Project Breakthrough! World's First Minicomputer Kit to Rival Commercial Models." This headline in the January 1975 issue of Popular Electronics triggered the neurons in Bill Gates's brain. In an instant, he perceived that the revolution had begun. Most earlier computers cost hundreds of thousands of dollars, filled room-sized air-conditioned vaults, and were found in university science centers, government agencies, and corporate headquarters. But this kit cost only $397.The computer (its name—Altair— came from a planet in the TV series Star Trek), could fit on a desktop. Gates believed that computers like this would soon be as much a part of life as telephones or automobiles. Armed with the slogan,"A computer on every desktop," Gates resolved to become the Henry Ford of the computer
Revolution (and to become, like Ford, immensely rich). He was twenty years old.
Gates recognized Altair's fatal flaw: It did little more than cause a few lights to blink in complex ways. It lacked internal instructions to convert electrical signals into letters and numbers. He determined to write instructions—the software—to make the personal computer useful. Gates and Paul Allen, a school friend, telephoned Ed Roberts, the president of MITS, manufacturer of the Altair. They told him they had written operating software for the machine. Roberts was skeptical. Scores of programmers had made such claims, he said, but none had actually done it. He told them to bring their software to the company headquarters in Albuquerque, New Mexico, within two months.
Bill Gates as a young CEO at Microsoft.
Allen and Gates were euphoric, but not for long:They had not even begun to write a program for the Altair. The challenge of doing so in five weeks would have been unimaginable but for one thing:The electronic core of the Altair was the Intel 8080 computer chip, and for years Allen and Gates had been devising machines and software based on the Intel 8008, whose logic was similar to the 8080.
The boys had met in 1967 at Lakeside, an elite private school in Seattle, when Gates was in seventh grade, Allen in ninth. That year, the Lakeside Mothers Club had bought time on a digital training terminal that connected by phone to a company that leased a mainframe computer. Within weeks of its installation, this computer had become Gates's life. He remained in the terminal room after school and late into the evenings, breaking only for Coke and pizza. Sometimes he conked out while staring at the screen; his clothes were perpetually wrinkled and spattered with pizza sauce. "He lived and breathed computers,"a friend recalled.
Gates learned programming by writing programs and seeing what worked. His first was for playing tic-tac-toe. He also designed a program for student schedules at Lakeside. He placed "all the good girls in the school"(and very few males of any kind) in his own classes—an early manifestation of his penchant for defeating competitors by conniving to eliminate them.
Although his father was a wealthy corporate attorney and his mother a prominent socialite, Gates was preoccupied with making money. In high school he took a job tabulating automobile traffic data; this required that he count the holes in a roll of paper punched out when automobiles passed over a hose. He designed a computerized machine to count and analyze the data and he formed a company, Traf-O-Data, to build and market the device. But, Traf-O-Data failed to attract many customers—most municipalities and highway departments lost interest when they learned that the company was run by high school students.
Gates, who earned a perfect score on the math portion of the SAT, chose a complex strategy to gain admission to the most competitive colleges. In his application to Harvard, he emphasized his political involvement (he had worked one summer as a congressional page); to Yale, he cited his creativity (a starring role in a dramatic production) and character (a former Boy Scout); and to Princeton, "I positioned myself as a computer nerd." Admitted to all three, he went to Harvard. Allen went to work as a programmer for Honeywell. But when they began work on the Altair operating program, Allen moved into Gates's dormitory and Gates skipped most classes. To save time, they built a simulator based on the published specifications of the Altair and feverishly churned out the operating software.
They completed the program just hours before Allen boarded the plane to Albuquerque. (Allen went because he was older and presumably a more credible "corporate" spokesman.) The next morning, Allen fed long rolls of punched yellow paper tape—the software—into an Altair while company executives looked on skeptically. For fifteen minutes the machine clattered away. Misgivings mounted. Then the teletype printed the word, "READY." Allen typed, "PRINT 2 + 2." The teletype spat out "4." The program worked. Gates and Allen had a deal.
Gates dropped out of Harvard and formed a partnership with Allen. They called their company Microsoft and moved to Albuquerque. They wrote operating programs for personal computers introduced by Apple, Commodore, and Radio Shack. Soon money was pouring into Microsoft. In 1979 they moved Microsoft to Bellevue, Washington, near Seattle. Then came the blockbuster.
In 1980 IBM, the world's foremost manufacturer of mainframe computers, belatedly entered the home computer market. IBM approached Gates to write the operating software for its new, state-of-the-art personal computer. IBM intended to keep the computer's specifications secret so that other manufacturers could not copy its design, but Gates shrewdly proposed that IBM make its specifications public. Doing so would allow the IBM personal computer to become the industry standard, giving IBM the edge in developing peripherals—printers, monitors, keyboards, and various applications. IBM agreed. Now Gates's software, called Microsoft-Disk Operating System (MS-DOS), would run every IBM personal computer as well as every computer made by other companies according to the IBM specifications. In a single stroke, Gates had virtually monopolized the market for PC operating software.
Microsoft's sales jumped from $7.5 million in 1980 to $140 million in 1985.Then Microsoft moved into software applications: word processing, accounting, and games. After Allen was diagnosed with Hodgkin's disease in 1983, he briefly retired and purchased the Portland Trail Blazers basketball team; he became a billionaire. By 1991, Gates was the wealthiest man in the world. In 1994, he and his wife established the Bill and Melinda Gates Foundation; by 2010,it had assets of over $33 billion and gave nearly $2 billion annually to charitable causes, especially education.