Kay Nishi and the Meeting that Started MS-DOS

Programming at the right level

SubscribeSign in

Kay Nishi and the Meeting that Started MS-DOS<br>On a late September Sunday night in 1980, three young men decided to launch MS-DOS

Nemanja Trifunovic<br>May 12, 2026

Share

September 28, 1980, was a Sunday, and the Old National Bank Building in Bellevue, WA was mostly empty. Except for eighth floor, occupied by Microsoft - a privately owned software company with about 50 employees at that time. Microsoft’s employees generally worked long hours, and it was no wonder that on that evening the light was on in a corner office that belonged to Bill Gates. With him were Paul Allen and Kay Nishi1.

Kazuhiko “Kay” Nishi, Bill Gates and Paul Allen in 1978<br>Allen and Gates were childhood friends and co-founders of Microsoft. In 1975, after the first commercially successful microcomputer Altair 8800 was released, they wrote a BASIC interpreter for the new machine without even seeing it and then moved to Albuquerque to be close to MITS - the company that produced Altair.<br>By 1978, Microsoft was supplying BASIC for most early home computers. The relationship with MITS deteriorated and the founders decided to move the company to Seattle area.<br>Before the move, a young Japanese entrepreneur Kazuhiko “Key” Nishi, introduced himself to Bill Gates. The two quickly became friends and Nishi was appointed as Microsoft’s vice president for Far East, although he still kept running his own company - ASCII Corporation. In 1979 Nishi brought some major Japanese customers to Microsoft, starting with NEC which produced the popular NEC PC 8001 personal computer. Japanese market almost overnight became a major source of revenue for Microsoft.<br>I can’t celebrate our 50th anniversary without mentioning Kay Nishi, whose partnership and friendship were critical to Microsoft’s expansion internationally—in Japan and beyond. Not only is he an amazing thinker (and one of the most under-appreciated leaders in the company’s history), he’s also more like me than anybody I’ve ever met.<br>Bill Gates

After Microsoft relocated in early 1979, Nishi spent even more time with Gates and Allen. He helped recruit Steve Ballmer in June 1980. He was in the office when an IBM delegation first visited Microsoft on July 22nd, 1980, and demonstrated some of the Japanese computers that ran Microsoft BASIC.<br>During the early phase of IBM’s secret PC project (“Project Chess”), Nishi was involved in talks with IBM’s hardware engineers, trying to convince them to add more memory, a more powerful CPU and better graphics capabilities, with limited success.<br>Soon it became clear the biggest obstacle for the project was the lack of a suitable disk operating system. The obvious solution was Digital Research’s CP/M, but its port to the 16-bit Intel processors that IBM planned to use was late, and DR repeatedly refused to commit to IBM’s aggressive schedule. At last, IBM’s software lead for the project, Jack Sams, lost patience and asked Bill Gates to find an alternative.<br>On September 28th, Gates invited Allen and Nishi to his office to break the stalemate.<br>Microsoft at that point in time did not sell operating systems; in February 1980, it licensed UNIX source code from AT&T, and in August announced it was working on a UNIX-based operating system called XENIX. It was not a solution for the IBM PC which was too limited to run a real UNIX. Microsoft definitely had expertise to develop a simple operating system for the IBM PC, but the schedule was tight, and Gates was a pessimist by nature; Microsoft had already committed to deliver not only the BASIC interpreter, but also all the compilers they were selling at the time - adding an operating system to the list must have sounded scary.<br>It was Kay Nishi who put things in perspective: the amount of code for all the software Microsoft had already agreed to port was some 400 KB of assembly source. Nishi’s estimate was that the operating system would add no more than 20 KB. Then he jumped and yelled “Got to do it! Got to do it!”.<br>As it happened, Microsoft did not even have to develop the OS from scratch. Paul Allen knew of an existing operating system for Intel 8086, developed by an employee of Seattle Computer Products, Tim Paterson. The operating system was officially named 86-DOS but was also known by its code name: QDOS, which stood for “quick and dirty operating system”. Allen offered to call the SCP’s owner Rod Brock in the morning and ask to license 86-DOS. Again, Gates was hesitant: betting the critical IBM project on something called “quick & dirty”? In the end he agreed.<br>Microsoft finally had a plan for an operating system for IBM PC. On September 30th it was presented to IBM at a meeting in Boca Raton. On November 6th, the official contract was signed; Microsoft was the supplier for all system software for Project Chess.

1Sources for this post are the following books:<br>Ray Duncan: The MS-DOS Encyclopedia

Paul Allen: Idea Man

Stephen...