The first microcomputer, the Altair 8800, was like a French bulldog. That is, it was ugly, expensive, and not all that bright, but people loved it. The Altair didn’t even have a display, just LED’s that lit up. Most significantly, it served as the inspiration for a small number of future computer entrepreneurs.

The cover of the January 1975 issue of Popular Electronics featured the Altair 8800, the “World’s First Microcomputer,” created by Ed Roberts and his company, MITS. Roberts, an engineer, founded MITS to sell rockets. As the space race fizzled, so too did interest in rocketry and he pivoted to a hot commodity, calculators. Eventually, a price war broke out in calculators so he used the general-purpose Intel 8080 chip, that powered many calculators, to create a first general-purpose home computer.

College students Bill Gates and Paul Allen wrote a BASIC programming language for the popular machine. Gates hacked it out on paper tape. On their way to visit Roberts, they need a company name. Microcomputer Software? Too long. Microsoft. Roberts was happy to sell the program, though he may have been happy to sell anything that ran on his clunky invention.

Lifelong California friends Steve Jobs and Steve Wozniak hung out at the Homebrew Computer Club, for do-it-yourself computer enthusiasts. Jobs worked at Atari and Wozniak at HP. Everybody there noticed the MITS. The two friends were eventually inspired to build their own computer company, Apple.

Roberts eventually sold MITS for $6 million and used the funds to buy a farm then attend medical school. The man called “the father of the personal computer” never again took an interest in computers.

Microcomputer Operating System (CP/M)

Operating systems tie the parts of a computer together, transforming it from silicon into something we can interact and use.

Gary Kildall

In 1973, Gary Kildall wrote the first widely used microcomputer operating system, CP/M. It gained popularity over the years. Kildall had a Ph.D. in computer science of Univ. WI. He created a simulator for the Intel 4004 and consulted with Intel, in the (then) three-person software group, creating the first microcomputer compiler for the Intel 8008, PL/M.

It took a year but Kildall eventually built a controller for the disk, computer, and memory ー a full operating system ー calling it control program/monitor, CP/M. That evolved in basic input/output system, BIOS, that still exists today.

There were many knock-offs of Kildall’s operating system. One was called “Quick DOS,” or QDOS for short (DOS stands for Disk Operating System). Kildall had a thriving business and seldom bothered hiring lawyers to shut down the small copycats. Most computer manufacturers preferred the original material and were unwilling to violate copyrights.

Working on the IBM-PC in stealth, IBM approach Kildall in the late 1970’s to license his operating system. Dorthy, Kildall’s wife, was running the business. When IBM arrived for discussions, she refused to sign a one-sided non-disclosure, concerned it would impede her ability to work with other companies that were buying their software. IBM left.


Kildall had been working with Microsoft, which created programming languages. Kildall had a theory that one company should be dominant in operating systems, another should focus on programming languages and a third or more on user software (ex: word processors). Each should have multiple competitors, he believed, but they should not break through their silos. Keeping them separate, he reasoned, would prevent monopolization and stagnation of technological progress. Microsoft was aware of both Kildall and his theory.

After IBM failed to make progress on their operating system, the lead engineer for the IBM PC suggested bringing Microsoft’s Bill Gates, who they’d been working with for programming languages. Lead IBM engineer Philip “Don” Estridge personally liked Gates – he worked with his mother on a charity board – and Gates’ father was a prominent attorney. Gates had already signed IBM’s nondisclosure.

IBM asked Gates if he could produce an operating system. Gates agreed, despite that neither he nor anybody at Microsoft had ever built an operating system. He then quickly contacted Tim Paterson, the “inventor” of QDOS, and licensed it for $25,000 (later adding another $50,000 and employing Paterson as an early Microsoft employee).

Licensing Wars

Microsoft’s licensed QDOS to IBM for little money but reserved the right to sell the software to other computer makers as Microsoft DOS, or MS-DOS.

IBM eventually also licensed CP-M, agreeing to allow buyers to choose. However, IBM sold CP-M computers at a much higher price. Since the operating systems did the same thing – because QDOS was a copy of CP-M – buyers purchased the less expensive MS-DOS. More importantly, Microsoft went on to sell countless copies of MS-DOS to other computer makers, since they knew that was shipping with the reference computer, the IBM-PC.

Microsoft eventually evolved MS-DOS into Microsoft Windows. Kildall eventually sold his business to Novell and died, about three years later, in a bar fight.

Kildall’s children, in a memoir written from an autobiography he died, wrote:

“Gary viewed computers as learning tools rather than profit engines. His career choices reflect a different definition of success, where innovation means sharing ideas, letting passion drive your work and making source code available for others to build upon. His work ethic during the 1970s resembles that of the open-source community today.”

Gary Kildall