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Even though the Softcard was a slight diversion from Microsoft’s normal focus on computer language software, Gates embraced it because it represented yet another strategic opportunity to extend CP/M’s market domination while also binding Microsoft BASIC to CP/M. Microsoft eventually sold hundreds of thousands of Softcards, which told Sams that it was a popular and reliable product.
Sams started his software hunt by contacting Gates and proposing IBM license the Softcard, along with all other programming languages Microsoft offered.
What Sams didn’t understand was that although Softcard was a Microsoft product, its most valuable feature was the CP/M operating system, owned by Digital Research. Gates told Sams that IBM needed to license CP/M directly from Kildall and offered to help Sams make the deal happen.
At the time, Gates accepted his subordinate position in the software food chain. He had positioned Microsoft so that the company’s success was dependent on CP/M’s continued market domination. If CP/M were paired with Microsoft BASIC inside the new IBM PC, Gates saw how the two complementary programs might be inseparable as industry leaders for years to come.
Gates arranged the initial meeting with IBM and Kildall. With Sams in the room, Gates called Kildall and said he was sending an important client and that Kildall should, according to sources, “treat them right.”
Gates’ phone call, however didn’t do much good. Almost nothing went right when Sams and his team sat down with Kildall and his wife Dorothy, who managed the business side of Digital Research. At first, Dorothy absolutely refused to sign IBM’s strict, strongly worded confidentiality agreement. An entire day wasted discussing what, if anything, the two parties could discuss.