Hard Drive - Bill Gates and the making of the Microsoft Empire 4

In my reading of Hard Drive – Bill Gates and the making of the Microsoft Empire by James Wallace and Jim Erickson, the author accounts how Bill Gates dealt with piracy issues by computer hobbyists over the BASIC language that he and his team at Microsoft had developed.

The author writes at page 99 – “Those patient enough to have actually received an Altair kit, skilled enough to have assembled the pieces, and lucky enough to have gotten the machine up and running could have cared less who authored BASIC. They just wanted to use it, and when they couldn’t get it, many resorted to “stealing” this prized piece of software that gave them the programming power to turn $397 worth of electronic parts and an Intel 8080 chip into a useful computer that could do more than just flash two rows of red LED lights.”

At page 101 – “According to one account, someone from Homebrew picked up the punched paper tape containing BASIC lying on the floor near the Altair. Someone else later ran off copies of the tape, and at the next Homebrew meeting a large box of tapes was passed out to anyone who wanted one. Gradually, then exponentially, BASIC spread from computer club to computer club like a virus. And no one was paying for it. When Gates learned what was going on, he was beside himself. No wonder he and Allen were receiving so little money from their royalty agreement with MITS, he thought. One day he stormed into Roberts’ office and threw one of his fits that many around MITS had become accustomed to. “I vividly remember the conversation,” recalled Roberts, “him coming into my office that first summer and screaming and yelling at the top of his lungs that everyone was stealing his software, and he was never going to make any money, and he wasn’t going to do another thing unless we put him on the payroll.””

Gates went so far as to offer to sell ownership of BASIC at $6,500 to the head of MITS, Ed Roberts, which the author describes as something that would have been the bonehead deal of the century. But Roberts decided not to take Gates up on the offer, telling an associate of Gates that he liked both Gates and Allen and didn’t want to take advantage of them because they were so young. The author comments that in truth, Roberts decided it made better business sense to continue paying royalties to the two, and reap whatever benefits came from the enhancements they were making with BASIC.  

Bill Gates responded by denouncing the activities of these software pirates. At page 100 – “But as far as Bill Gates was concerned, they were unprincipled thieves. And he called them as much in an infamous letter published in the Altair newsletter, which was reprinted in other computer magazines and ended up as dartboard material in computer clubs from New York to California.”

In his letter, Gates highlighted how the hobbyists act of stealing software programs inhibits software developers from creating softwares to hobbyists. He added that he would appreciate letters from anyone who wants to pay up, or has a suggestion or comment, and that nothing would please him more than being able to hire programmers and deluge the hobby market with good software.

The letter had its backlash. At page 103 – “The Southern California Compute Society, which had been visited by the MITS-mobile in early 1975 and by now had several thousand members, threatened to sue him. “They were upset that Gates had called them thieves,” said Bunnell. “They were not all thieves…just most of them.” Only a handful of people who possessed pirated copies of BASIC sent Gates money as he had asked them to do in his letter. Some fired off their own angry letters in return. What was the difference between making copies of BASIC and taping music off the air rather than buying the recording artist’s music, some wanted to know? Others argued the altruistic position that BASIC belonged in the public domain, an argument that had some merit since Gates and Allen had created BASIC using the PDP-10 at Harvard, a computer funded by the Defense Advanced Research Projects Agency. In other words, these people argued, the computer time they had used was paid for with taxpayer’s money.”

However, there were some good outcomes from the piracy issue. At page 107 – “The BASIC that Gates and Allen had written in those eight frantic weeks at Harvard a year earlier had now spread all over the country, thanks in large measure to the very actions of hobbyists Gates had so bitterly denounced. BASIC had become a de facto standard in the young microcomputer industry. When new computer companies joined the revolution and needed a BASIC language, they came to Albuquerque and did business with Gates and Microsoft. And they came with pockets stuffed with money.”

Speaking about piracy issues in the computer software industry and the anti-piracy measures taken by software developers, the game seems to be one of cat and mouse, and I am not really sure who is winning at the moment. There are indeed many accessible means of obtaining pirate contents online. The most infamous hosting site of pirate contents currently is probably piratesbay which has managed to stave off attempts to close down its hosting site.

I do support anti-piracy because I think piracy is stealing. After all, if you can’t afford it, there is no need to buy it. Intellectual property content are usually not basic goods necessary for public consumption. Save for cases where they actually are, such as medicine. There, I think there may be a case for allowing generic or pirated goods to be manufactured, within certain legal limits, to protect the interest of people.