PART 7: Evolutio of DOS/WINDOWS - Bill gates
Evolution of DOS/WINDOWS
August 1981 DOS 1.0
March 1983 DOS 2.0
August 1984 DOS 3.0
November 1985 WINDOWS 1.0
October 1986 DOS 4.0
October 1987 WINDOWS 2.0
December 1987 OS/2 1.0
October 1988 OS/2 1.1
May 1990 WINDOWS 3.0
June 1991 DOS 5.0
March 1992 OS/2 2.0
April 1992 WINDOWS 3.1
May 1993 OS/2 2.1
July 1993 NT 3.1
September 1994 NT 3.5
October 1994 OS/2 3.0
June 1995 NT 3.51
August 1995 WINDOWS 95
August 1996 OS/2 4.0
August 1996 NT 4.0
June 1998 WINDOWS 98
February 2000 WINDOWS 2000
12 August 1981 IBM announces the Personal Computer. Gates & Allen are not invited to the rollout. That same month Steve Jobs visits Microsoft for the first time and gives a mesmerizing speech about his vision for computing (the Reality Distortion Field). In October Gates travels to Cupertino to see an early mockup of the Macintosh Computer.
Jobs had initially opposed the Mac within Apple for two years on the assumption that the Apple Lisa (being developed by ex-PARC alumni) would be far superior. (Jobs had toured PARC in 1979 and immediately set out to build a GUI [graphics user interface] computer.) After being kicked out of the Lisa project Jobs switched allegiance to the Mac project being run by Jef Raskin (another PARC alumnus).
Gates makes a deal with Jobs & Apple to supply software for the Macintosh. Microsoft and Apple sign a contract on 22 January 1982 to provide a spreadsheet, a business graphics program, and a database. Microsoft was prohibited from distributing software that used a Mouse before 1 January 1984! Gates was later to take advantage of that deadline. He was convinced after viewing the Apple Mac that GUI was the future.
Gates and Jobs for different reasons were both keen to get a spreadsheet program to compete with VisiCalc. Gates realized that the market was shifting away from languages and toward applications, and Jobs wanted his own spreadsheet program so he did not have to pay royalties to VisiCale. This first Microsoft spreadsheet was called Multiplan.
In 1981 Apple had total sales of $334M and profits of $39.4M, Microsoft, $15M gross and $1.5M net was a bit player. That same year Apple sold 150,000 computers and IBM sold 200,000 computers.
In late 1981 and early 1982 most analysts expected CP/M-86 for the IBM PC to kill DOS off the moment it became available. However, IBM charged $240 for CP/M-86 when it did come on the market in the spring of 1983 and by then it was too late. The experts misread the market. However, the situation was crystal clear independent software developers (a pattern that would repeat itself with WINDOWS 3.0). They were writing a flood of new DOS programs and virtually none for the CP/M-86.
In the beginning Gates almost gave MS-DOS away - often charging less than half the official price of $95,000 to OEM customers. This allowed Gates to get MS-DOS established before the ever-so-slow Gary Kildall could get CP/M-86 onto the market.
Gates clearly formulated his DOS strategy very early on. At a computer forum in May 1981 he said: "Why do we need standards?... It's only through volume that you can offer reasonable software at a low price. Standards increase the basic machine we can sell into.....I really shouldn't say this, but in some ways it leads, in an individual product category, to a natural monopoly: where somebody properly documents, properly trains, properly promotes a particular package and through momentum, user loyalty, reputation, sales force, and prices builds a very strong position within that product."
A second aspect of Gates' overall strategy revealed itself in early 1982 when Compaq built the first legal IBM-compatible computer by reverse engineering IBM's ROM BIOS (Read Only Memory Basic Input Output System). Microsoft gave both MS-DOS and PC-DOS code to Compaq to ensure it could develop a fully compatible computer.
BASIC was more problematic because it was both on disk and in ROM. Gates solved this problem by assigning a separate team of BASIC programmers to the Compaq project and as Compaq fed back changes they needed in BASIC, Gates simply incorporated them into the new editions of the ROM BASIC that Microsoft provided IBM! This kept everything legal.
In late 1982 Paul Allen contracts Hodgkins disease and resigns from Microsoft just before the release of DOS 2.0. March, 1983, DOS 2.0 released along with the IBM XT. Paul Allen had fought vigorously for drastically upgrading DOS and after a classic screaming match with Gates Allen prevailed. DOS 2.0 contained a laundry list of UNIX like features and was drastically re-written.
By 1982 Microsoft had 200 employees and sales of $32,000,000.
By the fall of 1982 Microsoft has as many programmers on the Mac project as Apple did. Gates and his programmers (the "Smart Guys") were convinced that the Mac was the computer of the future and the software development was proceeding at a breakneck pace. Simultaneously, Gates and Allen were pondering how to build a GUI for the IBM PC as early as February 1982.
At the fall 1982 Comdex Lotus 1-2-3 was released. Although 1-2-3 bypassed DOS and worked directly with the IBM PC hardware (in order to get enough memory), this only served to reinforce the IBM PC standard and started a flood of PC specific software.
Also at the fall 1982 Comdex VisiCorp (owners of VisiCalc the "Killer Ap" for the Apple II) displayed Vision a MAC/SINDOWS-like GUI.
Gates begins the development of WINDOWS (called Interface Manager) to head off Vision. Interface Manager was classic Gates: Vaporware do a demo, sign the contracts, get the code done later. In April 1983 a phony "smoke-and-mirrors" demo was done. Microsoft promoted Interface Manage throughout 1983 with great zeal (allegedly tying its purchase to the purchase of DOS in clear violation of antitrust law). On 10 November 1983 Microsoft announced Windows with great fanfare in New York City to try to head off Vision. IBM refuses to endorse Windows and actively works against Microsoft's interests.
Gates was determined not to miss the applications boat again he missed it with DOS he was not going to miss it with the coming change to a GUI. He was determined that Windows was going to be the new standard and that Microsoft would have the inside track on applications development.
To implement this strategy Microsoft developed its own Mouse and released it in June 1983. Microsoft engineers figured out how to power the mouse through the Serial Port and the concept was eventually patented.
At first there was no software at all that worked with the Mouse but by November 1983 Microsoft released WORD. WORD supported the Mouse and had plenty of features that took advantage of it.
This activity by Microsoft made Jobs and Apple nervous for obvious reasons. Gates argued that the contract Microsoft signed to work on the Mac project did not prevent Microsoft from working on an overall operating environment and the contract expired 1 January 1984 in any case. Gates and Jobs formally rescinded their old agreement for applications development on 15 January 1984-just one week before the release of the Мас.
Vision comes out in September 1983 and turns out to be an expensive dud. Once again Microsoft benefited from inept competition.
Mitch Kapor of Lotus was not inept however. Lotus was riding high because of 1-2-3 and Lotus made more money than Microsoft in 1983.
Gates was so worried about Lotus's Symphony - an integrated "be-all, end-all" product he re-directs the development of Excel from a DOS spreadsheet to the MAC to head off Lotus.
Late in 1983 Borland releases Turbo Pascal for only $49.95 and eats Microsoft's lunch. It featured an integrated editor-compiler and quickly became the standard severely cutting into Microsoft's language market.
In 1983 Microsoft sales were $55,000,000. By 1984 about 10,000,000 personal computers where shipping a year and most of them had DOS on them. By this time Microsoft had switched to per-machine deals with vendors. Microsoft would give computer makers a price break on DOS if they would also buy BASIC for a large number of machines (most makers way overestimated what their market share would be). Per-machine deals made it virtually impossible for competitors to crack the DOS monopoly. Vendors that were already paying a royalty for DOS on every machine were not going to offer a different operating system except as a high-priced option!
Microsoft in effect collected a bounty, a tax virtually every time anybody bought a DOS machine from someone other than IBM! It was a vast money machine that expanded even further in May 1984 when Phoenix Software Associates was able to reverse-engineer the IBM PC ROM BIOS and would sell its ROM BIOS chip to all comers. The market exploded as a result.
In August 1984 AT with 80286 and DOS 3.0 was released. The keyboard of the AT has a new key - SysRq (system request). This was an attempt by IBM to distance itself from Microsoft by enabling it to run other operating systems by simply hitting the SysRq key. Part of this effort was TopView, which was supposed to allow multi- tasking, and was clearly intended to block Windows and other similar products.
Fiscal 1984 Microsoft sales were $100,000,000.
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