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SCO, Linux, and Microsoft in the History of OS: 1980s

SCO, Linux, and Microsoft in the History of OS: 1980s
Daniel Eran Dilger
[continued from part two: SCO, Linux, and Microsoft in the History of OS: 1970s]

Xerox PARC and Apple New Macintosh: 1980 – 1984.
While Microsoft ripped off the 70s technology in Digital Research’s CP/M to resell in the 80s as MS-DOS, Apple used its hardware profits of the 70s to finance the development of a new generation of much more powerful software in order to sell new hardware in the 80s.


Building on ideas originally developed at Xerox PARC, Apple developed a new generation of desktop computers with graphical interfaces: the Lisa and Macintosh. Apple paid Xerox for its technology inspiration using a stock deal. Apple’s products weren’t based on a copy of Xerox code, nor did Apple have any code access.

The software Apple designed went well beyond what Xerox researchers had envisioned. For example, while Xerox originated the idea of the mouse and a bit-mapped display with windowed regions, Apple independently developed the ideas of direct interaction of movable windows, as well as the automatic redrawing of the background required as a window moved around on the screen.

Apple also built its computers with an entirely different system architecture which enabled it to drive the entry package price down from the $100,000 dollar investment Xerox required for its $16,000 workstations sold in a package with file and print servers, to standalone Mac systems that only cost $2500.

Apple 80s timeline

[On Xerox, Apple and Progress - Folklore.org]

Microsoft Copies Apple’s Mac: 1982 – 1987.
Microsoft got involved in developing the first applications for Apple’s Macintosh prior to its launch, and had early inside access to prototype hardware and the Mac’s graphical system software. Figuring that the real money was in software, not in selling computers, Microsoft hoped to spread its graphical Mac applications to work on other hardware, but Apple wasn’t interested in licensing its operating system to run on other company’s systems.

Microsoft decided that the best way to end competition in the PC world between its MS-DOS and CP/M would be to develop a graphical front end with applications that worked like Apple’s Mac, but which ran on commodity PCs and required MS-DOS. That could enable it to lock up the DOS market and erect barriers to competition that would guarantee it an ongoing monopoly in the PC market.

Using its intimate knowledge of the Mac system software and its toolbox development libraries, Microsoft began offering Windows as a copycat system for DOS, to enable PC users to run ported versions of Microsoft’s Mac applications. PC users failed to pay much attention to it throughout the 80s however, and no PC makers installed Windows on their systems until Windows 3.0 in 1990.

Microsoft Copies Apple
[A Rich Neighbor Named Xerox - Folklore.org]

Graphical Desktops From Commodore and Atari: 1985 – 1990.
Microsoft wasn’t the only company to recognize the obvious future in graphical desktop operating systems pioneered at Xerox and brought into the mainstream by Apple.

Atari had been developing 16-bit video game system led by Jay Miner, who then left Atari to set up the Amiga Corporation in the early 80s. Initially contracting with Atari to build a specialized video gaming chipset, Amiga ended up being purchased outright by Commodore, which used Amiga’s technology to launch a new desktop computer with advanced audio and video features.

Amiga launched Commodore out of the 8-bit world of the very popular but increasingly dated C-64, and into the graphical realm of Apple’s Macintosh, rivaling it with color graphics and a lower price point.

Jack Tramiel, who had been president of Commodore before it acquired Amiga, had left the company over concerns that Apple’s new Mac would destroy the market for its 8-bit computers. His vision of a new 16-bit graphical system led him to acquire the struggling Atari, where he scuttled its failing 8-bit computer operations with the intent to reinvent the company as a low cost leader in the new market for powerful, graphical desktops.

Tramiel fought to retain Amiga’s technology in a lawsuit between the two companies that ravaged the competitive edge of both from 1984 through 1987. In the meantime, Atari released its own system called the Atari ST, which used an operating system based in part on CP/M, along with Digital Research’s new graphical environment called GEM, which was based upon work developed by Lee Jay Lorenzen of Xerox PARC.

Competitive pressure on the low end from the Commodore Amiga and Atari ST pushed Apple to release the 16-bit Apple IIGS in 1986 as a consumer-priced version of its Mac software technology, paired with Apple IIe compatibility. That hybrid product kept Apple entrenched in education, while also allowing its separate Mac line to settle into a premium price bracket that delivered the company high profit margins.

Atari and Commodore

[1985-1990: 16-bit Graphical Computing]

Steve Jobs’ NeXT Computer: 1986 – 1990.
High margin Macs allowed Apple to continue to fund new generations of software advances into the next decade. However, Apple founder Steve Jobs left the company in 1986 after determining that Apple’s management under CEO John Scully was not appropriately planning for the next jump in computing technology after the Mac.

Jobs then formed NeXT, originally to develop an advanced software platform that would run on other makers’ hardware. After deciding that no existing hardware was powerful enough to deliver the ideas behind NeXT, the company developed its own hardware platform.

The new NeXT computers shared some similarities to Apple’s Mac II line, but incorporated a specialized DSP chip and used an experimental magneto-optical drive technology to replace both the floppy and hard drive. They also ran NeXTSTEP, an advanced new generation of software that combined the state of the art in operating systems and application development technology.

Apple and NeXT
[1990-1995: NeXT, Be, and the Mac PC]

Windows In Search of an Operating System: 1987 – 1990.
Faced with the advanced graphical computers being offered by Apple, Atari, Commodore, and NeXT, Microsoft realized that the DOS it had copied from CP/M was a rather worthless foundation for the future.

At the same time, it also faced competition from alternative DOS vendors, including Digital Research. Its CP/M-86 was offering Microsoft stiff competition for MS-DOS in the existing PC market, while GEM was rivaling Microsoft’s struggling plans with Windows.

Microsoft planned to scuttle the market for DOS entirely; it began work with IBM in 1987 to develop a real operating system to replace it, called OS/2. By killing off any DOS competition, Microsoft would be in a position to lead its installed base of MS-DOS users to IBM’s new OS/2, and could then focus its efforts on developing Windows as a graphical shell to run a ported version of its Mac Office applications on top of OS/2.

Microsoft lacked any real operating system experience, so it was happy to have IBM take the reigns on OS/2. Having also lost any interest in reselling Unix, Microsoft also sold off Xenix to the Santa Cruz Operation in 1987.

XENIX and OS/2
IBM’s Personal System/2: 1987 – 1990.
IBM hoped that Microsoft could help it deliver a clone of the Mac application environment running on top of OS/2. Like Apple, IBM was selling hardware. Under its agreement with Microsoft to ship PC-DOS, IBM had lost its ability to steer the PC market; hardware cloners had simply copied IBMs PC designs.

IBM hoped that OS/2 would give it a way to market a new generation of PCs, called PS/2, and license the new hardware designs to other PC makers at a profit. Things didn’t work out as planned for IBM; PC makers simply continued to develop their own cheaper PC clone designs and license the existing MS-DOS.

The failure of IBM’s PS/2 hardware and OS/2 software was also a problem for Microsoft. It had announced that MS-DOS 4.0 was the end of the line for DOS and that the new OS/2 would be the official future of the PC.

[1990-1995: The Race to Deliver The Next New Platform]

Race to Deliver the Next New Platform

Microsoft Scrambles Back to DOS: 1990.
The PC world’s hesitation to leave DOS was good news for Digital Research, which had upgraded CP/M under the new name DR-DOS in 1988 and continued work on a competitive new versions. A new 5.0 version of DR-DOS released in May of 1990 greatly outpaced the final version of MS-DOS.

Microsoft announced that its own new version of MS-DOS 5.0 would be out soon, and trade magazines, including InfoWorld and PC Week, began extensive coverage of the promised new features of Microsoft’s MS-DOS 5.0 as if it already existed.

It wasn’t actually released until a year later, but the early announcement helped to kill DR-DOS sales. The trick worked so well that Microsoft repeated again in 1991, holding up sales of DR-DOS 6 for another year while it again scrambled to catch up in features with its own MS-DOS 6.

Microsoft Leverages its Monopoly and Benefits from Litigation: 1985 – 1990.
Microsoft was lagging a half decade behind the new generation of graphical desktop computers represented by the Mac, Amiga, and ST, along with the GEM graphical environment developed for PCs by Digital Research.

Throughout the 80s, Microsoft’s Windows product was an unusable joke, and its plans to advance DOS into a more powerful desktop system in its OS/2 partnership with IBM had failed. Microsoft was able to repeatedly bluff its losing hand, thanks in part to fawning press coverage of its vaporware promises, but also due to the contention between companies that hoped to prevent competition through litigation.

  • Apple sued Digital Research in 1985 over its GEM product and won concessions that hobbled GEM as a viable competitor in the PC world.
  • Apple also sued Microsoft in 1988 over Windows 2.0, but its claims were tabled because CEO John Sculley had earlier agreed to license certain Mac interface ideas to Microsoft for use in Windows 1.0 as a concession for continued development of Mac apps; the court upheld Microsoft’s claim that its deal with Apple allowed it to develop new versions of Windows unhindered by and without any licensing fees to Apple.
  • Apple’s litigation effectively helped to isolate Microsoft as the only viable competitor in the PC market for a graphical operating system, partly due to Sculley’s incompetence in management, and partly because Windows was such a bad copy of the Mac that Apple expressed more interest in stopping the more sophisticated copies being developed by others, including Digital Research.
  • Apple also threatened to sue NeXT after Jobs’ new company attracted talent from Apple interested in working on the latest new technology. That conflict was settled in a deal that pushed NeXT out of the consumer space, marginalizing the new technology NeXT developed and preventing competitive pressure from driving innovation and lower prices for Apple’s Mac products.
  • Atari and Commodore were similarly involved in litigation over technology from Amiga throughout the late 80s, which stifled the competitive efforts of both.

[Apple's Billion Dollar Patent Bluster: Patent vs. Copyright]

Apple's Billion Dollar Patent Bluster: Patent vs. Copyright
After being set back by Apple’s litigation on its GEM graphical front end, Digital Research later faced being completely shut out of the market by Microsoft’s Windows and its artificial ties to MS-DOS, which only got stronger in the release of Windows 95, which tied Windows and DOS together into a single product.

Meanwhile, Microsoft’s exclusive licensing agreements with PC makers also locked DR-DOS and IBM’s now independent OS/2 out of the market.

Microsoft then used its Office applications to push Windows on the PC as an alternative to the Mac, while holding up new releases of its Office applications for the Mac, the platform that originally put Microsoft into the business application arena.

Microsoft Bluffs a Losing Hand: 1990.
While all of the leaders in technology fought amongst themselves, an incompetent DOS vendor–with no proven ability to deliver any real new technology–was using its marketing skills to bluff its losing hand and clean up the table.

Once Microsoft finally delivered a usable version of Windows 3.0 in 1990, the company realized it could make more money licensing its Windows layer to DOS PC makers, allowing it to abandon its alliance with IBM.

Microsoft also realized it could use Windows as a weapon to destroy DR-DOS and other DOS competitors. While actually fully compatible with DR-DOS, Microsoft designed Windows 3.1 to warn users that using anything but its own MS-DOS might cause problems.

Microsoft’s DOS was no technical match for IBM’s superior solo effort on OS/2, Apple’s established Macintosh business on the graphical end, the commercial Unix running most workstation systems, or Digital Research in the DOS PC market, and was decades behind the state of the art demonstrated by NeXT. This technical problem was solved thorough clever marketing.

[1990-1995: The Rise of Windows NT & Fall of OS/2]

1990-1995: The Rise of Windows NT & Fall of OS/2
Microsoft’s Cairo Vaporware: 1991.
As a distraction, Microsoft announced “Cairo” in 1991 as its soon to be released new operating system. Wowed by Microsoft’s promise to deliver amazing new technology that would catapult it back into the running, the media celebrated Cairo and declared a great fearsome uncertainty upon vendors of existing products.

  • Apple continued development of a revised new System 7 for the Macintosh.
  • The Amiga and ST developed niche markets in video production, music, architecture, and desktop publishing.
  • IBM continued work on OS/2 as ‘a better DOS than DOS and a better Windows than Windows.’
  • NeXT focused its product at high end clients who knew better than to try to use DOS and Windows.
  • Digital Research continued working to develop DR-DOS and embedded versions.

[1990-1995: Microsoft's Yellow Road to Cairo]

1990-1995: Microsoft's Yellow Road to Cairo]
After announcing its Cairo operating system, Microsoft continued to push its existing Windows as a way to monopolize the DOS PC market. Meanwhile, Apple, IBM, Linux, and Novell began new efforts to compete against Microsoft’s monopoly position.

Next: things really get going in the 1990s:
[SCO, Linux, and Microsoft in the History of OS: 1990s]

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11 comments

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