The idea that Bill Gates has appeared like a knight in shining armour to lead all customers out of a mire of technological chaos neatly ignores the fact that it was he who, by peddling second-rate technology, led them into it in the first place. Douglas Adams (Hitch-hikers Guide…)
The Lakeside School attended by Bill Gates and Paul Allen bought time from GE, but used it too quickly. The school then contracted with Computer Center Corporation, whose system the duo hacked into, exploiting its weaknesses and stopping usage time being logged. CCC banned them but they were later hired to seek out bugs.
Gates and Allen formed the Lakeside Programmers’ Group to hone their programming skills. They came across an application for traffic engineers that applied simple rubber tube devices using pneumatics to count passing traffic and record results on 16-bit paper tape. The device’s output could not be read directly into standard 8-bit systems; third parties were hired to analyse the data manually.
Gates and Allen persuaded schoolmates to transcribe the data onto punched cards; via Allen’s father they used the University of Washington’s computer inexpensively to process the analysis.
To read the tapes directly they sought a microprocessor-based approach and approached Paul Gilbert, a student at the University of Washington, to build it. He selected the Intel 8008 MPU and took a year developing it. As a Traf-O-Data computer did not exist, Allen used computer emulation on a PDP-11. This meant they created and tested the Traf-O-Data software in parallel with the hardware development – an approach they later used for BASIC and the Altair 8800.
At the first demonstration the reader failed and soon after the State of Washington ran the analyses for cities at no charge. There was no longer any requirement for the system – the experience was valuable.
Paul Allen saw the Popular Electronics issue that announced the Altair and showed it to 19-year-old Bill Gates. They recognised an opportunity to provide a BASIC interpreter, allowing users to enter instructions in clear language, software creating the machine code.
They were convinced that the first such software would dominate the market and rushed to complete the language within the small 4K of memory of the Altair, without ever seeing one in the flesh.
When Allen demonstrated it to MITS he did not have money to pay for his hotel room; Roberts subbed him. Loaded from punched paper tape, the software crashed; a second tape ran successfully. The first program was ‘10 print 2+2’ then ‘Run’, getting back the answer ‘4’.
The licence deal was agreed for $3,000, plus $30 per sold copy of the 4k version, $35 per 8k. MITS would own all rights after paying $180k.
Paul Allen became VP and director of software development at MITS in Albuquerque; Bill Gates was appointed a software specialist. Gates later dropped out of Harvard and they founded Micro-Soft (with a hyphen) based in Albuquerque to be convenient for Altair.
1975 Altair or MITS BASIC was introduced, the first computer language made widely available on a PC. Later they offered to sell MITS all rights and intellectual property ownership in 8080 BASIC for $6,500. Fortunately for them Roberts refused the deal so they retained ownership and could develop it for other products. At the end of 1975 Microsoft had three employees, Gates, Allen and Ric Weiland, a school friend; the annual revenue was $16,000.
The First Altair Convention is remembered for Bill Gates launching an attack on software piracy. Users would club together and buy a single copy of BASIC and then distribute it, calling this ‘multi-user Basic’. A deliberate catch inserted into MITS BASIC to prevent its use with other 8080 products. Users resolved it, and distributed copies of the ‘open’ version as New Jersey Basic. Gates was incandescent in his speech and also wrote a series of tirades about the immorality of software piracy. But hadn’t he essentially pirated Dartmouth BASIC?