Microsoft Founded — April 1975

In January 1975, Bill Gates—a Harvard sophomore—took a phone call from his friend Paul Allen in Albuquerque, New Mexico.

"Have you seen the new Popular Electronics?" The January issue's cover was the Altair 8800 from MITS: the first personal microcomputer, US$397 as a kit, US$498 assembled.

Allen, on the other end, said: "We're going to write a BASIC for it."

Two-Month Camp

They sent MITS a letter claiming that they had a BASIC interpreter under development for the Altair, ready for delivery shortly.

In fact, nothing had been written. Neither of them had touched a real Altair. Working from the Intel 8080 specification alone, they planned to emulate the Altair on Harvard's computer-centre PDP-10 and write the BASIC there—an audacious plan even by the standards of the day.

Over about eight weeks, from February into March, Gates, Allen, and a third hand—Monte Davidoff—lived in the Harvard computer room and built BASIC. Delivery was on paper tape. In early March, Allen flew to MITS in Albuquerque and fed the tape into a real Altair.

Until that moment they had had no way to verify that what they had written would actually run on real hardware. It ran. It fit into 8 KB of memory; an interactive shell answered 4 when you typed PRINT 2+2.

"Micro-Soft"

On 4 April 1975, Gates and Allen registered the company in Albuquerque. The name began as 'Micro-Soft'—short for microcomputer software. The hyphen dropped off in 1976.

Using Harvard's computer to emulate an Altair brought Gates a disciplinary review for misusing the institution's DEC computer resources. In the autumn of 1975, he formally took a leave from Harvard and moved to Albuquerque to sell BASIC alongside MITS.

The Open Letter to Hobbyists

By February 1976, Altair BASIC was mature enough to sell. But Gates discovered an unexpected problem: copies of the BASIC tape were being passed around among hobbyists, almost universally pirated.

On 3 February 1976, he sent his Open Letter to Hobbyists to the hobbyist magazines. The argument was direct:

Most of you hobbyists are stealing your software. You pay for hardware, but you pay nothing to those who write software.

Who in this situation would write professional software?

Most of you should be aware that you are stealing our time.

This one-page letter is still read as one of the earliest important documents in the history of the software industry. The claim that software is not an appurtenance of hardware but its own commodity—an intellectual asset, protected by copyright—was put squarely to the public for the first time here.

Fifty Years On

By 2026, Microsoft is valued at more than US$3 trillion, alongside Apple as one of the most valuable companies in the world. Annual revenue above US$200 billion; roughly 230,000 employees.

The starting point of all of it is a small office in Albuquerque registered as 'Micro-Soft' in April 1975.

And Gates's 1976 argument—on whether software ought to be paid for, who its author is, and what copyright in code means—still frames the debate, five decades later: through the Apple App Store and Epic Games litigation, the EU Digital Markets Act, and the current arguments about the use of copyrighted material to train generative-AI models. Whether one agrees or argues against it, the frame is his.