50 Years Ago, Gates And Allen Made The Deal That Launched Microsoft

This week marked the 50th anniversary of the birth of several empires. On July 22, 1975, Bill Gates and Paul Allen signed a deal with Micro Instrumentation and Telemetry Systems.

The company was better known as MITS, and the deal with the as-yet-unnamed partnership between Gates and Allen was to provide a BASIC interpreter for MITS’s new computer, the Altair 8800.

MITS Altair 8800 – click to enlarge

There are many contenders for the “first microcomputer” or “first personal computer,” and which machine any one obsessive old geek digital antiquarian favors depends on how they define some of the terms.

The MITS Altair ticks a lot of boxes, though, and set the pattern for a lot of the future computer industry. It used an Intel 8080 microprocessor, not a bunch of discrete parts. It was modular, built from cards that slotted into a bus, a form of which was later standardized as the S100 bus. Rather than some expensive workstation like an IBM 5100 aimed at scientists and so sought-after that people will travel back in time to find one, the Altair was aimed at hobbyists. Kitting one out well enough to run CP/M would have cost $4,000 or more.

With 1 kB of RAM, all you could do was toggle 8080 instructions into the 8800 using the front-panel switches. But if you spent another $264 for the 4 kB memory board in kit form, it could do something much more interesting. It could run BASIC, the famous Microsoft 4K BASIC, Microsoft’s first product, which The Register was reporting on half that time ago. It was co-written by Bill Gates, the late Paul Allen, and Monte Davidoff, who gave us an interview that same year. These days, you can study the annotated source code on GitHub.

MITS founder Ed Roberts is no longer with us, but his business acumen in getting the new machine on the front cover of the January 1975 Practical Electronics magazine inspired Gates and Allen to set up a business and pitch a BASIC interpreter to him. Microsoft’s website still has a timeline of those early days. As it says:

Bill Gates and Paul Allen in 1981 – click to enlarge

That deal 50 years ago shaped this vulture’s career, and that of pretty much every other person in this business. It didn’t just set Microsoft on the path to industry dominance (and make those two co-founders immensely wealthy). It’s also a significant reason why BASIC dominated the computer industry for decades to follow – for better or worse.

In time, that deal gave Gates the clout to pursue his plan of “a computer on every desk and in every home,” as we quoted closer to then than now. It set Intel on the path to the power and influence that is now waning. Those legions of standardized x86-powered PCs were designed to run the apps for the OS that Microsoft bought in from SCP in 1981.

Within a decade, those inter-compatible 8088 and 8086 machines had affordable 80386SX-based descendants, and those created the fertile soil for Linux to germinate and grow – and that also applies to FreeBSD and its cousins. ®

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