It took some time before Microsoft managed to break away from the influence of MITS and not before Bill Gates became very angry at the way his beloved Basic was being pirated by all and sundry.
In the end most of Microsoft's early revenues came not from selling individual copies of Basic to enthusiasts but from making custom ROMs for the huge number of home computers that were being produced. ROMs are much more difficult to pirate and so a steady flow of cash became available and Microsoft just grew and grew.
This isn't to say that Microsoft just drifted along picking up projects at random. You only have to look at its record of early success to see that there was a mind that excelled at strategy behind it. When most of Microsoft's cash came from languages they licensed Unix to be resold as Xenix.
Even then they didn't do the conversion work but sub-contracted to SCO, a small west coast firm. When the Apple II became a success and they had very little code for its 6502 processor they designed a plug-in Z80 card for it and licensed CP/M. Incidentally this represents one of Microsoft's few forays into the hardware world.
When asked to do the operating system for the new IBM PC, Microsoft bought outright an operating system from Seattle Computer Products that would save a year in development time.
At the time IBM thought that they were getting sole rights to the OS called PCDOS, and indeed they were, but Microsoft also retained the right to sell a version of PCDOS called MS-DOS. At the very start there was a perception that MS-DOS was some how not quite PCDOS - but this soon faded as cheap PC clones became available all running MS-DOS.
The move not only made MS-DOS the industry standard it also made sure that IBM didn’t have the stranglehold on the industry that it would have had if Microsoft had sold MS-DOS outright. PC-DOS was also sold fairly cheaply compared to the other two operating systems that IBM offered - UCSD P, and CP/M 86. Gates was very clear that more or less giving it away was well worth it in terms of licensing deals to come!
When IBM attempted to gain a stranglehold on the market by reinventing the PC but this time with proprietary hardware it also wanted some proprietary software but strangely it still asked Microsoft to develop it in partnership.
The difference was that IBM had a bigger share and its OS/2 was going to be different from Microsoft’s OS/2. As things turned out both the PS/2 and OS/2 failed and Microsoft’s Windows became the number one operating system. Gates claims to have tried to interest IBM in Windows but his attempts fell on deaf ears.
“In May 1990, the last weeks before the release of Windows 3.0, we tried to reach an agreement with IBM for it to license Windows to use on its own personal computers. We told IBM that we thought that although OS/2 would work over time, for the moment Windows was going to be a success and OS/2 would find its niche slowly.”
Although the split with IBM caused them to produce their own version of OS/2 to compete with Windows, Microsoft made money on every copy of OS/2 IBM sold! When OS/2 had to be Windows compatible to stand a chance of survival Microsoft moved the goal posts by releasing Windows 3.1 and removing real mode support.
Bill Gates, Programmer
Time and time again you can see the evidence of fancy foot work and the closer you look the fancier it gets! It all has the mark of a programmer's mind set to the complex task of managing a business.
If you read about Bill Gates's character you will most often find him described as intelligent, arrogant and prone to temper tantrums. Coming from a well-to-do background he fits the mould of the spoilt, over-privileged child who never quite managed to grow up. He certainly looked the part of the awkward teenager, a fact that many top company executives have commented on and initially found difficult to deal with.
A common problem seems to have been misidentifying Gates as the office junior rather than the boss! They also comment in many cases that Gates then went on to impress them with his confidence and grasp of the business in hand.
A strange mixture.
The most important feature of Bill Gates has to be his powerful intelligence coupled with his overwhelming desire to win.
There is no question that he is very intelligent - his early school success, the quality of the programs with which he has been associated and the number of times Microsoft managed to win irrespective of chance factors are all a testimony to this. He also values people with whom he can have "high band width" communication and this is perhaps one the main reasons that Microsoft worked as if it were a single unit more than any other company.
His addiction to winning is proved by his appetite for playing games - poker, go - and fast cars. Even catching a plane for a business appointment was turned into a competitive game - how late could you leave the Microsoft offices and still catch the plane!
While it is tempting to compare Gates with Steve Jobs of Apple - they were born in the same year and were both founders of major competing companies - the comparison quickly turns into a contrast.
About the only similarities seem to be their tendency to have temper tantrums, although Bill Gates seems even to have managed these to good effect! The key difference is that Gates is a techie, an analytical thinker, whereas Jobs worked more by impressions and hunches than anything else.