R.I.P. | Sep. 3–Andrew Kay, Kaypro-IBM (Comment)

Andrew Kay (1919-2014)
Inventor of the Kaypro

September 7, 2014–Andrew F. Kay was born January 22, 1919 and died four days ago, on September 3. 

He was President and CEO of Kay Computers, a personal computer firm. He invented the Kaypro computer, which was once among a small handful of top contenders in the personal computer business.

The only other facts in his astonishingly short eight-line Wiki entry miss the fascination of his story (in contrast with the Gary Kildall Wiki, which is long and interesting).

The last Wiki paragraph is devoted to Kay's founding a chapter of the Rotary Club and board membership of a nonprofit that helps children with their vocabulary:

Mr. Kay also served as Senior Business Advisor to Accelerated Composites, LLC. A 1940 graduate of MIT, he started his career with Bendix followed by two years at Jet Propulsion Laboratory. He later founded Non-Linear Systems, a manufacturer of digital instrumentation, in 1952. NLS developed a reputation for providing rugged durability in critical applications for everything from submarines to spacecraft. At NLS he invented the digital voltmeter. 

He was also a founder of the Rotary Club of Del Mar, California. As a member of the Board of Directors of Johnson O'Connor Research Institute, he pursued the advancement of education with particular attention to the development of "a thinking vocabulary" as a basic component of creating leadership capabilities for managers in science and technology fields.

The lengthy and well-written obit in the New York Times by John Markoff does more justice to Kay's contributions, and tells the story of the Kaypro II, which like the Osborne 1, had for a couple of years the potential to take over the industry.

The Osborne 1 was the star of the 1981 West Coast Computer Faire in California. The Kaypro II was the star of the 1982 Faire even though it weighed 5 pounds more.

Comment

I owned both an Osborne 3 (still do) and a Kaypro II then and so did most of my friends. The Kaypro was all-metal, which made it impact-resistant but also heavy. It was nick-named "Darth Vader's lunch box". I lugged the lighter portable Osborne 3 computer and thousands of miles in a backpack in 1986, when Alice and I and our two children, 9 and 12, spent a summer in Japan courtesy of the Japan Foundation.

Both the Osborne and the Kaypro could have won out, but they made classic mistakes, mostly in marketing, that opened the door for Microsoft to team up with IBM.

Kaypro's Operating System, CP/M.  Kaypro was based on CP/M (Control Program for Microcomputers), a computer operating system (OS) invented in 1973 by Seattle-born Gary Kildall, who had a Ph.D. in computer science from the University of Washington. An OS allocates storage, schedules tasks, and presents the boot-up and default interface to the user between applications (i.e., special programs for special needs). Early computers all had two disk drives so that the OS and app could be in one drive and the user's data in the other. A good OS makes it easy for third-party software writers to create apps for the computer.

Gary Kildall (1942-1994)
Inventory of CP/M,
Kaypro's OS

Kildall's CP/M allowed files to be read and written to and from an eight-inch floppy disk, the first disk operating system (DOS) for a microcomputer. If Andrew Kay had realized how valuable the OS could turn out to be, he might have pre-empted Microsoft by buying up the rights from Kildall and marketing them, keeping his Kaypro on track. Kay might have worked out a deal that made the Kaypro a real competitor with IBM.

What happened instead was the consequence of the fateful outcome of an approach by IBM in 1980 to Bill Gates of Microsoft, to discuss the state of home computers and what Microsoft products could contribute. Gates gave IBM a few ideas on what would make a great home computer, including Basic written into the ROM chip. Microsoft had already produced several versions of Basic for different computer systems beginning with the Altair, so it would be easy enough for Microsoft to write a version for IBM.

Writing an OS for an IBM computer would be a first for Microsoft, so Gates kindly suggested to IBM that it investigate buying the rights to CP/M from Gary Kildall, whose CP/M was now a standard OS, selling more than 600,000 copies. It was bundled with the Kaypro and other computers.

IBM tried to contact Gary Kildall for a meeting. They got an appointment with Dorothy Kildall, Gary's wife and business partner since 1976, when the two of them formed a research and mail-order sales company, Intergalactic Digital Research (they later dropped Intergalactic from the name), to design and sell software for PCs.  Kildall rewrote CP/M as BIOS (Basic Input/Output System) to make it compatible with different computers. By 1978, the company's product was the standard for most PCs and was generating $100,000 a month. In 1981, its popularity peaked but revenues continued to rise to $44.6 million in 1983.

The legend, subsequently denied, is that Gary Kildall couldn't bother meeting with IBM, went flying instead, and Dorothy Kildall refused to sign a non-disclosure agreement. IBM walked away exasperated. The Wiki entry on Gary Kildall provides a pretty balanced picture of the Roshomon-like stories of what happened that day in 1980.

Looking back at it, IBM's exasperation with Kildall and vice versa, if that's what it was, cost IBM billions of dollars in revenue and the Kildalls a bigger fortune and a bigger place in history (for what that's worth). There should be a name for that - the "Kildall effect". From the vantage point of today, that exasperation truly killed all for both sides of the negotiation. The beneficiary was someone not at the table, Bill Gates and Microsoft.

Paterson's QDOS and Microsoft's MS-DOS. IBM returned to Bill Gates and gave Microsoft the contract to write a new operating system, which would become MS-DOS and would eventually end the use of CP/M and the Kaypro II. Microsoft developed The "Microsoft Disk Operating System" or MS-DOS.

MS-DOS was based on QDOS, the "Quick and Dirty Operating System" written by Tim Paterson of Seattle Computer Products, for use on their fledgling Intel 8086-based computer.

QDOS was a great name the cleverness of which has been insufficiently appreciated. QDOS is pronounced the same way as the Greek word (κῦδος) for praise or fame, kudos (the Anglicized use of the word often incorrectly treats it as a plural of "kudo"). MS-DOS deep-sixed the great pun in the original at the same time as it eclipsed the fame of Kildall. Microsoft traded the pun for the marketing clout it borrowed from IBM.

QDOS appears to have been reverse-engineered by Tim Paterson from Gary Kildall's CP/M. Tim Paterson purchased a CP/M manual and used it to write QDOS in only six weeks. QDOS could well have been different enough from CP/M to be a legally different product, but we will never know because IBM with its army of lawyers was not a great target for a law suit as central as that.

In the end Gates (i.e., Microsoft) bought the rights to QDOS from Tim Paterson for only $50,000, keeping his mouth tightly shut about the request from IBM that Microsoft made write their PC-DOS. Bill Gates even persuaded IBM to allow Microsoft to sell/lease MS-DOS separately to other computer manufacturers.

Virtually all of Microsoft's subsequent success comes from that one deal, which has been called the deal of the 20th century. Think of the markup - buying something for $50,000 and selling it to IBM for total revenue of about $1 trillion in average annual installments over the next 50 years of $20 billion.

It's now 34 years since that deal and in the last two years, Microsoft revenue averaged about $80 billion. It's conservative to allocate only one-fourth of that revenue to the licenses that originate from its MS-DOS licenses.

In 1981, Tim Paterson saw the light and quit Seattle Computer Products to go to work for Gates.

The Aftermath–Kildall's Decline. Gary Kildall, the inventor of CP/M, is the same age as me and died 20 years ago, the same year as my father. He made a deal with IBM that he decided was administered unfairly. He lashed out at Microsoft as MS-DOS took off and he was personally convinced it was copied from CP/M code. He and his wife Dorothy were divorced in 1983. He remarried in 1986 and five years later gave up control of his company. He started to have problems with alcohol and took up hanging around with other motorcyclists, a deadly combination as he reportedly died in an assault in a bikers' bar.

The decline of his company and the inevitable comparisons with Bill Gates and Microsoft were hard for him to take. But he sold his company to Novell in 1991 for a reported $120 million so he made out better financially than Osborne.

After his death he was given many generous recognitions, including praise from Bill Gates, who–to be fair– did not start competing with Kildall until after IBM was rebuffed (if that is the right word).