This month in tech history: Microsoft enters OS market

Microsoft may not be the dominant force it once was – Apple is now the world’s biggest tech company in terms of revenue, profit, assets and market cap –  but it is still the world’s leading software company, significantly ahead of Oracle in second place according to figures from Forbes Global 2000. But that all started somewhere, and November 1980 seems a good place to start.


6 November 1980 - Microsoft signs a contract with IBM to create an operating system

Microsoft was officially established on 4 April 1975, by childhood friends Paul Allen and Bill Gates. The company first entered the OS business in 1980 with its own version of Unix, called Xenix, but it was MS-DOS (Microsoft Disk Operating System) that really put them on the map.

MS-DOS resulted from a request by IBM for an operating system to use in its IBM PC range of personal computers. Microsoft didn’t have an operating system at the time, and so first licensed, then bought, 86-DOS, an operating system written by Tim Paterson and owned by Seattle Computer Products, for $75,000 in July 1981 and began modifying it to meet IBM’s specification. PC DOS version 1.0, which supported only floppy disks, was shipped in August 1981, when IBM first released its PC. The software was then substantially rewritten by Microsoft to support subdirectories and hard disks, before version 2.0 was released with the IBM PC-XT in March of 1983.

Should to wish to, you can download the source and object code to Microsoft’s MS-DOS operating system versions 1.1 and 2.0 – for non-commercial use only – thanks to an agreement between Microsoft Corporation and the Computer History Museum.

MS-DOS went through eight versions, until Microsoft stopped development in 2000. It was the most commonly used member of the DOS family, and the main OS for IBM PC compatible PCs during the 1980s and the early 1990s. In one of those quote-perfect moments, Bill Gates was apparently initially told by IBM representatives, “Don't get too excited and don't think anything big is going to happen”. Ultimately it was the product that allowed Microsoft’s transformation from a programming languages company to a software development firm. During the late 1990s to early 2000s, MS-DOS was gradually overtaken by graphical OSes, and it became the underlying basic operating system on which early versions of Windows ran. Which brings us to November 1983.


10 November 1983 - Microsoft announced Windows

20 November 1985 – Microsoft introduced Windows

On 10 November 1983, Microsoft announced a new product, Windows, which aimed to compete with other graphical user interfaces (GUIs), like the one on the Apple Lisa. This caused some problems - Apple felt Windows encroached on their innovation in GUI development so filed a suit against Microsoft alleging infringement on copyright. The case was eventually settled in court in 1993 - in Microsoft’s favor.

There were a number of delays during development, and two years after the initial announcement, Windows 1.0 finally became available to the public on 20 November 1985. Major features included pull-down menus, tiled windows, mouse support, and cooperative multitasking of the program’s applications. Despite some early adopters, the Windows interface wasn’t generally accepted until version 3.0. In addition to the full Windows packages, runtime-only versions were shipped with early Windows software from third parties making it possible to run their Windows software on MS-DOS, without the full Windows feature set.

Microsoft Windows dominated the world’s PC market with over 90% market share, overtaking Apple’s Mac OS (introduced in 1984). On PCs, Windows continues to be the most popular OS, although Microsoft admitted in 2014 it has lost the majority of the overall operating system market to Android - the number of Windows devices sold in 2014 were less than 25% of Android devices sold. Whether this is a fair comparison though, given we’re talking two very different platforms…

As of September 2016, the most recent version of Windows for PCs, tablets, smartphones and embedded devices is Windows 10, and for server computers is Windows Server 2016. Not forgetting of course the specialised version that runs on the Xbox One.


« Microsoft runs through its AI strategy at Future Decoded London


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Kate Hoy

Kate Hoy is Editor of IDG Connect

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