"Success is a lousy teacher. It seduces smart people into thinking they can't lose."
- Bill Gates
Bill Gates is known as one of the most influential people in the world. He is co-founder of Microsoft, one of the most recognized name in the computer industry with nearly every computers in the world are using it.
With his great success in the computer software industry also came many criticisms. With his ambitious and aggressive business philosophy, Gates and his Microsoft lawyers have been in and out of courtrooms fighting legal battles almost since Microsoft began.
The Microsoft monopoly in the industry sets about completely dominating every market it enters through either acquisition, aggressive business tactics or a combination of both. Some of the largest technology companies that have fought legally against the actions of Microsoft are Apple Computer, Sun Microsystems, Netscape, Opera and WordPerfect.
According to the Forbes magazine, Bill Gates is the richest man in the world and has held the number one position for many years.
William Henry Gates III was born on October 28, 1955, in Seattle, Washington. Gates grew up in an upper middle-class family with two sisters: Kristianne and Libby. Their father, William H. Gates, Sr., was a promising but a shy prominent lawyer. Their mother, Mary Maxwell Gates, was an athletic, University of Washington graduate, that was actively involved in student affairs and leadership and served on the Board of Directors for First Interstate BancSystem and the United Way (founded by her grandfather) and International Business Machines (IBM).
Gates's parents are of English, German, and Scots-Irish descent.
Gates showed early signs of competitiveness when he coordinated family athletic games at their summer house. He also likes playing board games and excelled in the game of Monopoly. Gates is known as William Gates III or "Trey" because his father had the "II" suffix.
Gates was a reader as a child, spending many hours over reference books such as the encyclopedia. Around the age of 11 or 12, although he was doing well in school, Gates seemed bored and withdrawn at times. This has made his parents began to have concerns about his behavior, and worried that he might become a loner at moments during his life.
At the age of 13, Gates enrolled in the Lakeside School where he exceed in nearly all his subjects, especially in math and science. When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School's rummage sale to buy a Teletype Model 33 ASR terminal and a block of computer time on a General Electric (GE). With the system, Gates took an interest in programming with BASIC in which he was excused from math classes to pursue his interest. He wrote his first computer program on this machine: an implementation of tic-tac-toe that allowed users to play games against the computer. Gates was fascinated by the machine and how it would always execute software code perfectly. When he reflected back on that moment, he said, "There was just something neat about the machine."
Later, beside the 33 ASR, Gates and other students also spent their times with other systems including DEC PDP minicomputers. One of these systems was a PDP-10 belonging to Computer Center Corporation (CCC), which banned Gates and other Lakeside students: Paul Allen, Ric Weiland, and Kent Evans for the summer after it caught them exploiting bugs in the operating system to obtain free computer time.
After the ban, the four students offered their service to find bugs in CCC's software in exchange for computer time. Instead using the system from Teletype, Gates went to CCC's offices and learned the source code for various programs that ran on the system, including programs in FORTRAN, LISP, and machine language. The arrangement between Gates with CCC continued until 1970, when the company went out of business. The following year, Information Sciences, Inc. hired the four Lakeside students to write a payroll program in COBOL, providing them computer time and royalties. After his administrators became aware of his programming abilities, Gates wrote the school's computer program to schedule students in classes. He modified the code so that he was placed in classes with mostly female students. He later stated that "it was hard to tear myself away from a machine at which I could so unambiguously demonstrate success."
At age 17, Gates formed a venture with Allen, called Traf-O-Data, to make traffic counters based on the Intel 8008 processor. In early 1973, Bill Gates served as a congressional page in the U.S. House of Representatives.
Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on the SAT and enrolled at Harvard College in the autumn of 1973. While at Harvard, he met Steve Ballmer, who later succeeded Gates as CEO of Microsoft.
In his early years at college, Gates devised an algorithm for pancake sorting as a solution to one of a series of unsolved problems presented in a combinatorics class by Harry Lewis, one of his professors. Gates's solution held the record as the fastest version for over thirty years; its successor is faster by only one percent. His solution was later formalized in a published paper in collaboration with Harvard computer scientist Christos Papadimitriou.
Spending a lot of time using the school's computers, Gates did not have a definite study plan while a student at Harvard. Gates remained in contact with Paul Allen. Gates joined him at Honeywell during the summer of 1974. In 1975, Allen saw the release of the MITS Altair 8800 based on the Intel 8080 CPU, in which Gates and Allen saw this as the opportunity to start their own computer software company.
The first time where Gates and Allen formed partnership is at the Poker Room in Currier House at Harvard University.
The Microsoft Partnership
The idea for Microsoft started in January 1, 1975 when Paul Allen showed Bill Gates an issue of Popular Electronics that demonstrated the Altair 8800. Allen and Gates saw potential to develop an implementation of the programming language BASIC for the system. Bill Gates called the creators of the new microcomputer, MITS (Micro Instrumentation and Telemetry Systems), offering to demonstrate the implementation in order to win a contract with the company. Although Gates and Allen did not have an Altair and had not written code for it, at that time they just wanted to gauge MITS's interest.
The President of the company, Ed Roberts, agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS's offices in Albuquerque was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Gates and Allen left Boston, moved to Albuquerque (where MITS was located), and co-founded Microsoft there. Gross income of the young company was $1 million in 1975.
Paul Allen was then hired by MITS, and Gates took a leave of absence from Harvard to work with Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-Soft" (a portmanteau of microcomputer and software), a name that came from Allen, and had their first office located in Albuquerque. Within a year, the hyphen was dropped, and on November 26, 1976, the trade name "Microsoft" was registered with the Office of the Secretary of the State of New Mexico.
Since then, Gates never returned to Harvard to complete his studies. Gates dropped out of Harvard and talked about his decision with his parents. His parents were supportive of him after seeing how much Gates wanted to start a company.
Microsoft's early products were different variants of Microsoft BASIC which was the dominant programming language in late 1970s and early 1980s home computers such as Apple II (Applesoft BASIC) and Commodore 64 (Commodore BASIC), and were also provided with early versions of the IBM PC as the IBM Cassette BASIC.
Microsoft's BASIC was popular with computer hobbyists, but Gates discovered that a copy had leaked into the community and was being widely copied and distributed. In February 1976, Gates wrote an Open Letter to Hobbyists saying that MITS could not do such a thing without payment. This letter was unpopular with many computer hobbyists, but Gates persisted in his belief that software developers should be able to demand payment from what they have created. And since the trouble the company had in its early rise, Microsoft became independent of MITS in late 1976. Microsoft continued to develop programming language software for various systems and moved from Albuquerque to its new home in Bellevue, Washington on January 1, 1979, after the former rejected Gates's loan application.
The Rise of Microsoft
By releasing its early products, Microsoft quickly gained fame. The success was then continued with the release of DOS (Disk Operating System), an operating system that brought the company its real success.
Steve Ballmer joined the company on June 11, 1980. The following year, Microsoft restructured to become an incorporated business in its home state of Washington by changing its name to Microsoft, Inc.. As part of the restructuring, Bill Gates became President of the company and Chairman of the Board, and Paul Allen became Executive Vice President.
During Microsoft's early years, all of its employees are multitasked and had broad responsibility for growing the company's business. As President of the company, Gates oversaw the business details, but still continued to write code as well. In the first five years, Gates personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.
Approached by IBM
Microsoft was approached by IBM (International Business Machines (IBM)) in July 1980 regarding its upcoming personal computer, the IBM PC. The company first proposed that Microsoft write the BASIC interpreter. When IBM's representatives mentioned that they needed an operating system, Gates referred them to Digital Research (DRI), makers of the widely used CP/M operating system. Since IBM's discussions with Digital Research failed, IBM contracted Microsoft to provide a version of the CP/M operating system.
Microsoft did not have an operating system when they closed the deal with IBM. For this deal, Microsoft purchased a CP/M clone called 86-DOS (QDOS), an operating system similar to CP/M that Tim Paterson of Seattle Computer Products (SCP) had made for hardware similar to the PC for less than $100,000, which IBM renamed it PC-DOS in exchange for a one-time fee of $50,000. Due to potential copyright infringement problems with CP/M, IBM marketed both CP/M and PC-DOS for $240 and $40, respectively, with PC-DOS eventually becoming the standard because of its lower price. 35 of the company's 100 employees worked on the IBM project for more than a year.
Gates did not offer to transfer the copyright on the operating system, because he believed that other hardware vendors would clone IBM's system. In 1983, Microsoft collaborated with numerous companies, and created a home computer system, MSSX, which contained its own version of the DOS operating system, entitled MSX-DOS. The product was then became relatively popular in Japan, Europe and South America. Later, the market saw a flood of IBM PC clones after Columbia Data Products successfully cloned the IBM BIOS, quickly followed by Eagle Computer and Compaq.
The deal with IBM allowed Microsoft to have control of its own QDOS derivative, MS-DOS, and through aggressive marketing of the operating system to manufacturers of IBM-PC clones Microsoft rose from a small player to one of the major software vendors in the home computer industry. Despite IBM's name on the operating system the press quickly identified Microsoft as being very influential on the new computer.
When the IBM PC debuted, Microsoft was the only company that offered operating system, programming language, and application software for the new computer. With the release of the Microsoft Mouse on May 2, 1983, Microsoft continued to expand its product line in other markets. This expansion included Microsoft Press, a book publishing division, on July 11 the same year, which debuted with two titles: Exploring the IBM PCjr Home Computer by Peter Norton, and The Apple Macintosh Book by Cary Lu.
When Apple, one of Microsoft's closest rival in the industry, established by Steve Jobs, Steve Wozniak and Ronald Wayne, continued to deliver richly engineered, but expensive experience, Bill Gates and Paul Allen gain market share by delivering software to cheap commodity personal computers.
Microsoft Windows and Microsoft Word
Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. Although the two companies successfully developed the first version of the new system, mounting creative differences caused the partnership to deteriorate. It ended in 1991, when Gates led Microsoft to develop a version of OS/2 independently from IBM.
The first operating system publicly released by the company was a variant of Unix in 1980. Acquired from AT&T through a distribution license, Microsoft dubbed it Xenix, and hired Santa Cruz Operation in order to port and adapt the operating system to several platforms. This Unix variant would become home to the first version of Microsoft's word processor, Multi-Tool Word (Microsoft Word). Microsoft Word became notable for its concept of "What You See Is What You Get", or WYSIWYG.
Microsoft's Word was also the first application with the ability to display bold text. The product was first released in the spring of 1983, and free demonstration copies of the application were bundled with the November 1983 issue of PC World, making it the first program to be distributed on-disk with a magazine. However, Xenix was never sold to end users directly although it was licensed to many software OEMs for resale. It grew to become the most popular version of Unix, measured by the number of machines running it (note that Unix is a multi-user operating system, allowing simultaneous access to a machine by several users). By the mid-1980s Microsoft had gotten out of the Unix business, except for an interest in SCO.
Management and Leadership
As a successful businessman and a well-known entrepreneur, Bill Gates has caught the eyes of public for his personality and his way to manage and build a company from the ground until how it is known today.
Since the early days of Microsoft, Gates was the one who have the primary responsibility for the company's product strategy. He was aggressive in broadening the company's range of products, and wherever his company achieved a dominant position in the market against competitors, he is notorious in defending it at all cost. He also gained a reputation for being distant to others when people said that he wasn't easy to have contact with.
One executive recalled that after he one showed Gates a video game and defeated him 35 of 37 times. When the two met again a month later Gates "won or tied every game. He had studied the game until he solved it. That is a competitor."
Gates is known to be sarcastic. As an executive, Gates regularly met Microsoft's senior managers and program managers often interrupt presentations with comments within his own perspective. He is verbally combative, berating managers for weaknesses he see in them from their business strategies and proposals that placed the company's long-term interest at risk.
Most of his time in Microsoft, Gates's role was management and executive role. He was also an active software developer in the company's early years, particularly on the company's programming language products. He has not officially been on a development team since working on the TRS-80 Model 100, but wrote code as late as 1989 that shipped in the company's products. On June 15, 2006, Gates announced that he would transition his role to philanthropy. He divided his responsibilities between two successors (Ray Ozzie and Craig Mundie).
Gates stepped down as chief executive officer of Microsoft in January 2000. He remained as Chairman and created the position of Chief Software Architect. In June 2006, Gates announced that he would be working part-time at Microsoft, and full-time work at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, Chief Software Architect, and Craig Mundie, Chief Research and Strategy Officer. Gates's last full-time day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.
Since leaving day-to-day operations at Microsoft, Gates continues his philanthropy and, among other projects, purchased the video rights to the Messenger Lectures series called The Character of Physical Law, given at Cornell University by Richard Feynman in 1964 and recorded by the BBC. The videos are available online to the public at Microsoft's Project Tuva.
On February 4th, 2014, Microsoft officially announced Satya Mandella as its third CEO. Gates steps down from being the Chairman and assume the new title of Technology Advisor, which will increase his time at the company. John Thompson assume Gates role as the new Board Chairman.
On March 13, 2020, Microsoft announced Gates would be leaving his board positions at Microsoft and Berkshire Hathaway, to dedicate more of his efforts in philanthropic endeavors.
This happened 45 years after Gates founded Microsoft, or about 12 years since Gates stopped his day-to-day role within the company.
Bill Gates began to appreciate the expectations others had of him when public opinion mounted suggesting that he could give more of his wealth to charity. Gates studied the work of Andrew Carnegie and John D. Rockefeller, and in 1994 sold some of his Microsoft stock to create the William H. Gates Foundation. In 2000, Gates and his wife combined three family foundations into one to create the charitable Bill & Melinda Gates Foundation, which is the largest transparently operated charitable private foundation in the world.
The primary aims of the foundation are to enhance healthcare and reduce extreme poverty, and in America, to expand educational opportunities and access to information technology. The foundation, based in Seattle, Washington, is controlled by its three trustees: Bill Gates, Melinda Gates and Warren Buffett. Other principal officers include Co-Chair William H. Gates, Sr. and Chief Executive Officer Jeff Raikes. It had an endowment of $36.2 billion as of September 30, 2012.
Although the foundation itself notes that the philanthropic role has its own limitations. In 2007, its founders were ranked as the second most generous philanthropists in America. In 2010, its founders had started The Commission on Education of Health Professionals for the 21st Century titled as "Transforming education to strengthen health systems in an interdependent world".
The foundation allows benefactors access to information regarding how its money is being spent, unlike other major charitable organizations. David Rockefeller has been credited as a major influence for Gates' philanthropy act. Gates and his father met with Rockefeller several times, and modeled their giving in part on the Rockefeller family's philanthropic focus, namely those global problems that are ignored by governments and other organizations. As of 2007, Bill and Melinda Gates were the second-most generous philanthropists in America, having given over $28 billion to charity. They plan to eventually give 95 percent of their wealth to charity.
The foundation was at the same time criticized because it invests assets that it has not yet distributed with the exclusive goal of maximizing return on investment. As a result, its investments include companies that have been charged with worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily, and pharmaceutical companies that do not sell into the developing world. In response to press criticism, the foundation announced in 2007 a review of its investments, to assess social responsibility. It subsequently canceled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices. The Gates Millennium Scholars program has been criticized for its exclusion of Caucasian students.
On December 9, 2010, Gates, investor Warren Buffett, and Mark Zuckerberg (Facebook's CEO) signed a promise they called the "Gates-Buffett Giving Pledge", in which they promised to donate to charity at least half of their wealth over the course of time.
As of November 2012, 91 billionaires have signed The Giving Pledge.
Awards and Recognition
In 1987, just days before his 32nd birthday, Bill Gates was listed as a billionaire in the pages of Forbes 400 Richest People in America issue. As the world's youngest self-made billionaire, he was worth $1.25 billion, over $900 million more than he'd been worth the year before, when he'd debuted on the list.
Time magazine named Gates one of the 100 people who most influenced the 20th century, as well as one of the 100 most influential people of 2004, 2005, and 2006. Time also named Gates, his wife Melinda and U2's lead singer Bono as the 2005 Persons of the Year for their humanitarian efforts. In 2006, he was voted eighth in the list of "Heroes of our time". Gates was listed in the Sunday Times power list in 1999, named CEO of the year by Chief Executive Officers magazine in 1994, ranked number one in the "Top 50 Cyber Elite" by Time in 1998, ranked number two in the Upside Elite 100 in 1999 and was included in The Guardian as one of the "Top 100 influential people in media" in 2001.
In 1994, Gates was honored as the twentieth Distinguished Fellow of the British Computer Society. Gates has received honorary doctorates from Nyenrode Business Universiteit, Breukelen, The Netherlands, in 2000; the Royal Institute of Technology, Stockholm, Sweden, in 2002; Waseda University, Tokyo, Japan, in 2005; Tsinghua University, Beijing, China, in April 2007; Harvard University in June 2007; the Karolinska Institutet, Stockholm, in January 2008, and Cambridge University in June 2009. He was also made an honorary trustee of Peking University in 2007. Gates was also made an honorary Knight Commander of the Order of the British Empire (KBE) by Queen Elizabeth II in 2005, in addition to having entomologists name the Bill Gates flower fly, Eristalis gatesi, in his honor.
In November 2006, Gates and Melinda were awarded the Order of the Aztec Eagle for their philanthropic work around the world in the areas of health and education, particularly in Mexico, and specifically in the program "Un país de lectores". In 2010 he was honored with the Silver Buffalo Award by the Boy Scouts of America, its highest award for adults, for his service to youth.
Bill Gates held first place on the Forbes 400 list from 1993 through to 2007, and number one on Forbes list of The World's Richest People from 1995 to 2007 and 2009. In 2011, Forbes ranked Gates as the fifth most powerful person in the world.
In May 2014, Gates is no longer the largest shareholder of Microsoft for the first time in the history of the company. A stock sale by Gates reduced his ownership to 330.1 million shares, compared to more than 333 million owned by Steve Ballmer as of the company's last proxy filing. Gates has been steadily selling his shares for years, at an average of 80 million shares annually, primarily to endow the Bill & Melinda Gates Foundation.
Bill Gates married Melinda French on January 1, 1994. The couple have three children: daughters Jennifer Katharine (b. 1996) and Phoebe Adele (b. 2002) and son Rory John (b. 1999).
The family resides in a earth-sheltered house in the side of a hill overlooking Lake Washington in Medina. As of 2006, the total assessed value of the property (land and house) is approximately about $125 million, and the annual property tax is around $991,000. His 66,000 sq ft (6,100 m2) estate has a 60-foot (18 m) swimming pool with an underwater music system, as well as a 2,500 sq ft (230 m2) gym and a 1,000 sq ft (93 m2) dining room.
Also among Gates's private acquisitions is the Codex Leicester, a collection of writings by Leonardo da Vinci, which Gates bought for $30.8 million at an auction in 1994. Gates that is also known as an avid reader, has the ceiling of his large home library engraved with a quotation from The Great Gatsby.
Gates that has a net worth of $67 billion (2013), also enjoys playing bridge, tennis, and golf, in which some of this activities are shared with Warren Buffett. Gates learned bridge from his parents but took it up seriously when he began playing with him. The two billionaires are passionate bridge players who often compete in person, in tournaments, and online under the names "Chalengr" for Gates and "T-Bone" for Buffett.
In 1999, Gates that was number one on the Forbes 400 list for years and the richest man in the world, has his wealth briefly surpassed $101 billion, causing the media to call Gates a "centibillionaire". Despite his wealth and extensive business travel, Gates usually flew coach until 1997, when he bought a private jet. Since 2000, the nominal value of his Microsoft holdings has declined due to a fall in Microsoft's stock price after the dot-com bubble burst and the multi-billion dollar donations he has made to his charitable foundations.
In a May 2006 interview, Gates commented that he wished that he were not the richest man in the world because he disliked the attention it brought. Since he became a successful businessman at a young age, Gates always has the media's attention.
Gates has several investments outside Microsoft, which in 2006 paid him a salary of $616,667 and $350,000 bonus totalling $966,667. He founded Corbis, a digital imaging company, in 1989. In 2004 he became a director of Berkshire Hathaway, the investment company headed by long-time friend Warren Buffett. Gates also invested in Cascade Investments LLC, bgC3 and TerraPower. In 2013, Gates and other investors financed $35M in ResearchGate.
Despite his reputation as one of the wealthiest man and one of the greatest philanthropist, both Bill Gates and Melinda that has refused to give any competitor's product to their children (one of which was Apple's product), told in an interview that their three children will inherit only a very small portion of Gates's wealth. "That amount of money," Gates said, "would not be good for them." $10 million each is the estimate that's been cited. He also said that he'll pay for education and health issues, but his children are expected to find careers and support themselves while making a contribution to society.
Gates has publicly stated that the majority of his wealth will be donated to the Bill & Melinda Gates Foundation. Since the dot-com bubble bursts, and his philanthropic activity, Gates holds the #2 spot on the Forbes list of wealthiest individuals, after Mexican Carlos Slim. On March 2014, Forbes released its annual rankings for the world's richest people showing that Gates ($76 billion from $67 billion last year) overtook Slim ($72 billion from $73 billion last year) for the first time in four years. This had made Gates hold the #1 spot 15 times in the last 20 years.
Despite the fact that most people concludes that many of Microsoft's success is impossible to separate from the role Apple played. As executives, Bill Gates and Steve Jobs have partnered at various times, competed all the time, and challenged one another in ways that helped shape the landscape of techdom. It's a complex relationship. Steve Jobs and Bill Gates were frenemies, but when Jobs died, the mutual respect between the two tech titans was quite strong: By his bed, Jobs kept a letter Gates had written the Apple co-founder in his final months.