Bill Gates

Synopsis
Born on October 28, 1955, in Seattle,
Washington, famed entrepreneur Bill
Gates began to show an interest in
computer programming at age 13.
Through technological innovation,
keen business strategy and aggressive
business tactics, he and partner Paul
Allen built the world's largest
software business, Microsoft. In the
process, Gates became one of the
richest men in the world. In February
2014, Gates announced that he was
stepping down as Microsoft's
chairman.
Early Life
Bill Gates was born William Henry
Gates III on October 28, 1955, in
Seattle, Washington. Gates began to
show an interest in computer
programming at the age of 13 at the
Lakeside School. He pursued his
passion through college. Striking out
on his own with his friend and
business partner Paul Allen, Gates
found himself at the right place at
the right time. Through technological
innovation, keen business strategy
and aggressive business tactics, he
built the world's largest software
business, Microsoft. In the process,
Gates became one of the richest men
in the world.
Bill Gates grew up in an upper
middle-class family with two sisters:
Kristianne, who is older, and Libby,
who is younger. Their father, William
H. Gates Sr., was a promising, if
somewhat shy, law student when he
met his future wife, Mary Maxwell.
She was an athletic, outgoing student
at the University of Washington,
actively involved in student affairs
and leadership. The Gates family
atmosphere was warm and close, and
all three children were encouraged to
be competitive and strive for
excellence. Bill showed early signs of
competitiveness when he coordinated
family athletic games at their
summer house on Puget Sound. He
also relished in playing board games
(Risk was his favorite) and excelled
at Monopoly.
Bill had a very close relationship with
his mother, Mary, who after a brief
career as a teacher devoted her time
to helping raise the children and
working on civic affairs and with
charities. She also served on several
corporate boards, including those of
the First Interstate Bank in Seattle
(founded by her grandfather), the
United Way and International
Business Machines (IBM). She would
often take Bill along when she
volunteered in schools and at
community organizations.
Bill was a voracious reader as a
child, spending many hours pouring
over reference books such as the
encyclopedia. Around the age of 11
or 12, Bill's parents began to have
concerns about his behavior. He was
doing well in school, but he seemed
bored and withdrawn at times. His
parents worried he might become a
loner. Though they were strong
believers in public education, when
Bill turned 13, they enrolled him at
Seattle's Lakeside School, an exclusive
preparatory school. He blossomed in
nearly all his subjects, excelling in
math and science, but also doing
very well in drama and English.
While at Lakeside School, a Seattle
computer company offered to provide
computer time for the students. The
Mother's Club used proceeds from the
school's rummage sale to purchase a
teletype terminal for students to use.
Bill Gates became entranced with
what a computer could do and spent
much of his free time working on the
terminal. He wrote a tic-tac-toe
program in BASIC computer language
that allowed users to play against
the computer.
It was at Lakeside School where Bill
met Paul Allen, who was two years his
senior. The two became fast friends,
bonding on their common enthusiasm
over computers, even though they
were very different. Allen was more
reserved and shy. Bill was feisty and
at times combative. They both spent
much of their free time together
working on programs. Occasionally,
they disagreed and would clash over
who was right or who should run the
computer lab. On one occasion, their
argument escalated to the point
where Allen banned Gates from the
computer lab. On another occasion,
Gates and Allen had their school
computer privileges revoked for
taking advantage of software
glitches to obtain free computer time
from the company that provided the
computers. After their probation,
they were allowed back in the
computer lab when they offered to
debug the program. During this time,
Gates developed a payroll program
for the computer company the boys
hacked into, and a scheduling
program for the school.
In 1970, at the age of 15, Bill Gates
went into business with his pal, Paul
Allen. They developed "Traf-o-
Data," a computer program that
monitored traffic patterns in
Seattle, and netted $20,000 for
their efforts. Gates and Allen
wanted to start their own company,
but Gates's parents wanted him to
finish school and go on to college
where they hoped he would work to
become a lawyer.
Bill Gates graduated from Lakeside
in 1973. He scored 1590 out of 1600
on the college SAT test, a feat of
intellectual achievement that for
several years he boasted about when
introducing himself to new people.
Early Career
Gates enrolled at Harvard University
in the fall, originally thinking of a
career in law. But his freshman year
saw him spend more of his time in
the computer lab than in class. Gates
did not really have a study regimen.
Instead, he could get by on a few
hours of sleep, cram for a test, and
pass with a reasonable grade.
Gates remained in contact with Paul
Allen, who, after attending
Washington State University for two
years, dropped out and moved to
Boston, Massachusetts, to work for
Honeywell. In the summer of 1974,
Gates joined Allen at Honeywell.
During this time, Allen showed Gates
an edition of Popular Electronics
magazine featuring an article on the
Altair 8800 mini-computer kit. Both
boys were fascinated with the
possibilities that this computer could
create in the world of personal
computing. The Altair was made by a
small company in Albuquerque, New
Mexico, called Micro Instrumentation
and Telemetry Systems (MITS). Gates
and Allen contacted the company,
proclaiming that they were working
on a BASIC software program that
would run the Altair computer. In
reality, they didn't have an Altair to
work with or the code to run it. But
they wanted to know if MITS was
interested in someone developing
such software. MITS was, and its
president Ed Roberts asked the boys
for a demonstration. Gates and
Allen scrambled, spending the next
two months writing the software at
Harvard's computer lab. Allen
traveled to Albuquerque for a test
run at MITS, never having tried it
out on an Altair computer. It worked
perfectly. Allen was hired at MITS
and Gates soon left Harvard to work
with him, much to his parents'
dismay. In 1975, Gates and Allen
formed a partnership they called
Micro-Soft, a blend of "micro-
computer" and "software."
Microsoft (Gates and Allen dropped
the hyphen in less than a year)
started off on shaky footing. Though
their BASIC software program for the
Altair computer netted the company
a fee and royalties, it wasn't
meeting their overhead. Microsoft's
BASIC software was popular with
computer hobbyists who obtained pre-
market copies and were reproducing
and distributing them for free.
According to Gates's later account,
only about 10 percent of the people
using BASIC in the Altair computer
had actually paid for it. At this
time, much of the personal computer
enthusiasts were people not in it for
the money. They felt the ease of
reproduction and distribution
allowed them to share software with
friends and fellow computer
enthusiasts. Bill Gates thought
differently. He saw the free
distribution of software as stealing,
especially when it involved software
that was created to be sold.
In February of 1976, Gates wrote an
open letter to computer hobbyists
saying that continued distribution
and use of software without paying
for it would "prevent good software
from being written." In essence,
pirating software would discourage
developers from investing time and
money into creating quality software.
The letter was unpopular with
computer enthusiasts, but Gates stuck
to his beliefs and would use the
threat of innovation as a defense
when faced with charges of unfair
business practices.
Gates had a more acrimonious
relationship with MITS president Ed
Roberts, often resulting in shouting
matches. The combative Gates clashed
with Roberts on software development
and the direction of the business.
Roberts considered Gates spoiled and
obnoxious. In 1977, Roberts sold MITS
to another computer company, and
went back to Georgia to enter
medical school and become a country
doctor. Gates and Allen were on their
own. The pair had to sue the new
owner of MITS to retain the software
rights they had developed for Altair.
Microsoft wrote software in different
formats for other computer
companies and, at the end of 1978,
Gates moved the company's
operations to Bellevue Washington,
just east of Seattle. Bill Gates was
glad to be home again in the Pacific
Northwest, and threw himself into his
work. All 25 employees of the young
company had broad responsibilities
for all aspects of the operation,
product development, business
development, and marketing. With
his acumen for software development
and a keen business sense, Gates
placed himself as the head of
Microsoft, which grossed $2.5 million
in 1978. Gates was only 23.
The Rise of Microsoft
Gates's acumen for not only software
development but also business
operations put him in the position of
leading the company and working as
its spokesperson. He personally
reviewed every line of code the
company shipped, often rewriting
code when he saw it necessary. As the
computer industry began to grow with
companies like Apple, Intel, and IBM
developing hardware and
components, Bill was continuously out
on the road touting the merits of
Microsoft software applications. He
often took his mother with him. Mary
was highly respected and well
connected with her membership on
several corporate boards including
IBM. It was through Mary that Bill
Gates met the CEO of IBM.
In November 1980, IBM was looking
for software that would operate their
upcoming personal computer (PC)
and approached Microsoft. Legend
has it that at the first meeting with
Bill Gates someone at IBM mistook
him for an office assistant and
asked him to serve coffee. Gates did
look very young, but he quickly
impressed IBM, convincing them that
he and his company could meet their
needs. The only problem was that
Microsoft had not developed the
basic operating system that would run
IBM's new computers. Not to be
stopped, Gates bought an operating
system that was developed to run on
computers similar to IBM's PC. He
made a deal with the software's
developer, making Microsoft the
exclusive licensing agent and later
full owner of the software but not
telling them of the IBM deal. The
company later sued Microsoft and
Gates for withholding important
information. Microsoft settled out of
court for an undisclosed amount, but
neither Gates nor Microsoft admitted
to any wrong doing.
Gates had to adapt the newly
purchased software to work for the
IBM PC. He delivered it for a
$50,000 fee, the same price he had
paid for the software in its original
form. IBM wanted to buy the source
code, which would have given them
the information to the operating
system. Gates refused, instead
proposing that IBM pay a licensing
fee for copies of the software sold
with their computers. Doing this
allowed Microsoft to license the
software they called MS-DOS to any
other PC manufacturer, should other
computer companies clone the IBM
PC, which they soon did. Microsoft
also released software called
Softcard, which allowed Microsoft
BASIC to operate on Apple II
machines.
Between 1978 and 1981, Microsoft's
growth exploded, and staff
increased from 25 to 128. Revenue
also shot up from $4 million to $16
million. In mid-1981 Gates and Allen
incorporated Microsoft, and Gates
was appointed president and
chairman of the board. Allen was
named executive vice-president.
By 1983, Microsoft was going global
with offices in Great Britain and
Japan, and with 30 percent of the
world's computers running on its
software. But 1983 also brought news
that rocked Microsoft to its very
foundation. Paul Allen was diagnosed
with Hodgkin's disease. Though his
cancer went into remission a year
later with intensive treatment, Allen
resigned from company that same
year. Rumors abound as to why Allen
left Microsoft. Some say Bill Gates
pushed him out, but many say it was
a life-changing experience for Allen
and he saw there were other
opportunities that he could invest his
time in.
The Invention of Microsoft
Windows
Though their rivalry is
legend, Microsoft and Apple shared
many of their early innovations. In
1981 Apple invited Microsoft to help
develop software for Macintosh
computers. Some developers were
involved in both Microsoft
develeopment, and the development
of Microsoft applications for
Macintosh. The collaboration could be
seen in some shared names between
the Microsoft and Macintosh
systems.
It was through this knowledge sharing
that Microsoft was to develop
Windows. A system was that used a
mouse to drive a graphic interface,
displaying text and images on the
screen. This differed greatly from
the text and keyboard driven MS-DOS
system where all text formatting
showed on the screen as code and
not what actually would be printed.
Bill Gates quickly recognized the
threat this kind of software might
pose for MS-DOS and Microsoft
overall. For the unsophisticated user
—which was most of the buying public
—the graphic imagery of the VisiCorp
software would be so much easier to
use. Gates announced in an
advertising campaign that a new
Microsoft operating system was about
to be developed that would use a
graphic interface. It was to be called
"Windows," and would be compatible
with all PC software products
developed on the MS-DOS system. The
announcement was a bluff, in that
Microsoft had no such program under
development. But as a marketing
tactic it was sheer genius as nearly 30
percent of the computer market was
using the MS-DOS system and would
wait for Windows software rather
than change to a new system. Without
people willing to change formats,
software developers were unwilling to
write programs for the VisiCorp
system and it lost momentum by early
1985.
In November 1985, Bill Gates and
Microsoft launched Windows; nearly
two years after his announcement.
Visually the Windows system looked
very similar to the Macintosh system
Apple Computer Corporation had
introduced nearly two years earlier.
Apple had earlier given Microsoft full
access to their technology while it was
working on making Microsoft products
compatible for Apple computers.
Gates had advised Apple to license
their software but they ignored the
advice, being more interested in
selling computers. Once again, Gates
took full advantage of the situation
and created a software format that
was strikingly similar to the
Macintosh. Apple threatened to sue
and Microsoft retaliated, saying it
would delay shipment of its Microsoft
compatible software for Macintosh
users. In the end, Microsoft
prevailed in the courts because it
could prove that while there were
similarities in how the two software
systems operated, each individual
function was distinctly different.
In 1986, Bill Gates took Microsoft
public with an initial public offering
(IPO) of $21 per share. Gates held 45
percent of the company's 24.7 million
shares and became an instant
millionaire at age 31. Gates's stake
at that time was $234 million of
Microsoft's $520 million. Over time,
the company's stock increased in
value and split numerous times. In
1987, Bill Gates became a billionaire
when the stock raised to $90.75 a
share. Since then, Gates has been at
the top, or at least near the top, of
Forbes ' annual list of the top 400
wealthiest people in America . In
1999, with stock prices at an all time
high and the stock splitting eight-
fold since its IPO, Gates's wealth
briefly topped $101 billion.
Yet, Bill Gates never felt totally
secure about the status of his
company. Always having to look over
his shoulder to see where the
competition was, he developed a
white hot drive and competitive
spirit. Gates expected everyone in the
company to have the same drive and
dedication. One story goes that one
of Gates's assistants had come to
work early to find someone sleeping
under a desk. She considered calling
security or the police when she
discovered it was Gates.
Bill Gates's intelligence allowed him
to be able to see all sides of the
software industry—product
development and corporate strategy.
When analyzing any corporate move,
he would develop a profile of all the
possible cases and run through them,
asking questions about anything that
could possibly happen. His
confrontational management style
became legend as he would challenge
employees and their ideas to keep
the creative process going. An
unprepared presenter would hear,
"That's the stupidest thing I've ever
heard!" from Gates. But this was as
much a test of the rigor of the
employee as it was Gates's passion for
his company. He was constantly
testing the people around him to see
if they were really convinced of their
ideas.
Outside the company, Bill Gates was
gaining a reputation as a ruthless
competitor. Several tech companies
led by IBM began to develop their
own operating system called OS/2 to
replace MS-DOS. Rather than give into
the pressure, Gates pushed ahead
with the Windows software, improving
its operation and expanding its uses.
In 1989, Microsoft introduced
Microsoft Office which bundled office
productivity applications such as
Microsoft Word and Excel into one
system that was compatible with all
Microsoft products. The applications
were not as easily compatible with
OS/2. Microsoft's new version of
Windows sold 100,000 copies in just
two weeks and OS/2 soon faded away.
This left Microsoft with a virtual
monopoly on operating systems for
PCs. Soon the Federal Trade
Commission began to investigate
Microsoft for unfair marketing
practices.
Microsoft faced a string of Federal
Trade Commission and Justice
Department investigations throughout
the 1990s. Some related allegations
that Microsoft made unfair deals
with computer manufactures who
installed the Windows operating
system on their computers. Other
charges involved Microsoft forcing
computer manufactures to sell
Microsoft's Internet Explorer as a
condition for selling the Windows
operating system with their
computers.
At one point, Microsoft faced a
possible break up of its two divisions—
operating systems and software
development. Microsoft defended
itself, harking back to Bill Gates's
earlier battles with software piracy,
and proclaiming that such
restrictions were a threat to
innovation. Eventually, Microsoft was
able to find a settlement with the
federal government to avoid a
breakup. Through it all, Gates found
some inventive ways to deflect the
pressure with light-hearted
commercials and public appearances
at computer trade shows posing as
Star Trek's Mr. Spock. Gates
continued to run the company and
weather the federal investigations
through the 1990s.
Personal Life
In 1989, a 28-year-old Microsoft
executive named Melinda French
caught the eye of Bill Gates, then 37.
The very bright and organized
Melinda was a perfect match for
Gates. In time, their relationship
grew as they discovered an intimate
and intellectual connection. On
January 1, 1994, Melinda and Bill
were married in Hawaii. But only a
few months later heartbreak struck
Bill Gates as his mother was
diagnosed with breast cancer. She
died in June 1994. Gates was
devastated.
Bill and Melinda took some time off
in 1995 to travel to several countries
and get a new perspective on life
and the world. In 1996, their first
daughter, Jennifer, was born. A year
later, Gates moved his family into a
55,000 square foot, $54 million house
on the shore of Lake Washington.
Though the house serves as a business
center, it is said to be a very cozy
home for the couple and their three
children.
Philanthropic Efforts
With wife Melinda's influence, Gates
took an interest in filling his
mother's role as a civic leader. He
began to realize that he had an
obligation to give more of his wealth
to charity. Being the consummate
student he was, Gates studied the
philanthropic work of Andrew
Carnegie and John D. Rockefeller,
titans of the American industrial
revolution. In 1994, Gates and his
wife established the William H. Gates
Foundation which was dedicated to
supporting education, world health,
and investment in low-income
communities. In 2000, the couple
combined several family foundations
to form the Bill and Melinda Gates
Foundation. They started out by
making a $28 billion contribution to
set up the foundation.
Bill Gates stepped down from the
day-to-day operations of Microsoft
in 2000, turning over the job of CEO
to college friend Steve Ballmer who
had been with Microsoft since 1980.
He positioned himself as chief
software architect so he could
concentrate on what was for him the
more passionate side of the business.
He still remains chairman of the
board. Over the next few years, his
involvement with the Bill and
Melinda Gates Foundation occupied
much of his time and even more of
his interest. In 2006, Gates
announced he was transitioning
himself from full-time work at
Microsoft, to devote more quality
time to the Foundation. His last full
day at Microsoft was June 27, 2008.
In addition to all the accolades of
being one of the most successful and
richest businessmen in the history of
the world, Bill Gates has also
received numerous awards for
philanthropic work. Time magazine
named Gates one of the most
influential people of the 20th
century. The magazine also named
Gates, his wife Melinda, and rock
band U2's lead singer Bono as the
2005 Persons of the Year.
Gates also holds several honorary
doctorates from universities
throughout the world and an
honorary Knight Commander of the
Order of the British Empire by Queen
Elizabeth II. In 2006, Gates and his
wife were awarded the Order of the
Aztec Eagle by the Mexican
government for their philanthropic
work throughout the world in the
areas of health and education.
In February 2014, Gates announced
that he would be stepping down as
chairman of Microsoft in order to
move into a new position as
technology adviser. In addition to
Gates's transition, it was reported
that longtime Microsoft CEO Steve
Ballmer would be replaced by 46-
year-old Satya Nadella.