The year is 1975. Gerald Ford is in the White House, South Vietnam falls, Muhammad Ali defeats Joe Frazier in the "Thrilla in Manila" world championship boxing match, the late-night comedy show NBC's Saturday Night (later called Saturday Night Live) debuts, One Flew Over the Cuckoo's Nest sweeps the Oscars, and Captain & Tennille's "Love Will Keep Us Together" and Glenn Campbell's "Rhinestone Cowboy" top the music charts.
And in New Mexico, Harvard dropout Bill Gates and his high school friend Paul Allen set up a tiny business to write software for a new microcomputer called the Altair 8800. Their first product is the Altair BASIC language. At some point during that year, the company is called Micro-soft, and then MicroSoft, before it is ultimately named Microsoft.
From those modest beginnings, that company went on to help give birth to an entire industry, change the way we live and work, and become one of the largest software companies on the planet, creating countless millionaires, and several billionaires, along the way.
As Microsoft celebrates its 35th anniversary, I've decided to take an idiosyncratic and opinionated look at the best, worst and most notable moments, technologies, products, decisions and people in the company's history. A lot has happened in that time, so if you think I've left anything out or disagree with my choices, share your thoughts in the article comments.
Now, step into the Wayback Machine and read on.
Savviest business deal
In November 1980, Microsoft signed an agreement with IBM to provide an operating system for the still-secret IBM Personal Computer, to be released in 1981. The operating system would ultimately be called PC-DOS, a rebranding of Microsoft's MS-DOS.
Microsoft didn't actually write MS-DOS; instead it paid to have Seattle Computer rewrite its own QDOS (Quick-and-Dirty Operating System) for the purpose, without telling Seattle Computer to whom the operating system would be sold. (Microsoft signed the contract with Seattle Computer one day after signing the contract with IBM.)
QDOS was largely based on the CP/M operating system, owned by Digital Research. Ironically, IBM had originally turned to Digital Research for an operating system for the IBM PC, but the two companies' negotiations broke down. Too bad for Digital Research; Microsoft went on to use its relationship with IBM as a springboard to develop its worldwide dominance in business operating systems.
In July 1987, Microsoft bought Forethought for $14 million in cash. Forethought had developed a presentation program for the Macintosh, initially called Presenter, which it renamed PowerPoint for trademark reasons. PowerPoint later became one of the core programs of Microsoft Office, which for many years has been the dominant office productivity suite.
In August 1985, Microsoft and IBM signed a deal to partner in the development of an advanced operating system called OS/2. The operating system never achieved the widespread popularity of DOS, or later on Windows, and became a bone of contention between Microsoft and IBM.
Microsoft devoted most of its development resources to Windows and Windows NT, rather than OS/2, and ultimately abandoned OS/2 to IBM, which eventually abandoned it as well.
Most surprising investment
In August 1997, longtime Microsoft rival Apple Computer was teetering on the brink of disaster and in desperate need of cash. Microsoft rode to the rescue, buying $150 million in nonvoting Apple stock. As part of the deal, Microsoft agreed to continue to develop Microsoft Office for the Mac, and Apple agreed to bundle Internet Explorer with the Mac OS operating system as the default browser.
Both parts of the agreement have since fallen by the wayside: IE for the Mac is gone, and although Microsoft continues to update Office for the Mac (usually some time after the Windows version is updated), it isn't required to do so.
Most prophetic memo
In February 1976, Gates issued a public letter berating people who were freely distributing tapes of the version of BASIC he and Paul Allen wrote for the Altair, without paying Microsoft for them. Here are excerpts from Gates' "An Open Letter to Hobbyists," sent to the Homebrew Computer Club:
The amount of royalties we have received from sales to hobbyists makes the time spent of Altair BASIC worth less than $2 an hour.
As the majority of hobbyists must be aware, most of you steal your software.... Who cares if the people who work on it get paid?
Who can afford to do professional work for nothing? What hobbyist can put 3 man years into programming, finding all bugs, documenting his product and distribute for free?
Although the term open source hadn't been coined at the time, this letter set the stage for Gates' career-long battle with open source and free software advocates.