April 4, 2022

The Birth of Microsoft

The Birth of Microsoft

April 4, 1975. Bill Gates and Paul Allen formalize their partnership with the creation of Microsoft, ushering in the era of the personal computer.


Cold Open

It’s June 7th, 2007 at Harvard University.

Sitting atop an outdoor stage, Bill Gates looks out at the campus’s courtyard filled with the awe-struck faces of recent graduates.

He watches the president of Harvard’s Alumni Association rise from the seat next to him and head to the podium.

"ANNOUNCER: Our next speaker, first known as the entrepreneur of the personal computer revolution, was named by Time Magazine as one of the hundred people who most influenced the 20th century.

After a 33-year leave of absence from his alma mater, I am pleased to present to you, Doctor William Gates."

Bill smiles at the introduction and rises to take his place at the lectern.

"BILL GATES: I’ve been waiting more than 30 years to say this: Dad, I always told you I’d come back and get my degree.

I’m just happy that the Crimson called me Harvard’s most successful dropout. I guess that makes me valedictorian of my own special class. I did the best of everyone who failed."

Bill continues his speech; he’s self-assured, measured, and speaks with a clear confidence.

When he finishes, he’s met with a standing ovation that lasts over a minute.

This reaction isn’t unusual for Bill Gates. At this point in his career, Bill’s been the richest man in the world, every year, for over a decade. And for the past three years, Time Magazine named Bill as one of the hundred most influential people in the world. By all accounts, Bill has made it to the top of his field. But his journey to becoming the world’s youngest-ever billionaire didn’t begin in the vaunted halls of Harvard. It began in a rundown apartment in Albuquerque, New Mexico where Bill and his old friend, Paul Allen, made the fortuitous decision to launch a company by the name of Microsoft on April 4th, 1975.


From Noiser and Airship, I’m Lindsay Graham and this is History Daily.

History is made every day. On this podcast—every day—we tell the true stories of the people and events that shaped our world. 

Today is April 4th, 1975: The Birth of Microsoft.

Act One: Planting the Seeds

It’s the fall of 1968 at an elite prep school in Seattle, Washington.

Inside the school's computer lab, a 15-year-old Paul Allen logs onto the school’s only computer. As Paul feeds a paper tape with computer code into the machine's reader, he feels his peers surround him, eager to watch him test his latest code.

Their fascination is understandable. Lakeside, a prestigious all-boys prep school, is one of the only schools in the world with its own computer. To many, the machines are little more than an overgrown calculator. But, not to Paul. For Paul, computers are his life’s calling. Since founding the Lakeside Programmers Group, Paul has spent every lunchtime and free period in the computer lab, writing and testing code like that he’s trying out today.

Paul waits in anticipation as the computer takes several minutes to read his code, before typing a simple Run command. He waits nervously for an error message to appear. But it doesn’t. A slight smile washes over his face as he realizes his program works. The students around him cheer and pat him on his back.

Out of the corner of his eye, Paul notices a newcomer edging closer to him, a gangly, freckle-faced middle schooler with unruly blonde hair. Paul introduces himself to the boy who says his name is Bill Gates. And from that day forward, Paul sees Bill in the computer lab nearly every day. Before long, the two strike up a friendship. Paul teaches Bill all he can about computers. And like Paul, Bill is a fast learner.

Though he’s two years younger, Paul senses that Bill is incredibly smart, competitive, and driven. And when left together in the computer lab one day, Bill shows Paul an issue of Fortune magazine, asking him: “What do you think it’s like to run a Fortune 500 company?” Paul brushes him off, but Bill continues to wonder aloud, “Maybe we’ll have our own company someday.”

Eventually, an opportunity does come for the pair to work together. A local company hires the Lakeside Programmers Group to program its payroll. But, Paul worries it looks bad to have a young middle schooler like Bill working on the project, so he decides to keep Bill off the job.

Paul knows this will be a tough pill for Bill to swallow; Bill doesn’t do well with authority figures of any kind. And when Paul tells him the bad news, Bill is frustrated. He warns Paul that he’ll regret the decision.

For weeks, Paul struggles to get the project off the ground. But without Bill, it just isn’t working. So Paul returns to Bill to ask on him to come on board and help out. Bill agrees, but on one condition: Bill will only come back if he gets to be in charge of the project, and any other project they collaborate on. With few options, Paul agrees.

Together, they successfully complete the computer program, the first of many collaborations to come. Over time, these two will cement a lasting friendship, and a fruitful, enduring partnership. Soon, Bill and Paul will be fielding requests from a host of other clients. Together, the two will even program the computer system for a hydroelectric company, all while Bill is still in high school. But, it's a few years later, while Bill is a college student at Harvard, that the pair will receive their biggest opportunity yet.


It’s 1974 in Albuquerque, New Mexico.

At the headquarters of a struggling calculator business, Ed Roberts, the founder of the company, closes the door to his office. Ed knows there’s no room for distraction today. He needs to find a way to get his company out of debt, and he needs to do it fast.

Ed puts his head in his hands in exasperation as he ponders his company’s prospects. For years, calculators were a booming business. Just last year, Ed was selling calculators faster than his company could make them. But now, a price war threatens to send his company into bankruptcy. But Ed isn’t ready to throw in the towel, far from it.

With a deep exhale, Ed lifts his head. He eyes the computer microprocessor that sits on his desk, a new release from the computer company Intel. At that moment, inspiration strikes. Ed grabs a piece of paper and gets to work envisioning a new product; only this time it won’t be another calculator. Instead, Ed will create the Altair 8800, the world’s first commercially successful personal computer.

Ed’s creation will earn him a cover story with Popular Electronics magazine. And in just two months, Ed will receive 1,000 orders for the Altair 8800. But in order to deliver, he will need someone to create software to run on his computer. Luckily for Ed, the story in Popular Electronics will pique the interest of two young programmers who will take Ed’s computer to the next level, and spark a full-fledged technological revolution.

Act Two: The Beginning of a Revolution

It’s December 1974 in Cambridge, Massachusetts.

Paul Allen trudges through the snowy streets of Harvard Square toward a magazine kiosk. Paul steps inside and begins to browse its shelves, waiting for the snowfall to subside.

Paul still isn’t used to the harsh New England winters; it was only a few months ago that he dropped out of college in Washington to work as a programmer near Harvard, where Bill Gates is now enrolled. Though Bill had to convince Paul to move, he’s happy he did, in spite of the weather.

It’s become clear to Paul that immense technological advances are on the horizon. Though the big computer companies seem stubbornly focused on improving industrial computer systems, Paul knows that the advent of microprocessors could be laying the groundwork for a democratization of computer access, making it possible for everyday people to own a personal computer; it’s a revolution Paul wants to be a part of.

But today, as Paul scans the rows of magazines, an image stops him in his tracks, making him realize the revolution may have already begun. A wave of exhilaration and panic washes over Paul as he stares at the latest issue of Popular Electronics. On its cover is something called the Altair 8800, the world’s first minicomputer kit. Paul throws 75 cents on the counter, grabs the magazine, and rushes off to Bill’s dorm.

Once there, Paul shoves the magazine in Bill’s face and lets out a lament: “Bill, this is happening without us!” Paul doesn’t want to be late to the party. He knows a window of opportunity has opened for them; the Altair will need new software, and Paul is determined that he and Bill will be the ones to deliver it. But time is of the essence.

Paul and Bill know this job will be difficult to get. The Altair is a revolutionary new product. And Ed Roberts, the creator, will likely want to work with the best, most experienced programmers in the business. Paul and Bill are just college kids without much experience to speak of. So to make them seem more desirable, Bill decides to lie.

Using the dorm phone, Paul and Bill connect with Ed Roberts. On the call, Bill claims he and Paul are nearly finished with a brand new computer program that’s perfect for the Altair; one that will allow users to program the Altair in a popular computer language rather than machine code.

After hearing their pitch, Ed agrees to meet Paul in Albuquerque for a demo of their new computer software. They set a date in eight weeks. Paul and Bill are excited, but they’re also nervous. They pretended they've already built the perfect piece of software. Now, they have two months to deliver.


It’s February 1975 on a plane high above Albuquerque, two months after Paul and Bill first contacted Ed Roberts.

Paul feels the plane dip as it begins its final descent. He is on his way to meet Ed Roberts for a demo of the software he and Bill developed for Ed’s new personal computer. With Bill back at college, the burden of today’s demo falls squarely on Paul’s shoulders.

There hasn't been much time to prepare. Because for the past two months, Paul and Bill threw themselves into developing software they've said they already had. Bill stopped going to class. Paul started skipping work. But against all odds, they did it; they created software that allows users to program the Altair 8800 in an easy-to-use popular computer language, not machine code, making the computer accessible to far more people. All they have to do now is show it to the computer’s creator.

Bill stayed up all last night making sure there were no errors in the software. He didn’t find any, but that doesn’t mean the code will actually work. Paul and Bill don’t have an Altair 8800 to test their software on. And even though the code seems error-free, there was no way for them to know for certain that their software won’t crash.

As the plane’s seatbelt signs come on, a horrible realization strikes Paul: he’s forgotten something.

Paul panics as he realizes that he's neglected to include a critical piece of code called the bootstrap loader. Without it, the Altair won’t be able to read the computer program at all, rendering their software useless. Paul rummages for a notepad and begins scribbling code in pencil. As the plane lands, Paul examines his impromptu handiwork. It’s not the most elegant code he’s ever written, but he hopes it will work in a pinch.

As he steps out of the terminal, Paul searches for Ed Roberts. He imagines he’s just like every other CEO he’s seen: a stiff in a suit. But instead, Paul watches in confusion as Ed, a large, burly man in a tee shirt and bolo tie walks over to greet him.

Together, they drive in Ed’s pickup truck to the company building. Once inside, Paul feels his nerves return as Ed guides him to a light-blue metal box with “Altair 8800” stenciled on its front.

Paul feels a crowd of employees gather around him. With shaking hands, Paul loads his and Bill’s software onto the computer. Paul, Ed, and his employees wait in silence for seven minutes as the computer tries to read the code. Once it’s done, Paul flicks the Run switch. As the machine roars to life, Paul breathes a sigh of relief.

Paul’s success with the Altair will formally begin Bill and Paul’s partnership with Ed Roberts. Moving forward, all Altair computers will be sold with Bill and Paul’s software. Paul will join Ed as his full-time Director of Software, eventually convincing Bill to drop out of Harvard. And, on April 4th, 1975, in a shabby apartment in Albuquerque, New Mexico, Bill and Paul will formalize their business partnership with the founding of a software company they will call Microsoft. This company will soon rise to astonishing heights, but its success will come at a price.

Act Three: A Parting of Ways

It’s April 12, 1981, at the Kennedy Space Center in Florida, six years after Microsoft’s founding.

Paul Allen stands among a crowd of onlookers eagerly awaiting the launch of the very first space shuttle. Paul’s not here for work though. He’s here for pleasure, and a much-needed break from the office, and from Bill. 

For months, Paul and Bill have been hard at work preparing a new operating system for IBM, a major opportunity for Microsoft. But, Paul needed a break, so he came here to Florida to enjoy one of his favorite things in the world: space travel.

Though business has been booming, it’s become apparent to Paul that his partnership with Bill is crumbling. Since the day they founded Microsoft, Bill, and Paul’s partnership was never 50-50. At Bill’s insistence, Paul agreed to a 64-36 split of Microsoft when they founded the company. Bill became the company’s President and Paul, the company’s vice president. But, Paul has grown increasingly tired of answering to Bill.

The IBM deal has only elevated Bill’s fanatical work ethic. Bill doesn’t understand why Paul doesn’t want to work all day, every day, or why he wanted to stop working to go see the historic shuttle launch. Instead, Bill didn’t want Paul to take any time off. But Paul did it anyway.

Now, standing on the Florida coastline, Paul imagines Bill’s frustration back at Microsoft’s headquarters. He can already hear the rebukes he’ll face when he returns to the office. But, an announcement breaks Paul out of his thoughts: one minute left until liftoff. He smiles and joins the crowd around him in the final countdown.

With a thunderous rumble, the space shuttle launches into the sky. As he watches the shuttle carve its path through the atmosphere, all thoughts of IBM, Microsoft, and Bill fade. For the first time in a long while, Paul knows he’s exactly where he’s supposed to be.

Paul will stay in Florida to see the return of the shuttle, before heading back to Microsoft’s office. There, he and Bill will successfully deliver the Microsoft Disk Operating System, or MS-DOS, to IBM. Still, tensions between Paul and Bill will continue to simmer.

Though the development of MS-DOS will put Microsoft on a path to become the world’s biggest software company, Paul will leave Microsoft just two years after MS-DOS' release, citing, in part, persisting grievances against Bill. Paul will retain his stake in the company, but Bill and Paul’s relationship will remain rocky until Paul’s death in 2018.

But even after the deal with IBM, under Bill’s leadership, Microsoft will soar to new heights. Five years after Paul’s departure, Microsoft will go public, making Bill and Paul billionaires. By 1992, Bill will become the richest person in America and, three years later, the richest man in the world. By 2019, Microsoft will become the third U.S. public company to be valued at over $1 trillion.

Together, Bill and Paul will change the course of history, profoundly altering how people live and work through their contributions to the PC revolution, a movement spearheaded by the company they launched nearly fifty years ago on April 4th, 1975.


Next on History Daily. April 5th, 1895. Oscar Wilde loses a libel case that leads to his arrest and imprisonment, instigating the downfall of one of Victorian England’s most celebrated writers.

From Noiser and Airship, this is History Daily, hosted, edited, and executive produced by me, Lindsay Graham.

Audio editing by Mollie Baack. 

Sound design by Mischa Stanton. 

Music by Lindsay Graham.

This episode is written and researched by Alexandra Currie-Buckner.

Executive Producers are Steven Walters for Airship, and Pascal Hughes for Noiser.