Thursday, November 21, 1996
A Strange Twist of Fate
or
Where Are You Going To Go Today?
By MF Runkle
In my last Fribble, I wrote about the death of Commodore International. I received a fair amount of e-mail on that one, and I was quite surprised as to the dedicated following the Amiga developed. In this Fribble, I'm going to talk about the strange twist of events that led to the development of a product that certainly doesn't have the following of the Amiga, MS-DOS. MS-DOS was that well-marketed mediocre mousetrap that everybody needed. If things were a little different, CP/M instead of MS-DOS would be the operating system everybody would love to hate. In history and in life, little events occur that have unforeseen consequences and change the course of future events. There was just a minor twist of events that led to Microsoft becoming the 800-pound gorilla of the computer industry.
Bill Gates was your standard genius computer nerd-hacker in the early 70s. At 14, he was hacking into mainframe computers. His first venture was an invention called Traf-O-Data, which was a traffic counting machine. It didn't really sell too well and collapsed. Considering he was only a high-school student, that's not too bad really. This was only the beginning. After this he worked for C-Cube and TRW, writing software (while still in high school). In 1974 he went off to Harvard.
The start of Microsoft began with the Altair, the first marketed Personal Computer. In 1975, with Paul Allen, Gates developed a version of BASIC for this machine. The first reference to the name "Microsoft" was in a letter that year from Gates to Allen. While no one could see it at the time, this was the real beginning. The Altair was a really primitive thing, no monitor, disk drive, etc. You got your information by decoding the blinking lights on the front of the case.
The first operating system for PCs was CP/M (Control Program/Monitor) and was initially written by Gary Kildall in 1973. Kildall started his own company, called Digital Research. In time, almost all the microcomputers used this operating system. Paul Allen went to work for MITS (manufacturer of the Altair) in 1975. At the same time, he and Bill Gates started a company they called Micro-Soft. Ultimately, Allen left MITS, and Micro-Soft became Microsoft. They basically sold BASIC (sorry about the pun). Nothing really remarkable yet. In fact, compared with some of their peers, Gates and Allen didn't stand out that much, hard as it is to believe.
They continued the sale of BASIC, and in 1977 signed a legal partnership. Microsoft's Web site says they had $3,249.41 in checking, $9,156.28 in savings, and $505 in petty cash. That year they developed a version of FORTRAN, and by year's end they had nine employees. Before you sucker into a penny stock that has a balance sheet like this, Microsoft stayed privately held until 1986. By this time it had a much better balance sheet.
Let's fast forward through this evolutionary stuff, and go to August 1980. IBM was developing a PC, and they were looking for software. They met with Bill Gates about providing programming languages for their computer. Then, they asked him about an operating system. Could he sell them this popular operating system called CP/M? No, he couldn't, and he referred them to Gary Kildall of Digital Research.
It didn't happen. A story told repeatedly, and in print, is that Gary Kildall went flying his personal plane, and left the IBM executives cooling their heels. Kildall denied this later, and the story really doesn't have the ring of truth to it. Years ago I spoke to a woman who told me she worked for Kildall at this time, and it kills me, because I don't remember her name. I asked her about this, and she said no, Gary Kildall was not flying his plane. He felt since he owned the only real operating system for the PC, he could play hardball in negotiations. The IBM executives walked out of negotiations. Obviously, he couldn't.
IBM went back to Bill Gates. They asked him if he could come up with an operating system, and he said he thought he could. He purchased SCP-DOS from Seattle Computing, which had already been written for the Intel 8086 processor. Microsoft proposed to IBM to convert this to run on their machine. An agreement was signed in November 1980. Microsoft had to have its software ready by March. In February MS-DOS ran on the IBM PC prototype for the very first time. Now, IBM did go back to Digital Research, and signed an agreement for CP/M-86, which was to be a 16-bit version of CP/M. Too bad it wasn't ready on August 12, 1981, when IBM unveiled the PC. MS-DOS was.
What happened to Digital Research? It was ultimately acquired by Novell. Gary Kildall really did pretty well, but how many people know who he was compared to Bill Gates? Would the reverse be true if CP/M had been chosen as the operating system for the IBM PC? We can work out many scenarios. Maybe there would be two giants today in the business, Microsoft and Digital Research. However, remember in the mid-eighties Borland International was a big seller of computer languages just like Microsoft was. They do exist today, but barely. Maybe Digital Research would be the behemoth, and Microsoft would be hanging by a thread like Borland. All of this goes back to one failed negotiation. I don't think anybody could have foreseen what was to happen on that day. What insignificant event in your life today will have far-ranging consequences in the future? Only time will tell.
Where does Apple fit in all this? Well, they don't really, EXCEPT Steve Jobs saw this neat little thing at Xerox's Palo Alto Research Center called Smalltalk. It was a graphic, object-oriented language that relied heavily on a device called a "mouse." The system that he saw was the inspiration for the Macintosh, and ultimately, Windows. A better mousetrap was in development, and yet another branch of this tree was opening up.
Transmitted: 11/21/96