In the early 1970's, Bill Gates was one of the first persons to see the need for personal computer (PC) software that would allow PCs to operate efficiently. Following the release of the 8008 microprocessor chip by Intel in 1972, Gates and his friend Paul Allen wrote software for the chip to measure traffic flow along streets. In 1975, the Altair 8800 microcomputer (which had neither a keyboard nor a monitor) was released by Micro Instrumentation and Telemetry Systems (MITS). The Altair was based on Intel's 8080 microprocessor, which had ten times the performance of the 8008. That year, Gates and Allen left Harvard to start their new software company, Micro-Soft (renamed Microsoft in 1976), to write a BASIC program for the Altair. The young men hired several students at Harvard to write some parts of the program. MITS found a number of bugs in the program, so the Microsoft team spent a lot of time fixing the software. In 1976, Gates moved Microsoft to Albuquerque, New Mexico, where MITS was located. The team wrote various versions of BASIC to be used with the different computers then available. The BASIC programs were sold at a low cost since Microsoft believed that it would profit from the large number of computers sold with the programs.

Gates and his employees often worked up to sixteen hours a day while they developed the software for Microsoft. Microsoft BASIC was the founding product of the company, which later developed such programs as MS-DOS and the Windows operating systems.

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