Open Letter To Hobbyists - Altair BASIC

Altair BASIC

In December 1974 Bill Gates was a student at Harvard University and Paul Allen worked for Honeywell in Boston when they saw the Altair 8800 computer in the January 1975 issue of Popular Electronics. They had 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. They wanted to be the first to offer BASIC for the Altair computer and the software development tools they had previously created for their Intel 8008 microprocessor based Traf-O-Data computer would give them a head start.

By early March, Paul Allen, Bill Gates, and Monte Davidoff, another 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 went to Albuquerque, New Mexico, to test the software on an actual machine. To both Paul Allen's and Ed Roberts's surprise the software worked.

MITS agreed to license the software from Allen and Gates. Paul Allen left his job at Honeywell and became the Vice President and Director of Software at MITS with a salary of $30,000 per year. Bill Gates was still a student at Harvard and just a contractor with MITS. The October 1975 company newsletter gives his title as "Software Specialist". On July 22, 1975 MITS signed the contract with Allen and Gates. They got $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 and MITS got 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.

The April 1975 issue of MITS's Computer Notes had the banner headline "Altair Basic - Up and Running." The Altair 8800 computer was a breakeven sale for MITS. They needed to sell additional memory boards, I/O boards, and other options to make a profit. When purchased with two 4K memory boards and an I/O board the 8K BASIC was only $75. The initial standalone price for BASIC was $500.

MITS purchased a camper van and outfitted it with the complete product line. The "MITS-Mobile" team toured the United States giving seminars featuring the Altair Computer and Altair BASIC.

The Homebrew Computer Club was an early computer hobbyist club in Palo Alto, CA. At the first meeting in March, 1975 Steve Dompier gave an account of his visit to the MITS factory in Albuquerque where he attempted to pick up his order for one of everything. He left with a computer kit with only 256 bytes of memory. At the April 16, 1975 club meeting Dompier keyed in a small program that played the song "Fool on the Hill" on a nearby AM radio. In the July 1975 Computer Notes, Bill Gates described this as "the best demo program I've seen for the Altair…" Gates could not figure out how the computer could broadcast to the radio. (It was radio frequency interference or static controlled by the timing loops in the program.).