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Microsoft had no operating system
One of the two was Digital Research, in Pacific Grove, California. It already had an operating system for personal computers, and IBM's first instinct was to work with it. The other was a small Seattle company called Microsoft, which made computer languages and at that point had no operating system at all.
Bill Gates recognized the value of the opportunity and went after it, even though Microsoft had nothing to hand IBM yet. Both companies had received the same massive break, and only one of them treated it as the start of something.
The break was a single moment. What followed was years of building on it, as standards took hold and Windows grew step after step. The early versions of Windows were ones some people even laughed at, and Microsoft stayed on it through Windows 95 and later brought the Internet into it.
How did Microsoft end up with an operating system?
In 1981 Microsoft bought an operating system called 86-DOS from Seattle Computer Products, which had been written by Tim Paterson. Microsoft adapted it and supplied it to IBM as PC DOS. The purchase meant the company that had started with programming languages now owned the core software for IBM's new machine.
Why did Microsoft license DOS instead of selling it?
Microsoft kept the ownership of the software and licensed it to IBM, rather than selling it outright. That left Microsoft free to sell the same system, as MS-DOS, to other computer makers. When companies began building IBM-compatible machines, they all needed an operating system, and Microsoft was the one supplying it.
How did Windows go from joke to standard?
Windows 1.0 arrived in 1985 as a graphical layer running on top of MS-DOS, and it sold modestly. Windows 3.0, released in 1990, was the first version to sell in huge numbers. Windows 95 then added the Start menu and the taskbar, and it sold millions of copies within weeks of its launch.
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