Computers: A Hard-Core Technoid

He looks like an undernourished grad student as he waits for a plane at Seattle-Tacoma International Airport. His gray sweater has patches on the elbows; his shoes are scuffed; his ginger hair flops over a pair of steel-framed glasses. He fidgets with a thick pile of papers that contain preliminary sketches for a new portable computer and technical details for silicon chips that will be used in machines of the late 1980s. The tag on his battered black suitcase reads “William H. Gates, Chief Executive Officer and Chairman of the Board, Microsoft.”

Gates, 28, has helped catapult Microsoft to the forefront of the software industry, and his list of customers includes every major manufacturer of personal computers. When IBM wanted an operating system for its Personal Computer, it turned to Gates. When Apple needed software for its Macintosh, it gave Microsoft a test model to use in writing the programs. Gates helped with the design of Radio Shack’s Model 100, the first truly portable computer. Microsoft produced the MSX systems software that will be used for a new series of Japanese computers. Thanks to that business (and more), Gates, who owns almost half of the privately held company, has become America’s software tycoon.

The son of a prominent Seattle lawyer, Gates has spent most of his life around computers. He initially encountered them as a seventh-grader in 1967 when the proceeds from a mothers’ club rummage sale were used to buy a machine for Seattle’s Lakeside School. Gates devised a class-scheduling program so that he could take courses with the prettiest girls. Recalls Lakeside Math Teacher Fred Wright: “Bill had the ability to see shortcuts.”

Teaming up with Paul Allen, a friend and schoolmate, Gates formed a pint-size company, Traf-O-Data, that studied traffic patterns for small towns near Seattle. When he was 15 and a tenth-grader, the company grossed $20,000. Says Gates in his characteristic computerspeak: “I was a hard-core tech-Is noid.” He temporarily abandoned computers for a year in the early 1970s for such nontechnical pursuits as acting in the school play, but he did not lose his touch for making money. While he was working as a congressional page in 1972, he and a friend snapped up 5,000 McGovern-Eagleton campaign buttons for a nickel each just after South Dakota’s George McGovern dumped Missouri Senator Thomas Eagleton from the Democratic ticket. They later sold the scarce mementos for as much as $25 each.

After the first microprocessor was introduced in 1972, Gates and Allen tried to build a personal computer, but eventually decided to stick with software. Says Allen:

“Building a machine was too hair raising.” In 1975, when Gates was in a prelaw program at Harvard, Allen persuaded him to help adapt the computer language BASIC to run on the Altair, the first commercially available microcomputer. Gates and Allen spent six weeks writing a version of the language on a Harvard computer. Then, despite his parents’ objections, Gates dropped out of Harvard. He recalls, “Paul kept saying, ‘Let’s start a company. Let’s do it.’ ” In 1978 Microsoft had just 1 5 employees. Today it has 5 10 and sells 29 products, including computer languages like COBOL and FORTRAN, devices that permit computers to run programs originally designed for different machines, and software programs for such tasks as text editing and financial planning. Microsoft last year announced plans to sell a package called Windows that will enable different programs to run on a computer simultaneously.

Although Gates and Allen agree on most things, they have differed strongly about prices. Allen prefers to charge what the market will bear on the ground that people are willing to pay top dollar for good products, while Gates wants “to sell a lot at a low price.” The chairman generally gets his way.

Last year Allen discovered he was suffering from cancer. Though the illness is in remission, he is only now returning to full-time work as a company vice president. To ease his work load, as well as to shore up Microsoft’s managerial team, Gates has recruited executives from other companies. James Towne was hired from Tektronix, an electronic instruments maker, to become president, but he lasted less than a year. Last August, Towne was succeeded by Jon Shirley, 45, a former Tandy vice president.

Towne’s departure was due in part to Gates’ sometimes prickly and abrupt style. He reportedly has a sharp temper. Says Charles Simonyi, 35, a Microsoft programmer: “Bill isn’t going to explain everything twice.”

Gates and Shirley are naturally concerned about maintaining Microsoft’s success. The company had a jolt in January, when IBM announced that it would buy a version of UNIX, another operating system, from one of Microsoft’s competitors.

That could cut into sales of the MS-DOS jj system; it also was a warning that Gates sand his colleagues should not rely too 3 heavily on IBM.

Though Gates no longer does programming, he has little time for anything but business. Says he: “I’m still fairly hard-core.” Once or twice a week he finds time to see his current girlfriend, Jill Bennett, 27, who sells computers for Digital Equipment. In the past six years he has taken only 15 days’ vacation, four of them at a Phoenix tennis ranch in 1982.

His $750,000 home, which is just a 14-minute drive from Microsoft headquarters, has a 30-foot indoor swimming pool and a view of Lake Washington. But the hub of the home is an IBM PC in the den. Many evenings he works at the machine. When he grows tired, he can look up to the ceiling at a giant map of the world. It has been a long way from Mc-Govern buttons. —By Michael Moritz