Chương 29: The House of Pies (02/16/1982)

DATE: Tuesday, February 16, 1982 LOCATION: Houston, Texas | House of Pies Restaurant LOCAL TIME: 01: 00 PM CST I sat in the dark of the Sand Castle library in La Jolla, wearing heavy headphones. The signal bouncing from the transmitter hidden inside Uncle Bob's leather briefcase in Texas was fuzzy, but clear enough. In Houston, the diner smelled of cherry pie and cigarette smoke. Three men sat in a booth, huddled over a paper placemat. Rod Canion, Jim Harris, and Bill Murto.

They were senior engineers who had just recently quit Texas Instruments, and they looked highly conspiratorial. On the placemat, Canion was sketching a box. It looked like a sewing machine case. It was the blueprint for the Compaq Portable. The first "luggable" PC. I didn't know the exact code required to reverse-engineer an IBM BIOS chip. But as an Information Arbitrageur, I knew the practical history of computing.

I knew that in this exact month, in this exact diner, these three men were analyzing the observed mechanics of how to clone the IBM PC legally without getting crushed by IBM's army of lawyers. I just needed to make sure they used our software to do it.

"The BIOS is the problem," Harris was saying through the wire.

"If we copy IBM's code directly, their lawyers will bury us. If we write our own, the machine might not be 100% compatible."

"We clean-room it," Canion suggested, laying out the practical strategy with tight precision.

"One team reads the IBM code and writes a spec sheet. Another team—who has never seen the IBM code—writes a new BIOS purely from the specs. It's an airtight, legally defensible wall."

"Fine," Murto said.

"But what about the OS? We can't ship a portable computer without an operating system. IBM won't license PC-DOS to us. They want to kill any hardware competition before it starts." Through the wire, the heavy, rhythmic thud of Bob Yauney's leather shoes approached the table. Bob didn't come alone. He brought the attack dog.

"Gentlemen," Bob said smoothly. The three engineers looked up. Canion quickly covered the sketch on the placemat. If you discover this tale on Amazon, be aware that it has been unlawfully taken from Royal Road. Please report it.

"Who are you?" Canion asked, his tone defensive.

"I'm the guy who owns the bridge you're trying to cross," Bob said. The crisp flick of a business card sliding across the Formica table echoed through the wire. FRACTAL SYSTEMS, INC.

"And this," Bob gestured to the scrawny young man standing next to him, "is our subsidiary CEO. You might know him."

"Bill Gates," Murto whispered, recognizing the face from the trade magazines.

"Microsoft."

"Fractal-Microsoft," Bob corrected smoothly, glancing at his attack dog. Gates tightened his jaw.

"We wrote the DOS for IBM," he said, his voice high, nasally, and dripping with technical arrogance.

"We know who you are," Canion said.

"We also know you're in bed with Big Blue."

"It's an open marriage," Bob grinned. Bob pulled up a chair. Gates sat next to him, immediately grabbing a napkin and a pen, invading their space.

"I know exactly what you're doing," Gates said, tapping his pen against the sketch Canion was trying to hide.

"You're trying to figure out how to build a portable clone. Intel 8088 chip. 4. 77 MHz. You're hung up on the software."

"We're just having pie," Canion lied.

"Don't insult me," Gates snapped.

"It's the only hardware move that makes sense. But your machine is a heavy brick without the operating system. You need absolute compatibility. You need our DOS. And without me, you don't have it."

"And you can't give it to us," Harris challenged.

"IBM has exclusivity."

"That's where you're wrong," Bob interrupted, taking over the business flank.

"IBM thinks they have exclusivity. But my legal team ensured the contract was... flexible. We retained the right to license."

"We can license MS-DOS to you right now," Gates said, looking Canion dead in the eye.

"One hundred percent binary compatible. If a program runs on the IBM 5150, it runs on your box. No lawsuits. No hacks. You become the first legal clone in the world." The three engineers went dead silent. They looked at Gates, the technical gatekeeper. Then they looked at Bob, the corporate shark holding the leash.

"What's the catch?" Murto asked cautiously.

"The catch is the price," Bob said, unlocking his briefcase.

"And the bundle." Bob pulled out a contract and laid it on the table.

"You pay a royalty to Fractal Systems on every single machine you ship," Bob dictated.

"And when our new graphical applications are ready—Word, Excel, the whole Office suite—they come pre-installed on every hard drive you manufacture." Murto blinked, looking at Gates.

"A fully integrated suite? For a portable?"

"You sign with us, you're a legitimate competitor overnight," Gates said coldly, leaning forward.

"You don't sign... you're just three guys eating pie and waiting to get sued." Canion looked at the contract. He looked at the sketch of the machine that would eventually make Compaq the fastest company in history to hit the Fortune 500. He realized he wasn't just buying an operating system; he was buying an alliance against IBM.

"If we sign this," Canion said, picking up the pen, "we're in business tomorrow?"

"Sign it," Bob said.

"And let's make history." The scratch of ink on paper vibrated through the earpiece.

"Welcome to the network," Bob said. I took off the headphones in La Jolla and leaned back in the leather chair. I walked to the window of the library. The sun was setting over the Pacific. Down on the beach, my dad was sitting on a blanket, holding Neil up by his armpits so his tiny bare feet could kick at the seafoam. The IBM monopoly was officially over. The Clone Wars had begun. And Fractal Systems was selling the bullets to both sides.