The tech world brims with stories of triumph, showmanship, betrayal and deceit. But this is not one of those stories. This is a story of fate and confusion undoing what might have been a great testimony of entrepreneurship. This is the story of Gary Kildall.
There was a time in the tech world when very few doubted Gary’s ascension until all of sudden things started crumbling before screeching to a heartbreaking halt. What happened in between can best be described as a fateful turn of events.
In case you are still wondering who the heck this Kildall guy is, well, he was someone who could have been a multi-billionaire had he been in the right place at the right time. He was someone who could have been as famous as Bill Gates had he played his cards right.
He was a tech visionary – a central figure in the development of personal computing in the ’70s and the early ’80s.
Gary started his career as a mathematics professor at Naval Post Graduate School in Monterey, California. With his background in mathematics, he started to lean towards programming. In 1972, he completed his Ph.D in Computer Science and started consulting for Intel.
It was around this time that Gary developed operating software for Intel 4004 microprocessor. He called it PL/M (Programming Language for Microcomputers). Some time later, he came up with CP/M (Control Programming for Microcomputers) which could help the microprocessor control a floppy drive. Apparently, CP/M failed to excite the Intel honchos and they decided to give it a pass.
Not happy with the cold response of Intel, Gary along with his wife Dorothy decided to go full hog with CP/M. The couple started a company called Intergalactic Digital Research out of their old Victorian home in California. Later in 1977, they incorporated it as Digitial Research Inc. (DRI).
Before CP/M came along, every computer had to have a tailor-made software. Gary changed that. By 1979, CP/M was the most popular 8-bit operating system in the world. Microcomputer companies such as IMSAI 8080, North Star, Osborne were all running on CP/M.
At the same time, a little known company called Traf-O-Data run by a certain Bill Gates and Paul Allen also used CP/M to collect data from the roadway traffic counters.
By the late-70s, the waves of change were sweeping away microcomputers. Gary was going to straddle the change from microcomputers to personal computers. A change even he didn’t see coming.
Steve Wozniak and co. hit the market with first Apple personal computer in 1976 and soon others followed. The PC market ballooned to $1 billion size within a matter of three years.
It wasn’t long before IBM – the tech giant of that era – took notice and decided to jump into the fray. IBM knew it was late to the PC market and had to come out all guns blazing. In 1981, the IBM crack team tasked with creating the first IBM PC decided to buy off-the-shelf components along with software in order to expedite its entry to the PC market.
Bill Gates and Microsoft were on the rise by the early ’80s. IBM approached Gates who rightly pointed them to DRI citing that Microsoft had yet to build an operating system of its own. However, before moving on, IBM legal team had Bill sign a non-disclosure agreement (NDA).
What went wrong?
The legend is that Bill Gates called Gary Kildall to inform him about the arrival of an important group of people. His NDA with IBM forbid him to mention anything about the company and their meeting. Sadly, Gary failed to decipher the cryptic message of Bill Gates and left for a flying trip in his private plane.
When IBM came knocking, Gary wasn’t home. His wife Dorothy and a team of DRI lawyers met the IBM team and apparently, failed to inspire any confidence in the latter.
IBM wanted a forever license for CP/M – something Dorothy refused flat-out. Further, IBM wanted Dorothy to sign a unilateral non-disclosure agreement which she and her legal team weren’t very comfortable with.
By the time, Gary met the IBM team, a fair bit of damage was done. Gary wanted to sell CP/M on a royalty basis, retaining its name. IBM wanted to pay a one-time fee instead.
As a result, IBM team stalked out in a huff and appraoched Bill Gates again, who now sensed a clear opportunity. The only issue was that Microsoft still didn’t have an operating system.
To solve this problem, Bill Gates scurried to Seattle Computers, a me-too manufacturer of CP/M clone called Q-DOS. Q-DOS was the shorthand for Quick and Dirty Operating System. Microsoft rechristened it as PC-DOS and presented it to IBM.
This upset Gary. IBM sensing a legal infringement approached Gary with a solution that it would license both Microsoft’s PC-DOS and DRI’s CP/M with its line of PCs and let the market decide which is better.
Confusion reigned supreme
When IBM rolled out the advertisements for both products, DRI was in for a rude shock. Bill Gates had priced PC-DOS at $40 whereas Gary’s CP/M-86 sold for $240. A massive 6-to-1 chasm.
Some industry insiders later commented that IBM consciously priced CP/M six times higher than PC-DOS. It never had the intention to honor the agreement with DRI in spirit.
Microsoft now had the game rigged in its favor and it went on to conquer the world. DRI suffered a major blow and started to slip off the industry’s radar and with it did Gary Kildall.
The end of the road
Gary’s life wasn’t the same post-IBM-contract. In 1991, he sold DRI to Novell as a last ditch effort to put up a fight against Microsoft. Sadly, that failed, too. These failures took a heavy tolly on him.
Everywhere he went, people would bring up IBM, Microsoft and if he was really flying out on that day.
As a consequence, he descended into alcholism and severed his professional connections. In 1991, he stopped appearing in ‘The Computer Chronicles‘, a famous tech show on TV which he co-hosted since 1985.
Then came the worst. In 1994, Gary got into a brawl at a Biker’s bar and later passed away due to head injuries. It was a tragic end to a life full of passion.
Jacqui Morby of TA Associates – a PE firm which invested in DRI – recounts an interesting incident in a video interview to Stewart Cheifet, Gary’s co-host at ‘The Computer Chronicles’. Gary and Bill Gates were both on a panel during a tech event. Gary made a point that this (operating systems) is a very large market and there is room for lots of companies.
Bill Gates interjected, “No! There will always be one company.“
Lost in the footnotes of history?
It’s an acknowledged fact that history remembers winners. The losers often get relegated to the footnotes of the past and sometimes, they just vanish altogether. All we can do is imagine what might have been but let’s make sure that Gary Kildall’s story is not forgotten.
Do you think it was Gary Kildall’s operating system that underpinned Bill Gates’s empire? Was Gates right to grab the opportunity that presented itself the second time with both hands? Let me know your thoughts in the comments box below.