The Founding of Microsoft: Bill Gates and Paul Allen

April 4 marks the anniversary of the founding of Microsoft, a computer technology corporation that became a central figure in the personal computing revolution.

The Founding of Microsoft

Microsoft was founded on April 4, 1975, by Bill Gates and Paul Allen in Albuquerque, New Mexico.

The company’s origins were tied to the MITS Altair 8800, which appeared on the cover of Popular Electronics on January 1, 1975. This publication inspired Allen and Gates to develop a BASIC language specifically for the Altair system.

On February 1, 1975, Gates and Allen completed Altair BASIC and sold it to their first customer, MITS of Albuquerque, New Mexico. This product represented the first computer language program designed for a personal computer.

The partnership evolved throughout 1975. Paul Allen joined MITS as the director of software on March 1, 1975. By July 1, 1975, the BASIC program officially shipped as version 2.0 in 4K and 8K editions.

On July 22, 1975, Gates and Allen signed a licensing agreement with MITS regarding the Basic Interpreter. At that time, the company was not yet an official partnership and the name Microsoft had not been formally chosen.

The earliest known written reference to the company name occurred on July 29, 1975, in a letter from Bill Gates to Paul Allen, where Gates used the term Micro-soft to refer to their partnership.

By the end of its first year, the company’s financial scale was modest. According to Form 1065 U.S. Records, the year-end sales total as of December 31, 1975, was 16,005 dollars.

Growth and Market Expansion

Microsoft transitioned from a small software provider to a global leader through strategic partnerships and product development. In 1980, the company formed a partnership with IBM to bundle Microsoft’s operating system with IBM computers, a deal that provided Microsoft with a royalty for every sale.

In 1985, IBM requested that Microsoft develop a new operating system called OS/2. While Microsoft produced OS/2, it simultaneously continued to sell its own alternative. Microsoft Windows eventually overshadowed OS/2 in sales.

During the 1990s, Microsoft launched several versions of Windows, which allowed the company to capture over 90% of the market share for personal computers worldwide.

Corporate Scale and Current Products

As of June 30, 2015, Microsoft employed 128,076 people worldwide and reported a global annual revenue of US$86.83 billion.

The corporation’s current best-selling products include:

• The Microsoft Windows operating system
• Microsoft Office, a suite of productivity software
• Xbox, a line of games, music, and video entertainment
• Bing, a line of search engines
• Microsoft Azure, a cloud services platform