FREE ESSAY ON BILL GATES

BILL GATES

Bill Gates
Bill Gates, cofounder of the Microsoft corporation, holds 30.7 percent of its stock
making him one of the richest people in the United States. He was the marketing and sales
strategist behind many of Microsoft's software deals. Their software became the industry
standard in the early 1980s and has just increased in distribution as the company has
grown, so much that the Federal government is suggesting that Microsoft has violated
Sherman and Clayton antitrust acts. 
Bill Gates' first interest in computers began at Lakeside, a private school in Seattle
that Gates attended. There he wrote his first software program when I was thirteen years
old. It was for playing tic-tac-toe(Gates 1). It was at Lakeside that Gates met Paul
Allen, who later became cofounder with Gates of Microsoft. There they became friends and
began to mess around with the computer(Gates 2). Back in the sixties and early seventies
computer time was expensive. This is what drove me to the commercial side of the software
business(Gates 12). Gates, Allen and a few others from Lakeside got entry-level software
programming jobs. One of Gates early programs that he likes to brag about was written at
this time. It was a program that scheduled classes for students. I surreptitiously added
a few instructions and found myself nearly the only guy in a class full of girls(Gates
12). 
In 1972 Intel released their first microprocessor chip: the 8008. Gates attempted to
write a version of BASIC (Beginner's All-purpose Symbolic Instruction Code) for the new
Intel chip, but the chip did not contain enough transistors to handle it. Gates and Allen
found a way to use the 8008 and started Traf-O-Data, a computer traffic analysis
company(Clayton 452) It worked well however, marketing their new machine proved to be
impossible. No one actually wanted to buy the machine, at least not from a couple
teenagers(Gates 14). Gates and Allen had more less successful endeavors in starting a
software company. In 1974 Intel announced their new chip: the 8080. The two college
students sent off letters to all the big computer companies, offering to write them a
version of BASIC for the new Intel chip. We got no takers(Gates 15). 
While at Harvard, the cool thing to do was to slack off on classes for most of the
semester and try and see how well the student could do at the end. Steve Ballmer and
Gates took a tough graduate- level economics course together- Economics 2010. The
professor allowed you to bet your whole grade on the final if you choose(Gates 40). They
did that, did not do anything for the class all semester, and studied and got A's. During
one of these slack off periods, Gates and Allen found a very small computer: the Altair
8800 ('Altair' was a destination in a Star Trek episode)(Gates 16). It had a few switches
and lights on the front that you could get to blink, but that was about all. This new
chip had great potential, but there was no way to program it. After five weeks of not
going to classes, not eating or sleeping regularly, their version of BASIC was written-
and the world's first microcomputer software company was born. In time we named it
'Microsoft'(Gates 17). 
Gates left Harvard on leave in 1975. Microsoft's big economic break came in 1980 when
IBM- the computer industry leader- asked Gates to develop an operating system for its new
personal computer(Clayton 452). IBM usually did not use external help in software design
or hardware manufacture, but they wanted to release the first personal computer in less
than a year. IBM had elected to build its PC mainly from off-the-shelf components
available to anyone. This made a platform that was fundamentally open, which made it easy
to copy(Gates 47). IBM bought the microprocessors from Intel and licensed the operating
system from Microsoft. Microsoft bought some work from another company in Seattle and
hired its top engineer, Tim Paterson. The system became known as the Microsoft Disk
Operating System, or MS-DOS. 
Now because of the licensing agreement between IBM and Microsoft, IBM had no control over
Microsoft's distribution of its MS-DOS to other companies who wanted to clone the IBM
machine. This decision by IBM is still under great debate. Many industry analysts argue
that IBM should have waited for their own software developers to develop an operating
system or that IBM should have purchased MS-DOS from Microsoft. However, from a more
broad economic picture of IBM's decision, it may have just turned out for the good of
Microsoft, IBM and the average computer user. Microsoft's goal was not to make money
directly from IBM, but to profit from licensing MS- DOS to computer companies that wanted
to offer machines more or less compatible with the IBM PC(Gates 49). By allowing
Microsoft to sell MS-DOS to other companies, this made IBM's PC the industry de facto
standard. With other companies scrambling to compete with IBM, Microsoft licensed MS-DOS
to these companies and fulfilled one of Microsoft's goals: to create the standard for the
industry(Jobs 50). Compaq Computer of Houston launched [the first] clone in 1982 and
attained FORTUNE 500 status a scant four years later(Schlender 42). Hundreds of companies
followed. 
MS-DOS dominated the market much like VHS beat out Betamax and how early TV sales boomed.
The more people bought the product, the more companies produced it and with the
television, the more sets were sold, the more programming was available. This was a main
reason why Apple's Macintosh only controlled 9% of the market(Schlender 40). The PC story
would be far different if Apple had licensed its operating system software to other
computer makers early on(Cook 64). In effect, they had a monopoly on their own system and
software. Their lack of competition kept prices up and software selection down. Apple has
just recently licensed some Macintosh operating systems to other companies. 
Microsoft has thrived on the ability to foresee and understand the computer needs of the
average user. After Microsoft made their name with MS-DOS, they started work on a
graphical based operating system much like Apple's Macintosh computer. They called it
Windows. Windows swept the market(Clayton 452). By 1993 it was selling over 1 million
copies a month and Microsoft operating systems ran nearly 90 percent of the world's PC
s(Clayton). Microsoft had well achieved their goal of creating the standard for the
industry(Jobs 50). However, because Microsoft enjoys a near monopoly, beginning in June
of 1990, the Federal Trade Commission, which shares antitrust jurisdiction with the
Department of Justice, took the first crack, quietly opening an inquiry (Cook 64). Many
other software companies have cheered(Pain) the government and offered a deluge of help.
One of the big complaints of computer manufacturers is that they must agree to pay
software royalties...for every computer they ship, regardless of whether the computer is
sold with any Microsoft software. It is an all or nothing deal(Rohm 92). Steve Jobs,
cofounder of Apple and founder of Next, calls Microsoft the 'small orifice' through which
every other company must squeeze if it wants to participate in the PC market(Schlender
41). 
After two years of investigation, commissioners were deadlocked on whether to file an
antitrust complaint(Cook). However, antitrust chief Anne Bingaman continued the process
with a high-profile investigation. After collecting information, conducting interviews,
and talking to Gates, Microsoft signed an agreement that would require Microsoft to make
minor changes in the way it licenses DOS and Windows to computer manufacturers(Cook).
Federal District Court Judge Stanley Sporkin rejected the proposed statement. Bingaman
continued the case. She hired Sam Miller, a trial lawyer from San Francisco law firm of
Morrison & Foerster. Miller was to head up litigation against Microsoft. 
What will come of the lawsuit? If Microsoft agrees to the next settlement, it will level
the playing field(Rohm 94) or they could end up the next AT&T. It is up to those in
Washington and at Microsoft. If Microsoft looses, instead of just DOS with its huge share
of the market, if you've got three or four operating systems each having 25 or 30 percent
of the market, you're going to provide a lot more incentive for those people to
predisclose or disclose interface operations to everybody(Rohm 94) said a lawyer for the
case. The operating system that works with all applications and other operating systems
wins. That is IBM and Apple's Taligent and OS/2's strategy. 
Right now Bill Gates is building a multi million dollar water front home outside of
Seattle, equipped with all the technological luxuries that a few years ago only science
fiction writers could dream up, for he and his wife, Melinda French. He has a 2.5 million
dollar book deal that is selling now(Lyall 20). What is in Gates future? He loves his
work at Microsoft and continues to stay involved with running the company. He has gotten
with Craig McCaw and announced plans to launch a 9 billion dollar
satellite-communications by 2001. He is also working with Sega, Time Warner and TCI just
to name a few. As for his monopolistic image in computer circles, only time will tell. 
Bibliography
Bibliography
? Cook, William J. U.S. News & World Report. A Pain for Windows. Feb. 27,1995 p64-66 
? Clayton, Gary E. Ph.D. Economics Principles and Practices. New York:
Glencoe/McGraw-Hill 1995 
? Economist, The:The World This Week. March 26, 1994 p7 
? Economist, The: Business. January 22, 1994 p73 
? Fortune. June 28 1993 
? Gates, Bill. The Road Ahead. New York:Penguin Group 1995 
? Lyall, Sarah. Technos: Are These Books, or What? CD-ROM and the Literary Industry.
Winter 1994 p20-23 
? Quittner, Joshua. The Seattle Times. Seattle, Electronic Peek into the Future.September
5, 1993 D1+ 
? Rohm, Wendy Goldman. Wired:Oh No, Mr. Bill! April 1994. p90+ 
? Schlender, Brenton R. Fortune. Jobs and Gates Together. Aug. 26, 1991 p50+ 
? Schlender, Brenton R. Fortune:The Future of the PC. Aug 26, 1991, p40+