Retro: How Windows won the PC wars

There’s an urban legend that Microsoft Windows came to rule the world by beating Apple’s Mac OS. In fact, Microsoft had seen off Mac OS with MS-DOS long before Windows ever arrived. Nevertheless, Windows did face some serious challengers along the way to world domination. And although there wasn’t a single reason for its eventual triumph, Windows benefited from a tremendous amount of luck.

Retro: How Windows won the PC wars

The first example of Microsoft’s good fortune was the company winning the contract to produce the disk operating system for the IBM PC, launched in 1981. That was amazingly lucky, because IBM had intended to use Digital Research’s CP/M. When that deal fell through, it landed in Microsoft’s lap. Even more fortuitously, Microsoft knew someone – Tim Paterson of Seattle Computer Products – who’d already written a basic CP/M clone for the PC’s chip, which it could buy. The operating system was renamed PC-DOS (later to be rebranded MS-DOS) and Microsoft, a tiny 40-person operation with only $7.5 million in revenue, was on its way.

Going for GUI

Clearly, MS-DOS wasn’t going to last, so the next step was to find a replacement. At the time, everyone and his dog was working on graphical user interfaces (GUIs), inspired by Xerox’s work in the 1970s, and Microsoft was no exception. It announced Windows in 1983 and shipped the first version in 1985.

However, Microsoft faced stiff competition for Windows from Digital Research’s CP/M, which dominated the business market. Fortunately for Microsoft, CP/M-86 cost about four times as much: Digital Research believed IBM needed CP/M and that customers would pay a premium for it. It was wrong.

Digital Research wasn’t done, however. The company produced a better graphical front end than Windows, in the form of GEM (Graphical Environment Manager). It also had some reasonable applications, including GEM Write, GEM Paint and Ventura Publisher. And, unlike Windows, it ran on both business-standard Intel x86 chips and the racier Motorola 68000. Game over?

No, Microsoft got lucky once more. Redmond’s second biggest software house (after Nintendo) had a big buddy called Apple Computer, which was desperate for applications for its Macintosh computer. Apple didn’t like Digital Research because it had sold GEM to Jack Tramiel for his Atari ST, which InfoWorld magazine called the “Jackintosh”. The ST was slightly faster than the Mac, had a better screen and cost much less.

No fly on the wall has reported what really went on, but Apple gave Microsoft rights to the Mac interface and sued Digital Research over the “look and feel” of GEM. Microsoft improved Windows, while Digital Research capitulated and never recovered. (Later, Apple sued Microsoft and lost.)

Battle with Big Blue

One reason why Microsoft was keen on the Mac was because of its problems with IBM. The PC had been developed in a hurry by a “wild duck” group, contrary to IBM’s usual practice of owning the whole computer industry. When the PC succeeded beyond anyone’s wildest dreams, IBM pulled the PC division back into the fold and decided to change the industry to an IBM-owned standard. This resulted in the 1987 launch of the PS/2 (Personal System/2) with its new MCA (Micro Channel Architecture) bus and OS/2 operating system. IBM was going to stop making IBM PCs!

IBM, a $54 billion giant, had a whole business strategy called Systems Application Architecture to tie its mainframes, minis and PCs together. This required OS/2 Extended Edition, which was exclusive to IBM. Microsoft, a mere $0.35 billion tiddler, looked doomed.

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