Probably the smartest choice Bill Gates ever made came in 1980, when he decided not to hand over the copyright for Microsoft's first-ever operating system to IBM.
In 1980, IBM contracted a startup called Microsoft to deliver DOS,
Probably the smartest choice Bill Gates ever made came in 1980, when he decided not to hand over the copyright for Microsoft's first-ever operating system to IBM.
In 1980, IBM contracted a startup called Microsoft to deliver DOS, an operating system for its forthcoming IBM PC, on a tight deadline.
The IBM PC came out in 1981, and soon became a smash hit, surpassing the leading Apple II. A horde of competitors rushed to build their own "IBM Compatible" clones that could run all of the same software and use all of the same hardware upgrades.
But to build those IBM clones, they needed DOS. And if they wanted DOS, they needed to fork over cash to Microsoft. Microsoft kept the rights in lieu of royalties from IBM. DOS put Microsoft the very center of the PC revolution, even through the era of Windows, and even after IBM left the PC market, eventually selling off that business.
36 years later, it's been a long time since the IBM PC moment. And with the Apple iPhone and Google Android ruling the all-important mobile market, Microsoft missed its shot at the mobile operating system revolution.
That's why Microsoft, which keeps boasting about how much it loves selling cloud services and subscriptions, is suddenly investing so much in hardware like the HoloLens and the Surface. If no new IBM PC will come along like in 1981, Microsoft will just have to build it itself.
Jumpstarting the future
The iPhone and Android have a stranglehold on the mobile market. Apple has ridden the iPhone to becoming the most valuable company in the world, while Google's Android is now the most powerful operating system in the world.
Microsoft missed that boat. And Microsoft, going forward, has to decide if it wants to keep throwing good money after bad into its struggling Windows phone business while it tries to force the next big thing to happen.
Microsoft has decided to build the devices it wants to see in the world. And with PC sales shrinking, Microsoft is looking to more science-fictional co