WEBVTT - The Microsoft Story Part One 0:00:04.280 --> 0:00:07.600 Get in touch with technology with tech Stuff from Stuff 0:00:07.840 --> 0:00:15.320 dot Com. Everyone, and welcome to tech Stuff. I'm Jonathan Strickland, 0:00:15.400 --> 0:00:17.880 and and we're going to do another one of our 0:00:18.040 --> 0:00:20.439 episodes where we start to focus on a company. This 0:00:20.520 --> 0:00:23.000 will be at least a two partner because the company 0:00:23.000 --> 0:00:25.479 has been around well since the mid seventies, so they're 0:00:25.600 --> 0:00:28.080 kind of important. Yeah, it made some big contributions to 0:00:28.120 --> 0:00:30.440 the world of tech as it turns out. We're talking 0:00:30.480 --> 0:00:34.880 of course about Microsoft and UM. To really look at 0:00:34.920 --> 0:00:38.080 the origins of Microsoft, we're gonna go back quite a bit, 0:00:38.200 --> 0:00:42.360 back to nineteen fifty five when on October a certain 0:00:42.400 --> 0:00:47.000 Bill Gates was born to a wealthy family in Washington, UM. 0:00:47.920 --> 0:00:51.479 He came from a not so humble background. He actually 0:00:51.520 --> 0:00:54.680 was born into a very well to do family, UM, 0:00:54.800 --> 0:00:57.680 and that gave him certain advantages. He was able to 0:00:57.960 --> 0:01:03.440 take advantage of a pretty pretty interesting education. He went 0:01:03.480 --> 0:01:06.160 to Lakeside, which was a private school, and that's where 0:01:06.200 --> 0:01:08.959 he met Paul Allen, who would also be become important 0:01:09.000 --> 0:01:12.160 to this company. Yea Paul Allen who was two years 0:01:12.160 --> 0:01:14.800 older than Bill Gates. So it was interesting that these 0:01:14.800 --> 0:01:17.160 two struck up a friendship. They were separated by a 0:01:17.200 --> 0:01:20.280 couple of years in age and in grade, but both 0:01:20.319 --> 0:01:24.800 of them became fascinated with a machine at the school. 0:01:24.880 --> 0:01:28.400 It's a teletype machine. And you may, oh, my, Drew, 0:01:28.440 --> 0:01:30.800 geese have forgotten what these machines are like. Things changing, 0:01:30.840 --> 0:01:35.240 so scory and everyone quick to forget. But teletype machine. Yeah. Essentially, 0:01:35.319 --> 0:01:38.120 it was using telephone lines and you could send information 0:01:38.160 --> 0:01:41.800 across and it would type out the information. And they 0:01:41.840 --> 0:01:46.160 began to um kind of figure out ways of playing 0:01:46.200 --> 0:01:49.320 with it and learning how it worked and manipulating it. Supposedly, 0:01:49.400 --> 0:01:52.640 according to Wire, the pair exhausted the school's annual budget 0:01:52.680 --> 0:01:55.920 for time on this computer within a matter of weeks, 0:01:56.160 --> 0:01:59.680 and they soon started to um work with a with 0:01:59.760 --> 0:02:04.040 a local computer contract center to um find software bugs 0:02:04.080 --> 0:02:06.480 in exchange for extra time on the computers. Interesting, so 0:02:06.520 --> 0:02:08.320 they like the computers so much that they would work 0:02:08.400 --> 0:02:12.079 in orders for them to be able to continue to them. 0:02:13.120 --> 0:02:17.000 In nineteen seventy two, according to the BBC, Gates used 0:02:17.000 --> 0:02:21.400 the teletype machine to manipulate school schedules for a purpose 0:02:21.480 --> 0:02:25.200 that I find incredibly creepy. It was to to try 0:02:25.240 --> 0:02:28.480 to find the get the right girls a k a. 0:02:28.560 --> 0:02:30.840 The girls that he thought were kind of pretty into 0:02:30.880 --> 0:02:33.560 his classes with him. Yeah. Essentially, you know, he was 0:02:33.600 --> 0:02:37.400 just anyone who had who was wanting certain classes. He 0:02:37.440 --> 0:02:40.720 wanted to make sure that that the right mix of 0:02:40.760 --> 0:02:43.160 people were in the classes. He was in the right 0:02:43.200 --> 0:02:47.359 makes of people, being all the cute girls social engineer. Yeah, 0:02:47.800 --> 0:02:52.839 little creepy, little creepy. However, in ninety three, he yeah, 0:02:52.880 --> 0:02:56.840 he graduated, graduated, began to attend Harvard, and that's where 0:02:56.840 --> 0:02:58.840 he met someone else who would become really important in 0:02:58.840 --> 0:03:02.040 the Microsoft story, Mr Steve Balmer. They lived down the 0:03:02.040 --> 0:03:04.720 hall from each other in the same dormitory. Right, So 0:03:05.400 --> 0:03:09.280 then we move over into nineteen seventy four, moving right along, 0:03:09.919 --> 0:03:14.480 and uh, that's when the magazine Popular Electronics published its 0:03:14.639 --> 0:03:20.400 article about the Altair hundred. It was called the world's 0:03:20.440 --> 0:03:23.840 first micro computer kit to rival commercial models. Um, and 0:03:23.880 --> 0:03:25.960 yeah it was. It was talking about the Altaire and 0:03:26.080 --> 0:03:29.880 Intel's U four zeroes Ero four chip. And yeah, this 0:03:30.000 --> 0:03:33.520 was this was the dawning of the personal computer age. 0:03:33.560 --> 0:03:36.520 The Altair was, of course a kit that you could 0:03:36.720 --> 0:03:40.400 order and then build your own computer. Now, this was 0:03:41.040 --> 0:03:45.520 incredibly early on, so micro computers at this point were 0:03:45.600 --> 0:03:48.440 pretty primitive and there there wasn't a whole lot of 0:03:48.440 --> 0:03:51.680 software that you can run on them, because, uh, up 0:03:51.760 --> 0:03:56.000 until this point, computers were really pretty much only in 0:03:56.280 --> 0:04:00.920 research facilities, in in large companies that needed databases. They weren't. Again, 0:04:00.960 --> 0:04:02.400 you kind of had to rent time on them if 0:04:02.400 --> 0:04:04.640 you're going to really use them on a personal level, 0:04:04.680 --> 0:04:07.680 all right, and there wasn't much to do on a 0:04:07.720 --> 0:04:10.520 personal level. I mean, these were really machines meant to 0:04:10.600 --> 0:04:14.560 do calculations. There just weren't. I mean, it was not 0:04:14.600 --> 0:04:16.600 like it's not like there's a lot of word processing 0:04:16.640 --> 0:04:20.640 software even let alone games. Although of course anytime you 0:04:20.680 --> 0:04:23.080 have a machine and you've got people and they are 0:04:23.120 --> 0:04:27.240 smart and they are board, they will make games. Are 0:04:27.960 --> 0:04:30.400 They're small things that are easy, too easy to program. 0:04:30.440 --> 0:04:34.440 So right, So but the al tear comes out, and uh, 0:04:34.560 --> 0:04:37.560 the company that made the al Tear mits m I 0:04:37.640 --> 0:04:41.960 t S, invited readers to submit programming languages for the computer. 0:04:42.200 --> 0:04:46.240 Now in early nine as in like the day or 0:04:46.760 --> 0:04:51.800 two days after this this issue had hit the supposedly, um, 0:04:51.839 --> 0:04:54.680 I think Paul Allen came like came like running down 0:04:54.720 --> 0:04:57.040 the hall and was like, well check this out. Yeah, 0:04:57.080 --> 0:04:59.240 he had he had the copy of the magazine, and 0:04:59.279 --> 0:05:02.960 he said, let's do this, let's build a computer language 0:05:03.080 --> 0:05:05.359 for the al tear, and we can we can be 0:05:05.400 --> 0:05:08.880 the ones to to make history. And they, from at 0:05:08.920 --> 0:05:11.240 least one account, the account that I read in the BBC, 0:05:11.920 --> 0:05:16.000 they apparently told myths that they in fact had the 0:05:16.000 --> 0:05:19.919 programming language before they had you know, built it. But not. 0:05:20.080 --> 0:05:21.880 It's not to say that they didn't have the skills. 0:05:21.920 --> 0:05:24.200 They certainly did. They just they just didn't have the 0:05:24.240 --> 0:05:27.400 work done yet. But they pretty much committed themselves to it. 0:05:27.480 --> 0:05:30.560 And then over the course of several hours, maybe a 0:05:30.600 --> 0:05:33.960 couple of days, they built their computer language, which was 0:05:34.000 --> 0:05:36.919 a variant of the Basic computer language, which has been 0:05:36.960 --> 0:05:39.640 invented in the sixties, but this was the first one 0:05:39.760 --> 0:05:42.680 for this particular chip set. Yes, they had actually been 0:05:42.720 --> 0:05:45.120 playing with Basic way back in high school together, right, 0:05:45.240 --> 0:05:49.360 So now they created a simulator of the al tear 0:05:49.720 --> 0:05:53.840 on another machine, the deck PDP ten they had one. 0:05:53.920 --> 0:05:56.560 They ended up creating an emulator for the al tear 0:05:56.640 --> 0:05:59.440 so that they could actually test this programming language because 0:05:59.480 --> 0:06:01.520 otherwise they have no way of knowing if it would 0:06:01.560 --> 0:06:03.680 work or not. They didn't have access to an al tear, 0:06:04.680 --> 0:06:09.599 so uh. They then submit this programming language to MITS 0:06:09.680 --> 0:06:12.440 and uh, and it's met with some approval, so much 0:06:12.440 --> 0:06:15.239 so that Paul Allen was made the VP and director 0:06:15.279 --> 0:06:18.440 of software for the company. So I would say that 0:06:18.440 --> 0:06:23.039 that was a rousing success. Yeah, yeah and uh. Also Bill, 0:06:23.120 --> 0:06:25.200 Bill Gates and Paul Allen both moved to UM to 0:06:25.400 --> 0:06:29.039 its headquarters in Albuquerque. Ye Albuquerque, which just makes me 0:06:29.040 --> 0:06:32.159 think of weird all Yankovic. But anyway, or bugs Bunny 0:06:32.160 --> 0:06:35.400 should have taken that left in Albuquerque. But so on. 0:06:35.400 --> 0:06:38.200 On November twenty nine, Bill Gates sends a letter to 0:06:38.240 --> 0:06:41.800 Paul Allen, and the letter contains a certain name in it. 0:06:41.800 --> 0:06:45.760 It is micro dash Soft, which is the earliest known 0:06:45.800 --> 0:06:48.839 written reference of the company name. Although they had been 0:06:48.839 --> 0:06:53.920 talking about this for a while beforehand, according to most interviews, 0:06:54.120 --> 0:06:56.680 but this was the first time, the first the earliest 0:06:56.720 --> 0:06:59.599 written reference anyone has found. They had also tossed around 0:06:59.640 --> 0:07:02.560 something like Gates and Allen, Inc. Or something like that. 0:07:02.800 --> 0:07:06.679 Exciting stuff, you know. So they came up with this idea, 0:07:06.680 --> 0:07:08.919 and by the end of the year, the partnership that 0:07:08.960 --> 0:07:13.480 would eventually become Microsoft had earned sixteen thousand and five 0:07:13.560 --> 0:07:19.800 dollars in revenue and had a grand total of three employees. Uh. 0:07:20.120 --> 0:07:22.920 When you get to the next year nine, this is 0:07:22.960 --> 0:07:27.360 a huge year in personal computers, a huge year that 0:07:27.440 --> 0:07:30.360 people probably at the time could not have predicted would 0:07:30.440 --> 0:07:33.960 turn out to be so instrumental in shaping what the 0:07:34.000 --> 0:07:37.440 future of personal computing would be. This is the same 0:07:37.520 --> 0:07:43.920 year that two other individuals, uh some some rather prankster 0:07:44.120 --> 0:07:47.640 ish types, the Steve Steve Jobs and Steve West. They 0:07:47.680 --> 0:07:50.720 they had decided to uh work together to build their 0:07:50.760 --> 0:07:53.840 own personal computer. Now keep in mind, Gates and Allen 0:07:53.920 --> 0:07:58.560 aren't building computers. They're building not not even not even 0:07:58.600 --> 0:08:01.280 operating systems, right, not even Yeah, this is this is 0:08:01.320 --> 0:08:03.840 before personal computers really had what we would call an 0:08:03.840 --> 0:08:06.440 operating system. This is when you would put a uh 0:08:06.520 --> 0:08:08.480 some you would hook it up to some form of media, 0:08:08.840 --> 0:08:13.160 and then you would use a a ligne command to 0:08:13.360 --> 0:08:15.680 run a program. But that's about it. There's it's it's 0:08:15.800 --> 0:08:19.720 not so advanced as to call it an operating system. 0:08:19.800 --> 0:08:24.880 So Steve Jobs and Steve Wozniak are designing their own computer, 0:08:25.040 --> 0:08:28.120 which the first one was called the Apple One, which 0:08:28.880 --> 0:08:32.640 didn't you know, they only made a few hundred of them, 0:08:32.679 --> 0:08:35.679 as I recall, and the original price was six hundred 0:08:35.720 --> 0:08:39.320 sixty six dollars and sixty six cents for the Apple one. 0:08:40.040 --> 0:08:44.240 But they were they got to meet with Bill Gates 0:08:44.280 --> 0:08:48.079 and Paul Allen. In fact, uh uh they were chatting 0:08:48.080 --> 0:08:51.480 early at the Palo Alto Homebrew Computer Club about the 0:08:51.520 --> 0:08:55.240 possibility of using programming languages. So and even at the 0:08:55.280 --> 0:08:59.000 earliest days, Microsoft and Apple had a relationship. It wasn't 0:08:59.000 --> 0:09:02.559 a formal relationship by that point, but they knew each other. 0:09:02.640 --> 0:09:05.800 You know, people knew one another in these communities that 0:09:06.240 --> 0:09:08.520 this homebrew club was. That was a big organization. I mean, 0:09:08.559 --> 0:09:11.160 maybe not big, but but certainly a lot of people 0:09:11.160 --> 0:09:13.880 who had become key players in the industry over the years. 0:09:14.120 --> 0:09:16.920 Uh started out started out there, and for for a 0:09:17.000 --> 0:09:19.040 large part it was it was hobbyists at the time, 0:09:19.160 --> 0:09:22.640 but uh folks, folks like h like like Steve and 0:09:22.679 --> 0:09:25.640 Bill where um much more business minded, I think than 0:09:25.800 --> 0:09:29.040 than most other kids hanging out. Yeah. Yeah, they definitely 0:09:29.080 --> 0:09:32.199 had a bigger picture in mind than just hey, this 0:09:32.240 --> 0:09:34.440 is this is this is really this is a really 0:09:34.480 --> 0:09:36.839 cool device. I want to see what else I can 0:09:36.880 --> 0:09:39.880 do with it. Some some people were more than content 0:09:39.960 --> 0:09:42.320 to just keep it a hobby, but others were seeing 0:09:42.360 --> 0:09:44.760 the potential for this to be a game changer to 0:09:44.840 --> 0:09:47.680 be in its own industry. Well. In March of ninet, 0:09:48.320 --> 0:09:51.559 Bill Gates delivered the opening address at the first annual 0:09:51.640 --> 0:09:55.880 World I'll Tear Computer Convention, which as far as I know, 0:09:56.000 --> 0:09:59.280 is no longer happening. I've never been. Don't think that 0:09:59.679 --> 0:10:01.559 I would wonder what it would look like if you 0:10:01.600 --> 0:10:07.760 were to attend a World Altare computer convention in Paul 0:10:07.800 --> 0:10:10.360 Allen resigned from midst that year in my ts that 0:10:10.480 --> 0:10:13.840 year to work full time on the Microsoft project, and 0:10:14.000 --> 0:10:17.320 on November twenty six, nineteen seventy six, Allen and Gates 0:10:17.320 --> 0:10:21.440 trademarked the term Microsoft. They had since lost the hyphen. Yeah, 0:10:21.520 --> 0:10:25.400 now it's just Microsoft, no hyphen, just one word. That's same. 0:10:25.920 --> 0:10:29.080 Around that same time, Bill Gates officially drops out of Harvard. 0:10:29.160 --> 0:10:31.199 He had been uh, he took a break for a 0:10:31.240 --> 0:10:33.720 little while, then he went back, and at this point 0:10:33.800 --> 0:10:38.320 he had decided that he wanted to concentrate Microsoft um. 0:10:38.440 --> 0:10:42.079 Gates also writes an open letter to hobbyists where he 0:10:42.240 --> 0:10:45.640 addresses the issue of software piracy. Now keep in mind, 0:10:45.640 --> 0:10:48.520 this is the earliest days of personal computing, and already 0:10:49.080 --> 0:10:55.439 there was this this interesting, interesting dichotomy. Okay, you had 0:10:55.440 --> 0:10:58.960 people who wanted to have software freely available, which would 0:10:58.960 --> 0:11:01.320 then encourage more people to get into the hobby and 0:11:01.360 --> 0:11:03.719 more innovation. And then you had the people who are 0:11:03.720 --> 0:11:07.120 developing software who are saying, in order for me, don't 0:11:07.240 --> 0:11:10.040 let us make money, then we can't continue making cool 0:11:10.040 --> 0:11:12.160 stuff for you to play with. So yeah, there's no 0:11:12.200 --> 0:11:14.520 incentive for me to put in work if I'm not 0:11:14.600 --> 0:11:17.640 getting any reward from it. I mean, I love this 0:11:17.679 --> 0:11:20.000 as much as you guys do, but a guy has 0:11:20.000 --> 0:11:23.880 got to eat. I dropped out of Harvard, so uh 0:11:24.000 --> 0:11:27.199 so he wrote this open letter to to address these 0:11:27.200 --> 0:11:29.559 problems of software piracy, which is it's kind of funny 0:11:29.559 --> 0:11:31.600 because when you think about it, you know, we were 0:11:31.640 --> 0:11:34.320 more than three decades later, and we still have the 0:11:34.400 --> 0:11:39.199 same issues. It's now just on a larger scale scale. 0:11:39.280 --> 0:11:44.320 Exactly that next year nine, Bill Gates becomes the president 0:11:44.440 --> 0:11:47.800 and Paul Allen the vice president of Microsoft is now 0:11:47.840 --> 0:11:52.640 an official company and before they were considered to be 0:11:52.720 --> 0:11:55.319 general partners in this, and this was the first time 0:11:55.360 --> 0:11:58.560 that that they delineated their their responsibilities within the come 0:11:58.760 --> 0:12:02.440 right and Gates at this point owned more of Microsoft 0:12:02.440 --> 0:12:06.559 than Alan. Actually that's true all the way through the history. 0:12:06.800 --> 0:12:10.280 So Gates had a greater part of the ownership of 0:12:10.320 --> 0:12:15.640 the company, and they begin with a license deal to Apple. 0:12:16.160 --> 0:12:19.720 They were the ones who provided the Apple version of Basic, 0:12:20.520 --> 0:12:26.320 called Microsoft apple Soft Basic. So that's interesting to me 0:12:26.400 --> 0:12:29.280 too that the programming language for the Apple two computer 0:12:29.600 --> 0:12:31.880 was in fact developed by Microsoft, because a lot of 0:12:31.880 --> 0:12:35.360 people think then Microsoft and Apple have always had a 0:12:35.520 --> 0:12:41.000 very contentious, yea acrimonious relationship, like they were constantly butting heads, 0:12:41.000 --> 0:12:42.920 and that's not really true. In fact, there were a 0:12:43.000 --> 0:12:45.319 lot of times throughout for a long time they were 0:12:45.320 --> 0:12:47.800 they were really trying to help each other out. Yeah, 0:12:47.800 --> 0:12:49.840 they were working together because when you think about it, 0:12:49.880 --> 0:12:52.240 they're in two they were in two different businesses. Okay, 0:12:52.240 --> 0:12:54.760 So you had Apple that was developing all of their 0:12:54.800 --> 0:12:59.040 own hardware and software and Microsoft was just software. So 0:12:59.040 --> 0:13:01.560 it wasn't like they were wret competition with one another. 0:13:01.679 --> 0:13:04.680 Especially in those early days. They were all looking at 0:13:04.760 --> 0:13:08.440 a burgeoning industry and saying, how can we make this grow? Yeah, 0:13:08.760 --> 0:13:11.120 and everyone was trying to make money. By working together, 0:13:11.240 --> 0:13:13.959 you can make more money yea. Um speaking about money. Uh. 0:13:14.040 --> 0:13:19.720 In eight uh, Microsoft sales of Basic eighty eight alone 0:13:20.559 --> 0:13:26.040 exceeded one million dollars, so incredible. The company itself has 0:13:26.080 --> 0:13:30.520 been around essentially two years. Depending upon how you wanted 0:13:30.559 --> 0:13:33.720 to find the actual company, you could say as many 0:13:33.760 --> 0:13:36.520 as three, but it really that that first year it 0:13:36.559 --> 0:13:39.319 was really a partnership and not an official company at all. 0:13:40.040 --> 0:13:43.640 So they've already hit one million in revenue and sales. 0:13:43.720 --> 0:13:47.680 This is this is phenomenal. They also developed a programming 0:13:47.720 --> 0:13:52.200 language for another early personal computer that has there are 0:13:52.200 --> 0:13:55.079 people who love this machine. One of the Commodore is right, yep, 0:13:55.120 --> 0:13:59.720 the Commodore Personal Electronic Transactor or PET, the Commodore PET. 0:14:00.600 --> 0:14:04.000 So yeah, they developed the basic programming language for that 0:14:04.040 --> 0:14:07.360 as well. The next year, nineteen seventy nine, that's when 0:14:07.880 --> 0:14:12.200 they made their big move literally from from Albuquerque back 0:14:12.240 --> 0:14:15.280 up to Washington State. Yep. Now they weren't they weren't 0:14:15.280 --> 0:14:18.439 in their current headquarters yet. That's they hadn't quite moved 0:14:18.440 --> 0:14:21.000 that far. They went into Bellevue, which was actually not 0:14:21.120 --> 0:14:23.720 very far from where Paul Allen and Bill Gates grew up, 0:14:24.440 --> 0:14:29.720 and they formed the consumer Products division of Microsoft. This 0:14:29.800 --> 0:14:33.080 was an idea to development market retail products and to 0:14:33.160 --> 0:14:36.160 provide support for customers, and they actually started to develop 0:14:36.240 --> 0:14:39.800 their own in house game. All right, Microsoft Adventure came 0:14:39.800 --> 0:14:43.160 out of that. Yeah, people who remember Adventure remember it fondly. 0:14:43.320 --> 0:14:46.920 It was I mean, by any measure of today's standards, 0:14:47.200 --> 0:14:49.560 it's an incredibly primitive game. But at the time it 0:14:49.600 --> 0:14:51.120 was one of those things that people just fell in 0:14:51.200 --> 0:14:55.640 love with, but that they they invested in this, they 0:14:55.760 --> 0:14:58.520 tried to develop it, and ultimately they decided that it 0:14:58.600 --> 0:15:02.440 wasn't really performing up to their expectations, so they eventually 0:15:02.520 --> 0:15:06.680 folded it back into the overall company. Right right, During 0:15:06.720 --> 0:15:09.479 that year, they grew from thirteen to twenty eight employees. 0:15:09.680 --> 0:15:12.440 So then and Basic was was doing really well. It 0:15:12.480 --> 0:15:14.520 was kind of on the verge of becoming the standard 0:15:14.680 --> 0:15:17.520 language for for micro computers. Right. I think it's funny 0:15:17.680 --> 0:15:19.800 thirteen to twenty eight employees. You could say within that 0:15:19.920 --> 0:15:25.920 year they more than double size from thirteen to eight. Uh, 0:15:26.520 --> 0:15:30.280 humble beginnings. Now, if you move up to the next year, 0:15:30.320 --> 0:15:35.200 to nineteen eighty, that's when Bill Gates makes a very 0:15:35.240 --> 0:15:39.480 famous hire. He hires his old buddy from Harvard, Steve Balmer, 0:15:40.040 --> 0:15:44.080 and Steve Balmber becomes Microsoft's first business manager. Steve Balmer 0:15:44.160 --> 0:15:46.640 was the salesman. He was the guy who was known 0:15:46.720 --> 0:15:50.800 as he He just he understands the sales aspect. He 0:15:50.840 --> 0:15:54.920 could build these relationships between different companies. He can develop 0:15:55.000 --> 0:15:58.320 them because you know, most of Microsoft's business was really 0:15:58.360 --> 0:16:03.200 in partnering with their companies, not so much uh directing 0:16:03.240 --> 0:16:06.600 business directly at the consumer, right right, Yes, since as 0:16:06.640 --> 0:16:09.040 we said, they were just creating software at the time. 0:16:09.240 --> 0:16:12.680 It was you know, all convincing other people to uh yeah, 0:16:12.760 --> 0:16:16.240 let them develop programming languages for their platforms. Things like 0:16:16.360 --> 0:16:19.320 you know, the stuff that you would see that Microsoft 0:16:19.360 --> 0:16:21.400 had a hand in. Where that was the stuff that 0:16:21.440 --> 0:16:24.440 would come when you bought the computer you were buying, 0:16:24.440 --> 0:16:26.680 Like when you bought an Apple too and you started 0:16:26.680 --> 0:16:30.160 programming stuff, you were using the Microsoft programming language. But 0:16:30.200 --> 0:16:32.680 it wasn't like you bought a computer and then you 0:16:32.760 --> 0:16:35.560 ran out to grab the Microsoft copy of whatever software 0:16:35.560 --> 0:16:38.400 it was. It was all packaged together. So the business 0:16:38.440 --> 0:16:43.040 relationships were key in those early years with Microsoft. Yeah. Um, 0:16:43.520 --> 0:16:47.000 speaking of those business relationships, in July, they entered an 0:16:47.000 --> 0:16:50.680 agreement for the upcoming IBM PC. The code name of 0:16:50.720 --> 0:16:55.120 this project was Chess. Yeah. IBM has a history with 0:16:55.280 --> 0:16:58.680 Chess uh, they would actually at this point it would 0:16:58.720 --> 0:17:02.960 be a future with chess because IBM Suh IBM would 0:17:03.000 --> 0:17:07.360 famously u show that a computer chess champion could defeat 0:17:07.440 --> 0:17:11.360 the human grand chess champion. But at any rate, Yes, 0:17:11.440 --> 0:17:17.320 this this this code name project was for the developing 0:17:17.400 --> 0:17:21.600 software and operating system information for an upcoming personal computer 0:17:21.680 --> 0:17:25.320 developed by IBM and and and again Microsoft at the 0:17:25.320 --> 0:17:27.919 time was not was not creating operating systems. This was 0:17:27.960 --> 0:17:30.040 really kind of one of the first that was out there. Um, 0:17:30.080 --> 0:17:33.639 they a Gates and Bomber wound up buying something called 0:17:34.240 --> 0:17:38.960 QUDS Quick and Dirty operating System for about fifty grand, right, 0:17:39.440 --> 0:17:44.600 and they wound up a repackaging it or recoding recoding. 0:17:45.000 --> 0:17:47.160 They essentially used that as think of it as using 0:17:47.160 --> 0:17:50.040 that as the foundation to build their own operating system 0:17:50.080 --> 0:17:52.280 on top of So we don't mean to say that 0:17:52.320 --> 0:17:54.520 they just took They just weren't bought one thing and 0:17:54.560 --> 0:17:57.440 then repackaged it and then sold it. They definitely did. 0:17:57.560 --> 0:18:00.879 Microsoft did change that, but that was the basis of 0:18:00.880 --> 0:18:03.600 that operating system. Just as you would say that there 0:18:03.640 --> 0:18:07.320 are lots of different Linux distributions out there that take 0:18:07.440 --> 0:18:11.159 the basic Linux and then create something on top of 0:18:11.200 --> 0:18:13.840 it that makes it makes it more usable for a 0:18:13.880 --> 0:18:17.200 certain part of the audience, right right, But they renamed 0:18:17.240 --> 0:18:20.159 it disc operating System and licensed it to IBM for 0:18:20.440 --> 0:18:22.879 eight grand um, which which sounds like a small amount, 0:18:22.880 --> 0:18:24.960 and it was even at the time a relatively small amount, 0:18:25.000 --> 0:18:29.919 but um. But they also had an agreement to earn 0:18:30.119 --> 0:18:33.919 on top of any any PC sales that the system 0:18:33.960 --> 0:18:36.440 went on too. In addition to that, they were even 0:18:36.600 --> 0:18:41.040 more savvy because they retained the licensing rights so that 0:18:41.040 --> 0:18:45.280 they could license that same operating system to other manufacturers. Now, 0:18:45.359 --> 0:18:48.960 for those who aren't aware, when the IBM compatible computers 0:18:48.960 --> 0:18:51.800 started coming out, that these were machines that were built 0:18:51.880 --> 0:18:56.080 by other companies besides IBM that could run the same 0:18:56.119 --> 0:18:58.400 sort of software because they were using a very similar 0:18:58.520 --> 0:19:02.480 or identical chip set to the IBM PC. So that 0:19:02.520 --> 0:19:06.040 meant that Microsoft, because they retained this licensing agreement that 0:19:06.280 --> 0:19:09.879 they could license other manufacturers, could provide the operating system. 0:19:09.960 --> 0:19:12.000 So that meant that suddenly you had all these different 0:19:12.000 --> 0:19:15.560 machines from different manufacturers that could do essentially the same 0:19:15.600 --> 0:19:18.560 thing as the IBM PC, but because they were offered 0:19:18.600 --> 0:19:22.480 by someone else and they were using perhaps different materials, 0:19:22.840 --> 0:19:25.639 sometimes the price would be significantly lower. This is what 0:19:25.760 --> 0:19:29.280 would eventually one of the factors I should say that 0:19:29.320 --> 0:19:32.800 would eventually lead IBM to pull out of the consumer 0:19:33.040 --> 0:19:37.879 PC market, because once this train got set in motion, 0:19:38.040 --> 0:19:40.600 it really was hard to derail it. It meant that 0:19:40.800 --> 0:19:44.080 IBM had to compete essentially against itself. They had invented 0:19:44.560 --> 0:19:46.919 the approach that they wanted to take, and then everyone 0:19:46.960 --> 0:19:49.960 else could just copy it. Um Apple, by the way, 0:19:50.040 --> 0:19:53.480 had a very similar situation for a while after Steve 0:19:53.560 --> 0:19:57.960 Jobs was politely asked to leave or he left on 0:19:58.000 --> 0:20:00.840 his own, depending upon whom you ask uh, and then 0:20:00.840 --> 0:20:03.200 Apple did a very similar thing where they actually licensed 0:20:03.200 --> 0:20:06.680 out the Apple designed to other manufacturers. When Jobs came back, 0:20:06.720 --> 0:20:08.679 he put a stop to that. Technically, I think it 0:20:08.720 --> 0:20:11.159 had already kind of stopped before he came back, but 0:20:11.200 --> 0:20:15.760 he definitely um So anyway, this was one of those 0:20:15.800 --> 0:20:18.400 things where it was a great move for Microsoft. Maybe 0:20:18.480 --> 0:20:20.399 not such a great move for IBM PC, but it 0:20:20.440 --> 0:20:23.840 meant that Microsoft had guaranteed yet more revenue down the 0:20:23.880 --> 0:20:28.280 line by licensing this operating system to other manufacturers. They 0:20:28.320 --> 0:20:31.680 also started to develop their own hardware in the form 0:20:31.720 --> 0:20:36.040 of special microprocessors, circuit boards that could allow the computer 0:20:36.440 --> 0:20:40.080 computers that have are based around one particular design to 0:20:40.240 --> 0:20:42.680 run programs that were built for other types of computers. So, 0:20:42.720 --> 0:20:45.120 in other words, it's kind of like an emulator. So 0:20:45.240 --> 0:20:47.120 you know, like if you had an Apple To computer 0:20:47.160 --> 0:20:48.919 and I had an IBM computer and I had this 0:20:48.960 --> 0:20:51.199 program I wanted you to be able to use, you 0:20:51.240 --> 0:20:54.399 couldn't use it on your Apple TO. The architecture is 0:20:54.400 --> 0:20:57.680 totally different. It just wouldn't work. So what Microsoft was 0:20:57.720 --> 0:21:00.520 starting to do was build up microchips or or actually 0:21:00.560 --> 0:21:03.480 circuit boards that you could insert into a computer, put 0:21:03.480 --> 0:21:07.920 it in one of the computer's expansion slots. Yeah, and so, uh, 0:21:08.200 --> 0:21:10.040 it wasn't like it was a magic pill that would 0:21:10.080 --> 0:21:12.920 work on every computer. They had only a few specific 0:21:12.960 --> 0:21:15.520 ones that would allow one type of computer to run 0:21:15.640 --> 0:21:19.520 one type of other software. So, but it was an 0:21:19.520 --> 0:21:21.760 interesting move that they were getting into hardware. This was 0:21:21.760 --> 0:21:24.080 their first time of really doing that. Otherwise they were 0:21:24.119 --> 0:21:29.520 just concentrating on code. Now. Um, then that's when we 0:21:29.560 --> 0:21:34.439 actually get launch of ms DOS Microsoft disc Operating System. Uh, 0:21:34.520 --> 0:21:38.320 and that's introduced on the IBM PC. UM and that's 0:21:38.359 --> 0:21:42.359 also when Microsoft got a visit from a certain Mr. 0:21:42.480 --> 0:21:47.119 Steve Jobs, and he Steve Jobs, arrived at Microsoft to 0:21:47.119 --> 0:21:49.239 give them an early look at what would be the 0:21:49.320 --> 0:21:53.879 Macintosh computer. This is one The Macintosh computer does not 0:21:54.000 --> 0:21:57.600 come out until nineteen four, so this is several years 0:21:57.600 --> 0:22:00.679 in advance of the debut of this computer. And it 0:22:00.800 --> 0:22:03.960 just shows really that the development cycle for these kinds 0:22:03.960 --> 0:22:08.199 of devices can take several years sure, and also just 0:22:08.240 --> 0:22:10.480 shows the strength of the relationship at that stage in 0:22:10.520 --> 0:22:13.520 the game. But you know, it's you know, being being 0:22:13.560 --> 0:22:18.400 willing to show something that secretive at that point, and uh, 0:22:18.760 --> 0:22:21.719 it was. It was kind of fun I think, um uh. 0:22:22.000 --> 0:22:25.000 People were referring it to it as a wonderful machine 0:22:25.280 --> 0:22:28.159 and eventually there would be a funny little acronym about that. 0:22:28.200 --> 0:22:29.520 But I'll get to that in a little bit later. 0:22:30.000 --> 0:22:33.560 So that same year Microsoft incorporated, but was still a 0:22:33.560 --> 0:22:36.200 privately held company. They did not have an initial public 0:22:36.240 --> 0:22:40.520 offering yet, and Gates was became the president and chairman 0:22:40.800 --> 0:22:43.760 and Alan became the executive vice president. And by the 0:22:43.840 --> 0:22:47.920 end of the year, the revenues hit sixteen million dollars 0:22:48.000 --> 0:22:50.879 and they had a hundred and twenty eight employees. Yeah, 0:22:50.960 --> 0:22:53.800 that's that's a great number for a computer programmer, A 0:22:53.880 --> 0:22:56.960 hundred twenty eight, because it's falling into the pattern there. 0:22:57.560 --> 0:23:03.639 Um In the Microsoft developed something internally called the Microsoft 0:23:03.760 --> 0:23:08.480 Local Area Network or MILAN, and that was to connect 0:23:08.520 --> 0:23:11.639