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Computer had been signed. Two days of agonizing suspense ensued, with Gates and Allen worrying that Seattle Computer would get wind of the IBM deal and greatly raise their price. But since IBM was itself trying to keep its PC project secret, word didn’t leak, and Microsoft got Q-DOS for only $50,000. The system would prove instrumental in making Microsoft the industry giant it became.
    Seattle Computer’s Q-DOS underwent many changes, of course, before becoming Microsoft’s MS-DOS. Microsoft had hired away the top engineer at Seattle Computer, Tim Paterson, and put him in charge of developing the new version. Since Microsoft also worked closely with IBM on the actual design of the IBM PC, there was a great deal of work to be done. Bill Gates and Paul Allen were still involved in hands-on development work, the actual creatingof code, in those days, and the tension that must have existed from 1980 to 1981 surfaced momentarily fifteen years later when the two men gave a joint interview to Fortune . In the interview, Gates brought up the fact that in the midst of the IBM project, Allen had insisted on going to see a space shuttle launch. Allen quickly put in that it was the first space shuttle launch and that he had gone down to Florida and flown back the same day, being absent less than thirty-six hours.
     
     
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    T he weirdest thing of all, though, was when we asked to come to the big official launch of the PC in New York, IBM denied us. About four days later we got this form letter that IBM probably sent to every vendor, even the guy who had the capacitators in the machine. It said something like, “Dear vendor, thank you for your help, blah, blah, blah.” They eventually apologized to us for that.
    —B ILL G ATES , 1995
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    Originally designed for the Intel 8088 or 8086 microprocessing chips (and later for more advanced chips), MS-DOS was a powerful 16-bit operating system, using the then standard character-based mode that would be superseded by the graphical interface developed for the Macintosh three years later. The original MS-DOS had a memory limit of 640K, but that too would eventually be surpassed. Even with the advent of the graphical Windows operating system, MS-DOS continued to provide the underlying support. The initial MS-DOS system was considered fast, but as more powerful microprocessing chips were developed by Intel, it was updated to operate at much greater speed. A great deal of Microsoft’s success can be attributed to the fact that in MS-DOS it created an operating system that could serve as a sound basis for succeeding generations of more sophisticated operating systems and endless software applications.
    Although the IBM PC would be in direct competition with the Apple II, Microsoft also developed its first application for Apple Computer in 1980. This was the Softcard for Apple II, which allowed that computer to run the CP/M operating system of Digital Research. But at the time, it was the relationship with IBM that Gates and Allen saw as the central building block for the future. Microsoft wasnot paid a great deal for its development work for IBM—less than $200,000—but Gates made certain that their contract with IBM allowed for Microsoft’s adapting MS-DOS for the clones of the IBM PC, which the hardware giant was prepared to authorize.
     
     
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    I t was great that Paul got better, and we wanted him to come back more than anything. But there was just no part-time way to come back to Microsoft. If you were going to be there, you were really going to work hard. We all knew that. It’s still that way.
    —B ILL G ATES , 1995
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    Once the IBM PC was on the market, Microsoft pushed MS-DOS hard, persuading other software companies to develop applications for the operating platform. This was important, since IBM was offering a choice of software, also making available a version of Digital Research’s CP/M operating system, as well as a far more expensive UCSD Pascal P-System. Since