Bill Gates

Co-founder of Microsoft Corp.

Founded: 1975
"Ultimately, the PC will be a window to everything people are interested
in-and everything we need to know."-Bill Gates
Some see him as an innovative visionary who sparked a computer
revolution. Others see him as a modern-day robber baron whose
predatory practices have stifled competition in the software industry.
Regardless of what his supporters and detractors may think, few can
argue that Bill Gates is one of, if not the most successful entrepreneur of
the 20th century. In just 25 years, he built a two-man operation into a
multibillion-dollar colossus and made himself the richest man in the
world somewhere along the way. Yet he accomplished this feat not by
inventing new technology, but by taking existing technology, adapting it
to a specific market, and then dominating that market through innovative
promotion and cunning business savvy.
Gates' first exposure to computers came while he was attending the
prestigious Lakeside School in Seattle. A local company offered the use
of its computer to the school through a Teletype link, and young Gates
became entranced by the possibilities of the primitive machine. Along
with fellow student Paul Allen, he began ditching class to work in the
school's computer room. Their work would soon pay off. When Gates
was 15, he and Allen went into business together. The two teens netted
$20,000 with Traf-O-Data, a program they developed to measure traffic
flow in the Seattle area.

Despite his love and obvious aptitude for computer programming, and
perhaps because of his father's influence, Gates entered Harvard in the
fall of 1973. By his own admission, he was there in body but not in spirit,
preferring to spend his time playing poker and video games rather than
attending class.
All that changed in December 1974, when Allen showed Gates a
magazine article about the world's first microcomputer, the Altair 8800.
Seeing an opportunity, Gates and Allen called the manufacturer, MITS, in
Albuquerque, New Mexico, and told the president they had written a
version of the popular computer language BASIC for the Altair. When he
said he'd like to see it, Gates and Allen, who actually hadn't written
anything, starting working day and night in Harvard's computer lab.
Because they did not have an Altair to work on, they were forced to
simulate it on other computers. When Allen flew to Albuquerque to test
the program on the Altair, neither he nor Gates was sure it would run.
But run it did. Gates dropped out of Harvard and moved with Allen to
Albuquerque, where they officially established Microsoft. MITS collapsed
shortly thereafter, but Gates and Allen were already writing software for
other computer start-ups including Commodore, Apple and Tandy Corp.
The duo moved the company to Seattle in 1979, and that's when
Microsoft hit the big time. When Gates learned IBM was having trouble
obtaining an operating system for its new PC, he bought an existing
operating system from a small Seattle company for $50,000, developed
it into MS-DOS (Microsoft Disk Operating System), then licensed it to
IBM. The genius of the IBM deal, masterminded by Gates, was that while
IBM got MS-DOS, Microsoft retained the right to license it to other
computer makers.

Much as Gates had anticipated, after the first IBM PCs were released,
cloners such as Compaq began producing compatible PCs, and the
market was soon flooded with clones. Like IBM, rather than produce
their own operating systems, the cloners decided it was cheaper to
purchase MS-DOS off the shelf. As a result, MS-DOS became the
standard operating system for the industry, and Microsoft's sales soared
from $7 million in 1980 to $16 million in 1981.
Microsoft expanded into applications software and continued to grow
unchecked until 1984, when Apple introduced the first Macintosh
computer. The Macintosh's sleek graphical user interface (GUI) was far
easier to use than MS-DOS and threatened to make the Microsoft
program obsolete. In response to this threat, Gates announced that
Microsoft was developing its own GUI-based operating system called
Windows. Gates then took Microsoft public in 1986 to generate capital.
The IPO was a roaring success, making Gates one of the wealthiest
people in the country overnight.
When Windows was finally released in 1985, it wasn't exactly the
breakthrough Gates had predicted. Critics claimed it was slow and
cumbersome. Apple wasn't exactly pleased either. They saw Windows
as a rip-off of the Macintosh operating system and sued. The case would
drag on until the mid-1990s, when the courts finally decided that Apple's
suit had no merit.
Meanwhile, Gates worked on improving Windows. Subsequent versions
of the program ran faster and froze less frequently. Third-party
programmers began developing Windows-based programs, and
Microsoft's own applications became hot sellers. By 1993, Windows was

selling at a rate of 1 million copies per month and was estimated to be

running on nearly 85 percent of the world's computers.
Microsoft solidified its industry dominance in the mid-1990s by
combining Windows with its other applications into "suites" and
persuading leading computer makers to preload their software on every
computer they sold. The strategy worked so well that by 1999 Microsoft
was posting sales of $19.7 billion, and Gates' personal wealth had grown
to a phenomenal $90 billion.
But with success has come scrutiny. Microsoft's competitors have
complained that the company uses its operating system monopoly to
retard the development of new technology-a claim Gates soundly
refutes. Nevertheless, the U.S. Justice Department filed an antitrust
lawsuit against the company in 1998 over its practice of bundling
software with Windows.
In November 1999, a U.S. District Court ruled that Microsoft indeed had
a monopoly in the market for desktop-computer operating systems. The
court also found that Microsoft engaged in tactics aimed at snuffing out
any innovation that threatened its dominance of the multibillion-dollar
computer industry. A federal mediator was appointed to oversee
"voluntary" settlement talks between the government and the software
giant. (As of press time, a settlement had not yet been reached.)
Attempting to explain his tremendous success, industry experts have
pointed out that there are really two Bill Gateses. One is a consummate
computer geek who can "hack code" with the best of them. The other is
a hard-driven businessman who, unlike most of his fellow Silicon Valley
superstars, took readily to commerce and has an innate instinct for the

marketplace. This combination enabled Gates to see what his

competitors could not. While they were focusing on selling software,
Gates was focusing on setting standards, first with MS-DOS and later
with Windows. The standards he helped set shaped the modern
computer industry and will continue to influence its growth well into the
next century.

Dead Giveaway
As a child, Bill Gates' two favorite games were "Risk" (where the object
is world domination) and "Monopoly."
Microsoft's Other Billionaire Bill Gates has become the singular face of
Microsoft, but the company wouldn't be what it is today without Paul
Allen. It was Allen who primarily wrote Microsoft's first program, and
according to Microsoft veterans, he championed the company's biggest
successes, including MS-DOS, Windows and Microsoft Word. But Allen
reached a turning point in 1983, when he was diagnosed with Hodgkin's
disease.
Forced to rethink his priorities, Allen resigned from his day-to-day duties
at Microsoft and resolved to spend more time enjoying the luxuries his
great wealth could afford. He pursued the good life for two or three
years, during which time the cancer went into remission. Rather than
return to Microsoft, however, he plunged into another start-up, founding
Asymetrix in 1985, and has since gone on to become one of the
country's most successful high-tech venture capitalists.