Microsoft Buys Full Rights to 86-DOS

July 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.