From: https://www.cnbc.com/2020/08/05/how-bill-gates-mother-influenced-the-success-of-microsoft.html
How Bill Gates' mom helped Microsoft get a deal with IBM in 1980 – and it propelled the company's huge success
Published Wed, Aug 5 202012:29 PM EDT Updated Thu, Aug 6 20209:50 AM EDT
A young Bill Gates
Doug Wilson | Getty Images
Bill Gates dropped out of Harvard University in 1975 to start Microsoft, the software company that would make him a billionaire by age 31.
According to Gates, part of his success is due to his parents – in fact, his late mother, Mary Gates, was said to be instrumental in a deal that helped propel Microsoft into the big leagues.
Mary was a respected businesswoman with many responsibilities, including her membership on the board of nonprofit organization United Way of King County. There, she met the late John Opel, then-chairman of IBM, who also was a member of the United Way board. In 1980, Microsoft was a small, five-year-old firm and Mary saw an opportunity to help her son's fledgling company by speaking with Opel, according to The New York Times.
That's because for the first time in IBM's then 70-year history, the company was looking to outsource help for an endeavor the company called project "Chess." IBM wanted to hire an outside software maker to develop an operating system for its personal computer.
Microsoft was already in the running for the project, but IBM was considering many software companies, including Digital Research, one of Microsoft's competitors. With this knowledge, Mary used her connection and spoke with Opel about Microsoft, and afterward, Opel spoke to IBM executives about the company.
Luckily for Microsoft, IBM's talks with Digital Research started to flounder, and when assessing options, Opel remembered Microsoft as the company "run by Bill Gates, Mary Gates' son," according to The Seattle Times.
As a result, IBM "took a chance," The New York Times reported, and hired Microsoft for the job. (In addition to Microsoft, IBM also contracted Digital Research and SofTech Microsystems to adapt operating systems for IBM's personal computer.)
When Microsoft won the job, it didn't actually have an operating system of its own. So in 1981, the company bought QDOS, an operating system created by hardware company Seattle Computer Products, and with it developed MS-DOS, the Microsoft Disk Operating System. Microsoft licensed its MS-DOS to IBM to use as the operating system for its personal computer. (In addition to Microsoft, IBM also contracted Digital Research and SofTech Microsystems to use their operating systems for IBM's personal computer.)
Because the MS-DOS was non-exclusive to IBM, it became one of Microsoft's most profitable products ever. The operating system was not only used in all IBM computers at the time, but also became the go-to operating system for almost every personal computer on the market.
In 1986, Microsoft went public at $21 a share, and following, Gates immediately became a multi-millionaire. As the company's success continued, Gates became a billionaire just a year later.
Gates was CEO at Microsoft until 2000, stepped down as chairman in 2008 and left the company's board in March to dedicate more time to his Bill & Melinda Gates Foundation. Microsoft currently has a market cap of $1.6 trillion.
This story has been updated to include information on the additional operating systems IBM used for its personal computer.
In 1980, IBM first approached Bill Gates of Microsoft, to discuss the state of home computers and what Microsoft products could do for IBM. Gates gave IBM a few ideas on what would make a great home computer, among them to have Basic written into the ROM chip. Microsoft had already produced several versions of Basic for different computer system beginning with the Altair, so Gates was more than happy to write a version for IBM.
As for an operating system (OS) for an IBM computer, since Microsoft had never written an operating system before, Gates had suggested that IBM investigate an OS called CP/M (Control Program for Microcomputers), written by Gary Kildall of Digital Research. Kindall had his Ph.D. in computers and had written the most successful operating system of the time, selling over 600,000 copies of CP/M, his operating system set the standard at that time.
IBM tried to contact Gary Kildall for a meeting, executives met with Mrs. Kildall who refused to sign a non-disclosure agreement. IBM soon returned to Bill Gates and gave Microsoft the contract to write a new operating system, one that would eventually wipe Gary Kildall's CP/M out of common use.
The "Microsoft Disk Operating System" or MS-DOS was based on Microsoft's purchase of QDOS, the "Quick and Dirty Operating System" written by Tim Paterson of Seattle Computer Products, for their prototype Intel 8086 based computer.
However, ironically QDOS was based on (or copied from as some historians feel) Gary Kildall's CP/M. Tim Paterson had bought a CP/M manual and used it as the basis to write his operating system in six weeks. QDOS was different enough from CP/M to be considered legally a different product. IBM had deep enough pockets, in any case, to probably have won an infringement case if they had needed to protect their product. Microsoft bought the rights to QDOS for $50,000, keeping the IBM & Microsoft deal a secret from Tim Paterson and his company, Seattle Computer Products.
Bill Gates then talked IBM into letting Microsoft retain the rights, to market MS-DOS separate from the IBM PC project, Gates and Microsoft proceeded to make a fortune from the licensing of MS-DOS. In 1981, Tim Paterson quit Seattle Computer Products and found employment at Microsoft.
"Life begins with a disk drive." - Tim Paterson