Microsoft Introduces Windows

Windows 1.0 LogoNovember 10, 1983

Microsoft formally announces Windows, a graphical user interface for Microsoft DOS-based systems. Bill Gates promises that Windows will ship by April of 1984. However, in true Microsoft fashion, Windows 1.0 doesn’t actually ship until November 1985. While Windows 1 and Windows 2 saw limited usage, it wasn’t until Windows version 3 that Windows began to see widespread acceptance.

IBM Signs A Deal With The Devil

IBM PC-DOS 1.0November 6, 1980

IBM and Microsoft formally sign an contract whereby Microsoft will create an operating system for the in-development IBM PC. During the summer of 1980, IBM was originally interested in licensing the popular CP/M operating system, but the inability to come to an agreement with Digital Research led IBM to ask Microsoft if they could develop an operating system similar to CP/M. Microsoft was already going to work with IBM to deliver their BASIC programming language for the IBM PC, but they did not have an operating system. However, Microsoft knew that a small company named Seattle Computer Products had developed an operating system similar to CP/M called QDOS, for Quick-and-Dirty Operating System. Microsoft suggested to IBM that QDOS could work as the IBM PC’s operating system. IBM asked Microsoft to license and further develop the operating system, which led to the formal contract on November 6, 1980. After the contract was signed, in December 1980 Microsoft would license the QDOS operating system to begin development of the IBM PC version. In July of 1981, just weeks before the IBM PC would ship, Microsoft purchased full rights from SCP for what was now called 86-DOS. IBM PC-DOS was the name of the operating system that would ship on the IBM PC, but it was Microsoft that wholly developed the operating system after acquiring it from SCP.

Microsoft shrewdly included a clause in the agreement that allowed them to sell the operating system to other companies under the name MS-DOS. It was this clause that changed the course of technology history, opening the door for Microsoft to become the dominant technology company of the PC era. Microsoft seemed to understand that by controlling the operating system, the underlying hardware became less relevant. IBM obviously did not consider this concept, nor did they foresee that companies would be able to successfully clone their hardware platform. Once companies were able to clone the hardware, they needed an operating system. Microsoft was more than happy to provide them with that operating system, which by design was completely compatible with IBM’s PC-DOS. Once IBM lost control of the platform they created, power shifted to the one major commonality between the IBM-compatible clones: Microsoft’s operating system. It was IBM’s name that pushed the IBM PC into prominence, but it was the combination of hardware cloning and Microsoft licensing the operating system that created the dominant platform of the PC era, crushing nearly all competing personal computer platforms in the process. Without this seemingly minor clause in this pivotal contract, the history of the PC era could have been quite different than it was.

Windows XP Released

Windows XP LogoOctober 25, 2001

Microsoft releases the operating system Windows XP, the successor to both Windows 2000 and Windows ME. Designed to unify the Windows NT line and Windows 95 line of operating systems, Windows XP was not replaced by Microsoft until January 2007 with Windows Vista. However, with a nearly six-year run and the public debacle surrounding the release of Windows Vista, Windows XP remained the world’s most popular operating system until August 2012.

Microsoft Word 1.0 for DOS

Microsoft Word 1.0September 29, 1983

Microsoft releases their first software application, Microsoft Word 1.0. For use with MS-DOS compatible systems, Word was the first word processing software to make extensive use of a computer mouse. Not coincidentally, Microsoft had released a computer mouse for IBM-compatible PCs earlier in the year. A demo version was also included for free with a copy of PC World magazine, marking the first time a floppy disk was included with a magazine.

Windows 95 Released

Windows 95 LaunchAugust 24, 1995

Kicking off one of the largest product launches in technology history, Microsoft releases the highly anticipated Windows 95. More than one million copies will be sold in the first four days of its release.

Apple Loses to Microsoft in Court

Apple v MicrosoftAugust 24, 1993

Perhaps the most famous lawsuit in technology history is decided for Microsoft. Apple claimed that Microsoft’s Windows violated their copyrights on the “visual displays” of the Macintosh. The judge in the case ruled that most of the claims were covered by a 1985 licensing agreement. Other claims were not violations of copyright due to the “merger doctrine”, which basically states that ideas can not be copyrighted. This paved the way for Microsoft to develop Windows 95, which imitated the Macintosh even more so than previous versions of Windows.

The First Internet Explorer

Internet Explorer 1.0August 16, 1995

Microsoft introduces Internet Explorer, which at the time was a modified version of Spyglass Mosaic, which Microsoft had licensed. Later when Microsoft began including Internet Explorer for free with Windows, Spyglass sued Microsoft for not paying what they felt were the proper royalties. Microsoft settled for $8 million.

Windows Gets Blasted

Blaster Worm SymptomAugust 11, 2003

The Blaster worm, also known as MSBlast or Lovesan, begins to spread on the Internet, infecting Windows XP and Windows 2000 computers. The primary symptom of the worm was the crashing of the RPC service, which would trigger the computer to shut itself down and reboot as shown in the graphic. Microsoft estimated the number of machines infected between 8 and 16 million. Damage caused by the worm was estimated at $320 million.

Apple and Microsoft Call Truce

Steve Jobs and Bill Gates Macworld Expo 1997August 6, 1997

At the Macworld Expo in Boston, Steve Jobs announces that Apple and Microsoft have signed a five-year alliance. Bill Gates famously makes his seemingly ominous “big brother” appearance on the large presentation screen during the announcement. As part of the deal, Microsoft committed to continuing development of Microsoft Office for Mac over the next five years, Apple would make Internet Explorer the default web browser on the Mac, Apple and Microsoft would collaborate on Java compatibility, and Microsoft invested $150 million in Apple stock. However, the most important part of the arrangement is that both companies would cross-license all existing patents along with any new patents over the next five years, Apple would drop their long-running series of patent-infringement lawsuits against Microsoft, and Microsoft paid an undisclosed amount of money to Apple.

The common assumption in the tech community is that Microsoft’s $150 million investment in Apple saved the company. However, the reality is that with Apple holding $1.2 billion in cash at the time, $150 million was a relatively small sum of money. Some now believe the undisclosed amount of money that Microsoft paid Apple was in fact a secret settlement to the patent-infringment claims. Estimated at anywhere between $500 million to $2 billion, this was the real meat of the “cross-licensing” arrangement. It was likely this much larger undisclosed amount, along with the show of confidence that Apple would be around at least another five years, that gave Apple and Steve Jobs the breathing room needed to reinvent Apple into the most valuable company in the world.

Microsoft Buys Full Rights to 86-DOS

86-DOSJuly 27, 1981

About two weeks before IBM begins shipping the first IBM PC, Microsoft buys the full rights to the operating system 86-DOS, formerly known as QDOS (Quick and Dirty Operating System), from Seattle Computer Products for $50,000. Microsoft had previously paid $25,000 to SCP for a non-exclusive license in December 1980 in order to begin porting the operating system to the IBM PC, which used the Intel 8088 processor. Microsoft renamed 86-DOS to MS-DOS and licensed it to IBM as PC-DOS. SCP would later sue Microsoft claiming fraud because Microsoft did not reveal IBM as a licensee. The case was settled in SCP’s favor for 1 million dollars, a fraction of the annual revenue Microsoft was receiving from MS-DOS and PC-DOS.