How These Three Startups Became Household Names

Microsoft, Sony, and Tata Consultancy Services found success through intrapreneurship, risk taking, and a bit of luck

4 September 2015

This article is part of our September 2015 special report on startups, which highlights IEEE’s efforts to attract more entrepreneurial types to the organization.

It takes much more than a good idea to create a successful company. You need the right business partners and mentors, not to mention investors willing to take a risk on your idea. Many who’ve succeeded also had the luck to be at the right place at the right time, combined with the courage to move forward.

Certainly this was how the IEEE members behind Microsoft, Sony, and Tata Consultancy Services turned their companies from concepts into technology giants.

SMOOTH OPERATORS

Like most ventures, Microsoft started small but had a huge vision: a computer on every desktop in every home. Cofounders IEEE Member Paul Allen and Bill Gates*  were childhood friends from Seattle who shared an enthusiasm for computers.

After reading about the Altair 8800, the first personal computer, Gates and Allen contacted Micro Instrumentation and Telemetry Systems (MITS), the creators of the new microcomputer, and offered to build a BASIC (short for Beginners All-Purpose Symbolic Instruction Code) programming language interpreter for the Altair. (Interpreters read code and execute instructions.) Since they didn’t actually have an Altair, Allen built a simulator of the computer while Gates developed the interpreter. They traveled to Albuquerque in 1975 to demonstrate their interpreter for the first time on a real Altair computer and when it ran successfully, MITS agreed to distribute it.

Gates took a leave of absence as a Harvard undergraduate, and the two moved to Albuquerque to found Micro-Soft. They dropped the hyphen and registered Microsoft as a trade name in 1976. Three years later, they relocated to larger offices in Seattle. The company is now headquartered in Redmond, Wash. Neither Gates nor Allen finished college.

Microsoft went on to develop two groundbreaking operating systems. In 1980 it launched MS-DOS, which managed computer hardware and bridged the gap between hardware and application programs. Windows, a graphical extension of MS-DOS, came later. Windows continues to dominate the personal computer market with its operating system, and Microsoft Office is the most popular office software suite.

Allen left Microsoft in 1982 and founded Vulcan, a company in Seattle that manages his various business and philanthropic efforts. Gates stepped down as chair of Microsoft only last year to pursue philanthropy full-time through the Bill and Melinda Gates Foundation. Formed in 2000, it donates money to various charitable organizations and scientific research programs.

A VISION FOR THE TRANSISTOR

Long before Sony sold its TV sets, cameras, game consoles, and other electronics worldwide, its founder IEEE Fellow Masaru Ibuka started a small electronics repair shop in a Tokyo department store. It opened its doors in 1946, with eight employees. The following year, he joined his business partner, Akio Morita, whom he met while they were both serving in the Imperial Japanese Navy during World War II, and the two founded a company called Tokyo Tsushin Kogyo (Tokyo Telecommunications Electronics Corp.). The company, which started with 20 employees, built Japan’s first magnetic tape recorder, called the Type-G. 

In 1952, Ibuka visited the United States for the first time in an effort to boost sales of his recorder. After learning about the transistor, invented in 1948 by researchers at Bell Labs, Ibuka persuaded his partner to obtain a license to manufacture it at the company’s factory in Japan. While researchers in the United States were finding military applications for the transistor, Ibuka saw its potential in more consumer-oriented electronics. In 1958, as TTEC’s presence in the U.S. market grew, the company changed its name to Sony—a play on sonus, the Latin word for sound, and “sonny,” at the time a popular American nickname for boys.

Sony became famous for a number of inventions, including the first transistorized television set (1960), the Betamax videotape recorder (1975), the Walkman portable cassette player (1979), and the Playstation entertainment system (1995).

In 1972 Ibuka received the IEEE Founders Medal for “outstanding administrative leadership in applying solid-state devices in consumer electronics, thereby enhancing industry growth and bringing distinction to the profession.” 

 Ibuka retired in 1976 but stayed on as an advisor until his death in 1997. Morita stepped down as chairman in 1994 and died in 1999.

SOLVING GLOBAL PROBLEMS

Tata Consultancy Services (TCS), a multinational IT service company with headquarters in Mumbai, does business in 46 countries. In 2013, Forbes named TCS the world’s second most valuable IT company, after IBM.

But in the late 1960s, TCS was a little-known data-processing subsidiary of a much larger corporation, Tata Sons—a global enterprise founded in 1868 by Jamsetji Tata. In 1969, Life Fellow Faqir C. Kohli became the first CEO of TCS. Its early contracts under Kohli included providing punched-card services to sister company Tisco (now Tata Steel) and building an interbranch data system for the Central Bank of India. In 1979, it developed an electronic depository and currency-trading system, which was immediately purchased by banks in Canada, South Africa, and Switzerland. In the early 1990s, the company sold software to help countries throughout Europe convert their currencies to the euro.

But it was the Y2K scare in the years leading up to 2000 that thrust TCS into the spotlight. The transition between 1999 and 2000 was a problem for digital data storage systems because systems designers had usually truncated a four-digit year to the last two digits. This made the year 2000 indistinguishable from 1900. Organizations worldwide raced to upgrade their computer systems before the start of the new millennium. Many companies outsourced this task to TCS, which had the software tools to automate the Y2K conversion process.

TCS went public in 2004 and in March posted $3.5 billion in profits for 2014 on revenues of $15.5 billion. Forbes reports that TCS has more than 300,000 employees at its locations worldwide, more than a third of them women.

In 1994 Kohli was named deputy chairman of TCS. He retired two years later.* Now 91, Kohli is commonly referred to as the father of India’s IT revolution. In addition to making his many contributions to industry, he has also served on the board of governors of the College of Engineering, in Pune, India, where he has helped modernize the engineering curricula and facilities to support the IT industry’s growth. He received the 2012 IEEE Founders Medal for “early vision and pioneering contributions to the development of the IT industry in India.”

*This article has been corrected

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