Gates became interested in computer programming when he was 13, during the era of giant mainframe computers. His school held a fund raiser to purchase a teletype terminal so students could use computer time that was donated by General Electric. Using this time, Gates wrote a tic tac toe program using BASIC, one of the first computer languages. Later he created a computer version of Risk, a board game he liked in which the goal is world domination. At Lakeside, Bill met Paul Allen, who shared his interest in computers. Gates and Allen and two other students hacked into a computer belonging to Computer Center Corporation (CCC) to get free computer time but were caught. After a period of probation, they were allowed back in the computer lab when they offered to fix glitches in CCCs software. At age 17, Gates and Allen were paid $20,000 for a program called Traf O Data that was used to count traffic.
In early 1973, Bill Gates served as a congressional page in the U.S. House of Representatives. He scored 1590 out of 1600 on the SAT and was accepted by Harvard University. Steve Ballmer, who became CEO of Microsoft after Bill retired, was also a Harvard student. Meanwhile, Paul Allen dropped out of Washington College to work on computers at Honeywell Corporation and convinced Gates to drop out of Harvard and join him in starting a new software company in Albuquerque, New Mexico. They called it Micro Soft. This was soon changed to Microsoft, and they moved their company to Bellevue, Washington.
In 1980, IBM, one of the largest technology companies of the era, asked Microsoft to write software to run their new personal computer, the IBM PC. Microsoft kept the licensing rights for the operating system (MS DOS) so that they earned money for every computer sold first by IBM, and later by all the other companies that made PC computers. Microsoft grew quickly from 25 employees in 1978 to over 90,000 today. Over the years, Microsoft developed many new technologies and some of the worlds most popular software and products such as Word and Power Point. Although some have criticized Gates for using questionable business practices, he built Microsoft into one of the largest companies in the world. He has been described as brilliant but childlike, driven, competitive, intense, fun, but lacking in empathy.
Bill Gates is one of the richest men in the world. In 2012, his $61 billion dollars in assets made him the worlds second richest man according to Forbes Magazine. In 2006, Gates announced that he would cut back his involvement at Microsoft to spend more time on philanthropy and his foundation. The Bill and Melinda Gates Foundation supports many causes including the quest to eradicate Polio, fighting AIDS, malaria and tuberculosis; providing vaccinations for children; and even reinventing the toilet among many other things.
Bill had a very close relationship with his mother, Mary, who after a brief career as a teacher devoted her time to helping raise the children and working on civic affairs and with charities. She also served on several corporate boards, including those of the First Interstate Bank in Seattle (founded by her grandfather), the United Way and International Business Machines (IBM). She would often take Bill along when she volunteered in schools and at community organizations.Bill was a voracious reader as a child, spending many hours pouring over reference books such as the encyclopedia. Around the age of 11 or 12, Bills parents began to have concerns about his behavior. He was doing well in school, but he seemed bored and withdrawn at times. His parents worried he might become a loner. Though they were strong believers in public education, when Bill turned 13, they enrolled him at Seattles Lakeside School, an exclusive preparatory school. He blossomed in nearly all his subjects, excelling in math and science, but also doing very well in drama and English.While at Lakeside School, a Seattle computer company offered to provide computer time for the students. The Mothers Club used proceeds from the schools rummage sale to purchase a teletype terminal for students to use. Bill Gates became entranced with what a computer could do and spent much of his free time working on the terminal. He wrote a tic tac toe program in BASIC computer language that allowed users to play against the computer.
It was at Lakeside School where Bill met Paul Allen, who was two years his senior. The two became fast friends, bonding on their common enthusiasm over computers, even though they were very different. Allen was more reserved and shy. Bill was feisty and at times combative. They both spent much of their free time together working on programs. Occasionally, they disagreed and would clash over who was right or who should run the computer lab. On one occasion, their argument escalated to the point where Allen banned Gates from the computer lab. On another occasion, Gates and Allen had their school computer privileges revoked for taking advantage of software glitches to obtain free computer time from the company that provided the computers. After their probation, they were allowed back in the computer lab when they offered to debug the program. During this time, Gates developed a payroll program for the computer company the boys hacked into, and a scheduling program for the school.In 1970, at the age of 15, Bill Gates went into business with his pal, Paul Allen. They developed Traf o Data, a computer program that monitored traffic patterns in Seattle, and netted $20,000 for their efforts. Gates and Allen wanted to start their own company, but Gatess parents wanted him to finish school and go on to college where they hoped he would work to become a lawyer.Bill Gates graduated from Lakeside in 1973. He scored 1590 out of 1600 on the college SAT test, a feat of intellectual achievement that for several years he boasted about when introducing himself to new people.
Microsoft (Gates and Allen dropped the hyphen in less than a year) started off on shaky footing. Though their BASIC software program for the Altair computer netted the company a fee and royalties, it wasnt meeting their overhead. Microsofts BASIC software was popular with computer hobbyists who obtained pre market copies and were reproducing and distributing them for free. According to Gatess later account, only about 10 percent of the people using BASIC in the Altair computer had actually paid for it. At this time, much of the personal computer enthusiasts were people not in it for the money. They felt the ease of reproduction and distribution allowed them to share software with friends and fellow computer enthusiasts. Bill Gates thought differently. He saw the free distribution of software as stealing, especially when it involved software that was created to be sold.In February of 1976, Gates wrote an open letter to computer hobbyists saying that continued distribution and use of software without paying for it would prevent good software from being written. In essence, pirating software would discourage developers from investing time and money into creating quality software. The letter was unpopular with computer enthusiasts, but Gates stuck to his beliefs and would use the threat of innovation as a defense when faced with charges of unfair business practices.
Gates had a more acrimonious relationship with MITS president Ed Roberts, often resulting in shouting matches. The combative Gates clashed with Roberts on software development and the direction of the business. Roberts considered Gates spoiled and obnoxious. In 1977, Roberts sold MITS to another computer company, and went back to Georgia to enter medical school and become a country doctor. Gates and Allen were on their own. The pair had to sue the new owner of MITS to retain the software rights they had developed for Altair.Microsoft wrote software in different formats for other computer companies and, at the end of 1978, Gates moved the companys operations to Bellevue Washington, just east of Seattle. Bill Gates was glad to be home again in the Pacific Northwest, and threw himself into his work. All 25 employees of the young company had broad responsibilities for all aspects of the operation, product development, business development, and marketing. With his acumen for software development and a keen business sense, Gates placed himself as the head of Microsoft, which grossed $2.5 million in 1978. Gates was only 23.
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.
In November 1985, Bill Gates and Microsoft launched Windows; nearly two years after his announcement. Visually the Windows system looked very similar to the Macintosh system Apple Computer Corporation had introduced nearly two years earlier. Apple had earlier given Microsoft full access to their technology while it was working on making Microsoft products compatible for Apple computers. Gates had advised Apple to license their software but they ignored the advice, being more interested in selling computers. Once again, Gates took full advantage of the situation and created a software format that was strikingly similar to the Macintosh. Apple threatened to sue and Microsoft retaliated, saying it would delay shipment of its Microsoft compatible software for Macintosh users. In the end, Microsoft prevailed in the courts because it could prove that while there were similarities in how the two software systems operated, each individual function was distinctly different.In 1986, Bill Gates took Microsoft public with an initial public offering (IPO) of $21 per share. Gates held 45 percent of the companys 24.7 million shares and became an instant millionaire at age 31. Gatess stake at that time was $234 million of Microsofts $520 million. Over time, the companys stock increased in value and split numerous times. In 1987, Bill Gates became a billionaire when the stock raised to $90.75 a share. Since then, Gates has been at the top, or at least near the top, of Forbes annual list of the top 400 wealthiest people in America. In 1999, with stock prices at an all time high and the stock splitting eight fold since its IPO, Gatess wealth briefly topped $101 billion.
et, Bill Gates never felt totally secure about the status of his company. Always having to look over his shoulder to see where the competition was, he developed a white hot drive and competitive spirit. Gates expected everyone in the company to have the same drive and dedication. One story goes that one of Gatess assistants had come to work early to find someone sleeping under a desk. She considered calling security or the police when she discovered it was Gates.Bill Gatess intelligence allowed him to be able to see all sides of the software industry product development and corporate strategy. When analyzing any corporate move, he would develop a profile of all the possible cases and run through them, asking questions about anything that could possibly happen. His confrontational management style became legend as he would challenge employees and their ideas to keep the creative process going. An unprepared presenter would hear, Thats the stupidest thing Ive ever heard! from Gates. But this was as much a test of the rigor of the employee as it was Gatess passion for his company. He was constantly testing the people around him to see if they were really convinced of their ideas.
Outside the company, Bill Gates was gaining a reputation as a ruthless competitor. Several tech companies led by IBM began to develop their own operating system called OS/2 to replace MS DOS. Rather than give into the pressure, Gates pushed ahead with the Windows software, improving its operation and expanding its uses. In 1989, Microsoft introduced Microsoft Office which bundled office productivity applications such as Microsoft Word and Excel into one system that was compatible with all Microsoft products. The applications were not as easily compatible with OS/2. Microsofts new version of Windows sold 100,000 copies in just two weeks and OS/2 soon faded away. This left Microsoft with a virtual monopoly on operating systems for PCs. Soon the Federal Trade Commission began to investigate Microsoft for unfair marketing practices.Microsoft faced a string of Federal Trade Commission and Justice Department investigations throughout the 1990s. Some related allegations that Microsoft made unfair deals with computer manufactures who installed the Windows operating system on their computers. Other charges involved Microsoft forcing computer manufactures to sell Microsofts Internet Explorer as a condition for selling the Windows operating system with their computers.
At one point, Microsoft faced a possible break up of its two divisions operating systems and software development. Microsoft defended itself, harking back to Bill Gatess earlier battles with software piracy, and proclaiming that such restrictions were a threat to innovation. Eventually, Microsoft was able to find a settlement with the federal government to avoid a breakup. Through it all, Gates found some inventive ways to deflect the pressure with light hearted commercials and public appearances at computer trade shows posing as Star Treks Mr. Spock. Gates continued to run the company and weather the federal investigations through the 1990s.
Bill and Melinda took some time off in 1995 to travel to several countries and get a new perspective on life and the world. In 1996, their first daughter, Jennifer, was born. A year later, Gates moved his family into a 55,000 square foot, $54 million house on the shore of Lake Washington. Though the house serves as a business center, it is said to be a very cozy home for the couple and their three children.
In addition to all the accolades of being one of the most successful and richest businessmen in the history of the world, Bill Gates has also received numerous awards for philanthropic work. Time magazine named Gates one of the most influential people of the 20th century. The magazine also named Gates, his wife Melinda, and rock band U2s lead singer Bono as the 2005 Persons of the Year.Gates also holds several honorary doctorates from universities throughout the world and an honorary Knight Commander of the Order of the British Empire by Queen Elizabeth II. In 2006, Gates and his wife were awarded the Order of the Aztec Eagle by the Mexican government for their philanthropic work throughout the world in the areas of health and education.In February 2014, Gates announced that he would be stepping down as chairman of Microsoft in order to move into a new position as technology adviser. In addition to Gatess transition, it was reported that longtime Microsoft CEO Steve Ballmer would be replaced by 46 year old Satya Nadella.
Despite his love and obvious aptitude for computer programming, and perhaps because of his fathers influence, Gates entered Harvard in the fall of 1973. By his own admission, he was there in body but not in spirit, preferring to spend his time playing poker and video games rather than attending class. All that changed in December 1974, when Allen showed Gates a magazine article about the worlds first microcomputer, the Altair 8800. Seeing an opportunity, Gates and Allen called the manufacturer, MITS, in Albuquerque, New Mexico, and told the president they had written a version of the popular computer language BASIC for the Altair. When he said hed like to see it, Gates and Allen, who actually hadnt written anything, starting working day and night in Harvards computer lab. Because they did not have an Altair to work on, they were forced to simulate it on other computers. When Allen flew to Albuquerque to test the program on the Altair, neither he nor Gates was sure it would run. But run it did. Gates dropped out of Harvard and moved with Allen to Albuquerque, where they officially established Microsoft. MITS collapsed shortly thereafter, but Gates and Allen were already writing software for other computer start ups including Commodore, Apple and Tandy Corp.
The duo moved the company to Seattle in 1979, and thats when Microsoft hit the big time. When Gates learned IBM was having trouble obtaining an operating system for its new PC, he bought an existing operating system from a small Seattle company for $50,000, developed it into MS DOS (Microsoft Disk Operating System), then licensed it to IBM. The genius of the IBM deal, masterminded by Gates, was that while IBM got MS DOS, Microsoft retained the right to license it to other computer makers.Much as Gates had anticipated, after the first IBM PCs were released, cloners such as Compaq began producing compatible PCs, and the market was soon flooded with clones. Like IBM, rather than produce their own operating systems, the cloners decided it was cheaper to purchase MS DOS off the shelf. As a result, MS DOS became the standard operating system for the industry, and Microsofts sales soared from $7 million in 1980 to $16 million in 1981.
Microsoft expanded into applications software and continued to grow unchecked until 1984, when Apple introduced the first Macintosh computer. The Macintoshs sleek graphical user interface (GUI) was far easier to use than MS DOS and threatened to make the Microsoft program obsolete. In response to this threat, Gates announced that Microsoft was developing its own GUI based operating system called Windows. Gates then took Microsoft public in 1986 to generate capital. The IPO was a roaring success, making Gates one of the wealthiest people in the country overnight.When Windows was finally released in 1985, it wasnt exactly the breakthrough Gates had predicted. Critics claimed it was slow and cumbersome. Apple wasnt exactly pleased either. They saw Windows as a rip off of the Macintosh operating system and sued. The case would drag on until the mid 1990s, when the courts finally decided that Apples suit had no merit.Meanwhile, Gates worked on improving Windows. Subsequent versions of the program ran faster and froze less frequently. Third party programmers began developing Windows based programs, and Microsofts own applications became hot sellers. By 1993, Windows was selling at a rate of 1 million copies per month and was estimated to be running on nearly 85 percent of the worlds computers.
Microsoft solidified its industry dominance in the mid 1990s by combining Windows with its other applications into suites and persuading leading computer makers to preload their software on every computer they sold. The strategy worked so well that by 1999 Microsoft was posting sales of $19.7 billion, and Gates personal wealth had grown to a phenomenal $90 billion.But with success has come scrutiny. Microsofts competitors have complained that the company uses its operating system monopoly to retard the development of new technology a claim Gates soundly refutes. Nevertheless, the U.S. Justice Department filed an antitrust lawsuit against the company in 1998 over its practice of bundling software with Windows.
In November 1999, a U.S. District Court ruled that Microsoft indeed had a monopoly in the market for desktop computer operating systems. The court also found that Microsoft engaged in tactics aimed at snuffing out any innovation that threatened its dominance of the multibillion dollar computer industry. A federal mediator was appointed to oversee voluntary settlement talks between the government and the software giant. (As of press time, a settlement had not yet been reached.)Attempting to explain his tremendous success, industry experts have pointed out that there are really two Bill Gateses. One is a consummate computer geek who can hack code with the best of them. The other is a hard driven businessman who, unlike most of his fellow Silicon Valley superstars, took readily to commerce and has an innate instinct for the marketplace. This combination enabled Gates to see what his competitors could not. While they were focusing on selling software, Gates was focusing on setting standards, first with MS DOS and later with Windows. The standards he helped set shaped the modern computer industry and will continue to influence its growth well into the next century.