Background: IBM was planning to enter the personal computer market, and decided to buy the operating system and languages from outside companies. The most popular operating system of the time was CP/M, written by Gary Kildall. IBM had marked in their briefing book that CP/M was made by Microsoft, and went to see Gates to purchase the OS and languages from him.
From Bob Cringely's Accidental Empires,
Gates pointed out to them that Kildall actually wrote CP/M, and arranged a meeting between IBM and Kildall. However, when IBM came by to see Kildall in Pacific Grove, he was out flying and they were left instead to negotiate with Kildall's wife.
"Dorothy Kildall squinted at the IBM nondisclosure agreement, imagining her new house with its stable and hot tub going on the auction block following an IBM legal action. She refused to sign, so the men from IBM left town."
IBM then returned to Gates, who then promised them an OS, which he then bought for $50,000 from a local software company.
Hard Drive by James Wallace and Jim Erickson
According to Jack Sams, the guy from IBM who went to DR to meet Kildall. He says that Kildall was out, flying on his plane, and Kildall's wife and a DR's lawyer met with him (Sams). They did not want to sign a non-disclosure agreement with IBM, so IBM went away without even talking with Kildall. (That agreement said that DR could not tell IBM confidential information, but if DR did so, IBM could not be sued for using it; and DR would be sued if it used any confidential information that IBM gave them.) That night, they went to Seattle and made the deal with Microsoft.
Computer Wars by Charles H. Ferguson and Charles R. Morris
When the IBM team made a scheduled visit to Kildall's company, Digital Research, Kildall was off flying his plane (Kildall insists he was on a business trip).
Kildall's wife refused to sign IBM's imposing nondisclosure agreement, so the IBM team left without stating their business.
For whatever reason, Kildall apparently took his time getting back to IBM when he returned, and blew one of the business opportunities of the century.
From Accidental Empires, Gary Kildall is quoted as saying "Ask Bill why function code 6 ends in a dollar sign. No one in the world knows that but me."
From Fire in the Valley, "The nondisclosure agreement IBM asked McEwen to sign troubled her because she felt it jeopardized Digital Research's control of its software. Company lawyer Jerry Davis agreed that the agreement should have been modified."
From http://www.best.com/~wilson/faq/, Kildall says that the plane story was first told by Gates, in an interview to the London Times. "This is Microsoft's version", he says, "but History always tells the winners' version, not the losers'".
Dorothy Kildall was actually an attorney and was in charge of the non-technical aspects of Digital Research.
