Microsoft's Bill Gates made an announcement last month that marked the beginning of the end of an era. For over 30 years Gates has maintained an influential voice in shaping the company that he co-founded. It stands today as the worldâ€™s largest software maker.
He said he would end his day-to-day work for Microsoft in 2008 to concentrate his efforts on his charitable foundation - the worldâ€™s largest philanthropy thanks to the billions in personal wealth he accumulated at the company over the years.
The companyâ€™s journey began in 1975 with three employees and has grown to more than 61,000 in over 102 countries and regions.
Describing the computer as Gates' life is an understatement. At an early age he had discovered a passion for computers. His father, William Henry Gates Senior, once told Time magazine about the passion for technology the young Gates and his friend, Microsoft co-founder Paul Allen had.
In a time when personal computers werenâ€™t yet readily available, just getting the time to use an expensive computer was a challenge. The pair offered their programming abilities during the evenings to fix errors on companiesâ€™ computers in exchange for the time to use them.
In his senior year in high school, Gates, Allen and friend Kent Evans formed the Lakeside Programmers Group to write a program for a clientâ€™s payroll system. During the course of their work, a heated argument exploded between Allen and Gates. Allen tried to take on the project by himself but failed. He later convinced Gates to come back so they could finish together. However Gates accepted on one condition.
â€œO.K, but Iâ€™m in charge â€¦ and Iâ€™ll get used to being in charge, and itâ€™ll be hard to deal with me from now on unless Iâ€™m in charge,â€ Gates said, according to Time.
New Era: Personal Computer
Graduating from high school, Gates left for Harvard to study computer science. In his third year, both Allen and Gates saw a magazine cover that would change their life forever.
The January 1975 front cover of the Popular Electronics magazine was a picture of a microcomputer design of Micro Instrumentation and Telemetry Systems (MITS) Altair 8800. To Gates and Allen this was a revolutionary change for the personal computer.
Computers then were expensive, which deterrred many consumers. An Apple I personal computer cost over $600. However the Altair 8800 cost only $360. The lower price for the Altair came about because users had to assemble it themselves.
â€œThis is it â€¦ It's about to begin!â€ said an excited Allen as he waved the magazine at Gates, reported The History of Computing Project.
Gates concurred on the Altair's significance and the pair began thinking what type of software they could write for it. With the introduction of the personal computer, Gates envisioned that every office and home would eventually have one. Thinking strategically he thought of how the computer field would grow.
â€œWe knew that however it got started, that there would be certain standards built-up around it, about how you programmed things,â€ he said. â€œWe wanted to be part of that excitement â€¦ this machine was just the beginning of an era.â€
Gates quit Harvard and focused on writing programming code for the new computer system. Within a few days, Gates boldly stated to MITS that both he and Allen had already written the code for the system, something they hadn't actually done.
Neither Gates nor Allen had ever used or seen the Altair system. However in eight week's time, both Gates and Allen worked diligently to present the code to MITS. Gates worked persistently to devise the code while Allen would test it at a local school.
Finally the big moment came.
According to James Wallace's 1993 book â€˜Hard Drive: Bill gates and the making of the Microsoft Empire,â€™ the program worked perfectly when presented to the management at MITS.
When the meeting concluded, MITS agreed to purchase the code. In its first year, Microsoft made $16,005.
By the end of 1978, as more companies began adopting the Microsoft software, the company's sales surged passed the $1 million mark, enabling it to set up its first overseas operations in Japan.
Sales grew quickly. In 1976, the company had revenues of $22,496 which jumped to $381,715 by the end of 1977, a 1700 percent jump.
In 1977, Microsoft soon broke off its relationship with MITS and introduced its own software in 1977 which was widely adopted. Some of Microsoft's clients then include large firms such as Citibank and General Electric.
The breakthrough, which made Microsoft a household name, came in 1981. International Business Machine (IBM) Corp. developed its first personal computer, which like the Altair 8880 revolutionized the industry. The new personal computer allowed peripherals devices to be added on.
Microsoft negotiated with IBM to write the programming code. Within months of launching the new computer in late 1981, clones of the hardware appeared. Under pressure from Microsoft, IBM agreed to let the Redmond firm obtain the exclusive legal right to distribute MS-DOS. MS-DOS became the new operating system for the PC and clones.
MS-DOS, used by over 150 million PCs, was the key for Microsoft to solidify its position in the software industry. Through adaptation of the program to fit different operating systems and expanding its operation globally it became a behemoth unmatched by any of its competitors.
The key was its compatibility with different hardware configuratons. Within 16 months of launching the first version of MS-DOS, the licence was extended to 50 hardware manufacturers.
Microsoft's branch in Japan was incorporated into a private company and the software company also expanded into England. As years went by, new branches opened, allowing Microsoft to quickly achieved market share in the world software industry.
To maintain its leadership position, Microsoft never kept still.
While known for its operating system, Microsoft also branched out into business programs. In 1982 Microsoft introduced an electronic spreadsheet known as Multiplan. In 1983, Microsoft Works version 1.1 was introduced to customers via free demonstration software. As years went by the programs were refined and new applications were added on.
Even Microsoft knew it had to diversify from its best selling product MS-DOS. In 1983, Microsoft developed an operating system known as XENIX that allowed multi-user capabilities to be used in the personal computer.
By 1984, Time Magazine reported that while over 1,000 companies were making programs, the Redmond Washington-based company led them all with projected a revenue of $100 million for the year.
In 1985, the software giant launched Microsoft Windows. It was an operating system with a graphic user interface (GUI), allowing the user to connect interactively with the computer. Another feature was the system allowed the use of several programs at the same time without quitting or restarting.
The company decided to go public in 1985. At the close of a frenzied first day of trading, its stock rose 25 percent to $28. By the end of 1986, revenue was approaching $200 million annually and company had over 1,400 employees.