Computers: Windows on the World

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Soon after microcomputers hit the market in 1975, Microsoft's Gates, then 19, took a leave of absence from Harvard to develop and sell the first program that allowed ordinary users to write software on a desktop computer. Today his Microsoft BASIC runs on nearly every brand of micro, from Apple to Radio Shack. When IBM began investigating the personal computer market three years ago, it asked Gates to build the control program for its new PC. As a result, Microsoft's disc operating system is the closest thing to a universal standard for the industry. Meanwhile, the company has branched out into games (Flight Simulator, Adventure) and business tools (Multiplan, Microsoft Word), and designed the software for the immensely successful Radio Shack Model 100 lap-size computer.

VisiCorp Chairman Dan Fylstra was a student at the Harvard Business School in 1978 when he heard about two MIT graduates with a new kind of program for business planning. He persuaded them to write it on one of the recently introduced Apple computers and took charge of the product's marketing campaign. The program, VisiCalc, turned out to be the single most popular piece of computer software ever written: more than 600,000 copies have been sold since 1979. Fylstra went on to publish a series of spinoffs (VisiFile, VisiPlot), building VisiCorp into a $45 million-a-year company. Lately, however, the firm has rapidly been losing market share to a host of competitors, including Microsoft.

Although the new products look remarkably similar, the companies have followed very different paths. VisiCorp spent three years and $12 million developing a complex window-display system (retail cost: $495) and the programs that run in it ($500 for the first two). Microsoft chose to build just the framework, which it will discount to manufacturers for about $200, and is relying on independent programmers to adjust their existing products to the new system.

VisiCorp has a head start, since its VisiOn will be on the market within weeks, while Microsoft's Windows will reach stores next spring. But Microsoft has more support from the computer manufacturers: some 23 firms, including Hewlett-Packard, Digital Equipment and Radio Shack, have agreed to offer Windows with their machines. Whichever product ultimately wins, Microsoft and VisiCorp are showing the direction software is likely to take.

—By Philip Elmer-DeWitt.

Reported by Michael Moritz/San Francisco