Steve Ballmer

Gary Kildall Digital Research was the name of the company. But we had licensed it to put on this card that plugged in the Apple II. And somehow IBM thought they could license CPM even though it wasn't our product, they thought they could license it from us.

And we said, no, no, no, but you can license our language software, but there are these guys down in Pacific Grove, California, and Bill called Gary Kildall and said, there's some guys, they want to talk to you. They're important. And Gary, they went down there and they didn't sign the non-disclosure agreement.

And we said, no, no, no, but you can license our language software, but there are these guys down in Pacific Grove, California, and Bill called Gary Kildall and said, there's some guys, they want to talk to you. They're important. And Gary, they went down there and they didn't sign the non-disclosure agreement.

And in the meantime, there was a company here in Seattle called Seattle Computer Products that had a little CPM clone.

And in the meantime, there was a company here in Seattle called Seattle Computer Products that had a little CPM clone.

It was pretty good. There was a company that happened to be here in town. Paul, Ellen, and I went down there. And we met with the founder, who later came to work at Microsoft, a guy named Tim Patterson. And we offered him, I think we paid $45,000 or $49,000 for this operating system because we told IBM, no, no, we can... uh, take care of it.

It was pretty good. There was a company that happened to be here in town. Paul, Ellen, and I went down there. And we met with the founder, who later came to work at Microsoft, a guy named Tim Patterson. And we offered him, I think we paid $45,000 or $49,000 for this operating system because we told IBM, no, no, we can... uh, take care of it.

There was kind of a famous meeting amongst me and Paul, uh, and Bill and this guy, Kazuhiko Nishi, who ran our kind of affiliate in Japan, uh, where we were talking about this. And there was a lot of, let's just say four letter words thrown around, uh, Scroom's five letters, but you get the drift.

There was kind of a famous meeting amongst me and Paul, uh, and Bill and this guy, Kazuhiko Nishi, who ran our kind of affiliate in Japan, uh, where we were talking about this. And there was a lot of, let's just say four letter words thrown around, uh, Scroom's five letters, but you get the drift.

That was kind of the theme. Kaz was kind of a cowboy. He was kind of, yeah. Yeah, Nishi, absolutely a cowboy. So we went, we sold it to him. Half of what we paid for it, we thought, we can do this 10, 20 times. 20 times 21,000, 400,000 against 50,000 we paid for it.

That was kind of the theme. Kaz was kind of a cowboy. He was kind of, yeah. Yeah, Nishi, absolutely a cowboy. So we went, we sold it to him. Half of what we paid for it, we thought, we can do this 10, 20 times. 20 times 21,000, 400,000 against 50,000 we paid for it.

No, we did not. Remember, the key thing was we didn't charge for the operating system on an ongoing basis. We charged for it one time. If you got a new version, we charged another time. We did the same thing for BASIC and everything else because... At the time, you could think we were like a substitute for an R&D department, which means we were fixed price. It was only...

No, we did not. Remember, the key thing was we didn't charge for the operating system on an ongoing basis. We charged for it one time. If you got a new version, we charged another time. We did the same thing for BASIC and everything else because... At the time, you could think we were like a substitute for an R&D department, which means we were fixed price. It was only...

I don't know, four or five years later that we actually switched to licensing per unit as opposed to just fixed fee. Here it is. Pay us once and we're done.

I don't know, four or five years later that we actually switched to licensing per unit as opposed to just fixed fee. Here it is. Pay us once and we're done.

But IBM wanted this. Okay. IBM, they were experimenting with a different approach. They'd said, look, instead of us building everything all custom, we want to use some industry standard parts, components, because that'll let us be more agile, et cetera. So they didn't come in. loathe to any of this. They knew that was our business. They know that was digital research's business.

But IBM wanted this. Okay. IBM, they were experimenting with a different approach. They'd said, look, instead of us building everything all custom, we want to use some industry standard parts, components, because that'll let us be more agile, et cetera. So they didn't come in. loathe to any of this. They knew that was our business. They know that was digital research's business.

And they wanted to use an Intel part versus their own proprietary part. They didn't ask Intel to do them a custom part either. The notion was, we'll move fast. We'll get away from the IBM bureaucracy by taking this approach. So I wouldn't say that was the hardest convincing, if you will, in the story.

And they wanted to use an Intel part versus their own proprietary part. They didn't ask Intel to do them a custom part either. The notion was, we'll move fast. We'll get away from the IBM bureaucracy by taking this approach. So I wouldn't say that was the hardest convincing, if you will, in the story.

They were selling a lot of computers and making profit also. They would have been making more profit than we were at the time, just the way pricing worked. There was a little twisty in here, though, I should throw at you if you're curious.