Part 11 - IBM's Secret
IBM had been watching the emerging PC marketplace. By 1980 the company had made a couple feeble attempts at their own PC products. One was the IBM 5100 computer which was a big desktop with a tiny screen, and the Datamaster - another future failure. IBM also had entertained the notion of buying the game company Atari and its early pc line.
IBM's chairman at the time decided to take a different approach, and gathered a group of the company's renegade successful managers - wild ducks in IBM-speak - to start a project code named the Manhattan project. Its mission was to explore building a PC that the market really wanted, and to try to end the embarrassment of the world's largest computer company being beaten out by long haired kids and unknown tiny startup companies, and to build it in a non-IBM company way. The IBM team approached Microsoft under pretense of doing a market survey, requesting Microsoft to sign a non-disclosure agreement which would enable IBM to disavow the meeting ever happened - (Mission Impossible tactics) - and asked Bill Gates for his opinions on what a PC should have and do. Gates had no problem with IBM's secrecy, and had many opinions as to what a PC should be like.
His ideas included using the new Intel 8086 16 bit processor for better performance, and desiring the computer to have better graphics and several other features not found in the current generation of PC's. IBM soon returned with the admission that they were interested in building their own PC and were considering using many of Gates' ideas. They asked if Microsoft would be able to write a special version of Basic for this PC project - they wanted Basic to be in a ROM chip in the computer. Microsoft had already written a version of Basic for Intel for their new 8086 processor, and readily agreed. This new generation PC would need an operating system, so naturally Gates told IBM to contact his friend Gary Kildall at Digital Research - who had written CP/M. Digital Research already had plans to develop a new operating system - CP/M for the 8086 - named CP/M 86.
Herein lies one of the most interesting stories of the microcomputer revolution. There are many war stories about this incident - including how Kildall deliberately kept IBM waiting while he flew his private plane - or how he refused to sign IBM's non-disclosure agreement. Gary Kildall had his own different story of exactly what happened here also - but the net result was that IBM wrote him off as a potential partner and returned to Microsoft still looking for an operating system. Wanting desperately to be part of this new project, Microsoft committed to writing the operating system also - although they had never written one before.
Fate smiled on Microsoft twice in these proceedings. First, IBM was somewhat leery of dealing with what they considered a somewhat flakey tiny software company, but it turns out that in addition to Microsoft's proven reputation as a viable language vendor, Mary Gates - Bill's mom - had served on the national board of United Way with one of the involved IBM senior executives - providing the validating social reference that they were working with "Mary's Gates' boy Bill".
The second fateful event was even more interesting and involves yet another Washington State connection in the microcomputer revolution. Microsoft soon realized that they knew nothing about writing an operating system and began to panic, but someone remembered talking to a Seattle hardware hacker who had already built a prototype computer using the new Intel 8086 and who had mentioned he was tired of waiting for Digital Research - so he had gone ahead and written his own operating system for it.
Ironically, this individual - whose name was Tim Patterson - had previously talked to Microsoft employees and had been very interested in the File Allocation method that Microsoft Basic used. Patterson worked for a local company named Seattle Computer Products and had indeed written his own operating system for his prototype 8086-based computer which incorporated a similar File Allocation system for disk management - and he had named it QDOS - for quick and dirty operating system.
Next we'll talk about what many have called the deal of the century, and we'll learn about what impact IBM's new PC had on the world.
On to Segment 12, "The Deal of the Century"
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