The birth of MS-DOS

by Guruprasad

<Prev Gallery Index Next>

A major breakthrough for Microsoft.

In the previous pic, we saw how Bill took the industry by storm and started revolutionizing the computer industry. But his vision of having a computer on every desk with Microsoft software was still a dream.

Today, lets see what happens next. This is a very interesting story and if someone asks you what was the most dramatic event in the history of computer industry, you can tell them this story :)

Throughout 1970s, companies like IBM & HP had underestimated the potential of personal computer and ignored it. In 1970s, companies like Apple & Microsoft took the risk of getting into this niche industry and the results were there for everyone to see. The personal computer indeed had a market. So, in 1980, IBM finally realized the potential of personal computer and decided to make one (not wanting to be left behind in this race).

Apple & Microsoft reacted in different ways to IBM’s announcement. Apple saw it as a threat to its business and to hide its fear, a full front page ad was published. Read more about it here:

But Microsoft reacted differently. Unlike Apple who saw IBM as threat, Microsoft considered IBM as its savior. Bill knew that IBM had the potential and power to bring a computer to every desk and he saw this as an opportunity to fulfill his vision by making sure his software goes into it.
Luck was in favor of Bill. Because IBM tried contacting Digital Research asking for an OS (Operating System), but the negotiation failed. Later, IBM called up Microsoft and asked the team to come to their HQ to discuss about their OS.

Here comes the most dramatic part. During the meet, Bill convinced IBM that they have an OS which will satisfy all their requirements. But the fact was that they did not have any OS at all. Talk about selling something that you dont even have. Bill had the guts to do it :) But Bill knew that he could somehow get such an OS (Paul had told him earlier that he knew somebody who was developing an OS).

The most interesting part of this deal was about revenue sharing. IBM wanted to pay a one time amount to Bill. But Bill wanted to license it to IBM and still retain ownership of the OS so that he can license it to other hardware manufacturers apart from IBM also. IBM saw this as an immature decision from Bill and asked him to reconsider, saying they are giving him a good offer and nobody else would be interested in his software. But Bill was adamant, and IBM happily accepted his agreement.

What happened next was very interesting. They got the deal from IBM, but had no OS. Paul rushed to the person who had developed an OS called QDOS (Quick & Dirty Operating System) and requested him to sell it to him for $50,000. This person was dumbstruck to find that someone is ready to pay “so much” for his OS and happily sold it to Paul. Bill & his team did some tweaking on this code and got the final OS ready and called it MS-DOS (Microsoft Disk Operating System). That is how, our legendary DOS command prompt was born.

In Aug 1981, the IBM-PC was launched with great fanfare. IBM not only relied on its brand value, but also lot of effort into marketing and the PC became an instant success.
Here is an interesting ad of the IBM PC of 1981

Soon after this, the floodgates opened up for Bill. Since he had good relations with some of the Japanese vendors, he made a deal with them to licence his OS for their hardware as well.
Today’s uploaded photo shows Bill & Paul sitting in a sea of computers from different vendors which started using his OS.

The IBM deal and QDOS purchase is very well dramatized in the movie “Pirates of Silicon Valley”.
Watch the 5-min clip here:

MS-DOS was their first major breakthrough but that did not stop MS from pushing further. Today, Microsoft is synonymous with Windows (with mouse and GUI). What tempted Bill to try his hands on GUI/mouse? How did they come up with their first windows software? How much of innovation went behind it? Did they buy something called quick and dirty windows (like QDOS) from someone and renamed it to MS-Windows? Or was there some other wicked planning in making windows? All these interesting questions will be later answered with more interesting stories using different interesting pics :)

Now, what is thought provoking in this? No doubt, Bill was hard working (he had proven his hard working capability by working day and night writing the BASIC interpreter as we saw in one of the prev pics). It was because of his hard work and determination, Microsoft was formed and went to the stage where IBM considered it for an OS. But this event shows that apart from hard working, one should have the risk taking ability, and to identify the right strategy of being at the right place at the right time.

If you remember one of the prev pics in this album, we had seen how a Grizzly bear takes a bit of risk to stand at the edge of a waterfall at the right time and waits for fishes to jump directly into its mouth.

Wasnt Bill’s strategy also a little similar to Grizzly bear’s. Being at the right place at the right time to reap the benefits :)
Means, hard work, risk and strategy, all these are important to be very successful. Hard work is like the foundation of a building, risk is like outer design (because even outsiders can see that you are taking a risk), strategy is like interior design (because only insiders know what is the strategy). All these are necessary to make a beautiful building :)