The Other Name behind Microsoft

The Canberra Times |19 October 1995


Paul Allen, who co-founded Microsoft at the age of 22

Few recognise that Paul Allen helped co-found the software giant alongside Bill Gates, as Wilson da Silva reports.

PAUL ALLEN once said he would be happy to call it quits after he made a million dollars. Twenty years after he co-founded software company Microsoft Corporation with Bill Gates, a company which now makes a million dollars 16 times a day, Allen is a billionaire several times over.


Bill Gates is known the world over as the founder of Microsoft. Allen’s role is virtually unknown. He the obscure half of one of the most successful partnerships in the history of computing; so obscure that even those who live and breathe computers may never have heard of him.


He will be the keynote speaker at the Multimedia ‘95 conference being held in Melbourne later this month. On the eve of His first visit to Australia — he will be arriving in his personal Boeing 747 — he is not giving interviews. In fact, he rarely talks to the media, which helps to explain his relative obscurity.

Allen is the obscure half of one of the most successful partnerships in the history of computing.

Yet Allen was there, right at the beginning of Microsoft. In 1975, at the age of 22, he and 19-year-old Gates entered the computing world in earnest. The two were brash enough to offer, MITS, one the world’s first microcomputer makers, a programming application language a month after reading about the company’s build-it-yourself Altair 8080 computer in an electronics magazine.


The company was impressed; it bought a licence and hired Allen as its head of software. A year later, he quit his job at MITS to concentrate on Microsoft, a name eventually registered in 1976. By the end of 1978 they had made their first million dollars in sales and had opened an office in Japan. The moved to Seattle the following year and, with a staff of 35, were writing programs for companies such as Ricoh and Texas Instruments.


But their truly stupendous break came in 1980 when IBM came shopping for an operating system to drive its first personal computer. IBM, the mainstay of large mainframe business computers, knew little about PCs but had been spooked into the PC business by the rapid growth of upstart companies like Apple and Digital Research.


Paul Allen and Bill Gates in the early days of Microsoft

They sought out Digital Research, then the bee’s knees in PC programming, but were told to join the queue. Desperate for an operating system, the Big Blue sought out Allen and Gates.


By coincidence, Allen was talking to a small company, Seattle Computer, about buying its new operating system, Q-DOS. When IBM came calling, the duo agreed to develop a new operating system for IBM. Two days later they closed the deal to ac quire Q-DOS for SUS50.000. They turned around and, after some modifications, sold it to IBM as MS-DOS.


This is the operating system that, thanks to IBM’s market power and some aggressive marketing by Microsoft, went on to become the PC standard. Today, MS-DOS and its descendants such as Windows ‘95 are at the heart of 80 per cent of the world’s PCs.


It was a mixture of luck, bravado, marketing flair and rigid determination to win that saw Microsoft rise to the top.

It was a mixture of luck, bravado, marketing flair and rigid determination to win that saw Microsoft rise to the top.

Allen disappeared into the shadows in 1983, when he was diagnosed as having Hodgkins’ disease. After years of treatment, he went into remission. When he recovered, the idea of returning to the hard drive of Microsoft didn’t appeal.


“To be 30 years old and have that kind of shock,” he said, “to face your mortality, really makes you feel like you should do some of the things that you haven’t done.”


MICROSOFT IS NOW a corporate behemoth. Allen’s 14 per cent stake in the company is worth US$4 billion (A$4.56 billion), more, than the gross domestic product of Papua New Guinea, Cambodia, Mozambique, Bermuda and Fiji. He has investments of US$1.2 billion (A$1.37 billion) in 20 information and entertainment companies.


He collects original Roman statues and paintings by French impressionist masters. His estate in Lake Washington, near Seattle, has three houses, a full-sized gym, an indoor pool and waterslide.


But inside the bearded, portly frame is still the teenage electronics enthusiast: he likes to jam with his band, collects Jimi Hendrix memorabilia and is building a museum to house his 6000-piece collection of the idol’s guitars and gold records.


These days, Allen is focusing on the information superhighway, or 'infobahn', as the progenitor of the next wave of technological revolution. He is mindful that most companies that ride a technological wave in one decade miss a ride on the next one.


At Microsoft, where he remains a director and a personal friend of Mr Gates, Mr Allen is trying to prove that wrong. But just in case he’s wrong with Microsoft, he’s got another 21 investments. All he needs is one of those companies to take off, and he’s made another few billion dollars.

Perhaps then he’ll call it quits.

Wilson da Silva is a journalist in Melbourne.

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