It was a cloudy Seattle day in late 1980, and Bill Gates, the young chairman of a tiny company called Microsoft, had an appointment with IBM that would shape the destiny of the industry for decades to come.
He went into a room full of IBM lawyers, all dressed in immaculately tailored suits. Bill’s suit was rumpled and ill-fitting, but it didn’t matter. He wasn’t here to win a fashion competition.
Over the course of the day, a
contract was worked out whereby IBM would purchase, for a one-time fee of about $80,000, perpetual rights to Gates’ MS-DOS operating system for its upcoming PC. IBM also licensed Microsoft’s BASIC programming language, all that company's other languages, and several of its fledging applications. The smart move would have been for Gates to insist on a royalty so that his company would make a small amount of money for every PC that IBM sold.
But Gates wasn’t smart. He was
smarter.
