Before Powerpoint came along, anyone who wanted a visual aid for their presentation would have to spend substantial amounts of time either scrawling on a board of some sort or in creating transparencies or slides to transmit information. Although Powerpoint has been maligned by some for encouraging lazy speaking styles, the alternative is much worse. It saves millions of man-hours every year that would otherwise be spent cleaning boards off or switching slides.
The first version of Powerpoint - first called Presenter, but later renamed because of copyright issues - was developed by Bob Gaskins and Dennis Austin, a University of California-Berkeley PhD student in 1984. The startup he worked for at the time was acquired by Microsoft soon after in 1987, and the first version of the software under the Microsoft banner was released for Windows 3.0 in 1990. When Microsoft purchased it, Powerpoint was already a mass success, selling more on its first day of release for the Macintosh OS than any other program in history at the time.
Powerpoint integrated the use of graphics and animations early on in its development, with more recent versions allowing the user to embed entire videos. The most effective Powerpoint presentations are used to highlight important points in a presentation, rather than to have the presenter simply read off of the slide. It's also very useful for presenting graphs and other visual data representations. As the software package became more popular, a market for specialized projection equipment grew up along side it, making it so that Powerpoint would be used for more than just creating slides and transparencies.
Unlike most of the other software products that have made their way into the Office suite, Powerpoint has never had significant market competition. Hypercard for the Macintosh was used for presentations in fair numbers, but never approached Powerpoint in terms of market penetration for professional users. That software package was discontinued in the mid-1990s.