Microsoft created Windows, Word, Xbox, the world’s first smartwatches, and more. This is the story of how Bill Gates and Paul Allen built a company in a garage, and within 15 years, their software ran on most of the world’s computers.
As you read on, you will learn:
— One magazine article that changed everything
— How programming became their breakthrough
— Windows empire: What started Microsoft
— Allen steps away, gates builds Windows
— What has Microsoft invented over the years?
— Working with Apple and Amazon
Where it all started?
Bill Gates and Paul Allen met back in school, sharing the childhood dream of one day owning a computer. At the time, computers were massive costly machines used only by scientists and the military.
After high school, Gates enrolled at Harvard and co-founded a small business with Allen called Traf-O-Data. Already confident programmers, the pair built a system to analyse traffic flow in real time, presenting results in spreadsheet form.
One Magazine Article That Changed Everything
In the early 1970s, the two read a magazine article about the first affordable, portable computer — the Altair 8800. It was a game-changer: something everyday people could own. Inspired, Gates and Allen decided to act. After all, a computer could not run without the right programming language.
They reached out to the Altair 8800’s creators and offered them working software. In reality, they hadn’t written the code yet — just drafted the idea back when they worked on traffic systems.
They then decided to act: Gates dropped out of Harvard, and the two set up shop in a garage, coding day and night. What they created was a programming language. Primitive, yes — but revolutionary nonetheless.
How Programming Became Their Breakthrough
At that time, no programming languages existed for personal computers. Gates and Allen were the first to build one — specifically for the Altair 8800. This breakthrough laid the groundwork for future programmers and software developers.
Their collaboration with Altair’s makers was a success and inspired them to build their own brand. At the time, they were only 20 to 22 years old.
Windows Empire: What Started Microsoft
Microsoft was officially founded by young Bill Gates and Paul Allen in April 1975. Originally written with a hyphen, Micro-soft, the name combined microprocessor and software. The hyphen was later dropped.
From the beginning, they worked on a new language called Fortran, released in the late 1970s. A year later, Allen was awarded $1 mln for his contribution to computing.
Their true breakthrough came in 1981, when IBM selected Microsoft’s MS-DOS as the main operating system for its personal computers.
What Is MS-DOS?
MS-DOS was Microsoft’s first operating system created by Gates and Allen, the prelude to Windows.
It was entirely text-based: no mouse, no icons, no windows. Users typed everything manually using command prompts.
The cursor was blinking on the black screen and they had to manually enter commands. For example:
dir— shows the list of files in a foldercopy— copies a filedel— deletes a filerun— launches a programme
It was functional, but far from user-friendly. Remembering all the commands was a chore. Gates and Allen knew something better was needed.
Allen Steps Away, Gates Builds Windows
In 1983, Paul Allen left the company and sold most of his shares, though he remained on the board. The shares he kept are now worth an estimated $25 bln.
Meanwhile, Bill Gates began developing Windows, initially built on MS-DOS. Over time, typed commands became obsolete, replaced by a graphical interface more familiar to modern users.
Windows took the world by storm and became the leading operating system. Bill became rich thanks to the company’s developments and even more ideas appeared. Today, roughly 90% of all computers run on Windows.
What Has Microsoft Invented Over the Years?
In the early 1980s, Microsoft released its first hardware invention — the computer mouse, while simultaneously working on Microsoft Word. Since then, the company has produced phones, tablets, and laptops, though many of its hardware products were later outshined by global tech rivals.
Microsoft released the world’s first smartwatch in 1994. The device had a stopwatch, could store 40 phone numbers, play tunes, and run simple games.
The company also tried to launch a audio player called Zune. But the Market was already occupied by Apple so they failed to gain traction.
Then came 2001 and the debut of Xbox. This gaming console marked a new era for video games, making Microsoft the first American company to compete seriously with Japanese giants like Sony and Nintendo.
Xbox boasted better performance than the PlayStation, enabled online play, and even allowed users to listen to music while gaming. Its headline title, Halo: Combat Evolved, became a smash hit, selling millions of copies worldwide.
Working with Apple and Amazon
In the mid-90s, Bill Gates famously helped save Apple from bankruptcy by investing over $100 mln. In return, Apple launched the iPad with an operating system based on Windows. Safari, Apple’s browser, was also compatible with Windows at the time.
Microsoft also collaborated with Amazon for years, helping build apps and websites for its e-commerce platform. Today, the companies continue to work together, especially in cloud computing.
The Financial Picture Today
Microsoft’s numbers have soared. In 2024, the company generated over $245 bln in revenue, a 16% increase from the previous year. Net profit for the year topped $88 bln, up 22% year on year.
Microsoft has seen failures and triumphs, but it now stands as a market leader. The main reason for their success is inventing something that does not yet exist, and an unlimited amount of work and time.
