Reference no: EM131418442

Bill Gates won, Gary Kildall lost. In the accepted version of history, Bill Kildall blew off a meeting with IBM representatives to go flying, thus losing the opportunity to sell his operating system to IBM for use on the hugely successful IBM personal computer. But Kildall’s own words, in a never published memoir written shortly before his death in 1994, detail a slightly more complicated tale. Like Bill Gates, Kildall was raised in the Seattle area, and like Gates Kildall had a passion for computers. Their paths even crossed when Gates, a high school student, and Kildall, a college student, both worked on the same computer system. Kildall joined the Navy and became a Computer Science instructor at the Navy’s Post-Graduate School in Monterey, California. Kildall and his students wrote a small control program, which he called CP/M (Control Program/Microcomputer) that allowed the microprocessor to communicate with a floppy drive. After his discharge from the Navy, he started Digital Research to market his program. The beauty of CP/M’s operating system was that it was separate from the hardware, allowing applications to run on computers from different manufacturers. His operating system soon dominated the market. It found its way onto computers manufactured by Apple, Radio Shack, Commodore, Zenith, Sharp, and almost a hundred other manufacturers. But Kildall was slow to write an updated version of his OS for the newer 16-bit microchips. Tim Paterson of Seattle Computer Products took parts of CP/M and rewrote the program for the newer processors. Paterson called his system QDOS (Quick and Dirty Operating System.) What happened next is unclear. What is known is that IBM approached Digital Research about licensing CP/M for use on the soon-to-be-introduced IBM PC. The widely believed story is that Kildall blew off the meeting to fly his plane, leaving Dorothy McEwing, the company’s business manager (and Kildall’s wife) to meet with the IBMers. Supposedly, McEwing balked at signing the IBM non-disclosure agreement and refused to make any modifications to CP/M. The IBM staffers left, looking elsewhere for an operating system. Kildall remembered it differently. He did take his plane out that morning, but returned in time for the meeting. (A Digital Research colleague Tim Rollander was on the plane with Kildall and insists they returned and attended the meeting.) Kildall stated that he and IBM reached a handshake agreement that day. Insiders at IBM believe no deal was made. IBM then approached Bill Gates to see if he could provide the operating system. Gates did not have an appropriate program, but he knew Tim Paterson had created QDOS based on CP/M. Gates bought the program from Paterson for $50,000, renamed it PC-DOS, and licensed it to IBM for a low royalty rate. Kildall and Digital Research never recovered. Within a few years, the IBM PC was the undisputed champ, and Microsoft was the leading provider of operating systems. Kildall introduced a DOS compatible version of CP/M in 1989 but claimed that Microsoft’s marketing tactics shut him out of the market. He remained bitter, believing that Microsoft stole the market by licensing Paterson’s rewrite of his operating system. He was 52 when he died in 1994 after falling outside a Monterey restaurant.

What does this story make you think about? What characteristics can you recognize in both Bill and Gary? What would you have done differently?