with the jointWarfighter Cloud capability project thejwcc this new 9 billion dollar contractwas split between four of the fivecompanies that were originally part ofthe Jedi bidding process Microsoft got apiece but it wasn't the big win thatthey'd hoped forsometimes reality can be underwhelmingled by their General Bill GatesMicrosoft grew into a behemoth thatunderstood its allies and ruthlesslydestroyed its enemies today Microsoft'swork with the military is based on thesame principles but in the end thosesetbacks don't matter all that much whatmatters is that Microsoft has become oneof the US military's most trustedvendors because it's more like themilitary than any other big tech companytoday the U.S military runs on WindowsXL spreadsheets and the Microsoft cloudis it flashy not necessarily but winningwars is a grind Microsoft knows thatbetter than almost anyone and as Warcontinues to become more digitalthroughout the 21st century and thedefense department it looks for Reliableprivate sector Partners Microsoft hasmade itself indispensable if you'd liketo know more about how technologyaffects geopolitics just watch thisvideo about the semiconductor warbetween America and China next thanks alot