The Rise of Microsoft
Gatess acumen for not only software development but also business operations put him in the position of leading the company and working as its spokesperson. He personally reviewed every line of code the company shipped, often rewriting code when he saw it necessary. As the computer industry began to grow with companies like Apple, Intel, and IBM developing hardware and components, Bill was continuously out on the road touting the merits of Microsoft software applications. He often took his mother with him. Mary was highly respected and well connected with her membership on several corporate boards including IBM. It was through Mary that Bill Gates met the CEO of IBM.In November 1980, IBM was looking for software that would operate their upcoming personal computer (PC) and approached Microsoft. Legend has it that at the first meeting with Bill Gates someone at IBM mistook him for an office assistant and asked him to serve coffee. Gates did look very young, but he quickly impressed IBM, convincing them that he and his company could meet their needs. The only problem was that Microsoft had not developed the basic operating system that would run IBMs new computers. Not to be stopped, Gates bought an operating system that was developed to run on computers similar to IBMs PC. He made a deal with the softwares developer, making Microsoft the exclusive licensing agent and later full owner of the software but not telling them of the IBM deal. The company later sued Microsoft and Gates for withholding important information. Microsoft settled out of court for an undisclosed amount, but neither Gates nor Microsoft admitted to any wrong doing.
Gates had to adapt the newly purchased software to work for the IBM PC. He delivered it for a $50,000 fee, the same price he had paid for the software in its original form. IBM wanted to buy the source code, which would have given them the information to the operating system. Gates refused, instead proposing that IBM pay a licensing fee for copies of the software sold with their computers. Doing this allowed Microsoft to license the software they called MS DOS to any other PC manufacturer, should other computer companies clone the IBM PC, which they soon did. Microsoft also released software called Softcard, which allowed Microsoft BASIC to operate on Apple II machines.Between 1978 and 1981, Microsofts growth exploded, and staff increased from 25 to 128. Revenue also shot up from $4 million to $16 million. In mid 1981 Gates and Allen incorporated Microsoft, and Gates was appointed president and chairman of the board. Allen was named executive vice president.
By 1983, Microsoft was going global with offices in Great Britain and Japan, and with 30 percent of the worlds computers running on its software. But 1983 also brought news that rocked Microsoft to its very foundation. Paul Allen was diagnosed with Hodgkins disease. Though his cancer went into remission a year later with intensive treatment, Allen resigned from company that same year. Rumors abound as to why Allen left Microsoft. Some say Bill Gates pushed him out, but many say it was a life changing experience for Allen and he saw there were other opportunities that he could invest his time in.