Just months after his 20th birthday, Bill Gates had already angered the programmer community.
As the first home computers began appearing in the 1970s, the world faced a question: Would its software be free?
This week marks the 50th anniversary of the day young Gates penned his infamous 1976 “Open Letter to Hobbyists,” complaining that his very first piece of commercial software had been pirated. It kicked off a series of reverberations, along with a major controversy that would continue boiling over the next half century — and ultimately shape the world we live and work in today.
‘A sea of blank canvases’
I asked Bruce Perens, who created the original Open Source definition in 1997, if he remembered Bill Gates’ letter in 1976. At the time, Perens was just 19, so “I was just out of high school and could not afford any kind of computer!”
Still, he recognizes that the historic document contains its own ironies — if not all the outlines of a struggle that was yet to come. “I think the most interesting thing about the letter… is that so many people thought at the time that you needed a company to develop something like BASIC, when it was really only written by one or two people. It would be someone’s hobby project today!”
In 1976, 20-year-old Bill Gates was “a slim blond genius who looked even younger than his tender years,” Steven Levy wrote in his book Hackers: Heroes of the Computer Revolution.
Working with 22-year-old Paul Allen (with some code from “hired” math programmer Monte Davidoff), Gates created a version of the BASIC programming language for the Altair 8800, which was destined to become the world’s first commercially successful home computer.
Ed Roberts, the head of the company, had then hired Allen (and let Gates work remotely) to write software for his microcomputer, leading Gates and Allen to decide the logical name for their software-writing enterprise would be: Micro-Soft.
Levy got the story of what happened next from a Berkeley building contractor turned Homebrew Computing Club member, Steve Dompier. After a demo in Palo Alto, “Somebody, I don’t think anyone figured out who, borrowed one of their paper tapes lying on the floor” — the tape holding the entirety of the Gates/Allen/Davidoff Altair BASIC code.
Silicon Valley systems tester Dan Sokol was asked if he had a way of duplicating tapes — to which the answer was yes. Sokol graced the next Homebrew Computing Club meeting with a box full of copies, Levy writes, charging “what in hacker terms was the proper price for software: nothing.”
In fact, there was an expectation that people would make and share copies of whatever they received. The result? “That first version of Altair BASIC was in free-flowing circulation even before its official release.”
‘Most of you steal your software!’
Expecting royalties, a none-too-happy Gates issued his “Open Letter to Hobbyists” in Micro Instrumentation and Telemetry Systems’ (MITS) next Altair Users’ Newsletter. MITS was the Albuquerque-based company behind the Altair.
Gates also had published the screed elsewhere, including the Homebrew Computer Club’s newsletter.
“Most of you steal your software…” wrote 20-year-old Gates. “Who cares if the people who worked on it get paid?”
Gates argued that just the computer time they’d used had a value of over $40,000.
Homebrew club member Lee Felsenstein said later in an oral history for Silicon Valley’s Computer History Museum that they all knew that number was “funny money… You never pay that much for computer time… We all knew this to be a spurious argument.”
Nonetheless, Gates estimated that 90% of Altair users had never purchased a copy of BASIC — and that (due to their lack of sales) their two months of work came out to $2 an hour. This stifled the creation of better software, Gates argued.
“Who can afford to do professional work for nothing?” he wrote.
“I would appreciate letters from any one who wants to pay up,” Gates closed his letter, giving his address at the Portals apartment complex in Albuquerque, New Mexico, also welcoming letters from anyone who “has a suggestion or comment.”
Gates received between 300 and 400 letters, Levy wrote later — many of them “intensely negative,” while “only five or six” contained the payment Gates requested.
“Well, there’s the actual industry where there’s trying to make money and there’s those hobbyists where we’re trying to make things happen.”
The price for a stand-alone copy of MITS’ version of BASIC was $500, Felsenstein said later. But in 1976, $500 was the equivalent of thousands of today’s dollars, and just to learn how to use those primitive early home computers, Felsenstein said, “we’d invested far more in terms of our time and brainpower and so forth.”
“So no one was much in a mood to say, ‘Oh, I’ll just come up with another $500 here and give it to them.’”
But more importantly, “This, kind of, delineated a rift within the industry. Well, there’s the actual industry where there’s trying to make money and there’s those hobbyists where we’re trying to make things happen,” Felsenstein said.
‘All hell broke loose’
Gates had closed his letter with a positive scenario for hobbyists. “Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.”
Instead, “All hell broke loose in the hacker community,” Levy writes.
The long-standing community who’d prided themselves on “hacking” away superfluous lines of code in other people’s programs now didn’t want to abandon the idea “that computer programs belonged to everybody. It was too much a part of the hacker dream to abandon.”
Presumably in response to Gates’ letter, an early Apple 1 ad later that year emphasized that “since our philosophy is to provide software for our machines free or at minimal cost, you won’t be continually paying for access to this growing software library.”
Levy notes that when Jim Warren first announced he’d be editing the legendary software magazine Dr. Dobbs Journal, he even specifically wrote that “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 duplicate it, then it won’t be ‘stolen.’”
And soon hobbyists were crafting their own sub-4K “Tiny BASIC” interpreters as an alternative to the Micro-Soft version. This led to the first occurrence of the now-famous phrase “Copyleft” — in October of 1976.
But ironically, Felsenstein believes National Semiconductor later licensed Microsoft’s version of BASIC because it was clearly the most popular — since “everybody had copied it and everybody was using it.” So in effect, “we made Microsoft the standard BASIC… the hobbyists did the marketing.”
And within five years Microsoft had also landed an even more important deal: providing IBM with their MS-DOS operating system in 1980…
But Gates didn’t surrender. Three months after his original letter, Gates published a follow-up, saying he hoped the attention “means that serious consideration is being given to the issue of the future of software development and distribution for the hobbyist.”
Although back at MITS, Gates and Allen just abandoned royalty-based pricing and switched to fixed-rate software production for their work.
Referencing his earlier “thieves” comment, Gates wrote in his second letter that the majority of hobbyists “are intelligent and honest individuals who share my concern for the future of software development.” He says he received letters from hobbyists “who saw the stealing going on and were unhappy about it”, as well as from small companies “that are reluctant to provide software because they don’t think enough people will buy the software to justify its development.”
And by the dawn of the Apple II era, thousands of programs were being written — and sold — for Apple’s next device. As the market for software grew, major companies like IBM and AT&T began changing the licensing on their code. 1980 even saw the passage of “The Computer Software Copyright Act” (according to a history from the Chicago Council on Science and Technology).
And 1998’s Digital Millennium Copyright Act finally criminalized copyright-circumventing technology.
‘So I asked Steve Jobs…’
Yet somewhere along the way, the seeds had been planted for a movement that would transform much of the tech world. “We really owe it to Richard Stallman for making the point that you didn’t need a company for all of this stuff,” Perens said.
It was Stallman who officially created the Free Software Movement in 1983, coinciding with the launch of the GNU Project in 1983 to provide alternatives to proprietary Unix tools. Perens acknowledges that “many people never got to hear about Free Software, while Open Source ended up being a lot more popular.
“I still maintain that Open Source is just a different way to market what Stallman started.”
Open/free software gathered momentum with the release of the Linux kernel in 1991, and then the publication of the official Open Source definition in 1998. Bruce Perens was that definition’s primary author (with input from a mailing list of Debian developers), and he illustrates where we ended up with an evocative story. “When I left Pixar in 2000, I stopped in Steve Job’s office — which for some reason was right across the hall from mine. I wasn’t important, so maybe management wanted to watch me!”
Perens had accepted a position as senior Linux/Open Source Global Strategist for Hewlett-Packard, which he describes as leaving Apple “to work on Open Source. So I asked Steve: ‘You still don’t believe in this Linux stuff, do you?’” And Perens still remembers how Steve Jobs had responded.
“I’ve had a lot to do with building two of the world’s three great operating systems” — which Jobs considered to be NeXT OS, MacOS and Windows. “‘And it took a billion-dollar lab to make each one.
“So no, I don’t think you can do this.’”
And then Perens shares the story’s triumphant punchline. “But I won that argument!
“Three years later, Steve stood onstage in front of a slide that said ‘Open Source: We Think It’s Great!’ as he introduced the Safari browser, which at that time was based on the browser engine developed by the KDE Open Source project!”
Rewatching the 2003 keynote where Steve Jobs first introduced Safari.
How fun & technical the presentations were back then, compared to the pre-recorded ones Apple puts out today!
And I love the sloppiness of this slide, with ’ instead of ‘ and a space before !
— Andreas Kling
(@awesomekling) Mar 18, 2024
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