Wealth

How Bill Gates’ mom helped Microsoft get a deal with IBM in 1980 – and it propelled the company’s huge success

Bill Gates dropped out of Harvard University in 1975 to start Microsoft, the software company that would make him a billionaire by age 31

According to Gates, part of his success is due to his parents – in fact, his late mother, Mary Gates, was said to be instrumental in a deal that helped propel Microsoft into the big leagues.

Mary was a respected businesswoman with many responsibilities, including her membership on the board of nonprofit organization United Way of King County. There, she met the late John Opel, then-chairman of IBM, who also was a member of the United Way board. In 1980, Microsoft was a small, five-year-old firm and Mary saw an opportunity to help her son’s fledgling company by speaking with Opel, according to The New York Times.

That’s because for the first time in IBM’s then 70-year history, the company was looking to outsource help for an endeavor the company called project “Chess.” IBM wanted to hire an outside software maker to develop an operating system for its personal computer.

Microsoft was already in the running for the project, but IBM was considering many software companies, including Digital Research, one of Microsoft’s competitors. With this knowledge, Mary used her connection and spoke with Opel about Microsoft, and afterward, Opel spoke to IBM executives about the company.

Luckily for Microsoft, IBM’s talks with Digital Research started to flounder, and when assessing options, Opel remembered Microsoft as the company “run by Bill Gates, Mary Gates’ son,” according to The Seattle Times.

As a result, IBM “took a chance,” The New York Times reported, and hired Microsoft for the job.

When Microsoft won the job, it didn’t actually have an operating system of its own. So in 1981, the company bought QDOS, an operating system created by hardware company Seattle Computer Products, and with it developed MS-DOS, the Microsoft Disk Operating System. Microsoft licensed its MS-DOS to IBM to use as the operating system for its personal computer.

Because the MS-DOS was non-exclusive to IBM, it became one of Microsoft’s most profitable products ever. The operating system was not only used in all IBM computers at the time, but also became the go-to operating system for almost every personal computer on the market.

In 1986, Microsoft went public at $21 a share, and following, Gates immediately became a multi-millionaire. As the company’s success continued, Gates became a billionaire just a year later.

Gates was CEO at Microsoft until 2000, stepped down as chairman in 2008 and left the company’s board in March to dedicate more time to his Bill & Melinda Gates Foundation. Microsoft currently has a market cap of $1.6 trillion.

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don’t miss:

Products You May Like

Articles You May Like

Millions can’t pay rent. Landlords making less than $50,000 a year are caught in the middle
Biden’s capital gains tax hike could spark a big sell-off in stocks. Here’s what that means for the market
Kevin O’Leary: How to find your passion and turn it into a successful career
Trump to sign executive orders protecting preexisting conditions and seeking a way to prevent surprise medical bills
HHS wants to test 30% of U.S. wastewater for the coronavirus as an ‘early warning system’

Leave a Reply

Your email address will not be published. Required fields are marked *