Microsoft in the 1980s
In the 1980s, Microsoft emerged as a pivotal player in the software industry, evolving from its foundational work on BASIC interpreters to becoming the largest software company globally. Founded by Bill Gates and Paul Allen, originally as Micro-Soft in 1975, the company relocated to Seattle and rebranded as Microsoft in 1981. The key turning point came with their acquisition of the Quick and Dirty Operating System (QDOS), which they developed into MS-DOS, licensed to IBM for the IBM PC. This relationship propelled Microsoft into the spotlight as MS-DOS became the standard operating system for numerous PC clones.
Throughout the decade, Microsoft endeavored to innovate beyond MS-DOS, exploring graphical user interface technologies influenced by Xerox and Apple. The release of the first version of Windows in 1985 marked this shift, though it did not gain immediate traction. It was not until the launch of Windows 3.0 in 1990 that Microsoft found significant success with a GUI-based operating system. Additionally, the company diversified its offerings by developing Microsoft Office and network products, further solidifying its position in the industry. Overall, the strategies and developments of Microsoft in the 1980s set the stage for its dominance in the software market and transformed the user experience of personal computing.
Microsoft in the 1980s
Identification American software company
Date Founded in 1976; incorporated under the name Microsoft in 1981
In 1988, Microsoft passed Lotus to become the largest software company in the world. It achieved its phenomenal growth during the 1980’s by using a business model that revolutionized the computer industry. The company entered into advantageous strategic partnerships, bought smaller companies whose intellectual property was necessary to complete major Microsoft products, and hired the best employees available to develop software that customers wanted.
In 1975 in Albuquerque, New Mexico, Bill Gates and Paul Allen developed a BASIC interpreter for the MITS ALTAIR microcomputer. Later in the 1970’s, they founded Micro-Soft to produce BASIC interpreters for a number of microcomputers. Steve Ballmer joined the team in 1980; a canny executive whose business acumen was important to Microsoft’s success, he would succeed Bill Gates as president in 1988. The company founders changed the name of their venture to Microsoft in 1981 and moved it to Seattle, Washington.
Gates and Allen decided to expand beyond concentrating solely on computer languages. They purchased the Quick and Dirty Operating System (QDOS), developed in 1980 by Tim Peterson. Microsoft added some features to QDOS and renamed the resulting operating system MS-DOS. In 1981, Microsoft licensed a version of its DOS operating system, PC-DOS, as well as a BASIC interpreter, to International Business Machines (IBM). PC-DOS became the operating system of the IBM PC. The success of the IBM PC platform resulted in many clones being developed by other companies. Microsoft provided MS-DOS for over fifty of these clones by 1982. The total sales of MS-DOS, added to the large PC-DOS sales, launched Microsoft on the road to becoming the largest software company in the world.
Microsoft was interested in marketing a more advanced operating system than MS-DOS, so the company ported to microcomputers a version of UNIX, developed by American Telephone and Telegraph (AT&T). During the early 1980’s, Microsoft licensed this operating system—XENIX—to IBM, Intel, and SCO. Rather than making XENIX its operating system of the future, however, Microsoft opted during the remainder of the 1980’s to develop several other operating systems, including OS/2, Windows, and Windows NT.
Windows
Microsoft was impressed with the XEROX Alto computer, which featured a graphical user interface (GUI) and was developed in 1981. Apple Computer, which was also impressed by Xerox’s innovations, visited the Xerox Palo Alto Research Center (Xerox PARC) and secured permission to utilize some of Xerox’s ideas and technology in its products. Microsoft, in turn, licensed some of the elements of Apple’s GUI (then under development for the Apple Macintosh computer) to use in its own products.
Microsoft released the first version of Windows in 1985. A second version followed in 1988. Version 2 of Windows featured overlapping windows, an element of the Apple GUI that Microsoft had not explicitly licensed. This prompted Apple to sue Microsoft. (Apple would eventually lose this lawsuit, based primarily on the fact that it had licensed some of its technology to Microsoft.) However, neither Windows 1.0 nor Windows 2.0 generated much excitement in the marketplace. With lessons learned from developing OS/2’s Presentation Manager, as well as software for the Mac, Microsoft released Windows 3.0 in 1990, finally achieving significant popularity and success with a GUI-based operating system.
Microsoft began working with IBM in 1985 to develop OS/2 for IBM to install on the PS2. The two companies publicly announced their joint venture in 1987. The partnership did not work well, however, and Microsoft dropped support for OS/2 in 1990, when Windows 3 proved to be successful.
Microsoft began development of Windows NT (new technology) in 1988. Windows up to that time had run on top of DOS, and the company decided it was time to replace the low-level operating system with a more advanced architecture. The shape of this new architecture was defined by Dave Cutler, former architect of the VMS operating system for VAX mainframes. Microsoft hired Cutler in 1988. In 1991, the company hired Richard Rashid to join the project. Rashid had developed the Mach kernel for UNIX, and he added a microkernel to Windows NT, making it very efficient. Windows NT was released in 1993 as the operating system of the future and was an immediate success.
Other Items
Microsoft developed a number of network products during the 1980’s. The NetBIOS network protocol was developed by Sytec in 1983 for IBM and Microsoft. This broadband local area network (LAN) used proprietary Sytec protocols on the IBM PC network. LAN Manager was initially developed in 1987 as a network to use with OS/2. Microsoft, in cooperation with 3COM, continued to develop LAN Manager after the OS/2 project was canceled. In 1990, Microsoft included much of the LAN Manager technology in Windows NT.
Microsoft Office was also developed during the 1980’s. The first version was released for Apple’s Mac in 1989; the first version for Windows followed in 1990. Office combined a series of different applications with different development histories in a single package. Microsoft had developed its first application, during the early part of the decade: a spreadsheet called MultiPlan, released in 1983. In the same year, Microsoft put together a team, led by Richard Brodie, that produced Microsoft Word for XENIX, DOS, and the Mac. During the early 1980’s, Microsoft developed Chart and File for the Mac, and these were later included in Office. Microsoft Works, a junior version of Office, was released in 1986. In 1987, Microsoft purchased Forethought Incorporated, the company that developed PowerPoint, and added this product to its inventory. Also in 1987, Microsoft announced Excel as an upgrade of Multiplan for Windows. In 1988, Microsoft and Ashton-Tate began work on a relational database, Microsoft SQL Server, based on a relational database management system licensed by Microsoft from Sybase and enhanced by Microsoft and Ashton-Tate. The first version was released in 1989.
Impact
The software that Microsoft developed during the 1980’s revolutionized the computer industry by demonstrating that a company could be a success if it specialized in computer software. During the 1980’s, Microsoft became increasingly profitable and powerful, growing to become an international company with facilities in Ireland, Mexico, and elsewhere. As personal computers and microcomputers became increasingly ubiquitous, Microsoft’s operating systems came to define many people’s experience of those computers. Indeed, both Microsoft’s greatest supporters and its greatest detractors agree on this point: For the majority of casual users, Microsoft Windows defines the possibilities and limitations of the human-computer interface. It was the company’s growth and strategies of the 1980’s that brought it to such a dominant position in the industry.
Bibliography
Manes, Stephen, and Paul Andrews. Gates: How Microsoft’s Mogul Reinvented an Industry—and Made Himself the Richest Man in America. Carmichael, Calif.: Touchstone Press, 1994. Biography of Bill Gates, focused on his professional career.
Tsang, Cheryl. Microsoft: First Generation. Somerset, N.J.: John Wiley, 1999. Description of the twenty-five-year development of Microsoft.
Wallace, James, and James Erickson. Hard Drive: Bill Gates and the Making of the Microsoft Empire. Carmichael, Calif.: HarperCollins, 1993. Account of how Microsoft developed as a company.