William Henry Gates III, KBE (born 28 October 1955),[2] commonly known as Bill Gates, is an American entrepreneur, software executive, philanthropist, the world's third richest man (as of 2008),[1] and chairman of Microsoft, the software company he founded with Paul Allen. During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the individual shareholder with the most shares, with more than 9 percent of the common stock.[3]
Gates was born in Seattle, Washington and excelled in school early on. He enrolled at Harvard College in 1973, where he met Steve Ballmer and who would later become CEO of Microsoft. After reading the January 1975 issue of Popular Electronics, Gates contacted Micro Instrumentation and Telemetry Systems and provided them with the Altair BASIC, and thus Microsoft was formed. This led to a partnership with IBM that required Microsoft to make the BASIC interpreter for the IBM PC. Later on, Gates struck another deal with IBM, allowing IBM to package Microsoft's PC-DOS software with IBM's personal computers in exchange for a fee paid to Microsoft for every computer sold. This deal established Microsoft as a major player in the software industry.
Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a large number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts.[4][5] In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.
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Early life
Gates was born in Seattle, Washington, to William H. Gates, Sr. and Mary Maxwell Gates. His family was wealthy; his father was a prominent lawyer, his mother served on the board of directors for First Interstate BancSystem and the United Way, and her father, J. W. Maxwell, was a national bank president. Gates has one older sister, Kristi (Kristianne), and one younger sister, Libby. He was the fourth of his name in his family, but was known as William Gates III or "Trey" because his father had dropped his own "III" suffix.[6] Early on in his life, Gates parents had a law career in mind for him.[7]
At thirteen he enrolled in the Lakeside School, an exclusive preparatory school.[8] When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School's rummage sale to buy an ASR-33 teletype terminal and a block of computer time on a General Electric (GE) computer for the school's students.[9] Gates took an interest in programming the GE system in BASIC and was excused from math classes to pursue his interest. He wrote his first computer program on this machine: an implementation of tic-tac-toe that allowed users to play games against the computer. Gates was fascinated by the machine and how it would always execute software code perfectly. When he reflected back on that moment, he commented on it and said, "There was just something neat about the machine."[10] After the Mothers Club donation was exhausted, he and other students sought time on systems including DEC PDP minicomputers. One of these systems was a PDP-10 belonging to Computer Center Corporation (CCC), which banned four Lakeside students—Gates, Paul Allen, Ric Weiland, and Kent Evans—for the summer after it caught them exploiting bugs in the operating system to obtain free computer time.[11]
At the end of the ban, the four students offered to debug CCC's software in exchange for free computer time. Rather than use the system via teletype, Gates went to CCC's offices and studied source code for various programs that ran on the system, including FORTRAN, LISP, and machine language. The arrangement with CCC continued until 1970, when it went out of business. The following year, Information Sciences Inc. hired the four Lakeside students to write a payroll program in COBOL, providing them computer time and royalties. After his administrators became aware of his programming abilities, Gates wrote the school's computer program to schedule students in classes. He modified the code so that he was placed in classes with mostly female students. He later stated that "it was hard to tear myself away from a machine at which I could so unambiguously demonstrate success."[12] At age 17, Gates formed a venture with Allen, called Traf-O-Data, to make traffic counters based on the Intel 8008 processor. That first year he made $20,000; however, when his clients discovered his age, business slowed.[13]
Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on his SATs, the standardized test for college admissions in the United States,[14] and subsequently enrolled at Harvard College in the fall of 1973.[15] While at Harvard, he met his future business partner, Steve Ballmer, whom he later appointed as CEO of Microsoft. He also met computer scientist Christos Papadimitriou at Harvard, with whom he collaborated on a paper about algorithms.[16] He did not have a definite study plan while a student at Harvard, and eventually took a leave of absence in 1975.[17] After Intel released the Intel 8080 CPU, Gates realized that this was the first computer chip which cost less than $200 that could run BASIC, making it the most affordable chip at the time to run inside a personal computer.[18] He figured that this was the only chance he would get to take advantage of the timing, and decided to start a computer software company with Paul Allen.[19] He had talked this decision over with his parents, who were supportive of him after seeing how much Gates wanted to start a software company.[20]
Microsoft
BASIC
After reading the January 1975 issue of Popular Electronics that demonstrated the Altair 8800, Gates contacted Micro Instrumentation and Telemetry Systems (MITS), the creators of the new microcomputer, to inform them that he and others were working on a BASIC interpreter for the platform.[21] In reality, Gates and Allen did not have an Altair and had not written code for it; they merely wanted to gauge MITS's interest. MITS president Ed Roberts agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS's offices in Albuquerque, was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Paul Allen was hired into MITS,[22] and Gates took a leave of absence from Harvard to work with Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-soft" and had their first office located in Albuquerque.[22] Within a year, the hyphen was dropped, and on November 26, 1976, the trade name "Microsoft" was registered with the USPTO.[22]
Microsoft's BASIC was popular with computer hobbyists, but Gates discovered that a pre-market copy had leaked into the community and was being widely copied and distributed. In February 1976, Gates wrote an Open Letter to Hobbyists in the MITS newsletter saying that MITS could not continue to produce, distribute, and maintain high-quality software without payment.[23] This letter was unpopular with many computer hobbyists, but Gates persisted in his belief that software developers should be able to demand payment. Microsoft became independent of MITS in late 1976, and it continued to develop programming language software for various systems.[22] The company moved from Albuquerque to its new home in Bellevue, Washington on January 1, 1979 for more expansion room.[21]
During Microsoft's early years, all employees had broad responsibility for the company's business. Gates oversaw the business details, but continued to write code as well. In the first five years, he personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.[24]
IBM partnership
In 1980 IBM approached Microsoft to make the BASIC interpreter for its upcoming personal computer, the IBM PC. When IBM's representatives mentioned that they needed an operating system, Gates referred them to Digital Research (DRI), makers of the widely used CP/M operating system.[25] IBM's discussions with Digital Research went poorly, and they did not reach a licensing agreement. IBM representative Jack Sams mentioned the licensing difficulties during a subsequent meeting with Gates and told him to get an acceptable operating system. A few weeks later Gates proposed using 86-DOS (QDOS), an operating system similar to CP/M and which Tim Paterson of Seattle Computer Products had made for hardware similar to the PC. Microsoft made a deal with SCP to become the exclusive licensing agent, and later the full owner, of 86-DOS. After adapting the operating system for the PC, Microsoft delivered it to IBM as PC-DOS in exchange for a one-time fee of $80,000. Gates insisted that IBM let Microsoft keep the copyright on the operating system, because he believed that other hardware vendors would clone IBM's system.[26] They did, and the sales of MS-DOS made Microsoft a major player in the industry[27] and helped push Microsoft towards Gates' vision for the company to have "a computer on every desk and in every home".[28]
Windows
Gates oversaw Microsoft's company restructuring on June 25, 1981, which re-incorporated the company in Washington and made Gates President of Microsoft and the Chairman of the Board.[21] Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. However, Gates sent out an internal memo on May 16, 1991 announcing that the OS/2 partnership was over and shifting energy to Windows NT kernel development.[29] Gates announced his retirement in June 2006, He officially retired for daily activities at Micorsoft corp. on January 7th २००८Management style
From Microsoft's founding in 1975 until 2006, Gates had primary responsibility for the company's product strategy. He aggressively broadened the company's range of products, and wherever Microsoft achieved a dominant position he vigorously defended it. Many decisions that led to antitrust litigation over Microsoft's business practices have had Gates' approval. In the 1998 United States v. Microsoft case, Gates gave deposition testimony that several journalists characterized as evasive. He argued with examiner David Boies over the definitions of words such as: compete, concerned, ask, and we.[30] BusinessWeek reported:Early rounds of his deposition show him offering obfuscatory answers and saying 'I don't recall,' in response to direct questions about Gate's involvement in the questionable death of Gary Kildall, so many times that even the presiding judge had to chuckle. Worse, many of the technology chief's denials and pleas of ignorance were directly refuted by prosecutors with snippets of e-mail Gates both sent and received.[31]
Gates later said that he had simply resisted attempts by Boies to mischaracterize his words and actions. As to his demeanor during the deposition, he said, "Whatever that penalty is should be levied against me: rudeness to Boies in the first degree."[32] Despite Gates' denials, the judge ruled that Microsoft had committed monopolization and tying, blocking competition, in violation of the Sherman Act.[32]
As an executive, Gates met regularly with Microsoft's senior managers and program managers. Most firsthand accounts of these meetings portray him as hostile, berating managers for perceived holes in their business strategies or their proposals which place the company's long-term interests at risk.[33] He has been described shouting at length at employees before letting them continue, with such remarks as, "That's the stupidest thing I've ever heard!"[34] and, "Why don't you just give up your options and join the Peace Corps?"[35] However, he was also known to back down when the targets of his outbursts responded frankly and directly.[34] When subordinates appeared to be procrastinating, he was known to quip, "Do you want me to do it over the weekend?"[36]
Gates' role at Microsoft for most of its history was primarily a management and executive role. However, he was an active software developer in the early years, particularly on the company's programming language products. He has not officially been on a development team since working on the TRS-80 Model 100 line, but he wrote code as late as 1989 that shipped in the company's products.[36] On June 15, 2006, Gates announced that he would transition out of his day-to-day role over the next two years to dedicate more time to philanthropy. He divided his responsibilities between two successors, placing Ray Ozzie in charge of day-to-day management and Craig Mundie in charge of long-term product strategy.[37] One of his last initiatives before announcing his departure was the creation of a robotics software group at Microsoft.[38]
Personal life
Gates married Melinda rench from Dallas, Texas on January 1, 1994. They have three children: Jennifer Katharine Gates (1996), Rory John Gates (1999) and Phoebe Adele Gates (2002). Bill Gates' house is a 21st century earth-sheltered home in the side of a hill overlooking Lake Washington in Medina, Washington. According to King County public records, as of 2006, the total assessed value of the property (land and house) is $125 million, and the annual property tax is $991,000. Also among Gates' private acquisitions is the Codex Leicester, a collection of writings by Leonardo da Vinci, which Gates bought for $30.8 million at an auction in 1994.[39]
Gates was number one on the "Forbes 400" list from 1993 through to 2007 and number one on Forbes list of "The World's Richest People" from 1995 to 2007. In 1999, Gates's wealth briefly surpassed $101 billion, causing the media to call him a "centibillionaire".[40] Since 2000, the nominal value of his Microsoft holdings has declined due to a fall in Microsoft's stock price after the dot-com bubble and the multi-billion dollar donations he has made to his charitable foundations. In a May 2006 interview, Gates commented that he wished that he were not the richest man in the world because he disliked the attention it brought.[41]
Gates has several investments outside Microsoft, which in 2006 paid him a salary of $616,667, and $350,000 bonus totalling $966,667.[42] He founded Corbis, a digital imaging company, in 1989. In 2004 he became a director of Berkshire Hathaway, the investment company headed by longtime friend Warren Buffett.[43] He is a client of Cascade Investment Group, a wealth management firm with diverse holdings.[44]
Philanthropy
Gates began to realize the expectations others had of him when public opinion mounted that he could give more of his wealth to charity. Gates studied the work of Andrew Carnegie and John D. Rockefeller and in 1994 sold some of his Microsoft stock to create the William H. Gates Foundation.[45] In 2000, Gates and his wife combined three family foundations into one to create the charitable Bill & Melinda Gates Foundation, which is the largest transparently operated charitable foundation in the world.[46] The foundation is setup to allow benefactors access how its money is being spent, unlike other major charitable organizations such as the Wellcome Trust.[47][48] The generosity and extensive philanthropy of David Rockefeller has been credited as a major influence. Gates and his father have met with Rockefeller several times and have modeled their giving in part on the Rockefeller family's philanthropic focus, namely those global problems that are ignored by governments and other organizations.[49]
The foundation's grants have provided funds for college scholarships for under-represented minorities, AIDS prevention, diseases prevalent in third world countries, and other causes. In 2000, the Gates Foundation endowed the University of Cambridge with $210 million for the Gates Cambridge Scholarships. The Foundation has also pledged over $7 billion to its various causes, including $1 billion to the United Negro College Fund. According to a 2004 Forbes magazine article, Gates gave away over $29 billion to charities from 2000 onwards. These donations are usually cited as sparking a substantial change in attitudes towards philanthropy among the very rich, with philanthropy becoming the norm.[50] Buffett, who was the world's second richest person,[51] announced on June 25, 2006 that he has pledged to give the foundation 10 million Berkshire Hathaway Class B shares, spread over multiple years through annual contributions.[52]
Gates announced on June 16, 2006 that he would move to a part-time role within Microsoft, leaving day-to-day operations management in July 2008 to begin a full-time career in philanthropy, but would remain as chairman.[37] Gates credited Buffett with influencing his decision to commit himself to charitable causes.[53] Days later, Buffett announced that he would begin matching Gates' contributions to the Gates Foundation of up to $1.5 billion per year in stock.[54] Buffett helped to guide the foundation to give its endowment away quickly. It became one of the few charitable organizations with a lifespan, promising to spend all of its resources and to close within 50 years of the deaths of its founders.[55]
Recognition
Time magazine named Gates one of the 100 people who most influenced the 20th century, as well as one of the 100 most influential people of 2004, 2005, and 2006. Time also collectively named Gates, his wife Melinda and U2's lead singer Bono as the 2005 Persons of the Year for their humanitarian efforts.[56] In 2006, he was voted eighth in the list of "Heroes of our time".[57] Gates was listed in the Sunday Times power list in 1999, named CEO of the year by Chief Executive Officers magazine in 1994, ranked number one in the "Top 50 Cyber Elite" by Time in 1998, ranked number two in the Upside Elite 100 in 1999 and was included in The Guardian as one of the "Top 100 influential people in media" in 2001.[58]
Gates has received several doctors honoris causa from several institutions including; Nyenrode Business Universiteit, Breukelen, The Netherlands in 2000,[59] the Royal Institute of Technology, Stockholm, Sweden in 2002, Waseda University, Tokyo, Japan in 2005, Harvard University in June 2007,[60] and from Karolinska Institutet, Stockholm, in January 2008.[61] Gates was also made an honorary KBE (Knighthood) from Queen Elizabeth II of the United Kingdom in 2005,[62] in addition to having entomologists name the Bill Gates flower fly, Eristalis gatesi, in his honor.[63]
In November 2006, he and his wife were awarded the Order of the Aztec Eagle for their philanthropic work around the world in the areas of health and education, particularly in Mexico, and specifically in the program "Un país de lectores".[64]
