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  • well, microsoft was the first software company where

  • we wrote software for personal computers and we believe that we could hire the best engineers

  • there was a unbelievable amount of software to be written

  • and we could do it well we could do it on a global basis

  • and... the original customer base was the hardware manufacturers

  • and we sold to literally hundreds and hundreds you know... over a hundred companies in japan

  • and over a hundred companies doing word processors and industrial control type of things

  • we know in the long run we wanted to sell software directly to users

  • but we actually didn't get around that till nineteen eighty

  • when we had uh... our first sort of games and productivity software that

  • that people would go to a computer store in actually buy the the software package

  • we actually talked about it in an article

  • and i think nineteen seventy seven was the first time it appears in print

  • where we say a computer on it on every desk and every home

  • and actually the

  • we said running microsoft software

  • if we were just talking about the vision we'd leave

  • that those last three words out

  • uh... if we were

  • talking in an internal company discussion

  • we put those words in

  • and

  • it's very hard to recall

  • how crazy and wild that was you know on every desk and in every home

  • you know at the time you have

  • people who are very smart saying

  • you know why would somebody needed computer or even Ken Olsen

  • who would run this company digital equipment

  • who made the computer i grew up with

  • and you know that we admired

  • both him and his company immensely

  • was saying that

  • this seemed kinda a silly idea

  • that people would want to have a computer

  • when

  • IBM

  • saw that we had written software for all the personal computers

  • they came to us sought our advice on the design

  • but we said you should put the discant

  • and since they wanted to ship very quickly

  • another company

  • uh...

  • called digital research

  • had done that work

  • for the eight bit machines

  • and they were starting to do a version for this new these new sixteen machines

  • we commenced by the end of the sixteen bit machine

  • using this

  • eighty eighty six eighty d eight processor. Well Digital Research

  • really hadn't finished the work

  • and then IBM was getting frustrated because Digital Research

  • wouldn't sign even a non-disclosure agreement

  • and then some of us uh... particularly Paul

  • and uh...

  • key person named Kozhikode Nishi

  • uh...

  • was from japan worked with us

  • said no no no we should just do that ourselves

  • and because of a quick timing

  • we end up liscensing the original code from another company

  • uh...

  • and turned that into MS-DOS

  • and

  • so then

  • subsequently MS-DOS competed with

  • this Digital Research CP/M

  • uh... after about two or three years and MS-DOS

  • became far far more popular

  • uh... then

  • than CP/M and then eventually we would

  • take an add

  • graphics capability on top of MS-DOS

  • and then integrate the two together

  • and so today when we talk about Windows

  • it actually includes

  • all those MS-DOS things in it. that's the full operating system

  • although most of you think of the graphics in Windows and stuff there's a lot of

  • more classic operating system capability that that's built in there

  • the IBM initial deal is a flat fee deal uh... another flat the deal

  • it had certain restrictions

  • that prevented IBM

  • from selling to other hardware makers

  • so people did

  • IBM PC compatible machines

  • we would get the revenue by doing business directly with those people

  • and that the deal was very complicated but it was a deal that

  • Steve Balmer who's a key person of the company by that time

  • and i thought a lot about

  • and it was a fairly

  • junior team from IBM so we tried to make sure they're giving our belief that

  • personal computers would be hyper popular

  • that microsoft would get

  • a lot of that upside so

  • they felt they got a very good deal, which they did

  • as the industry expanded

  • we uh...

  • for new versions and for different machines, we got that opportunity even

  • though they did not pay us the royalty

  • even in the early days if you set a computer on every desk in every home and

  • you'd say okay how many homes are there on the world how many desk are there on the world

  • you know can i make twenty bucks for every home, twenty bucks for every desk

  • if you get these big numbers

  • but part of the beauty of the

  • whole thing was

  • we were very focused on the here and now

  • should we hire one more person

  • if our customers

  • didn't pay us

  • whould we have enough cash to meet the payroll

  • we really were very practical about

  • that next thing and so involved in

  • the deep engineering

  • that we didn't get ahead of ourselves we never thought

  • you know how big we'd be. i remember

  • when uh... one of the early lists of wealthy people came out

  • and

  • uh... one of the Intel founders was there

  • the guy who ran Wayne

  • computer actually is still

  • Wayne is still doing well and we thought hmm... boy, the software business does

  • well

  • in fact, microsoft could be

  • somewhere to that, but it wasn't real focus that

  • that everyday activity of

  • just doing great software

  • drew us in

  • and some decisions we made, like the quality of the people, the way we were very global

  • that vision of

  • uh...

  • uh... how we thought about software that was very long term

  • but other than those things you know we just came in to work every day

  • and

  • uh...

  • wrote more code

  • you know hired

  • hired more people

  • it wasn't really until the IBM PC

  • succeeded and perhaps even into Windows succeeded that

  • there was a broad awareness that microsoft

  • was very unique

  • as a software company that these other companies have been one product

  • companies

  • hired

  • people couldn't do a broad set of things, didn't renew their excellence, didn't do

  • research

  • uh... so

  • and we thought we were

  • doing something very unique, but it was easily

  • not until nineteen ninety five or even nineteen ninety-seven that

  • that there was this wide recognition that we

  • we were the company that had

  • had revolutionized software

  • when i was very young

  • hadn't been exposed to computers, so i was mostly just reading,

  • doing math, learning about science

  • and i wasn't sure what

  • my career would be

  • i knew i loved

  • learning about things, i was an avid reader

  • but it was when i was twelve years old that i

  • i first got to use a computer

  • actually a very

  • limited machine by today's standards uh... but that

  • definitely fascinated me when i was first exposed

  • i was intrigued

  • uh... by figuring out what it could do and what it couldn't do

  • and some friends and I spent

  • lots of time uh... the teachers got intimidated, so we were on our own

  • trying to figure it out actually we gave

  • course on computers

  • uh... to the other students

  • and it became

  • you know a fascination where

  • uh... we

  • got paid for doing computer work and

  • talked about forming a accompany

  • uh... but

  • there was kind of a magical breakthrough when the computer

  • became

  • uh... cheap

  • and

  • we could see that

  • everyone could afford a computer

  • uh... that was

  • much later

  • uh... but it

  • uh... that's what got us to

  • really get together and create company for software

  • yeah, math was the thing that uh... came most natural to me

  • and

  • you know you take these

  • exams some of which were sort of nationwide exams and

  • uh... i did quite well almost

  • and that gave me some confidence and i had some

  • teachers who were very encouraging

  • uh... they

  • let me read text books, they encourage me to take

  • uh... college course on

  • symbolic math which is actually called

  • algebra

  • uh...

  • so i i felt

  • pretty confident in my math skills, which is a nice thing because

  • uh... not only the sciences but economics a lot of things

  • if you're

  • comfortable

  • uh... with math and statistics and

  • ways of looking at cause-and-effect

  • uh... that's extremely helpful

  • computers were immensely

  • expensive

  • uh... and cost millions of dollars a machine that

  • was far less powerful then

  • then what you have a

  • a cell phone

  • today and so that

  • either you

  • have a very

  • important application

  • or you just share the machine with other people and still you had to pay quite a

  • bit of money

  • and so time-sharing is where you connected up and sharing the machine

  • it's a lot better then

  • sending your programs in and because you can see

  • when you make a mistake

  • uh... pretty quickly

  • even so because they charge is so much

  • we'd actually typed the programs

  • offline on a paper tape

  • uh... so that we didn't

  • have any delay for typing

  • and then when we got onto the computer we'd feed in that tape

  • uh... so that

  • there was less less time online

  • but it gave you a sense of look at what you got right and wrong and you could try

  • and correct things

  • uh... we also

  • because of that time the dominant form of computing was using punch cards

  • we actually did that quite a bit when we're down

  • at the university of washington and use some of those

  • punch card systems

  • as computers became less expensive so-called mini computers

  • then more people had access mostly scientists and business people

  • but also we

  • managed to find

  • machines that weren't being used at night. the idea of the machine is something

  • that an individual would use and that would just sit there idle when they

  • weren't using them

  • that only made sense about a decade later

  • when the work that we and others have done

  • had gotten the price down so dramatically

  • that the idea of a computer sitting idle, you know, doesn't feel like some huge waste of

  • resources

  • like

  • it did when they were

  • so uh...