Microsoft Founded

Setting the scene

By 1975, computers were room-sized mainframes owned by corporations and universities. The Altair 8800, released in January 1975 as a kit for $397, was the first commercially successful personal computer, though it had no keyboard or screen—users flipped switches to program it. Bill Gates, a 19-year-old Harvard sophomore, and Paul Allen, a 22-year-old programmer at Honeywell, saw the Altair on the cover of Popular Electronics and realized software would be essential for personal computers.

What happened

On April 4, 1975, Gates and Allen founded Micro-Soft (later Microsoft) in Albuquerque, New Mexico, near Altair manufacturer MITS. Their first product was a BASIC interpreter for the Altair, which Gates famously wrote in eight weeks. Gates dropped out of Harvard to focus on the company. In 1977, Microsoft moved to Bellevue, Washington. The company's breakthrough came in 1980 when IBM approached Microsoft for an operating system for its new personal computer. Microsoft bought QDOS for $50,000, renamed it MS-DOS, and licensed it to IBM—retaining the right to sell to other manufacturers.

Why it still matters

Microsoft's decision to license MS-DOS to IBM clones created the PC-compatible ecosystem and made Microsoft the dominant software company. Windows, released in 1985, became the world's most used operating system, installed on over 90% of PCs at its peak. Microsoft's success made Gates the world's richest person and established the software industry's business model. The company later faced antitrust scrutiny in the 1990s. Microsoft demonstrated that in the computer revolution, software would be more valuable than hardware, and that controlling the platform could create a near-monopoly. It transformed how people work, communicate, and access information.

Background

Microsoft Corporation is an American multinational technology conglomerate headquartered in Redmond, Washington. The company became influential in the rise of personal computers through software like Windows and has since expanded into areas such as Internet services, cloud computing, artificial intelligence, video gaming, software, and more. A Big Tech company, Microsoft is the largest software company by revenue, one of the most valuable public companies, and one of the most valuable brands globally. The company later built the Windows operating system empire.