On April 4, 1975, childhood friends Bill Gates, then 19, and Paul Allen, then 22, founded Microsoft, a company that makes computer software. Originally based in Albuquerque, New Mexico, Microsoft relocated to Washington State in 1979 and from there grew into a major multinational technology corporation. In 1987, the year after Microsoft went public, Gates became the world’s youngest billionaire at age 31.
Microsoft, founded to make software for microcomputers
The company, originally called Micro-Soft, stood for microcomputers and software, to distinguish itself from larger, more traditional mainframes and minicomputers. Smaller microcomputers were less powerful. But they fit on a desk and were inexpensive enough that hobbyists could afford to keep one in their home.
Gates and Allen started the company in order to produce software for the Altair 8800. The Altair was an early personal computer that made its debut in late 1974. After seeing the Altair on the cover of Popular Electronics magazine, they resolved to create an implementation of a programming language called Basic, which made it much easier for hobbyists to write software for their new computers. Since the Altair was backordered and they couldn’t get one, Paul Allen wrote an emulator that would run on a DEC PDP-10 minicomputer, since Gates had access to a PDP-10 at Harvard.
MITS, the makers of the Altair 8800, soon agreed to distribute the software. Allen then quit his job as a programmer in Boston and Gates left Harvard University, where he was a student. They moved to Albuquerque and started Microsoft there because the city was home to MITS.
As new microcomputers became available, Microsoft created similar versions of Basic for them, making Microsoft’s dialect of Basic the de facto standard for small computers. Microsoft later grew into producing other programming languages and then into producing applications software and operating systems.
Microsoft didn’t go public until 1986. Its IPO was very successful, and the dotcom bubble was mostly about investors’ hunt for the next Microsoft.
How Gates celebrated Microsoft’s 50th anniversary
To celebrate Microsoft’s 50th anniversary of its founding, Bill Gates released the source code of Altair Basic, their first product. He released it as a PDF scan of a vintage printout. It’s 157 pages of Intel 8080 assembly language. By my estimation, that means it’s around 10,000 lines of code. I wonder if this means 49 years after Gates’ letter protesting people pirating Altair Basic, the code is free now?
In Microsoft’s early days, Gates did write code. He did eventually step back from programming to concentrate on running the company, but the last commercial product to contain code he personally wrote was the Radio Shack TRS-80 Model 100 portable computer, released in 1983.
Two more fun facts about Microsoft’s founding
During the most recent recession, circa 2008, I remember seeing an anonymous billboard that said Microsoft was founded during a recession. I guess someone with enough money to rent a billboard was trying to inspire people.
But is it true?
I looked it up. The United States was in recession from November 1973 to March 1975. So, by the letter of the law, Microsoft was founded a few days after a recession. But the effects of the 1970s stagflation recession did linger beyond March 1975, including the unemployment rate. Unemployment didn’t peak until May 1975, so it’s more than fair to say the economic recovery was uneven. To someone living through April 1975, it would have still felt like a recession. So if someone wants to say Microsoft was founded during a recession, I won’t argue any further.
A second fun fact is Microsoft’s use of venture capital. They did use venture capital, but very little of it. Microsoft only used one venture capital firm, and that firm only owned 6.2 percent of the company. Gates owned 45 percent. He didn’t trust venture capitalists.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.