There are only a few names that are as synonymous with an industry as Microsoft is with personal use software. Microsoft Windows and Microsoft Office are two of the most widely used pieces of software in the world, and for years Windows was the undisputed king of operating systems – Word, Excel, Powerpoint, Outlook, and other Office softwares are still the most widely-used solution in their respective fields, with consistent usage by school-aged children and business owners alike. But Microsoft, like many other great companies, comes from humble origins. Bill Gates, the single man most responsible for Microsoft’s success and the wealthiest person in the world, built Microsoft to capitalize upon the success of his early forays into software development. Today, Microsoft is a household name across the world, but at the beginning of this story, Microsoft’s founders were meeting in a California garage for the first meeting of the Homebrew Computer Club.
It was 1975 when MITS (Micro Instrumentation and Telemetry Systems) of Albuquerque, New Mexico, first debuted their personal computer on the cover of Popular Electronics. The January 1st issue of Popular Electronics announced the Altair 8800, and this new kind of computer sent gears spinning in the heads of many young entrepreneurs. Among these future-innovators were Bill Gates and Paul Allen, two friends who saw software as the future of the personal computer, and resolved to get themselves at the forefront of the development of that software.
Gates and Allen had always been interested in computers, even before becoming teenagers. They met when Allen was 14 and Gates was 12, when both were students at Lakeside School and both were huge computer geeks. Gates had always been driven to compete by his parents, and even at this young age he was throwing his full attention towards software development, including getting himself excused from math class to focus on programming instead. Shortly after meeting Allen, Gates (who had been banned from using the school computers) was asked by his school to write a program they could use to schedule classes. Gates did design the program, but also engineered it so that he was placed in classes with more girls.
After High School, Gates and Allen parted ways for college, with Gates heading to Harvard to follow his father’s footsteps. He considered becoming a lawyer like his father, but when he saw the 1975 MITS Altair on the cover of Popular Electronics, he decided to pursue his passion instead. He was a Sophomore at Harvard, but started spending his time focusing on his new project instead of his classes, purportedly working for 24-hour chunks at a time. During this time, one of the most popular programming languages was called BASIC. BASIC was widely used, but the Altair couldn’t run it because of how the computer was designed. Gates and Allen decided that their path to success would involve adapting BASIC so that is would work on the Altair, providing a new language for all the Altair owners to use.
After finishing their work in record time, Allen flew to New Mexico to deliver it to MITS, the first customer to license their new software. Mid-flight, he realized that he didn’t have a way to load it onto the actual Altair, since he and Gates had designed it using a simulator to emulate the real thing, and so Allen had to write a loader program at 30,000. He didn’t have a chance to test it before the big demonstration, but thankfully for him, it worked perfectly on the first try. This was the first computer language ever written purposefully for personal computers.
With their newfound success interpreting BASIC for the Altair, Gates and Allen moved to Albuquerque to continue working on the growing giant. Allen formally took a job at MITS, followed later that year by Gates, and shortly afterwards, Allen first uses the name “Micro-Soft” to refer to their partnership. The name came from a portmanteau of “microcomputer” and “software”, and was officially adopted as the name of the company in 1979, after being slightly adapted to “Microsoft”. During this early period, Gates and Allen associated with several other young entrepreneurs interested in computers, including one Gordon French. French’s garage became the meeting place for the “Homebrew Computer Club”
Of course, Microsoft wouldn’t stay in the garage for long.
In 1981, after several years of success making and selling operating systems (primarily different versions of BASIC), Microsoft had acquired a new CEO, Steve Ballmer, and was preparing to restructure to become an incorporated business in Washington. Gates became the company president and chairman of the board, and Allen became the executive vice president. Microsoft does some work for Apple and develops their first hardware product, the Z-80 SoftCard which allowed Apple II computers to run the CP/M operating system, which was at the time the industry standard for business software. This card was Microsofts biggest revenue source in 1980.
A variant of the Unix operating system, named Xenix, was announced in 1980, marking the first operating system publicly released by Microsoft. Xenix is perhaps most notable for being the first operating system to include “Multi-Tool Word,” the software that would go on to become Microsoft Word, one of the most widely used Microsoft products to this day. Word was distributed through disks attached to the November 1983 PC World magazine issues, putting microsoft software into the hands of many interested people. Shortly afterwards, IBM approached Microsoft to form a contact for Microsoft to develop a new operating system to run on their forthcoming IBM Personal Computer. Microsoft won the contract and provided their own DOS (Disk Operating System) which would go on to by the base of the company’s growing success, but also provided a close of the CP/M operating system named 86-DOS that they bought from Seattle Computer Products.
Some potential copyright issues caused IBM to market both systems, for $40 and $240, respectively, and the cheaper DOS became a huge success and industry standard. Microsoft had no competition in the field of operating systems, programming languages,and application software for the IBM PC, which was a very successful computer, and Microsoft earned $55 million in sales in 1983 alone. Not long afterwards, after severing their tie with Apple and after Allen left Microsoft due to illness, Gates becomes the youngest billionaire ever at the age of 31. He will go on to become the world wealthiest man a mere eight years later.
Today, Microsoft is still a giant at the forefront of software development and sale, but Gates is mostly in the news for his philanthropic efforts. After vowing to donate half of his net worth during his lifetime, Gates and his wife Melinda have been spending most of their time donating to worthy causes or establishing the infrastructure to put aid systems into effect even after their deaths. Gates is passionate about many causes, education among them – although he did drop out of college to pursue Microsoft, he has since returned to Harvard and finished his degree,
We hope that you enjoyed reading about the history of Microsoft, one of the companies that defines software and the most widely used PC operating system in the world. Next time on Garage Greatness, we’ll investigate the origins of the Etch A Sketch, the famous children’s toy that was developed in a garage!
