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The Founding of Microsoft – A Brief History

written by: •edited by: Rebecca Scudder•updated: 12/8/2009

How did Harvard student Bill Gates come to drop out of university to form a two-man software company in 1975 that just a few years later would become the largest software manufacturer on the planet?

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    How Did Bill Gates Form Microsoft?

    Microsoft is the world’s most famous computer software manufacturer, responsible for powering 1 billion personal computers (according to estimates in 2007) with its Windows operating systems as well as providing word processing, spreadsheet, presentation, email, and database software to around 500 million home and business customers around the world.

    Founded by Bill Gates in 1975, Microsoft became a public company in 1986, an event that is seen as the springboard for many of the developments seen since; the first icon driven user interface version of the operating system (Windows 3.0) and the first Microsoft Office bundle followed soon afterwards.

    Just how did Bill Gates start up a company that has become such a massive success?

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    Founding Microsoft

    An image of the young Bill Gates is used to advertise Microsoft Visual Studio In the early 1970s, there were no home computers. Businesses and universities took advantage of vast mainframes for data processing tasks, while typewriters dominated in offices.

    Technologically speaking, it was a different world. Although the microprocessor had been invented and marketed by Intel several years previously, the wide range of possibilities for the device were only just becoming apparent. As such, a small group of hobbyist companies started building very basic (by our standards) computers and selling them either complete or as kits through magazine advertisements.

    The release of the Altair 8800 mail order micro was the spark that prompted Bill Gates to quit Harvard and instead work on the development of computer software. Within months of the Altair 8800 being released, Gates and fellow dropout Paul Allen were working for its manufacturers MITS; just a few months later in November 1975 they founded Microsoft in Albuquerque, New Mexico.

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    Microsoft and the IBM PCs

    Gates had in fact contacted MITS to arrange a demo of interpreter software that would add a layer of added functionality to the Altair 8800 – unknown to MITS, the software didn’t exist, but just 6 weeks later the demo took place, testament to Gates’ early understanding of both business and the requirements of computer software.

    During these early days, Microsoft programmed a variety of operating systems for various computers, such as the Commodore BASIC found on the C64, and CP/M. A version of CP/M was prepared for computer giant IBM’s new range of personal computers in 1981 – the PC would ship with DOS (later to become MS-DOS) and Microsoft’s future was further assured when they aggressively marketed the Disk Operating System to the variety of companies attempting to cash in on IBM’s new market with their own PCs.

    In the space of ten years, Microsoft grew from a couple of dropouts programming in a bedroom to the largest software company in the world!