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On January 13, 2000, Bill Gates handed over the CEO position to Steve Ballmer, an old college friend of Gates and employee of the company since 1980, while creating a new position for himself as Chief Software Architect.Various companies including Microsoft formed the Trusted Computing Platform Alliance in October 1999 to (among other things) increase security and protect intellectual property through identifying changes in hardware and software.

Internet Explorer was not bundled with the retail Windows 95 boxes because the boxes were printed before the team finished the web browser, and instead was included in the Windows 95 Plus! In October 1997, the Justice Department filed a motion in the Federal District Court, stating that Microsoft violated an agreement signed in 1994 and asked the court to stop the bundling of Internet Explorer with Windows.

After a call from Gates claiming to have a working interpreter, MITS requested a demonstration.

Since they didn't yet have one, Allen worked on a simulator for the Altair while Gates developed the interpreter.

Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions—their largest being the acquisition of Linked In for .2 billion in December 2016,, Microsoft is market-dominant in the IBM PC-compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android.

The company also produces a wide range of other consumer and enterprise software for desktops and servers, including Internet search (with Bing), the digital services market (through MSN), mixed reality (Holo Lens), cloud computing (Azure) and software development (Visual Studio).

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Steve Ballmer replaced Gates as CEO in 2000, and later envisioned a "devices and services" strategy.

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