July 19, 2022, 3:33 pm | Read time: 5 minutes
By the mid-1970s, the world was already familiar with computers, but their commercial use is credited to Bill Gates and Paul Allen, the founders of Microsoft. They made computers accessible to everyone.
This vision had been with the young students since their school days together. Even back in the early 1970s, Gates and Allen were interested in computers and programming. But how did they manage to turn their vision into reality, establish Microsoft, and lead the company to global success?
Overview
To understand this, we look back to the late 1960s. At that time, there were bulky mainframes or small boxes with blinking lights, without monitors. These early computing machines had nothing in common with the computers we know today. Therefore, only a few people were interested in them, mainly true computer nerds. At that time, computers played no role for the average person.
Early Successes
Bill Gates and Paul Allen wanted to change that. Even after school, the two tinkerers worked on their vision in their spare time. Paul Allen was studying at Washington State University at the time. His friend Bill Gates simultaneously began studying mathematics at the prestigious Harvard University. During their studies, they founded their first company, Traf-o-Data, in 1972. The sole purpose of the company was to develop software for traffic counting.
This work required a lot of time and commitment. As a result, Paul Allen first dropped out of college, followed shortly by Bill Gates. Both then worked as programmers. Bill Gates had already been working on developing a programming language for the Altair 8800 computer for quite some time.
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A Programming Language Makes Microsoft Famous
In 1975, he achieved a breakthrough. The programming language he developed, Altair BASIC 2.0, became the raw material for the later marketing of home computers. BASIC was already known as a computer language. By the early 1980s, almost all computer owners knew what BASIC was. The Commodore 64–shortened to C64 or affectionately called the ‘breadbox’–made BASIC known worldwide.
However, a lot of development work was still needed. Bill Gates and Paul Allen now pushed this forward with great strides. To better market the programming language Altair BASIC 2.0 developed by Bill Gates, he and his friend Paul Allen founded the company Micro-Soft on April 4, 1975, in Albuquerque, New Mexico–initially with a hyphen and a capital S. The name was a combination of “Microcomputer” and “Software.” Microcomputers were the name for the first, smaller computing machines at the time.
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Microsoft BASIC Changes Everything
As Microsoft, Bill Gates and Paul Allen signed a licensing agreement with MITS–short for Micro Instrumentation Telemetry Systems. MITS had developed the Altair 8800. At that time, Microsoft provided MITS with two versions of their programming language: Altair BASIC 4K and Altair BASIC 8K. According to the contract, Microsoft received a one-time payment of $3,000. For each version of Altair BASIC 4K sold, they received $30, $35 for the sale of Altair BASIC 8K, and even $60 for the so-called Extended Version, which included BASIC with a manual and the kit for the Altair 8800. Hard to imagine today: The computer had to be meticulously soldered together at home.
This first licensing agreement with MITS provided the young company Microsoft with the start-up capital to achieve much greater things. Just a year later, in 1976, the company released a further development of Altair BASIC called Microsoft BASIC. This programming language formed the basis for the aforementioned C64, but also for a then-unknown computer company with a bitten apple as its logo. Apple also used the Microsoft BASIC version as a basis to develop its own operating system.
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This Is Microsoft Today
Everything that followed is well-known:
- MS-DOS,
- Windows,
- Microsoft Office, with Word and Excel.
From Microsoft, a company that initially only developed programming languages, it has become one of the most significant software and computer companies worldwide. With its products, Microsoft now generates annual revenue of nearly $170 billion.
Without Microsoft, without the vision and pioneering work of Bill Gates and Paul Allen, the massive spread of home computers in this form would not have occurred. Ultimately, the two Microsoft founders also influenced further technological development toward smartphones.
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Incidentally, Paul Allen did not actively witness much of the rapid development. He left Microsoft in 1983 due to an illness. However, he remained loyal to the company for quite some time as a board member and strategic advisor. In 2018, Paul Allen passed away from cancer.
Bill Gates has also since stepped back from operational business. In 2008, he moved into the background and focused more on the work of the Bill & Melinda Gates Foundation, a charitable organization he founded with his then-wife. Bill Gates continues to serve as an advisor to Microsoft.