"An Open Letter to Hobbyists" is a 1976 open letter written by Bill Gates, the co-founder of Microsoft, to early personal computer hobbyists, in which Gates expresses dismay at the rampant software piracy taking place in the hobbyist community, particularly with regard to his company's software.
In the letter, Gates expressed frustration with most computer hobbyists who were using his company's Altair BASIC software without having paid for it. He asserted that such widespread unauthorized copying in effect discouraged developers from investing time and money in creating high-quality software. He cited the unfairness of gaining the benefits of software authors' time, effort, and capital without paying them as a rationale for refusing to publish the machine code for his company's flagship product, thereby making it available to lower-income hobbyists who could have borrowed such program listings from their local library and entered the program into their hobby computer by data entry.
Gates was impressed with Steve Dompier's Altair music.
In December 1974, Gates, a student at Harvard University, alongside Microsoft co-founder Paul Allen, who worked at Honeywell in Boston, both saw the Altair 8800 computer in the January 1975 issue of Popular Electronics for the first time. They had both written BASIC language programs since their days at Lakeside School in Seattle, and knew the Altair computer was powerful enough to support a BASIC interpreter.[lower-alpha 1] Both Gates and Allen wanted to be the first to offer BASIC for the Altair computer, and expected the software development tools they had previously created for their Intel 8008 microprocessor-based Traf-O-Data computer to give them a head start.[1]
By early March of the following year, Allen, Gates and Monte Davidoff, a fellow Harvard student, had created a BASIC interpreter that worked under simulation on a PDP-10 mainframe computer at Harvard. Allen and Gates had been in contact with Ed Roberts of MITS, and in March 1975, Allen visited Albuquerque, New Mexico, to test the software on an actual machine. To both Allen and Roberts' surprise, the software worked.[2] MITS agreed to license the software from Allen and Gates. Allen left his job at Honeywell, and became the Vice President and Director of Software at MITS with a salary of $30,000 (equivalent to $163,154in 2022) a year;[lower-alpha 2][4] Gates remained a student at Harvard, and worked under MITS as a contractor instead, with the October 1975 company newsletter giving his title at the company as "Software Specialist".[5]
On July 22, 1975, MITS signed the contract with Allen and Gates, who would receive $3000 at the signing and a royalty for each copy of BASIC sold; $30 for the 4K version, $35 for the 8K version and $60 for the expanded version. The contract had a cap of $180,000, with MITS retaining an exclusive worldwide license to the program for 10 years. MITS would supply the computer time necessary for development on a PDP-10 owned by the Albuquerque school district.[6]
The April 1975 issue of MITS's Computer Notes had the banner headline "Altair Basic – Up and Running". The Altair 8800 computer was a break-even sale for MITS, who would need to sell additional memory boards, I/O boards, and other add-on options to make a profit. When purchased with two 4K memory boards and an I/O board, the 8K BASIC cost just $75, the initial standalone price for BASIC being $500.[clarification needed] To promote the computer, MITS purchased a camper van and outfitted it with the complete product line, dubbed the "MITS-Mobile"; the company used this van to tour the United States, giving seminars featuring the Altair Computer and Altair BASIC.
1975 Homebrew Computer Club and subsequent copying of Altair BASIC
The Homebrew Computer Club was an early computer hobbyist club in Palo Alto, California. At the first meeting in March 1975, Steve Dompier gave an account of his visit to the MITS factory in Albuquerque, where he had attempted to pick up his order for one of everything.[7] He left with a computer kit with 256 bytes of memory. At the April 16, 1975 club meeting, Dompier keyed in a small program that played the song "The Fool on the Hill" on a nearby AM radio, through the use of radio frequency interference or static controlled by the timing loops in the program.[8] Gates, who could not figure out how the computer could broadcast to the radio, described this in the July 1975 edition of Computer Notes as "the best demo program I've seen for the Altair".[9]
The June 1975 Homebrew Computer Club Newsletter carried this item written by Fred Moore, Editor:
The MITS MOBILE came to Rickey's Hyatt House in Palo Alto June 5th & 6th. The room was packed (150+) with amateurs and experimenters eager to find out about this new electronic toy.[10]
Altair 8K BASIC on paper tape. This was a popular storage medium before the invention of the low-cost floppy disk.
At the same June seminar, a paper tape containing a pre-release version of Altair BASIC disappeared. The tape was given to Dompier, who passed it on to Dan Sokol, who had access to a high speed tape punch. At the next Homebrew Computer Club meeting, 50 copies of Altair BASIC on paper tape appeared in a cardboard box.[11]
MITS offered a complete Altair system with two MITS 4K Dynamic RAM boards, a serial interface board and Altair BASIC for $995.[12] However, the $264 MITS RAM boards were unreliable, due to several component and design problems. An enterprising Homebrew Computer Club member, Robert Marsh, designed a 4K static memory that was plug-in compatible with the Altair 8800, and sold it for $255.[13] His company, Processor Technology, became one of the most successful Altair compatible board suppliers. As a result of Dompier's copying of Altair BASIC and Marsh's third-party 4K static memory plug-in, many Altair 8800 computer owners came to skip purchasing the bundled package from MITS directly, instead purchasing their memory boards from a third-party supplier and using a "borrowed" copy of Altair BASIC.
Ed Roberts acknowledged the 4K Dynamic RAM board problems in the October 1975 Computer Notes. The price was reduced from $264 to $195, and existing purchasers got a $50 rebate; the full price for 8K Altair BASIC was reduced to $200, though Roberts declined a customer's request that MITS give BASIC to customers for free, noting that MITS had made a "$180,000 royalty commitment to Micro Soft". Roberts also wrote that "Anyone who is using a stolen copy of MITS BASIC should identify himself for what he is, a thief", and described third-party hardware suppliers as "parasite companies".[14] The newly released Processor Technology static RAM board drew more current than the MITS dynamic RAM board, with the addition of two or three boards taxing the Altair 8800's power supply. As a consequence, Howard Fullmer began selling a power supply upgrade for the Altair, naming his company Parasitic Engineering as a nod to Roberts' comments.[15][lower-alpha 3] Fullmer would later help define the industry standard for Altair compatible boards, the S-100 bus standard.[17] The next year, 1976, would see many Altair bus computer clones such as the IMSAI 8080 and the Processor Technology Sol-20.
Open letter
Homebrew Computer Club Newsletter Volume 2, Issue 1, January 31, 1976
At the end of 1975, MITS was shipping a thousand computers a month, but copies of BASIC were selling in the low hundreds.[18] Additional software projects[vague] required more resources; the MITS 8-inch floppy disk system was about to be released, as was the MITS 680B computer based on the Motorola 6800. A high school friend of Allen and Gates, Ric Weiland, was hired to convert the 8080 BASIC to the 6800 microprocessor. David Bunnell, Computer Notes Editor, was sympathetic to Gates' position. He wrote in the September 1975 issue that "customers have been ripping off MITS software".
Now I ask you--does a musician have the right to collect the royalty on the sale of his records or does a writer have the right to collect the royalty on the sale of his books? Are people who copy software any different than those who copy records and books?[19]
Gates, keen to attempt to explain the cost of developing software to the hobbyist community, restated much of what Bunnell had written in September and what Roberts had written in October; however, the tone of his letter was different, instead emphasising Gates' view that hobbyists were stealing from him personally, and not from a corporation.
Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?
One of the principal targets of the letter was the Homebrew Computer Club, with a copy sent to the club directly. The letter also appeared in Computer Notes. To ensure the letter would be noticed, Bunnell sent the letter via special delivery mail to every major computer publication in the country.[20]
In the letter, Gates also mentioned the development of the APL programming language for the 8080 and 6800 microprocessors, a programming language in vogue with some other computer scientists in the 1970s. The language, which used a character set based on the Greek alphabet, required special terminals to implement that most hobbyist terminals did not have; as well as not displaying symbols from the Greek alphabet, most hobbyist terminals did not even display lowercase letters. Though Gates was enamored with APL, Allen did not believe it could be sold as a product; interest in the project soon faded, and the software itself was never completed.[21]
Reaction
Ad for the Apple I computer, noting Apple's policy of providing free or inexpensive software for its computers.
Following the difficulties with receiving piecemeal royalties, Microsoft switched to a fixed-priced contract with MITS, who would pay $31,200 for a non-exclusive license of 6800 BASIC.[22] The future sales of BASIC for the Commodore PET, the Apple II, the Radio Shack TRS-80 and others were all fixed-price contracts.[lower-alpha 4]
In early 1976 ads for its Apple I computer, Apple Inc made the claims that "our philosophy is to provide software for our machines free or at minimal cost",[24] emphasising that Apple BASIC was free.[25]
Microsoft's software development was done on a DEC PDP-10 mainframe computer system, with Allen having developed a program that could completely simulate a new microprocessor system. This allowed Microsoft to write and debug software before the new computer hardware was complete. The company was charged by the hour and by the amount of resources (such as storage and printing) used,[citation needed] the "$40,000 of computer time" mentioned in the letter. As a result of these software developments, the 6800 BASIC was complete before the Altair 680 was finished, with the 680 hardware arriving months late.[26]
Hal Singer of the Micro-8 Newsletter published an open letter to Roberts, pointing out that MITS promised a computer for $395, but that the price for a working system was $1000. He suggested a class action lawsuit or a Federal Trade Commission investigation into false advertising was in order. Hal also noted that rumors were circulating that Gates had developed BASIC on a Harvard University computer funded by the US government, and that customers should not pay for software already paid for by the taxpayer.[27] Gates, Allen and Davidoff had used a PDP-10 at Harvard's Aiken Computer Center, the computer system of which had been funded by the Department of Defence through its Defence Advanced Research Projects Agency; Harvard officials were not pleased that Gates and Allen (who was not a student) had used the PDP-10 to develop a commercial product, but determined that the computer itself, which technically belonged to the military, was not covered by any Harvard policy; the PDP-10 was controlled by Professor Thomas Cheatham, who felt that students could use the machine for personal use. Harvard placed restrictions on the computer's use, and Gates and Allen had to use a commercial time share computer in Boston to finalize the software.[28]
In 2008, Homebrew member Lee Felsenstein recalled similar doubts about Gates' $40,000 number: "Well, we all knew [that] the evaluation of computer time was the ultimate in funny money. You never pay that much for the computer time and I think that research will show that they were using someone else's computer time; someone else was paying for that. It could have been Honeywell where Paul Allen was working. So we all knew this to be a spurious argument."[29]
According to Felsenstein, Gates' letter "delineated a rift [between] the actual industry where there's trying to make money and there's those hobbyist where we're trying to make things happen";
The industry needs the hobbyists and this was illustrated by what happened eventually. When National Semiconductor, which made their own microprocessor chips in '77 or '78, decided they needed a BASIC ... they asked, 'What's the most popular BASIC?' And the answer was Microsoft BASIC because everybody had copied it and everybody was using it. So we made Microsoft the standard BASIC. National Semiconductor went to Microsoft and bought a license, they were in business that way. This was the marketing function and the hobbyists did the marketing with a complete antipathy of the company in question. There were other BASICs and, you know, some of them might even have been better. ... [Gates' later success] was in a certain measure because of what we did, that he said we shouldn't do, we were thieves to do it, and all.[29]
There is a viable alternative to the problems raised by Bill Gates in his irate letter to computer hobbyists concerning "ripping off" software. When software is free, or so inexpensive that it's easier to pay for it than to duplicate it, then it won't be "stolen".
Jim Warren, Homebrew Computer Club Member and editor of Dr. Dobb's Journal, wrote in the July 1976 ACM Programming Language newsletter about the successful Tiny BASIC project.[30] The goal was to create BASIC language interpreters for microprocessor based computers. The project had started in late 1975, but the "Open Letter" motivated many hobbyists to participate. Computer clubs and individuals from all parts of the United States and the world soon created Tiny BASIC interpreters for the Intel 8080, the Motorola 6800 and MOS Technology 6502 processors. The assembly language source code was published or the software was sold for five or ten dollars.
Gates, Bill (February 10, 1976). "An Open Letter To Hobbyists". Micro-8 Computer User Group Newsletter. Lompoc, California: Cabrillo Computer Center. 2 (2): 1.
Gates, Bill (March 11, 1976). "An Open Letter to Hobbyists". Minicomputer News. Boston, Massachusetts: Benwill Publishing.
Gates, Bill (March–April 1976). "An Open Letter To Hobbyists". People's Computer Company. Menlo Park, California. 4 (5).
Gates, Bill (May 1976). "Computer Hobbyists". Radio-Electronics. Vol.47, no.5. New York: Gernsback Publications. pp.14, 16. Archived from the original on 2019-01-29. Retrieved 2007-11-26.
Several responses to the letter were published, including one from Bill Gates.
Hayes, Mike (February 1976). "Regarding Your Letter of February 3". Homebrew Computer Club Newsletter. Mountain View, California: Homebrew Computer Club. 2 (2): 2. Retrieved November 25, 2007.
Singer, Harold L. (March 28, 1976). "An Open Letter to Ed Roberts". Micro-8 Computer User Group Newsletter. Lompoc, California: Cabrillo Computer Center. 2 (4): 1.
Gates, Bill (April 1976). "A Second and Final Letter". Computer Notes. Albuquerque, New Mexico: MITS. 1 (11): 5. Archived from the original on March 23, 2012.
Childs, Art (May 1976). "Interfacial". SCCS Interface. Los Angeles, California: Southern California Computer Society. 1 (6): 2, 4. Editor Art Childs writes about the letter he received from the "author of Altair Basic" and the resulting controversy on propriety software.
Wada, Robert (July 1976). "An Opinion on Software Marketing". BYTE. Vol.1, no.11. Peterborough, New Hampshire: BYTE Publications. pp.90, 91.
Warren, Jim C. (July 1976). "Correspondence". SIGPLAN Notices. ACM. 11 (7): 1. Jim Warren, the editor of Dr. Dobb's Journal, describes how the Tiny BASIC project is an alternative to hobbyist "ripping off" software.
Moores, Calvin (September 1976). "Are you an author?". BYTE. Vol.1, no.13. Peterborough, New Hampshire: BYTE Publications. pp.18–22. An article on software copyright law that discusses the "Open Letter to Hobbyists".
↑ Allen would later leave MITS in November of 1976.[3]
↑ David Ahl describes the assembly of an Altair 8800 system and the various problems that were encountered. The Processor Technology 8K Static RAM (page 94) and the Parasitic Engineering power supply (page 97) are used to replace the MITS components in his system.[16]
↑ Apple paid $21,000; Radio Shack $50,000; other companies paid roughly $35,000 per license.[23]
Related Research Articles
Tiny BASIC is a family of dialects of the BASIC programming language that can fit into 4 or fewer KBs of memory. Tiny BASIC was designed by Dennis Allison and the People's Computer Company (PCC) in response to the open letter published by Bill Gates complaining about users pirating Altair BASIC, which sold for $150. Tiny BASIC was intended to be a completely free version of BASIC that would run on the same early microcomputers.
Li-Chen Wang is an American computer engineer, best known for his Palo Alto Tiny BASIC for Intel 8080-based microcomputers. He was a member of the Homebrew Computer Club and made significant contributions to the software for early microcomputer systems from Tandy Corporation and Cromemco. He made early use of the word copyleft, in Palo Alto Tiny BASIC's distribution notice "@COPYLEFT ALL WRONGS RESERVED" in June 1976.
The Homebrew Computer Club was an early computer hobbyist group in Menlo Park, California, which met from March 1975 to December 1986. The club had an influential role in the development of the microcomputer revolution and the rise of that aspect of the Silicon Valley information technology industrial complex.
The Altair 8800 is a microcomputer designed in 1974 by MITS and based on the Intel 8080 CPU. Interest grew quickly after it was featured on the cover of the January 1975 issue of Popular Electronics and was sold by mail order through advertisements there, in Radio-Electronics, and in other hobbyist magazines. According to Harry Garland, the Altair 8800 was the product that catalyzed the microcomputer revolution of the 1970s. It was the first commercially successful personal computer. The computer bus designed for the Altair was to become a de facto standard in the form of the S-100 bus, and the first programming language for the machine was Microsoft's founding product, Altair BASIC.
Microsoft BASIC is the foundation software product of the Microsoft company and evolved into a line of BASIC interpreters and compiler(s) adapted for many different microcomputers. It first appeared in 1975 as Altair BASIC, which was the first version of BASIC published by Microsoft as well as the first high-level programming language available for the Altair 8800 microcomputer.
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Micro Instrumentation and Telemetry Systems (MITS) was an American electronics company founded in Albuquerque, New Mexico that began manufacturing electronic calculators in 1971 and personal computers in 1975.
Popular Electronics was an American magazine published by John August Media, LLC, and hosted at TechnicaCuriosa.com. The magazine was started by Ziff-Davis Publishing Company in October 1954 for electronics hobbyists and experimenters. It soon became the "World's Largest-Selling Electronics Magazine". In April 1957, Ziff-Davis reported an average net paid circulation of 240,151 copies. Popular Electronics was published until October 1982 when, in November 1982, Ziff-Davis launched a successor magazine, Computers & Electronics. During its last year of publication by Ziff-Davis, Popular Electronics reported an average monthly circulation of 409,344 copies. The title was sold to Gernsback Publications, and their Hands-On Electronics magazine was renamed to Popular Electronics in February 1989, and published until December 1999. The Popular Electronics trademark was then acquired by John August Media, who revived the magazine, the digital edition of which is hosted at TechnicaCuriosa.com, along with sister titles, Mechanix Illustrated and Popular Astronomy.
Henry EdwardRoberts was an American engineer, entrepreneur and medical doctor who invented the first commercially successful personal computer in 1974. He is most often known as "the father of the personal computer." He founded Micro Instrumentation and Telemetry Systems (MITS) in 1970 to sell electronics kits to model rocketry hobbyists, but the first successful product was an electronic calculator kit that was featured on the cover of the November 1971 issue of Popular Electronics. The calculators were very successful and sales topped one million dollars in 1973. A brutal calculator price war left the company deeply in debt by 1974. Roberts then developed the Altair 8800 personal computer that used the new Intel 8080 microprocessor. This was featured on the cover of the January 1975 issue of Popular Electronics, and hobbyists flooded MITS with orders for this $397 computer kit.
Processor Technology Corporation was a personal computer company founded in April 1975, by Gary Ingram and Bob Marsh in Berkeley, California. Their first product was a 4K byte RAM board that was compatible with the MITS Altair 8800 computer but more reliable than the MITS board. This was followed by a series of memory and I/O boards including a video display module.
Model Rocketry was an American hobbyist magazine published from October 1968 to February 1972. The Editor and Publisher was George J. Flynn and the Managing Editor was Gordon K. Mandell. Other members of the editorial and business staffs, some of whom held several positions at various times during the years the magazine was published, were Assistant Editors Robert B. Singer and Robert Parks ; Technical Editor Douglas J. Malewicki ; Business Managers George J. Caporaso, Jerome Apt, III, Thomas T. Milkie, and Arthur H. (Trip) Barber ; Technical Correspondent George J. Caporaso ; Distribution Managers Thomas T. Milkie, Kevin P. Brown, and Steven Glines ; and Art Director Thomas T. Milkie. The magazine was published by Model Rocketry, Inc., a closely held corporation owned by founding staff members George J. Flynn, Gordon K. Mandell, George J. Caporaso, and Thomas T. Milkie and members of their families. Its paid circulation reached 15,000 by 1970.
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Parasitic Engineering, Inc., was an American computer company founded by Howard Fullmer and Gene Nardi in 1974. Named as a tongue-in-cheek reference to a comment by MITS co-founder Ed Roberts, Parasitic's first products were hardware upgrade kits to MITS' Altair 8800 microcomputer kit, improving the latter's power supply rating and susceptibility to noise. The company later released their own microcomputer based on the same bus as the Altair, the S-100, but it was less popular than the company's hardware-improvement kits. By 1979, the company had pivoted to providing upgrades to Tandy's TRS-80. Parasitic went defunct in 1983.
↑ Singer, Harold L. (March 28, 1976). "Open Letter to Ed Roberts". Micro-8 Computer User Group Newsletter. Lompoc, CA: Cabrillo Computer Center. 2 (4): 1.
↑ Wallace (1992), 81–83. "Harvard officials had found out that he (Gates) and Allen had been making extensive use of the university's PDP-10 to develop a commercial product. The officials were not pleased." The computer was funded by the Department of Defense and was under the control of Professor Thomas Cheatham. "Although DARPA was funding the PDP-10 at Harvard, there was no written policy regarding its use. ... After the computer flap, Gates and Allen bought computer time from a timesharing service in Boston to put the finishing touches on their BASIC."
Manes, Stephen; Paul Andrews (1994). Gates: How Microsoft's Mogul Reinvented an Industry and Made Himself the Richest Man in America. New York: Touchstone, Simon and Schuster. ISBN0-671-88074-8.
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