This is something that’s very important to me, personally, and if you are reading this, it should be important to you too. This story is about Gary Kildall and his place in the PC industry. It’s something that I think more people really need to know about.

So, Lets Begin at The Beginning

It was the year 1977, and a new company, Apple Computers, had recently become very successful with the first PC, the Apple II.

This new machine was the first mass-produced personal computer that you didn’t have to put together yourself. Within 3 years of their breakthrough success, the personal computer industry was worth over a billion dollars. This is because for the first time in history, having a computer meant you could amplify your productivity and intellect in the comfort of your own home.

IBM, who at the time was in the corporate computer business, only sold large mainframes. These were more or less newer versions of the original computers, like the ENIAC and UNIVAC. And being the massive business that they are, IBM saw huge economic opportunity in the burgeoning PC industry. In fact, this was the opportunity of all opportunities.

By 1980 IBM had an eye on Apple’s success in the home computer market, and they realized that they were wrong about what they originally thought of the PC. It wasn’t just a toy for hobbyists anymore. These things could actually be useful. The problem for IBM is that it was such a huge company, that it was bogged down by its own bureaucracy and red tape. This made it very slow when it came to decisions. There was an approval process for absolutely everything.

It would have taken them years to come up with just a PC design, let alone a finished product. They were aware of this, and there was concern within the company that they may not be able to bring a computer to market fast enough to compete with Apple. The solution to this problem came in the form of a small, and somewhat secret team within the company.

Plug And Play, Sorta

This small team was tasked with the job of creating a business-oriented personal computer. When they set out to start the project, they chose to use off-the-shelf parts to speed up the design process. Using non-IBM components was, at the time, very unusual for the company. With this method, however, instead of taking several years to build a computer from scratch, they managed to have a complete product within a year.

By 1980, IBM had all the hardware put together and tested. It worked fine. The problem was, they didn’t have an operating system. An operating system is absolutely essential for a home user to run a computer. It keeps track of how and where files are stored, and how the computer handles hardware such as a keyboard, mouse, and monitor. Without an operating system, you have to program everything yourself, from scratch. Aware that the average person wouldn’t be interested in such an undertaking, they had to find a solution.

This is Where Things Get a Bit Interesting

IBM was the biggest tech company at the time, so any PC that they made was going to have a huge impact on the market. This created a massive demand for an operating system for the new machine. But the thing is, it was a secret project, so nobody new about it. They couldn’t open up bidding to attract software developers, they had to go find them.

Later that year, IBM approached Microsoft to build the operating system. IBM asked Bill Gates, who was initially mistaken for an office intern, to sign a non-disclosure agreement. Gates had to keep IBM’s plan a secret under threat of legal action by IBM. When they told him what they were working on, he had to tell them that Microsoft didn’t have an operating system to sell them. Bill instead pointed them in the direction of Gary Kildall.

Gary was a somewhat reserved and quiet guy, but he had already paved the way for operating systems and personal computers in 1971. He had made a programming language for Intel’s (and the world’s) first CPU, the 4004, but he soon realized that there had to be a way to control how the chip interacting with the rest of the computer system. The next year, in 1972, he solved this problem by creating CPM, which stands for Control Program for Micro-computers.

CPM: The Very First PC Operating System

Before CPM, each computer had to have specially designed software. You can think of it like this: That’s like every car on the road having a different way of operating it.

With an operating system like CPM, a programmer could write software for the operating system rather than the computer that the operating system ram on. This means you can write a program one time, and CPM would take care of the rest, making your program compatible on any machine. Despite this, Gary didn’t really have much interest in business and was just doing this as a hobby. His wife, Dorothy, however, saw the potential. She convinced him to start a business and start licencing his invention.

Digital Research is Born

The result was a company called Digital Research. By 1979, the new company’s product became the industry standard for operating systems. For all intents and purposes, they were the Microsoft of the late ’70s, and Gary was equivalent to what we now know Bill Gates to be.

So, IBM ended up taking Bill’s advice and they went to go see Gary in Seattle. Bill called Gary on the phone to let him know that ‘someone’ is coming to visit. Remember, because of the non-disclosure agreement that Gates signed, meant that he couldn’t explain to Gary who exactly was coming to visit. But he did say ‘Treat them right, they are important guys.’

Unfortunately, Gary was somewhat too much of a laid back guy and didn’t quite grasp the full urgency of what Bill was trying to tell him. Maybe he thought it was just another small company instead of the biggest tech company on the face of the earth. Because of this, he was not home at the time. Instead, he was out flying one of his airplanes on a business trip.

IBM ended up talking to Gary’s wife, Dorothy, who by then had become the head of operations at Digital Research. IBM’s lawyers begin pushing her to sign a non-disclosure agreement, basically saying that they were never there. Dorothy did not like this at all, and she refused to sign. This annoyed the IBM visitors, and they decided to leave the house.

A few days later, IBM would approach Bill Gates a second time. Bill, being opportunistic and deterministic in nature, wasn’t going to give Gary a second shot. He saw that what IBM was doing had the potential to change the PC market into something entirely different. A new cleaned up business image, rather than the geeky enthusiast image that it had.

Quick And Dirty Operating System

Bill Gates chose to do something pretty extraordinary: This time, he told IBM that Microsoft did have an operating system, even though they didn’t. What Microsoft was really planning to do, was to just buy an operating system from a small company down the street. He paid 75 thousand dollars for it. This Operating System was called the Quick and Dirty Operating System, or ‘Q-DOS’.

Yeah, that’s an odd name, but there is a reason for it. The code used to make it work was a clone of CPM, the operating system that Gary made. So with this clone, Microsoft now had a functioning operating system in their possession. Microsoft exchanged the word ‘dirty’ for the word ‘disk’ and Q-DOS became MS-DOS, the Microsoft Disk Operating System, and it was packaged with every IBM PC.

The first IBM PC was released in August 1981. The company expected to sell maybe about 250 thousand units, which they would have been more than happy with, but their machine exceeded all expectations, selling 2 million units in only a few years. IBM had now superseded Apple as the world’s largest PC maker. Now, because IBM put their name behind it, it was truly OK for business types to get into PCs. It was no longer just for enthusiasts. Now you could get real work done.

Around the same time, Gary became the co-host of ‘The Computer Chronicles’. A TV program that followed the progress of the personal computer at the time.

So, everything was falling into place for Bill Gates. He was setting himself up to be the richest man in the world. His dirty operating system was one half of the equation, but some smart business sense would complete it. Because the IBM PC was made from off the shelf parts, other manufactures such as Compaq and HP started making their own PC clones from the same parts. The deal between Microsoft and IBM was to licence their operating system to them for a one time fee of 50 thousand dollars.

Strings Attached

But there was a catch, Microsoft never mentioned to IBM that their deal was non-exclusive. Soon, Microsoft was selling MS-DOS to all of IBM’s competitors, taking a licensing fee from every computer sold. This licensing deal has been called the greatest business deal in history. It made bill gates the richest man in the world, practically overnight.

Gary’s failure to not be there at the right time is conversely referred to as one of the biggest business failures in history. Once the sales of the IBM PC took off, Gary realized what he had lost. For a rare moment, he would shed his kind nature, and threaten to sue IBM. In a settlement, IBM agreed to offer CPM alongside MS-DOS with every PC sold. Gary was super happy with this. People would now have the ability to choose for themselves which software they liked best. Justice had finally be served, or so he thought.

There was just one problem though, more than likely due to their bad experience with his wife when both software packages were released, DOS was sold for $40 and CPM was listed for $240. This was a complete disaster for CPM, considering the fact that these two software packages were essentially the same. For this reason, Gary’s CPM software would fade into digital obscurity, and by the late 1980s, Gary had lost to a clone of his own creation.

Unfortunately, he didn’t take it well. He was so tormented by the events that he didn’t even bother to sue IBM or Microsoft ever again. The strain from missing out on the greatest opportunity of many lifetimes would eventually cause Dorothy to leave Gary, and he would miss many episodes of his show, The Computer Chronicles.

With the industry booming, computers were everywhere, so this meant that he would forever be reminded of his failure everywhere he turned. Kildall went through huge bouts of depression and alcoholism. Sadly, in 1984, he died from head injuries sustained from a fistfight at a bar.

Today, Gary, the man that invented the operating system for PCs, is only a faint footnote in tech history, so I think that it’s important that we keep his contribution to the evolution of computing alive.

If there is anything that can be learned from this, it’s to make the most of every opportunity.

Leave a Reply

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