A year later, Gates dropped out of Harvard, once it became clear that the possibilities for Microsoft were bright.
The big break came in 1980 when an agreement was signed to provide the operating system that became known as MS-DOS, for IBM's new personal computer.
In a contractual masterstroke, Microsoft was allowed to licence the operating system to other manufacturers, spawning an industry of "IBM-compatible" personal computers which depended on Microsoft's operating system.
That fuelled further growth, prompting the company to float in 1986, raising $61m.
Now a multi-millionaire, Allen had already stepped back from the frontline. But Gates continued to play the key role in the company's growth, with his vision for networked computers proving central to Microsoft's success.
However, his judgement has not always appeared flawless.
While sales and profits rocketed in the early 1990s, he was seen to have misjudged on a grand scale the possibilities and growth of the internet.
Outside of Microsoft he also has interests in biotech companies, sitting on the board of the Icos Corporation and has a stake in Darwin Molecular, a subsidiary of British-based Chiroscience.