Gates did not have a definite study plan while a student at Harvard and spent a lot of time using the school’s computers. Gates remained in contact with Paul Allen, and he joined him at Honeywell during the summer of 1974, The following year saw the release of the MITS Altair 8800 based on the Intel 8080 CPU and Gates and Allen saw this as the opportunity to start their own computer software company. Gates dropped out of Harvard at this time. He had talked this decision over with his parents, who were supportive of him after seeing how much Gates wanted to start a company.
Main articles: History of Microsoft and Microsoft
MITS Altair 8800 Computer with 8-inch (200 mm) floppy disk system
After reading the January 1975 issue of Popular Electronics that demonstrated the Altair 8800, Gates contacted Micro Instrumentation and Telemetry Systems (MITS ), the creators of the new microcomputer, to inform them that he and others were working on a BASIC interpreter for the platform. In reality, Gates and Allen did not have an Altair and had not written code for it; they merely wanted to gauge MITS’s interest. MITS president Ed Roberts agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS’s offices in Albuquerque was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Paul Allen was hired into MITS, and Gates took a leave of absence from Harvard to work with Allen at M1ITS in Albuquerque in November 1975. They named their partnership “Micro-Soft” and had their first office located in Albuquerque. Within a year, the hyphen was dropped, and on November 26, 1976, the trade name ‘Microsoft was registered with the Office of the Secretary of the State of New Mexico. Gates never returned to Harvard to complete his studies.
Microsoft BASIC was popular with computer hobbyists but Gates discovered that a pre-market copy had leaked into the community and  was being widely copied and distributed.
In February l976, Gates wrote an Open Letter to Hobbyists in the MITS newsletter saying that MITS could not continue to  produce distribute, and maintain high-quality software without payment. This letter was unpopular with many computer hobbyists, but Gates persisted in his belief that  software developers should be able to demand payment
Microsoft became independent of MITS in late 1976, and it continued to develop programming language software for various systems.
The company moved from Albuquerque to its new home in Bellevue, Washington on January 1,1979.
During Microsoft’s early years, all employees had broad responsibility for the company’s business. Gates oversaw the business details, but continued to write code as well. In the first five years, Gates personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.
IBM partnership
IBM approached Microsoft in July 1980 regarding its upcoming personal computer, the IBM PC. The computer company first proposed that Microsoft write the BASIC interpreter. When IBM’s representatives mentioned that they needed an operating system, Gates referred them to Digital Research (DRI), makers of the widely used CP/M operating system. IBM’s discussions with Digital Research went poorly, and they did not reach a licensing agreement. IBM representative Jack Sams mentioned the licensing difficulties during a subsequent meeting with Gates and told him to get an acceptable operating system. A few weeks later, Gates proposed using 86-DOS (QDOS), an operating system similar to CP/M that Tim Paterson of Seattle Computer Products (SCP) had made for hardware similar to the PC Microsoft made a deal with SCP to become tile exclusive licensing agent, and later the full owner, of 86—DOS. After adapting the operating system for the PC, Microsoft delivered it to IBM as PC DOS in exchange for a one-time fee of $50,000.
Gates did not offer to transfer the copyright on the operating system, because he believed that other hardware vendors would clone IBM’s system. They did, and the sales of MS DOS made Microsoft a major player in the industry. Despite IBM’s name on the operating system the press quickly identified Microsoft as being very influential on the new computer, with PC Magazine asking if Gates were “The Man Behind The Machine?” He oversaw Microsoft’s company restructuring on June 25, 1981, which re-incorporated the company in Washington state and made Gates President of Microsoft and Chairman of the Board.
Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. Although the two companies successfully developed the first version of the new system, mounting creative differences caused the partnership to deteriorate. It  ended in 1991, when Gates led Microsoft to develop a version of OS/2 independently from IBM.
Management style
Bill Gates in January 2008
From Microsoft’s founding in 1975 until 2006, Gates had primary responsibility for the company’s product strategy. He aggressively broadened the company’s range of products, and wherever Microsoft achieved a dominant position he vigorously defended it. He gained a reputation for being distant to others; as early as 1981 an industry executive complained in public that “Gates is notorious for not being reachable by phone and for not returning phone calls.” Another executive recalled that after he showed Gates a videogame and defeated him 35 of 37 times, when they met again a month later Gates “won or tied every game. He had studied the game until he solved it. That is a competitor.”
As an executive, Gates met regularly with Microsoft senior managers and program managers. Firsthand accounts of these meetings describe him as verbally combative, berating managers for perceived holes in their business strategies or proposals that placed the company’s long-term interests at risk.
He often interrupted presentations with such comments as, That’s the stupidest thing I’ve ever heard!” and, “Why don’t you just give up your options and join the Peace Corps?” The target of his outburst then had to defend the proposal in detail until, hopefully, Gates was fully convinced. When subordinates appeared to be procrastinating, he was known to remark sarcastically, “I’ll do it over the weekend.”
Gates’s role at Microsoft for most of its history was primarily a management and executive role. However, he was an active software developer in the early years, particularly on the company’s programming language products. He has not officially been on a development team since working on the TRS-80 Model 100, but wrote code as late as 1989 that shipped in the company’s products. On June 15, 2006, Gates announced that he would transition out of his day-to-day role over the next two years to dedicate more time to philanthropy. He divided his responsibilities between two successors, placing Ray Ozzie in charge of day-to-day management and Craig Mundie in charge of long-term product strategy.