Trailblazer in digital revolution
Paul Allen, who has died from complications of non-Hodgkin’s lymphoma aged 65, was the cofounder with Bill Gates of Microsoft, on the strength of which he became one of the world’s richest people.
His wealth, estimated at more than US$20 billion, allowed him to launch a private asset management firm, Vulcan Inc, which backed more than 50 businesses; to set up philanthropic ventures (his foundations gave away about $2b); to own several sports teams; and to collect gigantic yachts as well as science fiction and rock’n’roll memorabilia.
Paul Gardner Allen was born in Seattle in 1953. Both his parents were librarians at the University of Washington, and Paul and his sister were raised in a house stuffed with books (Paul was especially keen on science fiction).
The children were also regularly taken to concerts, plays and museums, and Paul studied classical guitar. But his growing interest in technology and an obsession with Jimi Hendrix soon put paid to the likes of Segovia and Rodrigo, and with a soldering iron he converted his acoustic guitar into an electric one.
He attended the private Lakeside School, where he was two years ahead of Bill Gates. In the late 1960s the school acquired a teletype terminal connected to a remote mainframe, and the two boys became fascinated by the machine. When Paul went on to study at Washington State University in 1971, he and Gates set up a company called Traf-O-Data, which planned to build computers to analyse traffic volumes.
They immediately saw the usefulness of the Intel 8008 microprocessor that was released the following year, and which, for a fraction of the cost of conventional electronics, gave them the means to produce a number of traffic-counting computers, which they sold to several cities.
It was a modest success, but it convinced Allen and Gates that they had a future as entrepreneurs. It had also given them experience in rewriting software –
Paul Allen
co-founder of Microsoft b January 21, 1953 d October 15, 2018
they had modified the computer language Basic for the Traf-O-Data machines – which was to prove vital later.
In 1973 Gates took up a place at Harvard. Allen, meanwhile, had become bored with his studies; he dropped out of university and moved to Boston, where he took a job as a computer programmer with Honeywell.
He pestered Gates to continue developing their business ideas, but it was not until the beginning of 1975 that a real opportunity presented itself. The announcement that a computer called the Altair 8800, which used the Intel 8080 microprocessor, was to be released at a cost of $400, made personal computing an affordable option for enthusiasts.
Allen and Gates realised, however, that any prospective customer for the machine would also want software. ‘‘I thought, if we don’t do this, somebody else is going to,’’ Allen later said.
The pair proposed writing a version of Basic for the Altair and worked round the clock to complete it. In eight weeks they had produced a demo for the Altair’s manufacturer, Micro Implementation and Telemetry Systems (MITS), which was based in Albuquerque, New Mexico. The firm agreed to distribute Altair Basic, though Allen and Gates also retained the right to sell it on their own.
By the middle of 1975 Gates had dropped out of Harvard and moved to Albuquerque; Micro-Soft (as it was originally called) was registered as a business the following year. The Altair proved a success, and Allen and Gates soon realised each computer manufacturer would need a slightly different variant of Basic. As the market for microcomputers expanded rapidly, they found themselves inundated with work.
‘‘Our management style was a little loose in the beginning,’’ Allen later said. ‘‘We both took part in every decision, and it’s hard to remember who did what.’’
In general, however, it was Gates who handled contracts and business negotiations, while Allen, the selfdescribed ‘‘Mr Slow Burn, like Walter Matthau to Bill Gates’ Jack Lemmon’’, concentrated on ideas for new technology and products. In that area, he showed a fair degree of prescience. Allen told Fortune magazine that he could remember ‘‘talking about the fact that eventually everyone is going to be online and have access to newspapers and stuff’’ as early as 1973.
In 1979 Microsoft, as it was by now, moved from New Mexico back to Washington state. By then it had 12 employees, and was not unlike a good many moderately successful businesses doing reasonably well out of the boom in microcomputers. The next 18 months changed everything.
IBM had decided to enter the personal computing market, and had brought in Gates as an adviser in 1980. In August 1981 the company asked if Allen and Gates would be interested in producing its operating system. The pair had never really developed an operating system but they could see the potential and agreed.
Two days later, from a company called Seattle Computer Products, Allen acquired a CP/M (Control Program for Microcomputers) clone which ran on a ‘‘Quick and Dirty Operating System’’ (Q-DOS) called 86-DOS. He paid less than $50,000, in what has subsequently been called ‘‘the deal of the century’’. Allen and Gates’s modification of 86-DOS became MS-DOS, the default operating system for the vast majority of personal computers.
Allen and Gates advised IBM on building its first PC, incorporating PCDOS (as it was at first called) as the operating system. ‘‘By the end,’’ Gates said, ‘‘Paul and I decided every stupid thing about the PC.’’
After release, the IBM PC sold briskly, and dominated the market within a year. Though it could also work on CP/M, that system was priced at $240; PC-DOS was only $40. Microsoft’s sales quadrupled to $16 million in 1981. Crucially, its deal with IBM allowed them to retain control of MSDOS, and the company marketed it aggressively at the range of machines which cloned the IBM PC.
In 1983, with the release of Microsoft Mouse (a driver for the peripheral which became standard for PCs) and Microsoft Word, which rapidly established itself as the most popular word-processing program, the company had already begun its spectacular rise. It was later estimated by Fortune that Allen and Gates had created ‘‘more wealth than any other business partners in the history of American capitalism’’.
In 1983, however, Allen was diagnosed with Hodgkin’s disease, and underwent radiation therapy and a bone-marrow transplant. Though he maintained his formal links with Microsoft, he also decided ‘‘to step away from Microsoft and be closer to my family, and do some travelling and some other things I’d always wanted to do. After that two-year period, well, I just didn’t want to go back to work. I went to Bill and said: ‘I just want to do something different’.’’
In 1986 Allen set up Vulcan Ventures, and invested in a retail software company called Egghead. His other interests seemed largely recreational; he spent time scuba diving and playing the guitar in a rock band, and in 1988 he bought the Portland Trail Blazers basketball team for $70m.
By this point he was a billionaire, and from 1990 he began to invest in a wide range of companies, ranging from software and online retailing to electronic entertainment and multimedia content. His long-standing (and correct) view that high-bandwidth communications and cheap computers would fundamentally change almost every aspect of life led him to set up Interval Research.
In the early 1980s Allen had visited Xerox’s Palo Alto Research Centre, which had conceived many of the ideas which became cornerstones of the digital revolution. Allen realised that an effective think tank might actually benefit from not being tied to any one business. He set a budget of $100m to support Interval for 10 years, and set it up in 1992. Six years later, he spent $1.6b investing in companies which were intended ‘‘to build the infrastructure of the wired world’’.
By that point Allen was, thanks to his stock holding in Microsoft, the third richest American (after Gates and the fund manager, Warren Buffett), with a fortune which was estimated at $30b in the late 1990s.
In 1992 he founded Starwave, which packaged information electronically and became a leading provider of online content; the following year he bought 80 per cent of Ticketmaster.
He invested $500 million in DreamWorks, the animation film studio, in 1995 and was the sole investor in SpaceShipOne, which in 2003, on the 100th anniversary of the Wright brothers’ historic flight, became the first privately funded project to put a civilian into space.
Allen’s long-standing plans to provide a museum devoted to Jimi Hendrix eventually expanded in 2000 to become the Experience Music Project, an interactive museum designed by Frank Gehry and located next to the Seattle Space Needle. As well as a huge quantity of rock’n’roll memorabilia, the museum has a wing housing the Science Fiction Museum and Hall of Fame.
He also supported medical charities and founded the Allen Institute for Brain Science and the Allen Spinal Cord Atlas project to research neurological conditions. He also backed the Allen Telescope Array to search for extraterrestrial life, and the Flying Heritage Collection, which maintains vintage aircraft.
Allen had several large motor yachts; the biggest, Octopus, was the world’s eighth-largest, at 416ft long; it accommodated two helicopters, two submarines, a cinema, a music studio, a basketball court and a swimming pool.
He remained on the whole a private figure, though in 2011 he detailed the tensions in his creative partnership with Gates in a gripping autobiography, Idea Man.
He was linked at various times with actresses, and with the tennis player Monica Seles, but never married.
– Telegraph Group