The Genie in the Box - Fire in the Valley (2014)

Fire in the Valley (2014)

Chapter 5
The Genie in the Box

I think that most people’s real motivation for getting a computer was to learn—they wanted to see what they could do with it.

Dan Fylstra, publisher of VisiCalc

As the buyers of the first Altair computers found out, these new personal computers were nothing without software. Even then, it wasn’t clear how much they could do or what the programmers would be inspired to make them do. Within a few years there would be a multibillion-dollar market for personal-computer software, but in the 1970s it wasn’t immediately obvious that anyone could make money writing programs for these toys.

The Altair’s First Recital

There was nothing he could have said to prepare us for what happened.

-Lee Felsenstein, on Steve Dompier’s Homebrew demo

On the evening of April 16, 1975, during a Homebrew Computer Club meeting, Steve Dompier put on a show to remember. But Dompier was no showman. A slender, quick-moving young man with straight hair down to the middle of his back, he wore jeans and a nondescript sport shirt and “spoke quickly in a young person’s idiom,” Lee Felsenstein remembers, “filling in with ‘stuff’ when he saw no need to be more precise.”

But Dompier had in his possession an actual Altair. Few of the people there had seen one. Because MITS wasn’t delivering Altairs yet, Dompier had to earn his by flying to Albuquerque to pick it up in person. It may have seemed fanatical to travel a thousand miles to get what amounted to a $397 toy, but Dompier made it seem reasonable. This was an actual computer, he told the Homebrewers. It was real and it was here now. And all of them could buy it.

Buy their own computers? they thought. It used to be that only a rare few had the means to own one. Computers were controlled by a priesthood of technicians in white coats, who mediated between the machines and ordinary mortals. The technofreaks in the audience that night got caught up in Dompier’s excitement and began to imagine what they could do if they had computers of their own—or rather, what they would do when they had them.

What Dompier showed them that night made them understand how revolutionary that idea was.

Playing the Fool

Lee Felsenstein remembers, “He arrived carrying his Altair and other ‘stuff’ and crouched to set it up in a corner near the door. He unrolled an extension cord out into the hallway where one of the few live electrical outlets could be found, and then hunched over the Altair to enter [his] program through the front panel switches, deflecting all questions with, ‘Wait, you’ll see.’”

The Homebrewers were interested in the machine, but hardly expected it to do much of anything given that it had no display, no keyboard, and only a teaspoonful of memory. But some of them suspected that Dompier would come up with something interesting. He was a likable, down-to-earth fellow around whom the computer universe crackled. Lee Felsenstein was curious to see what Dompier could do with the Altair. If some people are accident-prone, Dompier was serendipity-prone, Felsenstein thought.

He wasn’t accident-immune, apparently. It took several minutes of painstaking switch-flipping for Dompier to enter his program. He knew if he made one mistake, it would all have to be done over. Then, just as he finished, someone tripped over the power cord and erased all his work. He plugged the machine back in and started all over, patiently reentering his program. Finally, he finished it—again.

He straightened up and made a brief announcement to the crowd—little more than an elaboration on “Wait, you’ll see.” “There was nothing he could have said to prepare us for what happened,” Felsenstein recalls. “Noise—sound—music began emitting from the speaker of the portable radio he had placed on the Altair’s cover. We immediately recognized the melody of the Beatles’ ‘The Fool on the Hill.’”

Dompier didn’t wait for applause. “Wait, there’s more,” he told the crowd. “It just started doing this itself.”

And then the tones of “Daisy Bell (A Bicycle Built for Two)” came from the speaker. "We were thrilled,” Felsenstein recalls, “to hear what many of us recognized as the first song ever ‘sung’ by a computer—in 1960, at Bell Labs—coming from this completely amateur setup.”

The music stopped and the applause began. The crowd gave Dompier a standing ovation.

Technically, what Dompier had done was just a clever but not entirely unfamiliar trick. He had exploited a characteristic of small computers that would end up annoying the neighbors of their owners for the next five years. The machines emitted radio-frequency interference, the stuff that makes snow in television pictures and static in radio transmissions. When Dompier realized that the Altair made his radio buzz, he decided to play around with the static. He figured out what he had to do with his program to control the frequency and duration of the noise.

Dompier’s little “radio interface” program, which on paper would have looked nonsensical to any programmer who didn’t know about its accidental side effects, turned the static into recognizable music. Dompier described his accomplishment a year later in an article entitled “Music of a Sort” in Dr. Dobb’s Journal, calling the event “the Altair’s first recital.”

Program It Yourself

But the Homebrewers understood the revolutionary implications of Dompier’s act. He understood, too, that by claiming this machine for such a trivial, thoroughly unprofessional use, he was planting a flag on newly conquered ground. This thing belongs to us, he was saying, and it was this act of rebellion against the spirit of the computer priesthood, more than his technical prowess, that the Homebrewers applauded that night.

Dompier’s program was short and simple. The machine did not have the memory for useful programs. At the time, hobbyists were more interested in hardware than software. After all, many of them had dreamed of owning a computer for some time, and they couldn’t start programming a machine that did not exist. But with the advent of the Altair, software became not only feasible but essential.

Those early computer enthusiasts had no choice but to write their own software. No one imagined then that anyone would actually buy software from someone else. Hobbyists wrote small programs that were little more than demonstrations of the machine’s potential.

Before the microcomputer could begin to change the world, software was needed in order to transform a plaything into a useful tool. A few pioneers worked within the tight memory constraints of the first machines and were still able to create some ingenious programs. As more memory became available, it became possible to write more complex and useful programs. The first of the more complicated programs tended to be frivolous, but soon serious applications and business and accounting software followed.

Programming, which started out as an activity for hobbyists, quickly became an earnest commercial enterprise. The two kinds of programs the new machines would need very quickly if they were going to be truly useful were operating systems and high-level languages. The collection of programs that controls input/output (I/O) devices, such as disk drives, and that shunts information into and out of memory and performs all the other operations that the computer user wants done automatically, is called an operating system. In practice, users typically work with a computer via an operating system. Large mainframe computers had operating systems, and it was clear to many people that microcomputers needed them, too.

Every computer also has what’s called a machine language, the set of commands the machine is made to recognize. These commands trigger the machine’s basic operations, such as moving data between its internal storage registers, storing data in memory, or performing simple arithmetic on data. A computer becomes widely useful only when it is possible to trigger whole groups of these fundamental operations with a single command. Collections of these more powerful and meaningful commands are embodied in high-level languages. The intricacies of machine language make it a cumbersome and complex language to use. High-level languages enable a computer user to progress beyond having to plod through the minutiae of machine language, thereby making a computer faster and producing more interesting results.

Beyond the programmer’s tools lay the application programs, the software that makes a computer actually accomplish something. But this was 1976; operating systems and high-level languages weren’t yet available, and application software was even further off. Yet to come were the word-processing programs that would turn a computer into a replacement for the typewriter, accounting programs that would keep track of payroll records and print checks, and educational programs that would introduce computer users to new ways of learning. The hobbyists of the day looked at their new machines and asked themselves what they could do with them.

Play games, they answered.

Pleasure Before Business

Man is a game-playing animal, and a computer is another way to play games.

-Scott Adams, computer-game software pioneer

Long before high-level languages and operating systems simplified programming, computer enthusiasts created games. They drew their inspiration mostly from the arcade games that were then becoming popular. The early microcomputer games were often just simpler versions of Missile Command, Asteroid, and others.

Early PC Games

Games provided the early hobbyists justification for having a computer. When friends questioned the utility of having such a machine, these hobbyists could show off a clever game, perhaps Steve Dompier’s Target or Peter Jennings’s Microchess, and listen to the oohs and aahs.

Dompier was among the most creative when it came to programming games on the Altair. With no I/O except the front-panel switches, it was a challenge to make the Altair do anything. A number of people, Dompier included, wrote variations on the popular Simon electronic game, in which the player chased the 16 blinking lights up and down the front panel, attempting to press the corresponding buttons to make the lights flash on and off “real pretty.”

Creating games also provided a way to learn how to program. As soon as they got their hands on Gates and Allen’s BASIC, they had the essential tool needed to create simple games. Several books were soon available that listed the programs for loads of different games. An Altair, KIM-1, IMSAI, or Sol owner could type in the program and start playing the game in no time. The first such book was David Ahl’s 101 BASIC Computer Games, compiled while Ahl was still at DEC and originally intended for use on minicomputers. Often displaying nothing more graphically sophisticated than patterns of asterisks printed out on a Teletype machine, the early games were primitive compared to today’s interactive, multimedia extravaganzas.

Many of the first games jumped over to microcomputers from minicomputers and mainframes. (It can be argued that the earliest ancestor of modern computer games, with all their flashy graphics, was a simple tennis-like game played on an oscilloscope.) Games were nothing new to the early hobbyists who had played them on the big computer systems at their jobs, sometimes even loading games into memory on large time-sharing systems. Of course, if they were caught playing, they faced trouble, but the temptation was too much to resist.

One of the most popular games for large machines was Star Trek, which allowed the player to pretend to be Captain Kirk and command the Enterprise through a series of missions against Klingon warships. Star Trek was an underground phenomenon, hidden in the recesses of a company or university’s computer, to be played surreptitiously when the boss wasn’t looking. No one paid for copies of the game, and no royalties were ever paid to the writers or creators of the Star Trek television show. Scott Adams, an RCA employee working on satellite-recognition programs at Ascension Island in the South Atlantic, recalls playing Star Trek on the satellite radar screens—an act that did not endear him to government officials.


Figure 36. Scott Adams Adams created some of the first games for personal computers.

(Courtesy of Scott Adams)

Because it was everywhere on larger machines, it was only natural that Star Trek would become one of the first microcomputer games. Many different versions of it already existed, and many more were soon written for microcomputers, including Dompier’s Trek for the Sol. When advanced technology made graphics possible on a microcomputer, Star Trek programs added visual simulations of “the final frontier.”

By late 1976, having graphics capability in a microcomputer was growing increasingly important. Cromemco, with its Dazzler board, and Processor Technology, with its VDM (Video Display Module), gave the Altair its first graphics. The VDM, released in 1976, also operated on the IMSAI, Sol, and PolyMorphic computers, and any other machine with an S-100 bus structure.

Frequently, graphics software was designed primarily to test or demonstrate the capabilities of a machine. The kaleidoscopic images and changing patterns of John Horton Conway’s game of Life were popular for that reason. Steve Wozniak’s Breakout and Steve Dompier’s Target were two real games that showcased the computers well. A clever programmer such as Dompier could easily make games to display a computer’s hidden talents. Target, described by its author as a “shoot-down-the-airplane-type game,” became a phenomenon. Employees at Processor Technology regularly played it during lunch, and soon it gained wider exposure.

One evening, Dompier was at home playing Target while occasionally glancing at a color television across the room. Suddenly the television screen lit up with video graphics, and there was his game, blazing away in full color on the set. He jerked his hands off the keyboard in amazement. No physical connection existed between the TV and the computer. Was the computer somehow able to broadcast the game to the TV? Stranger still was that the television screen showed a different stage of the game than what was currently on his terminal, but both screens were certainly displaying Target. Suddenly, the game on the TV screen dissolved into Tom Snyder’s face, and Dompier realized that the talk show host had been playing Target on air, demonstrating the Sol’s capabilities from coast to coast.

Another kind of game was generating a lot of publicity at around that time. It also depended on microelectronics, but it wasn’t played on a computer. A brilliant engineer and entrepreneur named Nolan Bushnell created an electronic game machine that proved to be the successor to pinball machines. He sold it through his start-up company, Atari. That machine, Pong, made Bushnell rich and famous, and eventually spawned millions of arcade and home-video game models. Bushnell sold Atari to Warner Communications in 1976 when Atari was doing $39 million in annual sales. Although the game machines that were Atari’s specialty were not general-purpose computers, the programmers who wrote games for personal computers took much of their inspiration from the Atari devices. (Atari would later make its own personal computers.)

Programs like Dompier’s Target were receiving mass attention and the game machines were enjoying great popularity, but microcomputer programmers in 1976 generally didn’t consider computer software a business, certainly not in the way that computer hardware was a business. At that time, very few programmers sold software to anyone other than a computer company, and in a market that narrow, the software sold cheaply.


A Toronto chess enthusiast named Peter Jennings (no relation to the TV news anchor) foresaw, earlier than most people involved with microcomputers, that microcomputer owners would gladly buy software from independent companies. Jennings had often toyed with the idea of designing a chess-playing machine. In fact, while still in high school he built a computer that could make the opening moves in a chess match.

After being introduced to microcomputers, Jennings figured he could program a machine to play the ancient board game. Jennings bought a KIM-1 microcomputer with less than 2K of memory at the PC 76 computer show in Atlantic City, brought it home, and boldly declared to his wife, “That’s a computer and I’m going to teach it to play chess.”

Writing a chess program compact enough to take up no more than a few hundred bytes of memory is the sort of challenge most people would just as soon avoid. As intricate as the game of chess is, the task could use up a huge chunk of a mainframe’s memory. Jennings was undeterred: he welcomed the challenge. Within a month he had written most of the code, after a few more months he had perfected it, and before long he was selling his chess program through the mail.

For $10, Jennings sent a stapled 15-page manual that included the source code for Microchess. His notice for it in the KIM-1 User Notes newsletter was one of the first advertisements for microcomputer application software. When Chuck Peddle, president of MOS Technology (manufacturer of the KIM-1), offered Jennings $1,000 dollars for all rights to the program, Jennings declined, saying, “I’m going to make a lot more money selling it by myself.”

One day while Jennings waited for the money to roll in, his phone rang and the caller identified himself as Bobby Fischer. The reclusive chess grand master wanted to play a match against Microchess. Jennings knew what the outcome would be, but gladly agreed. Later, after Fischer had trounced the program, he graciously told Jennings that the match had been fun.

The experience was fun for Jennings, too, and lucrative. The orders poured in. Jennings found that people who couldn’t play chess, and who weren’t even interested in learning chess, nevertheless bought the program. With Microchess, computer owners could show their friends that this thing they possessed was powerful and real. It could play chess. In a sense, Microchess legitimized the microcomputer.

One of the first buyers of Microchess was Dan Fylstra, who ordered the program while an associate editor at Byte magazine. Later on, after Fylstra started a company called Personal Software, he called on Jennings and the two struck up a partnership. Soon they were investing money from sales of Microchess into the marketing of a business program called VisiCalc, written by Dan Bricklin and Bob Frankston. The pairing of Fylstra and Jennings created one of the most important software companies in the industry. Bricklin and Frankston’s VisiCalc was Personal Software’s biggest hit.


Figure 37. Personal Software In the Personal Software booth at the first West Coast Computer Faire are Peter Jennings (left), creator of Microchess, and Dan Fylstra, who published Microchess and VisiCalc.

(Courtesy of David H. Ahl)

The transition from games to business software has occurred a number of times in the microcomputer industry. Several early game companies went on to add business-software departments. The games led to profits, and the profits led to business applications.


Adventure was another star of the computer-game underground. Originally written by Will Crowther and Don Woods on a mainframe computer at the Massachusetts Institute of Technology, Adventure involved a simple form of role-play: the user explored mazes, fought dragons, and ultimately discovered treasure. The game had no graphics whatsoever. Players would type in terse verb-object commands such as “GET GOLD” or “OPEN DOOR,” and the program would respond by describing whatever was nearby in the imaginary maze.

By storing dictionaries of verbs and nouns and tying them to certain commands, the programmer was able to create the impression that the Adventure program could understand those simple two-word sentences. No one but the programmer knew the program’s vocabulary, and figuring out how to communicate with the program was the best part of the game. Adventure achieved cult status, and San Francisco Bay Area programmer Greg Yob wrote a limited Adventure-type game for microcomputers called Hunt the Wumpus, which was played in a maze of tetrahedral rooms.

By 1978, Scott Adams decided that he could launch a company and sell computer games full time. Well-meaning friends warned him that programming Adventure on a microcomputer was impossible because storing the data for the maze structure and the library of its commands would require an excessive amount of memory. Nevertheless, Adams did the programming in two weeks and started a company, Adventure International. The company became a microcomputer-game empire, and its product attracted huge crowds at computer shows.

Adams became convinced that games like his Adventure Land and Pirate Adventure were serving to introduce computers to the average person. Other software companies also began selling adventure games. Even Bill Gates and Paul Allen at Microsoft, who until then had shown no professional interest in game software, released a version of Adventure. In addition to Star Trek and Adventure, games such as Lunar Lander made the transition from large to small computers.

When customers walked into computer stores in 1979, they saw racks, wall displays, and glass display cases filled with software, and most of it consisted of games. Games with outer-space themes were especially popular—among them Space, Space II, and Star Trek. To this day, games still represent a significant percentage of the software titles released each year.

Many more games were being released, including Programma’s emulation of the video game Space Invaders. Software companies such as Muse, Sirius, Brøderbund, and On-Line Systems reaped great profits from games. Programma amassed a huge and diverse supply of software—not a wise policy, as it turned out. Programma sold plenty of programs, mostly games, but not all of them were good, and its reputation suffered. When serious competition arrived, Programma did not survive its reputation for second-rate wares. Nevertheless, many personal-computer programmers got their professional start writing programs for Programma.

Few of those early software companies had the business savvy of the Personal Software people, and fewer still achieved the wide acceptance that Digital Research had earned for its operating system.

The First Operating System

CP/M was 5K and it gave you no more and no less than what an operating system should do.

-Alan Cooper, personal-computer software pioneer

The first operating system to qualify as a standard in the developing microcomputer industry actually appeared before the Altair itself. CP/M was not the result of a carefully planned project involving years of research by dozens of software specialists. Like most of the early significant programs, it originated out of one person’s initiative.

Gary Kildall

In mid-1972, Gary Kildall came across an advertisement on a bulletin board that said “MICROCOMPUTER $25.” The item advertised, the Intel 4004, was actually a microprocessor, arguably the first in the world, but it still sounded like a real bargain to Kildall. He decided to buy one.

Although many of the microcomputer companies’ founders didn’t fit the typical image of an industry leader, Gary Kildall didn’t even act as if he wanted to be in the game. While wrapping up his PhD at the University of Washington, Kildall had moved to Pacific Grove, California. He loved the scenic coastal town; its laid-back, fog-draped ambiance seemed to suit him. Kildall was soft-spoken, possessed of a disarming wit, and was most at ease in a sport shirt and jeans. He was an incurable diagram drawer. When he wanted to make a point while speaking, he would frequently fish around for chalk or a pencil. In the early 1970s, Kildall was happy in his job at the Naval Postgraduate School. He enjoyed teaching and the job left him time to program. Kildall had no particular business skills and no real desire to leave academia. He was comfortable just where he was.

Gary Kildall also liked to play with computers, and knew a lot about them, in both an academic and a practical, hands-on sense. He had been one of two people responsible for keeping the University of Washington’s Burroughs B5500 computer up and running. Later, when the university was acquiring its new CDC 6400 computer, Kildall was so well respected for his knowledge of computers that he served as the technical advisor on the purchase.

The other person responsible for keeping the B5500 running was Dick Hamlet. He and three others started a time-sharing company in Seattle that used DEC’s PDP-10 computer and some new DEC software. The idea was to allow people to log onto the PDP-10 remotely in order to tap its capabilities. Hamlet’s company was called Computer Center Corporation, or C Cubed, and for a time two teenagers named Bill Gates and Paul Allen worked there after hours searching for bugs in the DEC software.

It turned out that the $25 price on the Intel 4004 applied only to volume purchasers, and besides, a microprocessor was useless by itself; it needed to be incorporated into a computer. Kildall did buy the manual for the Intel 4004, wrote a program on the school’s mainframe to simulate the 4004, and began to write and test 4004 code to determine what he might eventually do with the “bargain basement” 4004 chip.

Kildall recalled that his father, who owned a navigation school in Seattle, had always wanted a machine that could compute navigational triangles. Kildall wrote some arithmetic programs to run on the 4004, offhandedly thinking that he might come up with something his father could use. He was just fooling around with the 4004, trying to see how far he could go and with what degree of speed and accuracy. He determined that the processor was pretty limited, but he still loved working with it. Soon thereafter, he traded some 4004 programs to Intel for a development system, a small computer built around the 4004, which was in effect one of the first true microcomputers, albeit not a commercial product.

Hooked on Micros

When Kildall visited the microcomputer division at Intel in 1972, he was surprised to see that the pioneering firm had set aside a space no larger than the average kitchen for the entire division. One of the people he met there was a clever programmer named Tom Pittman, a nonemployee who, like Kildall, had been intrigued by the 4004 and was already writing software for it. Kildall and Pittman got along well with the Intel people, and Kildall began working as a consultant for Intel on his one free day a week. In this new role, he tinkered with the 4004 for a few more months until he “nearly went crazy with it.” He then realized that he would never go back to working on large computers.

Soon Kildall was dabbling with Intel’s first 8-bit microprocessor, the 8008. He was working in the same two-level mode—that is, developing the software for a microprocessor on a minicomputer—that Gates and Allen used. Like Paul Allen, Kildall wrote programs to simulate the microprocessor on a larger machine and then used the simulated microprocessor with its simulated instruction set to write programs to run on the microcomputer. But unlike Gates and Allen, Kildall had the benefit of a development system so that he could check his work as he went along by trying it out on the system.


In just a few months, Kildall created a language called PL/M, inspired by a mainframe language called PL/I that was significantly more elaborate than BASIC. Kildall set up the development system in the back of his classroom, in effect creating the Naval Postgraduate School’s first microcomputer lab. Curious students would wander back there after class and tinker with the system for hours. When Intel upgraded the Intellec-8 from an 8008 processor to an 8080 and supplied Kildall with a display monitor and high-speed paper-tape reader, the professor and his students had a system comparable to the early Altair before the Altair was even conceived.

Kildall realized, however, that he was still missing an essential ingredient of a successful computer system—an efficient storage device. Two common storage devices on large computers at the time were paper-tape readers and magnetic disk drives. Considering how slow the microprocessor was, paper-tape storage was simply too cumbersome and expensive. Kildall set out to obtain a disk drive and did a little programming in exchange for a drive from Shugart. There was a catch: in order for the disk drive to work, a special controller was needed—a circuit board to handle the complicated task of making the computer communicate with the disk drive.

Kildall attempted to design such a controller several times. He also tried to create an interface that would allow his system to connect to a cassette recorder. But he found that he needed more than just programming talent to solve the complex engineering problem of interfacing the two machines. The project failed, and Kildall decided he was totally inept at building hardware. Nevertheless, he had demonstrated a lot of vision. It would be years before disk drives came into common use on microcomputers. Finally, at the end of 1973, Kildall approached John Torode, a friend of his from the University of Washington who would later found his own microcomputer company. “We’ve got a really good thing going here if we can just get this drive working,” Kildall told his friend. Torode got the drive to work.

Meanwhile, Kildall polished the software. At one point in late 1973, during his months of frustration with the disk drive, Kildall had taken a few weeks to write a simple operating system in his PL/M language. He called it CP/M, short for Control Program for Microcomputers. CP/M underwent further development, although it already provided the software needed for storing information on disks.

Some of CP/M’s enhancements arose under curious conditions. While he continued teaching, Kildall became involved in a project with Ben Cooper, the hardware designer in San Francisco who had worked with George Morrow on disk systems and had later started his own computer company, Micromation. Cooper thought that he could build a commercially successful machine to chart horoscopes, and he enlisted Kildall’s help in the project. The two had no interest or belief in astrology, and in fact considered it patent nonsense, but Cooper had ideas about the hardware and Kildall wanted to do the math that calculated star positions. They also figured that the result might be a commercial success. So Cooper built and Kildall programmed, and they came up with their “astrology machine,” which would stand in grocery stores eating quarters like an arcade game and printing out horoscopes. Kildall thought the machine was just beautiful.

Commercially, however, the astrology machine was a failure. Its makers placed machines in various locations around San Francisco, but the fancy knobs and dials that excited the two hobbyists irritated users—and with good reason. Customers would drop their quarters in and the paper would jam up. Kildall and Cooper were stumped on how to fix the problem. “It was a total bust,” Kildall later said.

Despite the disappointing results, the astrology machine gave Kildall his first commercial test of portions of his CP/M. In the process of programming the astrology machine, he rewrote the debugger and the assembler, two tools for creating software, and began work on the editor. These constituted the essential tools for developing programs. In addition, he created a BASIC interpreter that allowed him to write programs for the astrology machine. Some of the tricks he learned in developing the BASIC he would later pass on to his pupil, Gordon Eubanks.

As they worked on interfacing the disk drive, Kildall and Torode exchanged their views about the potential applications of microprocessors without saying much about microcomputers. They continued to believe, along with the designers at Intel, that the microprocessor would wind up in things like kitchen blenders and automotive carburetors. They thought of providing a combined hardware- and software-development system to encourage alternative uses of microprocessors. Kildall’s belief in the future of such “embedded applications” of microprocessors was undoubtedly fostered by his colleagues at Intel. At one point, Kildall and a few other programmers had written a simple game program using the 4004 microprocessor. When they approached Intel chief Robert Noyce with the suggestion that he market the game, Noyce vetoed it. He was convinced that the future of the microprocessor lay elsewhere. “It’s in watches,” he told them.

Digital Research

So Torode and Kildall, without forming an actual company, sold their hardware and software together—not as a microcomputer, but as a development system. And when Kildall, encouraged by his wife Dorothy, finally incorporated and began to offer CP/M for sale, he had no idea how valuable a program he had written. But how could he know? There were few microcomputer-software developers around.

At first, the Kildalls called their company Intergalactic Digital Research. The name was quickly shortened to Digital Research, and Dorothy, who was by this time running the company, began using her maiden name McEwen because she didn’t want customers thinking of her as “just Gary’s wife.” Digital Research’s earliest customers grabbed some stunning bargains. For instance, Thomas Lafleur, who helped found an early microcomputer company called GNAT Computers, made one of the first corporate purchases of CP/M. For $90 he gained the right to use CP/M as the operating system for any product his company developed. Within a year, a license for CP/M cost tens of thousands of dollars.


Figure 38. Digital Research Staff Tom Rolander (front row), Dorothy McEwen, and Gary Kildall (both in front of the sign) pose with the rest of the Digital Research staff in front of their Pacific Grove, CA, headquarters.(Courtesy of Tom G. O’Neal)

Dorothy later said that a 1977 contract with IMSAI was a turning point. Until then, IMSAI had been purchasing CP/M on a single-copy basis. Its ambitious plans to sell thousands of floppy-disk microcomputer systems prompted marketing director Seymour Rubinstein to negotiate seriously with Gary and Dorothy. He finally purchased CP/M for $25,000.

Rubinstein was convinced that he had virtually stolen the CP/M operating system from Gary, but the Kildalls’ perspective was somewhat different; the IMSAI deal made Digital Research a full-time business. After IMSAI bought CP/M, many other firms followed suit. CP/M was such a useful program that it was not until IBM introduced a microcomputer with a different operating system in 1982 that Digital Research faced any serious competition. The programmers who would provide that competition were still working at MITS in Albuquerque.

Getting Down to BASIC

If anyone had run over Bill Gates, the microcomputer industry would have been set back a couple of years.

-Dick Heiser, early computer retailer

While it’s true that the microprocessors and the crude microcomputers built by hobbyists/entrepreneurs gave computing power to the people, it was the BASIC programming language that let them harness that power. Two professors at Dartmouth College, seeking a better way of introducing their students to computers, used their grant from the National Science Foundation to give birth to BASIC in 1964. The language John Kemeney and Thomas Kurtz created was an instant success. Compared with the slow, laborious, and complex process of programming in FORTRAN, the comparable computer language in common use at the time, BASIC was a winged delight.

During the following two years, the National Council of Teachers of Mathematics debated over whether to support FORTRAN or BASIC as the standard educational language. FORTRAN, widely used in scientific computing, was considered better for large computational tasks; however, BASIC was far easier to learn.

Think of the Children

Bob Albrecht was a prominent supporter of BASIC. As a pioneer of computer education for children, he had been frustrated with FORTRAN. The council’s ultimate selection of BASIC was a watershed. The personal computer and the BASIC language would be the two most important products in the effort to convince educators that computers could help students learn. Bob Albrecht wanted to create software for reasons other than personal ambition. Always interested in turning kids on to computers, when the Altair came out, Albrecht asked himself, “Wouldn’t it be nice to have something called Tiny BASIC that resided in 2K and was suitable for kids?” Such a program would fit within the Altair’s limited 4K memory and could be used immediately.

Albrecht pestered his friend, computer-science professor Dennis Allison, to develop Tiny BASIC. Reports of progress on the program appeared in the People’s Computer Company (PCC) newsletter and its offshoot, Dr. Dobb’s Journal. “The Tiny BASIC project at PCC represents our attempt to give the hobbyist a more human-oriented language or notation with which to encode his programs,” wrote Allison. In an early issue of PCC, Allison “& Others” (as the cryptic byline read) explained their goal:

Pretend you are seven years old and don’t care much about floating-point arithmetic (what’s that?), logarithms, sines, matrix inversion, nuclear-reactor calculations, and stuff like that. And your home computer is kind of small, not too much memory. Maybe it’s a Mark-8 or an Altair 8800 with less than 4K bytes and a TV Typewriter for input and output.

You would like to use it for homework, math recreations, and games like NUMBER, STARS, TRAP, HURKLE, SNARK, BAGELS. Consider, then, Tiny BASIC.

“It’s Going to Happen!”

Many of Dr. Dobb’s and PCC’s readers did more than consider Tiny BASIC. They took Allison’s program as a starting point and modified it, often creating a more capable language. Some of those early Tiny BASICs allowed large numbers of programmers to start using the microcomputers. Two of the most successful versions came from Tom Pittman and Li-Chen Wang. Pittman knew microprocessors as well as anyone, including the engineers at Intel, because he had written one of the first programs for the 4004. He and Wang were “successful” in terms of the stated goal for Tiny BASIC—to give users a simpler language. The Tiny BASIC authors were not trying to use it as a path to wealth. Another, more ambitious BASIC was also in the works. In the fall of 1974, Bill Gates had left Washington for Harvard University. Gates’s parents had always wanted him to go to law school, and now they felt finally he was on the right track.


Figure 39. Paul Allen and Bill Gates Allen (left) and Gates founded Microsoft. (Courtesy of Microsoft)

But as precocious as he may have been, Gates found himself rooming with a math student who was even sharper than he was, and Gates was shocked when his roommate told him he had no intention of majoring in math but planned to study law. Gates thought, “If this guy’s not going to major in math, I’m sure not.” Examining his options, he immersed himself in psychology courses, graduate courses in physics and math, and long, extracurricular nightly poker games.

Then came that fateful January 1975 issue of Popular Electronics that Paul Allen would spot in Harvard Square and wave in front of Gates’s face.

“Look, it’s going to happen!” Allen shouted. “I told you this was going to happen! And we’re going to miss it!” Gates had to admit that his friend was right; it sure looked as though the “something” they had been looking for had found them.

Gates phoned MITS immediately, claiming that he and his partner had a BASIC language usable on the Altair. When Ed Roberts, who had heard a lot of such promises, asked Gates when he could come to Albuquerque to demonstrate his BASIC, Gates looked at his childhood friend, took a deep breath, and said, “Oh, in two or three weeks.” Gates put down the phone, turned to Paul Allen, and said, “I guess we should go buy a manual.” They went straight to an electronics shop and purchased Adam Osborne’s manual on the 8080.

For the next few weeks, Gates and Allen worked day and night on the BASIC. As they wrote the program, they tried to determine the minimal features of an acceptable BASIC—the same challenge Albrecht and Allison faced except that Tiny BASIC was to be usable on a variety of machines. Gates and Allen didn’t have this restriction. They were free to make their BASIC whatever they wanted. No industry standard existed for BASIC or for any other software, mostly because there was no industry. By deciding themselves what the BASIC required, Gates and Allen set a pattern for future software development that lasted for about six years. Instead of researching the market, the programmers simply decided, at the outset, what features to put in their software.

Both men threw themselves completely into the project, staying up late every night doing programming. Gates even made the ultimate sacrifice and abandoned some of his nightly poker games. They sometimes worked half-asleep. Paul Allen once observed Gates nod off, head on the keys, wake up suddenly, glance at the screen, and immediately begin typing. Allen decided that his friend must have been programming in his sleep and just kept right on when he woke up.

The two slept at their terminals and talked BASIC between bites of food. One day while in the dining hall at Gates’s Harvard dorm, they were discussing some mathematics routines—subprograms to handle noninteger numbers that they felt their BASIC needed. These floating-point routines were not especially difficult to write, but they weren’t very interesting either. Gates said he didn’t want to write them; neither did Allen. From the other end of the table a voice called out hesitantly, “I’ve written some floating-point routines.” Both of their heads turned in the direction of the strange voice, and that was how Marty Davidoff joined their programming team over lunch in the college cafeteria.

At no time during the project did Gates, Allen, or Davidoff ever see an Altair computer. They wrote their BASIC on a large computer, testing it with a program Allen had written that made the large machine simulate the Altair. At one point when Gates phoned Ed Roberts to ask how the Altair processed characters typed on a keyboard, Roberts must have been surprised that they were actually pursuing the project. He turned the call over to his circuit-board specialist, Bill Yates, who told Gates that he was the first to ask this obviously essential question. “Maybe you guys really have something,” he told Gates.

After six weeks, Paul Allen booked a plane reservation to Albuquerque as he and Gates scrambled to finish up the BASIC. On the night before Allen was scheduled to catch a 6 A.M. flight for Albuquerque, they were still working. At about 1 A.M., Gates told his friend to get a few hours of sleep, and when he awoke, the paper tape with the BASIC would be ready. Allen took him up on the offer, and when he did wake up, Gates handed him the tape and said, “Who knows if it works? Good luck.” Allen crossed his fingers and left for the airport.

Delivering the Code

Allen was sure of his and Gates’s abilities, but as the plane approached Albuquerque he began wondering if they had forgotten something. Halfway into the landing he realized what it was: they had not written a loader program to read the BASIC off the paper tape. Without that program, Allen couldn’t get their BASIC into the Altair. It had never been a problem on their simulated Altair—the simulation had not been that exact. Allen searched for some scrap paper, and as the plane descended, began writing in 8080 machine language. By the time the plane touched down, he had managed to scribble down a loader program. Now when he wasn’t worrying about the BASIC, he could fret about this impromptu loader program.

Not that Allen had much of a chance to worry about anything. Roberts was right there at the appointed time to meet him. Allen was surprised at Ed Roberts’s informality and by the fact he drove a pickup truck. He had expected someone in a business suit driving a fancy car. Equally surprising to him was the dilapidated appearance of the MITS headquarters. Roberts ushered him into the building and said, “Here it is. Here’s the Altair.”

On a bench before them sat the microcomputer with the largest memory in the world. It had 7K of memory, on seven 1K boards, and it was running a program that tested memory by writing random information into the computer’s memory and reading it back. The memory needed testing, but this program was the only one they had. As it ran, all the Altair’s lights were blinking. They had just gotten it working with 7K that day.

Roberts suggested that they postpone testing the BASIC until the next day and took Allen to “the most expensive hotel in Albuquerque,” as Allen recalled. The next day, Roberts had to pay the bill because an embarrassed Paul Allen hadn’t brought along enough cash to cover it.

That morning Allen held his breath as the machine chugged away, loading the tape in about five minutes. He threw the switches on the Altair and entered the starting address that invoked the program. As he flipped the computer’s run switch he thought, “If we made any mistake anywhere, in the assembler or the interpreter, or if there was something we didn’t understand in the 8080, this thing won’t work.” And he waited.

“It printed ‘MEMORY SIZE?’” said Roberts. “What does that mean?”

To Allen, it meant that the program worked. In order to print this message, at least 75 percent of the code had to be accurate. He entered the memory size—7K—and typed “PRINT 2+2.” The machine printed “4.”

Roberts was convinced and told Allen about some additional features he thought a BASIC needed. A few weeks later, Roberts offered, and Allen accepted, the position of MITS software director.

Gates decided that Harvard was less interesting than Albuquerque and moved there to join his friend. Although never a full-time employee of MITS, Gates spent most of his time there after he and Allen were beginning to realize that a large market for software existed beyond Altair users. The two signed a royalty agreement with Ed Roberts for their BASIC and meanwhile began looking for other customers for their language. Gates and Allen began calling their enterprise Microsoft.

The Other BASIC

Studying computer science was the Navy’s idea.

-Gordon Eubanks, software pioneer

One operating system—Kildall’s CP/M—would dominate the early years of the personal-computer industry. By comparison, the relative ease of creating new and different BASIC capabilities led to competition between two higher-level languages. One of those languages was Gates and Allen’s. The other was developed by a student of Kildall’s.

The Nuclear Engineer

In 1976, a young nuclear engineer named Gordon Eubanks had almost finished his US Navy service. As a civilian, he had logged nine months of experience with IBM as a systems engineer. The Navy offered him a scholarship to take a master’s degree in computer science at the Naval Postgraduate School in Pacific Grove, California. Why not? he thought. It sounded like a good deal.

Attending class was a tamer experience than most things that initially sounded enticing to Eubanks. His thick glasses and soft-spoken manner belied a real love of adventure. Eubanks thoroughly enjoyed his work on a nuclear-powered, fast-attack Navy submarine. His friend, software designer Alan Cooper, summed it up: “Gordon thrives on tension.”


Figure 40. Gordon Eubanks Eubanks’s master’s thesis under Gary Kildall became one of the early industry’s standard programming languages.

(Courtesy of Digital Research)

Gordon also liked to work hard. When he arrived at the Naval Postgraduate School, he soon heard about a professor named Gary Kildall who was teaching compiler theory. Everybody said Kildall was the toughest instructor, so maybe he’d learn something, Eubanks thought. For Eubanks, the hard work in Kildall’s class paid off. He became interested in microcomputers and spent a lot of time in the lab at the back of the classroom, working with the computer Kildall received for his work at Intel. When Eubanks approached his professor for a thesis idea, Kildall suggested that he expand and refine a BASIC interpreter Kildall had begun.

The BASIC that emerged from Eubanks’s work, called BASIC-E, differed from the Microsoft BASIC in one important way. Whereas the Microsoft version was interpreted—statements were translated directly into machine code—the Eubanks BASIC was a pseudocompiled language. This means that programs written in BASIC-E were translated into an intermediate code, which was then translated by another program into machine code. The same general idea was being tried in a BASIC compiler under development at Ohio State University.

Each approach had its merits, but BASIC-E had one critical advantage. Because its programs could be sold in the intermediate code version, which was not human-readable, the purchaser would be able to use the program but could not modify it or steal the programming ideas it incorporated. Therefore, software developers could write programs in BASIC-E and sell them without fearing that their ideas would be lifted. With a pseudocompiled BASIC, it now made sense to start selling software.

As far as Eubanks was concerned, the BASIC-E was solely an academic project. He placed his BASIC-E in the public domain and returned to the Navy for a new assignment. But before he did, he had two important meetings.

The first was with two young programmers, Alan Cooper and Keith Parsons, who realized there was money to be made writing personal-computer software. They determined to start an application-software company and, as they put it, “make $50,000 a year.” They wanted his BASIC-E, so Eubanks gave them a copy of his source code and never expected to see them again.

His second meeting was with IMSAI.

Business Software

Goaded on by Glen Ewing, another ex-student of the Naval Postgraduate School, Eubanks visited IMSAI to find out if the young microcomputer company might be interested in his BASIC. IMSAI wasn’t (at least not at first), but Eubanks wasn’t particularly disappointed. Sometime later, Eubanks received a telegram from IMSAI software director Rob Barnaby requesting a meeting. Soon after that, in early 1977, Eubanks found himself negotiating a contract with IMSAI’s director of marketing, Seymour Rubinstein, to develop a BASIC for the company’s 8080 microcomputer. Rubinstein gave the young programmer no quarter in the negotiations. Ultimately, Eubanks agreed to develop the BASIC and give IMSAI unlimited distribution rights to it in exchange for an IMSAI computer and some other equipment. The Navy engineer did retain ownership rights to his program.

The trade seemed more than fair to Eubanks. This was his first software deal and he was very green. As Alan Cooper remarked, “Gordon was saying, ‘Oh! They’re giving me a printer too!’” Eubanks did aspire to earning something more substantial than a printer—he dreamed of making $10,000 on his BASIC so that he could buy a house in Hawaii.


Figure 41. Alan Cooper Seen here in 1970, Cooper was instrumental in bringing business software to personal computers. (Courtesy of Mr. Snoid)

In April 1977, the first West Coast Computer Faire was taking place in San Francisco. Eubanks demonstrated his BASIC-E in a booth he shared with his former professor, Gary Kildall. Alan Cooper and Keith Parsons also showed up and reintroduced themselves to Eubanks. They explained that they had made some modifications in his BASIC and had begun developing some business-application software. Eubanks asked the young programmers if they had suggestions for his IMSAI project. Soon after that, the three of them decided to work together. As Eubanks refined the BASIC and Rob Barnaby, a demanding and meticulous taskmaster, tested it, Cooper and Parsons began writing General Ledger software under the business name Structured Systems Group, perhaps the first serious business software for a microcomputer.

The development of Eubanks’s BASIC was a late-night crash project like the Microsoft BASIC had been. Cooper and Parsons would drive to Cooper’s place in Vallejo, California, and sit until 3 A.M. drinking Cokes, poring over listings, and trying to decide which statements to put in the language. Like Gates and Allen had done, Eubanks determined the contents of the BASIC primarily by using his own good judgment. Selections were sometimes less than scientifically based. Sequestered in the Vallejo house, staring at code, Alan Cooper would suddenly suggest, “Why don’t you put a WHILE loop in?” referring to a frequently used programming statement. Eubanks would answer, “Sounds good to me,” and in the statement would go.

The long nights paid off. The result for Eubanks was CBASIC, which later made it possible for him to found his own company, Compiler Systems. Cooper and Parsons’s Structured Systems Group became his first distributor. But Eubanks wasn’t sure how much to ask for his BASIC. Cooper and Parsons suggested $150; Kildall suggested $90, the price at which CP/M first sold. Eubanks roughly split the difference and charged $100.

They needed to develop packaging and documentation for the product. Cooper and Eubanks wrote the manual and ordered 500 copies from a printer. They immediately got an order for 400 copies and they had to print another batch. They knew they were on their way. As for Gordon Eubanks, he got his house in Hawaii. In fact, he had underestimated the amount of money he would make on CBASIC, almost to the same degree that he underestimated the cost of houses in Hawaii.

A software industry was just starting to be built, but some of the foundation bricks had already been laid. Another brick was placed independently of either BASIC or CP/M.

Electric Pencil

When I started doing business, I had an unlisted phone number.

-Michael Shrayer, software pioneer and camera operator for Candid Camera

In the fall of 1975 at one of the early meetings of the Southern California Computer Society, a guest at the meeting had a special present for the attendees. Bob Marsh offered up a copy of Processor Technology’s public-domain software package called Software Package One. It was a collection of programmers’ programs—tools to make writing and modifying programs easier. Marsh told everyone, “Here you are, guys; enjoy it.”

An Editor for Developers

In the opinion of software developer Michael Shrayer, Software Package One was the most important product then in existence because it effectively enabled people to write software. Shrayer, a self-admitted “laid-back sort,” had moved from New York to California several years earlier. He had tired of his hectic life in the commercial-film world where, among other jobs, he worked as a camera operator for Allen Funt’s Candid Camera. In the middle of shooting a soft-drink commercial, Shrayer realized that the rat race was no longer worth it. After moving to California, he hooked up with the Southern California Computer Society, where he discovered Software Package One.


Figure 42. Michael Shrayer Shrayer started doing business with an unlisted phone number. Here he shows off his pioneering word-processing program, Electric Pencil.

(Courtesy of Paul Freiberger)

Shrayer was not fully satisfied with the editor portion of the software package and thought he could come up with something better. He created Extended Software Package 1 (ESP-1) and the beginnings of a pioneering software firm. Other computer hobbyists, in numbers that amazed Shrayer, wanted to buy the ESP-1 program. In most cases, he had to reconfigure the program for each customer’s particular machine. Almost overnight, the laid-back New Yorker found himself in a brand-new rat race.

Shrayer was soon making enough money to live on. It was a nice hobby, and remunerative, and he found that he liked to program. He gathered with other members of the club and talked endlessly about computers. He filled orders for copies of ESP-1. He was having fun.

Shrayer’s next idea proved to have a significant impact on the nascent software industry. Tired of having to type out the documentation for his assembler on a manual typewriter, Shrayer decided to use his Executor software (an upgrade of ESP-1) to get the job done. He asked himself, why not use the computer to type a manual? Nothing close to a word processor was available yet. Without having even heard the term “word processor,” Shrayer set about to invent one.

Ahead of His Time

By Christmas 1976, after nearly a year of work, Shrayer’s Electric Pencil was ready. Although first written on the Altair, Electric Pencil gained acclaim on Proc Tech’s Sol. “The Pencil,” as it became known, was soon selling quickly. The former camera jockey called his company Michael Shrayer Software, a decision he later regretted because it publicized his name so widely that it ruined his privacy. Nevertheless, at the outset of his new enterprise, he visited computer clubs to talk about his program and enjoyed the admiration heaped upon him.

The popularity of Electric Pencil was so great that it created a buyer demand that it be on all microcomputers then available. Shrayer spent much of his time rewriting the program for different systems. Not only did each kind of computer require a different version, but so did each kind of printer or terminal. Moreover, Shrayer was constantly upgrading Electric Pencil’s capabilities. In all, he wrote about 78 different versions.

Had Shrayer been a more experienced programmer, he might have made the program easier to rework. Had he been a more experienced businessperson, he might have sold it in a more organized fashion. But Shrayer was neither, and the rewriting devoured his time, and sales were often limited to single orders by mail. Shrayer grew tired of Electric Pencil and became irritated that it was growing into a serious business that demanded more of his time. He hired programmers to write some of the new Pencil versions for him.

Shrayer’s experience demonstrated that in 1977 hardware manufacturers still didn’t recognize the importance of software, perhaps thinking that the marketplace would remain dominated by hobbyists. In any case, no hardware companies were willing to pay Shrayer to adapt The Pencil to their machines, although they certainly wouldn’t complain if he did so on his own.

Just as Kildall, Eubanks, Gates, and Allen had done before him, Michael Shrayer proceeded according to his own whims and wishes and wrote programs for whatever machines he wanted to. When he eventually lost his enthusiasm for the whole enterprise, he went back to the quiet life he had found on leaving the film world.

Years later, Electric Pencil seemed to have become the program that would not die. Thousands of personal-computer owners continued to use it on machines such as the North Stars and Radio Shack TRS-80s. Shrayer had broken new ground and empowered nontechnical people to use personal computers to perform practical tasks. The market was expanding.

The Rise of General Software Companies

My unemployment had run out.

-Alan Cooper, software designer, on why he started a software company

After helping Gordon Eubanks write CBASIC, Alan Cooper and Keith Parsons set out to achieve their personal dream of making $50,000 a year. The two had known each other since high school. Parsons was the person who taught Cooper how to tie a necktie, a skill Cooper shelved at college when he became a self-described “long-haired hippie.” Cooper intensely wanted to “get into computers,” and asked the older Parsons for advice. “You’re overtrained,” Parsons told him. “Drop out of school. Get a job.” Cooper took the advice. After work, he and Parsons would get together and talk about starting their own company. Nirvana, they thought, is $50,000 a year.

The Checks Started Rolling In


Figure 43. Dan Fylstra Fylstra’s Personal Software published the first electronic spreadsheet program, VisiCalc. (Courtesy of Liane Enkelis)

When the Altair came out, Cooper and Parsons drew up their plans. They decided to market business software for microcomputers. They hired a programmer, put him in a tiny room, and told him to write. They were busy writing, too. For a while, the two tried to sell turn-key systems—computers with sophisticated software that jumped into action when the machine was turned on. They got nowhere with that idea. What they really needed was an operating system, of which there were none as far as they knew, and maybe a high-level language. A chat with Peter Hollenbeck at Byte Shop in San Rafael, California, led them to Gary Kildall, CP/M, and Gordon Eubanks.

After months of development on Eubanks’s BASIC and their own business software, Cooper and Parsons were ready to start making their $50,000 a year. They placed the first ad for CBASIC in a computer magazine. After much agonizing, they also decided to throw in a mention of their business software. In small print at the bottom of the ad, it read “General Ledger $995.” They were prepared for an attack from hobbyists for selling a program that was almost triple the cost of the Altair itself.

It didn’t take long to get a response, but it was not the rant they feared. A businessman in the Midwest sent in an order for the General Ledger. Cooper made a copy of the program and inserted it in a zip-lock plastic bag along with a manual, a method of packaging software that became common. Before they knew it, back came a check for $995. Cooper, Parsons, and the whole Structured Systems Group staff went out for pizza.

Meanwhile, they kept working on software. The atmosphere was giddy and the style far from corporate. Parsons paced the office shirtless, while Cooper, hair down to midback, guzzled coffee that “would dissolve steel.” The two of them, wired on caffeine and the excitement of the $995 check, wrangled about potential markets and dealer terms. Parsons’s girlfriend made phone sales while sunbathing nude in the backyard behind their “office.”

Three weeks later, another order came in and the staff had another pizza. The pizza ritual continued for two months. People were sending in checks for thousands of dollars. Soon the Structured Systems Group was eating pizza for breakfast, lunch, and dinner. Yes, there was money to be made writing software for personal computers.

Meanwhile, Back East…

Another early software company started up soon after the Altair announcement. In suburban Atlanta, far from Silicon Valley, several computer enthusiasts opened an Altair dealership called the Computersystem Center in December 1975. The group, including one Ron Roberts, had met as graduate students at Georgia Tech. They quickly realized that, as much as their customers wanted Altairs, they also wanted software to use with the machines. Business was slow at the outset, and they had lots of time on their hands to program.

The group contacted other Altair computer stores throughout the country and discovered that the need for software existed nationwide. In 1976, the group approached Ed Roberts with the idea of using the Altair name for their software distribution. Roberts recognized that software could help sell his machine and vice versa, and he agreed. Ron Roberts (no relation to Ed) became president of the Altair Software Distribution Company (ASDC). The idea was to distribute other people’s Altair software and to write a little of their own.

The group from Georgia called a meeting of Altair dealers in October 1976, and almost 20 stores (nearly all that existed) sent representatives. MITS representatives also attended the meeting because the dealers wanted to inform the MITS people about how delays in deliveries and mechanical failures were negatively affecting their business. Ron Roberts found that the Altair dealers had a lot in common. They all suffered from lack of software, hardware-delivery delays, hardware malfunctions, and the general public’s meager awareness of microcomputers. Of all those issues, “software was the biggest item on the agenda,” according to Ron Roberts.

Several dealers agreed right away at the meeting to purchase ASDC software. The initial software programs from ASDC were simple business packages: accounting, inventory, and, later on, a text editor. The accounting and inventory programs alone retailed for $2,000. Roberts and his colleagues considered the price reasonable; they’d previously worked in the minicomputer and mainframe industry where prices such as that were considered modest. Given the software vacuum at the time, ASDC was able to find buyers even at that hefty price. “We were making quite a bit of money,” Roberts recalled.

Ron Roberts later unhitched his wagon from that star after the sale of MITS to Pertec in 1977 and the subsequent fade-out of the Altair. CP/M was gaining popularity, and Roberts decided to convert the programs to enable them to run on Kildall’s operating system. This move allowed for sales for more than one brand of computer because many of the new hardware companies started in the wake of the Altair announcement adopted CP/M. Like a later de factostandard operating system from Microsoft, CP/M was machine-agnostic.

The word Altair now seemed inappropriate as part of the ASDC business name, so the company changed it to Peachtree Software after a downtown Atlanta street. “In the Atlanta area, it’s a quality name,” Roberts said. Peachtree employees were more businesslike than Cooper, Parsons, and the Structured Systems Group crew. Not only did they wear dress shirts instead of T-shirts, they even wore ties. They called their software product Peachtree Accounting and Peachtree Inventory.

In the fall of 1978, Roberts and one of his partners took the software part of the business and merged with Retail Sciences, a small computer consulting firm in Atlanta run by Ben Dyer, who had previously worked for a hardware-store chain (of the nuts-and-bolts variety). Following the merger, Peachtree released a general-ledger business package. Sales increased rapidly, as did the number of dealers carrying the Peachtree label, and soon it became one of the best-known and -respected names in the software field. Eventually Dyer changed the name of the whole company to Peachtree Software.

With SSG on the West Coast and Peachtree in the eastern part of the country, the software industry was establishing itself as an independent entity.

The Bottom Line

If they have a contest as to who is the best negotiator in the industry, I’ll withdraw to Seymour’s fine abilities. Seymour is a master. And I was just a poor child.

-Bill Gates

Seymour Rubinstein has said publicly that he left IMSAI to establish a software firm. But with his sharp business sense, Rubinstein must have seen the financial foundation dissolving under the house of IMSAI. More important, however, he chose to bring his business skills to a software industry characterized by haphazard marketing.

Creating a Consumer Market for Software

The lack of business expertise among its executives was holding back the software industry, Rubinstein felt. He decided that his firm would not sell to manufacturers, as Gary Kildall, Gordon Eubanks, and Bill Gates had been doing, nor would it sell by mail to end users, as Michael Shrayer, Alan Cooper, and Keith Parsons did. The number of computer stores wasn’t large, but it was growing. Rubinstein decided that his new firm, MicroPro International, would sell only to retailers.

But first he needed some software to sell, and Rubinstein knew where to turn for that. The day he left IMSAI, he visited another ex-employee, Rob Barnaby, who had headed IMSAI’s software-development division. Recalling the exhaustive programs Barnaby wrote to test Eubanks’s CBASIC and other examples of Barnaby’s clever and painstaking programming, Rubinstein knew he wanted Rob Barnaby for his company. So, he went out and got him. By September, Barnaby had completed MicroPro’s first two products, SuperSort and WordMaster. The first was a data-sorting program and the second was a text editor that Barnaby had begun working on while still at IMSAI.

Although sales for these two products grew rapidly ($11,000 in September 1978; $14,000 in October; $20,000 in November), Rubinstein felt the market could handle much more; he realized that Shrayer had whetted the appetite of computer owners. MicroPro was inundated with requests for a word processor like Electric Pencil. Not one to shun an opportunity, Rubinstein brought out a similar item. Barnaby’s new program, WordStar, was an elaboration of WordMaster into an actual word processor, and it quickly sold more copies than Electric Pencil or any other word-processing rival.

WordStar was also superior to Electric Pencil. Electric Pencil offered word wrap, the feature that allows users to continue typing after the end of a line is reached. But a fast typist could type quickly enough to cause the software to miss one or two characters while the word wrap “carriage” was returning. WordStar overcame that problem and offered another improvement in the form of a what-you-see-is-what-you-get display. In other words, text appeared on the screen in virtually the same form as it did when it was printed.

WordStar soon had rivals. In mid-1979, when MicroPro released WordStar, Bill Radding and Mike Griffin in Houston were almost ready to release their word processor, Magic Wand, a worthy competitor to WordStar.

Rubinstein offered WordStar and his other programs to dealers on a per-copy basis. Michael Shrayer had also investigated that option, but few computer-distribution centers or computer stores existed at the time. By late 1978, when MicroPro International commenced sales, the number of computer stores had grown exponentially. Along with two other companies—Personal Software, with its VisiCalc for the Apple, and Peachtree Software, with its General Ledger program—MicroPro established the standards by which application-software developers did business. By selling its product like any other consumer item, the software industry gained self-respect, credibility, and a financial bonanza.

The Challenge of Software Piracy

Software, these early developers understood, was a product like, say, a wristwatch or a stereo set was a product; however, software was different in one important respect. Software could be appropriated without removing the original item. A thief could copy someone else’s program, easier and faster than making an audio tape of someone’s Pink Floyd album. From the earliest days of the industry, the ubiquitous problem of unauthorized copying outraged many programmers, who saw the fruits of their ingenuity copied and recopied without the slightest monetary gain.

Bill Gates was the first programmer to call attention to the piracy problem. In January 1976, he wrote an “Open Letter to Hobbyists,” which was published, among other places, in the Homebrew Computer Club newsletter. In the letter, Gates lambasted the widespread copying of paper-tape copies of his BASIC and called the hobbyists who copied the program thieves. “The amount of royalties we have received from sales to hobbyists makes the time spent on Altair BASIC worth less than $2 an hour,” Gates wrote. “Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?”

Gates’s diatribe had no effect on hobbyists except to make them even more angry at the $500 MITS charged for Gates’s BASIC. Hobbyists could see no justification for the price—which was as much as the computer itself—especially because without BASIC the machine was pretty much useless. They felt it should be included with the machine.

From time to time, software developers tried to protect their programs from being copied by using subtle software tricks that either prevented a disk from being copied or that booby-trapped the copied program. Again and again, such schemes failed for one fundamental reason—if a copy-protected program can be written, it can also be cracked. Most companies began to view piracy as a cost of doing business.

The problem was easier to take given that business was good—very good. Soon software became as solid a reason to buy hardware as the computer itself. It was apparent that software was becoming a serious business. In fact, it was an easier business to get started in—and possibly get rich in—than hardware. The only cost of making software, as one wag put it, was printing the serial numbers.

The growing software market soon attracted more aggressive entrepreneurs.

Software Empires

Philippe was frequently absurd and right at the same time.

-Tim Berry, computer consultant who helped write Borland International’s business plan

There’s money to be made in this business. That was the message sent out after the success of the early microcomputer-software ventures such as Microsoft, Digital Research, Structured Systems Group, Peachtree Software, and MicroPro. The message was heard by a group of high-rollers who were willing to risk everything in a growing market that seemed to have enormous potential and no rules or boundaries.

The Frenchman

These new entrepreneurs descended on Silicon Valley from all over the world. Philippe Kahn was visiting from France on a tourist visa. A saxophone-playing mathematics graduate, Kahn was big, flamboyant, exuberant, and had a devilish twinkle in his eye. He had written software for André Truong Trong Thi’s pioneering Micral microcomputer, which had hit the French marketplace more than a year before the Altair made its splash in the United States. Kahn had also worked under computer-science legend Niklaus Wirth on a programming language Wirth had invented called Pascal.

Programming languages were designed for particular audiences. Programs written in FORTRAN looked something like the math notation you’d see on a classroom blackboard or in an engineer’s office; the language had the style and the capabilities that mathematicians and engineers wanted. COBOL programs were verbose and more human-readable, which made them better suited to COBOL’s target audience of business programmers. BASIC was simple and forgiving, a good language for students. Wirth’s new language, Pascal, was formal, rigid, and precise—a language a pure mathematician would love. Philippe Kahn, by education a mathematician, loved it.

When he came to Silicon Valley in 1982, Kahn rented office space in Cupertino and began doing business as a software consultant, using the name MIT (for Market In Time) and lining up clients, including Hewlett-Packard, Apple, and even a company in Ireland. When the Massachusetts Institute of Technology suggested he stop using the name MIT just about the time the Irish company went out of business owing Kahn $15,000, he accepted the defunct company’s name in lieu of payment. MIT became Borland International.

Borland had one marginally interesting software product, called MenuMaster, written by the brilliant Danish programmer Anders Hejlsberg, which worked with the CP/M operating system. By this time, IBM had released its personal computer, and it was obvious that Borland could sell a lot more copies of MenuMaster for the PC than for computers running the CP/M operating system. That, however, would require porting the program—rewriting it to work with the PC’s operating system. Plus, there were the advertising costs. It was clear that Borland needed an infusion of cash, which meant attracting investors, and for that the company needed a business plan.

Tim Berry was working in the same office complex on Stevens Creek Boulevard in Cupertino where Kahn had his office space. Berry agreed to help Kahn develop a business plan in return for a piece of Borland.

Berry was no entrepreneur; he was a cautious analyst with a family to support. But Kahn was bright, charismatic, and motivated. Berry wanted to sign on to see firsthand what Kahn would do. When the company incorporated in May 1983, Berry found himself on the company’s board of directors. He also wrote its earliest advertising, which featured a wildly fictitious story of the company’s origin along with a picture of a grizzled character named Frank Borland. Berry was a talented writer and the engaging ad copy helped to personalize the young company.

The Hustler

At the time that Philippe Kahn was writing software for André Truong Trong Thi’s Micral microcomputer, Lawrence Joseph Ellison, a fast-talking programmer from Chicago, had just landed a job at Ampex, a video- and audio-equipment manufacturer in Silicon Valley. Four years earlier, Lee Felsenstein had left Ampex to write for the counterculture publication The Berkeley Barb. But Larry Ellison was no 1960s revolutionary. When Ampex got a contract to develop a tape storage system for the CIA, Ellison was thrilled to be working on the project, which the CIA code-named Oracle.

Ellison was definitely Type-A entrepreneur material: aggressive, bright, fearless, arrogant, and mercenary. In June 1977, Ellison’s energy and drive led him to start his own company. Along with two Ampex coworkers, he founded Software Development Laboratories (SDL). With the knowledge they gained on project Oracle and some IBM technology, they figured they could put together a salable product.

The IBM technology they used was the relational model of databases, invented by Edgar F. Codd. An alternative to the usual flat-file model, in which no structure exists that governs the relationship among database entries, the relational model was largely untested. The relational database model required computing horsepower well beyond the capability of the microcomputers of the time. But microcomputers were not yet part of Larry Ellison’s world.

Ellison’s company, SDL, which soon changed its name to Relational Software Inc. and then again to Oracle, was planning to market a minicomputer database program that would sell “like donuts,” Ellison said. He had been telling everyone that he was going to become a billionaire, and to get there he knew he’d have to sell software to everybody. “Everybody” included the CIA, although when he tried to sell agency officials a product called Oracle based on a CIA-financed project by the same name, they told Ellison he “had a lot of nerve.”

They had no idea.

Ellison was a thrill seeker. He bodysurfed, flew airplanes, sailed boats, and played basketball, pushing himself hard enough to have suffered a few broken bones in the process. Ellison saw to it that his company reflected his gung-ho attitude and pushed the company to double its sales every year. No one in the company, probably not even Ellison, thought this was a sane business model, but somehow, for the first decade of its existence, the company doubled its sales every year.

Ellison insisted that the Oracle program be portable—“promiscuous” was his word. Like Electric Pencil, Oracle was intended to run on any computer; unlike Electric Pencil, Oracle was engineered to make this task if not easy, at least not extremely difficult.

IBM didn’t bring its relational database technology to market in a timely fashion, thereby opening the door for Oracle to get there first with IBM’s own technology. Meanwhile, other companies, such as Ingres in Berkeley, were soon also producing relational database products. IBM did Oracle another favor when it embraced an approach to writing database queries called SQL, which Oracle used rather than a competing approach used by Ingres. IBM then presented Oracle with its biggest opportunity when it released its microcomputer, the IBM PC, in 1982.

In short order, Oracle ported its database program to the IBM PC. Even though simple arithmetic said that the massive program would be unusable on the tiny machine, Ellison didn’t care. The Oracle database had to be, to use his term, promiscuous.

An Industry Develops

Microcomputers of that time needed a simpler database tool than the massive Oracle relational database program. What they needed was a simple, programmable, flat-file database program—one that fit within the memory capacity of the machines and that allowed users to build meaningfully complicated databases. That product already existed: it was called dBase II.

In 1980, George Tate and Hal Lashlee founded a company called, oddly enough, Ashton-Tate (there was no partner named Ashton). Tate and Lashlee planned to sell a database program for microcomputers, dBase II, which was written by Wayne Ratliff. dBase II was a novelty for the young microcomputer-software industry: it worked well and made computer users more productive. People who were experts in building databases with dBase II, and coding in the simple programming language that it included, were soon making a good living as dBase II specialists. By the early 1980s, when IBM came out with its PC, Ashton-Tate was the database king of microcomputers. When they ported dBase II to the PC, they held onto the title with no problem, untroubled by the existence of Oracle for the PC or any other similar competitor.


Figure 44. Digital Research at a trade show Susan Raab works the Digital Research booth at the West Coast Computer Faire. (Courtesy of Digital Research)

By 1985, Ashton-Tate had moved to larger headquarters in Torrance and was buying up other companies and fleshing out its product line, with dBase II remaining its bread and butter. Ed Esber had been brought in as CEO, and as Ashton-Tate acquired companies, Esber bragged, “Every software company is up for grabs.” Ashton-Tate’s dBase II virtually owned the database market for microcomputers, but that didn’t stop others from trying to break in with new and innovative approaches to database software.

In the fast-moving microcomputer software industry of the early 1980s, some of the microcomputing pioneers were embarking on their second or even third careers. Gordon Eubanks was one such example. After developing CBASIC with help from Alan Cooper and Keith Parsons, Eubanks sold CBASIC for a few years under the business name Compiler Systems. Then in 1981, he sold the company to Digital Research and went to work for his former professor, Gary Kildall, as a Digital Research vice president.

Inspired by an entrepreneurial urge he hadn’t really felt when he started Compiler Systems, in 1982 Eubanks left Digital Research to launch C&E Software. Within months, C&E bought another software start-up, Symantec, and assumed its name. Eubanks had helped to develop a simple and easy-to-use flat-file database program with a built-in word processor. It was called Q&A and became Symantec’s first product.

If Q&A represented the ease-of-use strategy in tapping a software market, Framework represented a “Swiss army knife” approach to software marketing. Written by first-class programmer Robert Carr, Framework was a remarkably powerful and advanced product—a word processor, spreadsheet, database program, and programming language all in one—and it ran on a PC. Carr hooked up with Martin Mazner, who had written award-winning ad campaigns before getting into the microcomputer-software business. In 1982, they founded Forefront Corporation with the specific goal of getting Ashton-Tate, one of the leading microcomputer-software companies, to bring Framework to market. Their plan worked when Ashton-Tate bought the company.

But dBase remained Ashton-Tate’s cash cow, boasting millions of users. By the late 1980s, dBase II was the third-best-selling program for the IBM PC, and Ashton-Tate was the world’s third-largest personal-computer software company, trailing close behind Microsoft (which exploded in size after the release of the IBM PC with its Microsoft-supplied operating system) and Lotus, the spreadsheet king. In 1986, The Washington Post called Microsoft, Lotus, and Ashton-Tate “the GM, Ford, and Toyota of the software business.” Other successful personal-computer database companies were around at the time, but they survived, like Fox Software and its FoxPro did, by touting their compatibility with dBase II.

Sell It Like a Book

When Philippe Kahn had Tim Berry help him write a business plan for Borland, the initial idea had been to attract some investment capital and port MenuMaster to the PC. But nothing was happening on either front: no investors were lining up and, Berry was alarmed to see, apparently no porting had been developed. Kahn finally admitted that there just wasn’t any good development software for PCs for doing the programming the porting job required. So, he put Anders Hejlsberg to the task of writing a Pascal compiler.

Berry was horrified at the thought. Pascal was not a simple language like BASIC. Writing a Pascal compiler was a huge undertaking, a much bigger job than porting MenuMaster. Now the porting of MenuMaster would have to wait until the Pascal compiler was finished. In the meantime, everyone around the world was bringing out products for the PC. Borland would miss that window of opportunity for being the first to market with PC-software products. This strategy was crazy, Berry thought.

In October 1983, Berry got a call from Kahn to come over to his office right away. Borland had relocated to Scotts Valley, on the other side of Northern California’s Santa Cruz mountains, and Berry, an independent consultant, was now working 50 miles away; this was an unexpected two-hour round-trip commute for Berry, but he went.

As Berry and the other Borland directors watched, Kahn demonstrated Turbo Pascal. They were stunned. It was astonishingly fast, and so compact that it easily ran in the limited memory of the PC. This program was better than anything they could remember seeing on a mainframe or minicomputer—a polished, appealing product that was brilliantly coded. Even amateur programmers could use this; one could even learn how to program with it. MenuMaster was never mentioned again.

Kahn dropped another bombshell on the board: they would sell Turbo Pascal for $49.95 by mail order. At the time, Microsoft was selling a Pascal compiler for roughly ten times that price. In theory, the Borland board should have had something to say about these decisions: Kahn was scrapping the business plan, dumping the company’s only proven product, and substituting a new product that he proposed to sell at a ridiculously low price. But at Borland International, Philippe Kahn was running the show, and quite a show it was. He was adamant about the $49.95 price; it would cut through the noise in the market, he said, and help them get their message out loud and clear.

Getting the message out would be a challenge. The company had literally no money for advertising. Nevertheless, a full-page ad for Turbo Pascal, with the $49.95 price and a number to call to place an order, appeared in the November 1985 issue of Byte magazine. To have made the November issue’s ad deadline, Berry ruefully observed, Kahn must have placed the ad listing the $49.95 price well before he showed the program to the board. No wonder Kahn was so adamant about the price, Berry thought. He had already committed them to it.

It wasn’t just one ad that ran; Kahn had placed $18,000 worth of ads. When the advertising salesperson came to the Borland offices, Kahn had his friends fill the chairs around the offices to create the impression of a more prosperous business in an attempt to bolster his request for credit. He had no choice; Borland had no money to pay for the ads, and they had no prospects of getting any money unless they got a lot of orders for Turbo Pascal right away.

In November, Borland raked in $43,000 in sales, which Kahn immediately spent on more advertising. “He was betting the company every chance he got,” Berry said. Within four months, the company was bringing in nearly a quarter of a million dollars a month. They were growing too fast to act like a “normal” company, and Kahn’s sales manager understood that. When a major software distributor offered in late 1985 to carry Turbo Pascal, he turned the distributor down even though it could have increased Borland’s sales significantly. It seemed crazy, but the five-month lag in payments the distributor imposed would have killed them.

Microsoft Steps In

Meanwhile, Ashton-Tate and Oracle were on a collision course. In 1988, Ashton-Tate partnered with Microsoft to bring a relational database product to market, edging in on Oracle’s technology-industry niche. At the same time, Ashton-Tate filed suit against FoxPro, the competitor in its own backyard, claiming that FoxPro was infringing on Ashton-Tate’s copyrights. On the face of it, the claim seemed legitimate: FoxPro’s business model basically called for producing something that looked and performed as much like dBase II as possible.

While expanding its market and protecting its flanks, Ashton-Tate was also tending to its current products, bringing out major new versions of dBase and Framework. Then, in late 1988, the boys at Oracle learned that Ashton-Tate was at work on a version of dBase for minicomputers. Now they were moving into Oracle’s territory.

Oracle had made a move into Ashton-Tate’s territory years earlier with Oracle for the PC, but it wasn’t so much a product as a technology demo. Even though nothing much could really be done with Oracle for PCs, given that it was buggy and frequently crashed, one could get an idea of what the software was supposed to do and get a feel for what Oracle on minicomputers was all about. The PC version by and large functioned as advertising for Oracle in a market where it didn’t yet have a viable product. When Oracle eventually did have a viable PC version, the company didn’t have to educate the market; the demand for the product was already there.

The appeal of the Oracle product was a little difficult to understand. Not only was the PC version inadequate and buggy, but the minicomputer versions were often buggy, too. To make matters worse, Oracle had a reputation for delivering products late. However, relational database technology was appealing, and Oracle’s sales efforts were formidable. The ad budget was doubling annually by the mid-1980s, along with the sales figures. The slogan of Oracle’s ad agency was “God hates cowards.” Oracle’s could have been “Take no prisoners.”

When Ellison learned that Ashton-Tate was planning a version of dBase for minicomputers, Oracle retaliated by pushing its PC version with a vengeance. Everywhere, ads appeared showing an Oracle fighter jet shooting down an Ashton-Tate biplane. Oracle began selling its PC version at cost. Because it was making large profits on its minicomputer versions, it could afford to do so. Ashton-Tate, with the bulk of its profits coming from dBase for the PC, had no response.

Unfortunately for Ashton-Tate, its newly released version of dBase was full of bugs. On top of that, the judge in the copyright-infringement case Ashton-Tate brought against FoxPro not only decided against Ashton-Tate but also stripped the company of its copyright. The court found that Ashton-Tate had not properly disclosed that its dBase product was based on work done at the government’s Jet Propulsion Lab—work that was in the public domain. The company was soon bleeding red ink. CEO Ed Esber was shown the door.

While Ashton-Tate suffered, Borland prospered. It had gone public in 1986, and by the end of the 1980s, with a half-billion dollars in revenues, it was one of the biggest software empires. In 1991, Borland bought Ashton-Tate.

Next, Microsoft launched an assault against Borland’s market niche. In 1986, Microsoft put out a major new release of Basic, turning the latest version of the language Microsoft had been rewriting and redefining since 1975 into what it hoped would be a Turbo Pascal killer. This was an important development: Microsoft had built its reputation on programming languages, and Borland’s fast, compact, and cheap language had hurt Microsoft’s sales in computer languages and made Microsoft look old and stodgy. QuickBASIC was to change that perception, and Microsoft did what it came to do best: it staged a killer press event to promote the product.

Technical journalists were invited to the Microsoft “campus” in Redmond, Washington, to see the latest technology. Those invited were editors and writers for technical magazines, and many of them were programmers in their own right. Microsoft treated the journalists to a fine meal and then issued them a challenge: each would compose a programming task that could be achieved in a few hours of work. A description of one of these tasks would then be pulled at random out of a hat, and from those descriptions the journalists/programmers would begin to write code. Whoever was the first to run a program that successfully completed a task would win a prize. The journalists were free to use their own computers and any programming software they liked. Microsoft’s new QuickBasic would be represented, and the programmer using it would be Bill Gates.

It had been nearly four years since Gates had written code. The last time was when he completed the software for the Tandy TRS-80 Model 100, a book-sized portable computer much prized by journalists. Gates was nervous and had stayed up late the night before familiarizing himself with QuickBasic. One of the journalists, a sharp programmer named Jeff Duntemann, would be using Turbo Pascal, and Duntemann knew Turbo Pascal inside and out.

When the contest was over, Bill Gates and QuickBasic had won. It was a crazy thing, an outrageous PR gamble, but it had paid off. The message was clear: Microsoft was run by a sharp, highly competitive businessman who also happened to have helped start the industry. Plus, he was profoundly knowledgeable about the technology, and no slouch as a programmer, either. QuickBasic ended up selling well against Turbo Pascal.

Borland soon found itself in trouble in a now ruthlessly competitive market. But Borland was out for blood, too: when one of its executives left to work for Gordon Eubanks at Symantec, Borland sued the former executive. It wasn’t Borland’s first major lawsuit. Lawsuits were becoming more and more common. The stakes were high, and competition was getting brutal.


Figure 45. Digital Research headquarters As Digital Research grew, it moved to larger headquarters. (Courtesy of Tom G. O’Neal)

But a market requires a marketplace. Gradually a publishing industry would grow up around the burgeoning personal-computer market, feeding the growing hunger for information, telling computer enthusiasts about the new products that were appearing every day. At the same time the early personal-computer stores were being challenged by well-financed chains. And this would bring a heavyweight player into the market with a bargain-basement computer and a network of stores to sell it. But early on, the marketplace really existed in the clubs and newsletters where hobbyists learned about new products.

Copyright © 2014, The Pragmatic Bookshelf.