The Altair 8800, released in 1975, is widely considered the first successful personal computer. Built by Micro Instrumentation and Telemetry Systems (MITS), it was one of the first computers designed for hobbyists and small businesses rather than government institutions or corporations. The Altair 8800 sparked the personal computing revolution by demonstrating that computers could be accessible to individuals.

As described in Source Code, Gates and Allen recognized the business potential of the Altair 8800 and developed a version of the BASIC programming language for it. This breakthrough marked the founding of Microsoft, as their software became one of the first commercially available programs for personal computers. Gates’s decision to license, rather than sell, the software to MITS reflects his early understanding of the value of software ownership and intellectual property.

ARPANET (Advanced Research Projects Agency Network) was an early computer network developed by DARPA in the late 1960s. It introduced packet switching, a method that allowed computers to send small packets of data across networks efficiently, rather than requiring dedicated connections. ARPANET is widely considered the precursor to the modern internet, as it laid the groundwork for TCP/IP protocols, which still govern how data move across global networks today.

Gates encountered ARPANET through Harvard’s Aiken Computation Laboratory, which had a direct connection to the network.