MITS licenses Altair BASIC from Bill Gates and Paul Allen

22nd July 1975
MITS licenses Altair BASIC from Bill Gates and Paul Allen

Bill Gates and Paul Allen sign a licensing agreement with MITS, for their implementation of the BASIC language. Gates and Allen receive US$3,000 immediately, with royalties of US$30 per copy of 4K BASIC, and US$35 for 8K BASIC.

In January 1975 Paul Allen showed Bill Gates a copy of Popular Electronics magazine that included plans to build the Altair 8800 computer. Seeing the potential to develop the BASIC language for the Altair, Bill Gates called Ed Roberts, the designer of the Altair and offered to demonstrate their BASIC interpreter with a view to agreeing a contract with the company. At that time, Gates and Allen didn't even have an Altair let alone written the BASIC interpreter, they simply wanted to gauge the response.

Ed Roberts agreed to meet them for a demo in March 1975. In the few weeks between the phone call and the meeting, they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter.

Bill Gates and Paul Allen flew to MITS's offices in Albuquerque, New Mexico, and demonstrated their software. It worked, and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. On 1st July 1975 the software officially shipped for the first time as version 2.0. The formal licensing agreement with MITS was signed on 22nd July 1975.

Gates and Allen left Boston, moved to Albuquerque, and co-founded Microsoft there. The gross income of the newly formed company in 1975 was $1 million.

Paul Allen was then hired by MITS, and Gates took a leave of absence from Harvard to work with Allen at MITS in November 1975. Paul Allen came up with the name "Micro-Soft" for the partnership. Months later they dispensed with the hyphen, and on November 26, 1976, the trade name "Microsoft" was registered with the Office of the Secretary of the State of New Mexico.

Related information:


  • Bill Gates and Paul Allen in front of white board, Feb. 10, 1982
    Credit: Copyright Barry Wong / The Seattle Times.
  • Altair 8800
    Credit: The Centre for Computing History
  • Images remain the copyright of the original copyright holder. Used under fair use policy for educational purposes only.

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