History of Microsoft 1975–1985

History of Microsoft 1975–1985

The idea that would spawn Microsoft germinated when Paul Allen showed Bill Gates the January 1, 1975 issue of Popular Electronics that demonstrated the Altair 8800.Allen and Gates saw potential to develop an implementation of the programming language BASIC for the system. Bill Gates called the creators of the new microcomputer, Micro Instrumentation and Telemetry Systems (MITS), offering to demonstrate the implementation in order to win a contract with the company. Allen and Gates had neither an interpreter nor an Altair system, yet in the eight weeks before the demo they developed an interpreter. When Allen flew to Albuquerque, New Mexico to meet with MITS, the interpreter worked and MITS agreed to distribute Altair BASIC. Allen and Gates left Boston, where Allen worked for Honeywell and Gates was enrolled in Harvard, moved to Albuquerque (where MITS was located), and co-founded Microsoft there. Revenues of the company totaled $16,005 by the end of 1976.

Allen came up with the original name of Micro-Soft (a portmanteau of microcomputer and software), as recounted in a 1995 Fortune magazine interview with Allen and Gates. Hyphenated in its early incarnations, on November 26, 1976 the company was registered under that name with the Secretary of State of New Mexico. The company's first international office was founded on November 1, 1978, in Japan, entitled "ASCII Microsoft" (now called "Microsoft Japan"), and on November 29, 1979, the term, "Microsoft" was first used by Bill Gates. On January 1, 1979, the company moved from Albuquerque to a new home in Bellevue, Washington, since it was hard to recruit top programmers to Albuquerque. Shortly before the move, eleven of the then-thirteen employees posed for the iconic staff photo on the right.

Steve Ballmer joined the company on June 11, 1980, and would later succeed Bill Gates as CEO, from January 2000 until February 2014. The company restructured on June 25, 1981, to become an incorporated business in its home state of Washington (with a further change of its name to "Microsoft Corporation, Inc."). As part of the restructuring, Bill Gates became president of the company and chairman of the board, and Paul Allen became Executive Vice President.

Microsoft's early products were different variants of Microsoft BASIC which was the dominant programming language in late 1970s and early 1980s home computers such as Apple II (Applesoft BASIC) and Commodore 64 (Commodore BASIC), and were also provided with early versions of the IBM PC as the IBM Cassette BASIC.

The first hardware product was the Z-80 SoftCard which enabled the Apple II to run the CP/M operating system, at the time an industry-standard operating system for running business software and many compilers and interpreters for several high-level languages on microcomputers. The SoftCard was first demonstrated publicly at the West Coast Computer Faire in March 1980. It was an immediate success; 5,000 cards, a large number given the microcomputer market at the time, were purchased in the initial three months at $349 each and it was Microsoft's number one revenue source in 1980.

The first operating system publicly released by the company was a variant of Unix announced on August 25, 1980. Acquired from AT&T through a distribution license, Microsoft dubbed it Xenix, and hired Santa Cruz Operation in order to port/adapt the operating system to several platforms. This Unix variant would become home to the first version of Microsoft's word processor, Microsoft Word. Originally titled "Multi-Tool Word", Microsoft Word became notable for its concept of "What You See Is What You Get", or WYSIWYG.

Word was also the first application with such features as the ability to display bold text. It was first released in the spring of 1983, and free demonstration copies of the application were bundled with the November 1983 issue of PC World, making it the first program to be distributed on-disk with a magazine.However, Xenix was never sold to end users directly although it was licensed to many software OEMs for resale. It grew to become the most popular version of Unix, measured by the number of machines running it[20] (note that Unix is a multi-user operating system, allowing simultaneous access to a machine by several users). By the mid-1980s Microsoft had gotten out of the Unix business, except for an interest in SCO.

DOS (Disk Operating System) was the operating system that brought the company its real success. International Business Machines (IBM) first approached Microsoft about its upcoming IBM Personal Computer (IBM PC) in July 1980.On August 12, 1981, after negotiations with Digital Research failed, IBM awarded a contract to Microsoft to provide a version of the CP/M operating system, which was set to be used in the IBM PC. For this deal, Microsoft purchased a CP/M clone called 86-DOS from Tim Paterson of Seattle Computer Products for less than US$100,000, which IBM renamed to IBM PC DOS.
Microsoft did not have an operating system when they closed the deal with IBM and IBM had not done their homework. Due to potential copyright infringement problems with CP/M, IBM marketed both CP/M and PC DOS for US$240 and US$40, respectively, with PC DOS eventually becoming the standard because of its lower price.35 of the company's 100 employees worked on the IBM project for more than a year. When the IBM PC debuted, Microsoft was the only company that offered operating system, programming language, and application software for the new computer.

Around 1983, in collaboration with numerous companies, Microsoft created a home computer system, MSX, which contained its own version of the DOS operating system, called MSX-DOS; this became relatively popular in Japan, Europe and South America. Later, the market saw a flood of IBM PC clones after Columbia Data Products successfully cloned the IBM BIOS, quickly followed by Eagle Computer and Compaq. The deal with IBM allowed Microsoft to have control of its own QDOS derivative, MS-DOS, and through aggressive marketing of the operating system to manufacturers of IBM-PC clones Microsoft rose from a small player to one of the major software vendors in the home computer industry. With the release of the Microsoft Mouse on May 2, 1983, Microsoft continued to expand its product line in other markets. This expansion included Microsoft Press, a book publishing division, on July 11 the same year, which debuted with two titles: Exploring the IBM PCjr Home Computer by Peter Norton, and The Apple Macintosh Book by Cary Lu.

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