Editing An Open Letter to Hobbyists (section)

== Altair BASIC ==
{{main|Altair BASIC}}

[[File:Computer Notes July 1975 pg1.png|thumb|right|alt=A low-resolution scan of the 1975 edition of ''Computer Notes''.|Gates was impressed with Steve Dompier's Altair music.]]

In December 1974, Gates, a student at [[Harvard University]], alongside Microsoft co-founder [[Paul Allen]], who worked at [[Honeywell]] in Boston, both saw the [[Altair 8800]] computer in the January 1975 issue of ''[[Popular Electronics]]'' for the first time. They had both written [[BASIC]] language programs since their days at [[Lakeside School (Seattle, Washington)|Lakeside School in Seattle]], and knew the Altair computer was powerful enough to support a BASIC interpreter.{{efn|The January 1975 issue of ''Popular Electronics'' was published on November 29, 1974. [[:File:Copyright Popular Electronics 1975.jpg]]}} Both Gates and Allen wanted to be the first to offer BASIC for the Altair computer, and expected the software development tools they had previously created for their [[Intel 8008]] microprocessor-based [[Traf-O-Data]] computer to give them a head start.<ref>Manes (1994), 68–70.</ref>

By early March of the following year, Allen, Gates and [[Monte Davidoff]], a fellow 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 (computer engineer)|Ed Roberts]] of [[Micro Instrumentation and Telemetry Systems|MITS]], and in March 1975, Allen visited Albuquerque, New Mexico, to test the software on an actual machine. To both Allen and Roberts' surprise, the software worked.<ref>Manes (1994), 65–76.</ref> MITS agreed to license the software from Allen and Gates. Allen left his job at Honeywell, and became the Vice President and Director of Software at MITS with a salary of $30,000 ({{Inflation|US|30000|1975|fmt=eq}}) a year;{{efn|Allen would later leave MITS in November of 1976.<ref>Manes, pg.103</ref>}}<ref>Young (1998), 164.</ref> Gates remained a student at Harvard, and worked under MITS as a contractor instead, with the October 1975 company newsletter giving his title at the company as "Software Specialist".<ref name="Computer Notes Oct 1975">{{cite journal|title=Contributors |journal=Computer Notes |volume=1 |issue=5 |page=13 |publisher=MITS |location=Albuquerque NM |date=October 1975 |url=http://startup.nmnaturalhistory.org/gallery/notesViewer.php?ii=75_10&p=13 |url-status=dead |archive-url=https://web.archive.org/web/20120323162008/http://startup.nmnaturalhistory.org/gallery/notesViewer.php?ii=75_10&p=13 |archive-date=March 23, 2012 }}</ref>

On July 22, 1975, MITS signed the contract with Allen and Gates, who would receive $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, with MITS retaining 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.<ref>Manes (1994), 82–83.</ref>

The April 1975 issue of MITS's ''Computer Notes'' had the banner headline "Altair Basic – Up and Running". The Altair 8800 computer was a break-even sale for MITS, who would need to sell additional memory boards, I/O boards, and other add-on options to make a profit. When purchased with two 4K memory boards and an I/O board, the 8K BASIC cost just $75, the initial standalone price for BASIC being $500.{{clarify|date=March 2024}} To promote the computer, MITS purchased a camper van and outfitted it with the complete product line, dubbed the "MITS-Mobile"; the company used this van to tour the United States, giving seminars featuring the Altair Computer and Altair BASIC.
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