In the early 70's, there was a company known as Intergalactic Digital Research.
The name was just a little too geeky for even them, and was later shortened to
Digital Research. The founder, Gary Kildall, created the first Disk Operating
System for Microcomputers called CP/M (Control Program for Microcomputers). This
became THE operating system for hobbyist microcomputers. A few years later this
changed a bit (or was supplemented) when Steve Jobs and Steve Wozniak designed a
home computer that came prebuilt. It was a wild concept for the time, not having
to build your computer -- it was a wildly successful idea as well. The
micro(home)-computer bloomed from a small little hobby toy, into something that
many small businesses wanted and felt they needed. But there was still the other
group of CP/M builders and users.
CP/M and DOS
IBM wasn't about to let this "Personal" computer market pass them by. IBM
also wasn't about to respond too well, and threaten their huge Mainframe market.
So they created a little rogue subdivision to make a personal computer - without
many resources (for IBM) and without much time. This Boca Raton Florida group
was creating the IBM-PC. They started slapping together some off-the-shelf
parts, into an intentionally cheap to build and slow computer. IBM used one of
the most inferior processors of the time (the Intel 8088) because they didn't
want this little computer to compete with their mini computer and mainframe
markets -- which was where they made their money. They also chose Intel because
Intel would let them second source the 80x86 processor, and because of some IBM
stock options (of Intel). This slow computer was based on designs and technology
that was years out of date - but it had one magic variable, the letters - I-B-M.
IBM needed Software to run on it, and an Operating System. IBM could create
the Operating System - but it would take 5 years, and probably end-up some huge
over-documented time-sharing mainframe OS that would not run on the cheap Intel
processor they had. So the Boca Raton group shopped around. Outsourcing the OS
allowed IBM to create a computer much faster than otherwise, but also turned out
to be a Multi-Billion Dollar mistake. (Short term thinking is often costly, but
the decision makers are usually rewarded and long gone before it is time to pay
The head honcho of IBM happened to belong to same charity as Bill Gates
well-to-do Mom. So Microsoft got a chance to create the operating system for the
IBM PC. The other company in the running was Digital Research, but Digital
Research didn't know how to handle the legal aspects of nondisclosure agreements
and was scared of IBM. Gates had good lawyers and was a good liar, and so got
also got IBM to underestimate Bill's lawyers, and so Gates not only sold the OS
to IBM and got paid, but he also got to keep the OS for himself and sell it
separately. This non-exclusive ownership is a cushy deal -- getting a some other
company to pay for your R&D on a product you get to sell (and you get to compete
with the company that is paying your bills).
(1)There is a story
about how IBM first came to Microsoft and asked for them to write an OS,
Bill Gates said "Oh, No... see Digital Research for an OS. We don't compete
with our friends." Then, only after Digital Research blew IBM off (because
Gary Kildall was out flying his plane), did Gates consider making the OS.
Considering Bill Gates ruthless behavior in business and marketing, I find
this completely unlikely. It is also untrue on at least a few other levels
This Rumor exists because of Cringley's Book "Accidental Empires"
and the PBS series "Triumph of the Nerds" which is based on that book. Both
are interesting and worth viewing, but are also a little fluffy and
pro-Microsoft on this and other events. There are many other books and
stories on the same account that are more believable.
I've also heard rumors that the real reason that Kildall didn't get the
OS was because he was Blackballed because of some indiscretion/event between
him and an IBM exec's wife. Even though I've heard that rumor, and it seems
he was a "swingin' 70's" kind of guy, I have found nothing to confirm the
event. I mention it strictly as industry rumor, not to make any inference.
IBM's actions were so pro-MS and anti-DR that politics seemed to play a
part in it -- and I find the "Gates' Mommy" thing to be the most likely
motivater. But the truth is that for a while, CP/M was marketed as a product
for the IBM-PC. It just had to sell at a premium because they didn't have
IBM's backing (money) subsidizing development.
choice, for a more detailed version whole story, orGates
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Bill Gates and Microsoft had to come up with something fast - their prior
claim to fame was a mediocre implementation of an old language (called Basic) --
an OS. Gates had convinced IBM that their DOS was a work nearly complete and
almost ready for delivery -- so it was time to start work on the system. Instead
of doing the OS themselves (as they had said), they went to a neighboring
company who was working on a direct rip-off of CP/M (that wasn't that good a
rip-off either). This company was Seattle Computing and the product was QDOS
(Quick & Dirty Operating System). MS bought all the rights for $50,000 (or $40K
- $100K depending on who you talk to), and with a few changes the work was
complete. Microsoft had, for a song, IBM-DOS and MS-DOS 1.0 (the same products,
but different names).
Digital Research (Gary Kildall) was livid at the cloning ofhisOS
(and a cheap clone at that). Up to this point he felt that he and Gates were
Colleagues with a Gentleman's agreement not to go for each others markets.
Digital Research stayed out of Languages, and Microsoft stayed out of
Operating Systems. Gates going into the OS's market seemed to be treachery,
all the more so when Gates did it with a direct rip-off of CP/M. Gary tried
to suit for the intellectual theft, but MS's lawyers whined and got IBM's
Legal to take care of it -- who got the whole cloning thing blamed on
Seattle Computing. Since Seattle Computing hadn't made any real money on the
deal, DR was not going to get any reasonable damage award, and Digital
Research could not fight IBM. Both Microsoft's and IBM's lawyers were bigger
than Kildalls', and so he gave up in disgust. He decided to make the better
product and win with Quality -- but seems to have remained bitter about this
Digital Research lost the bid for making the Operating System for IBM, not
because of the quality of products, but instead based on politics, Bill Gates
lies, and legal maneuverings. But Digital Research still had the superior
product. Digital Researches' CP/M86 that was far better and had far fewer bugs
than IBM/MS-DOS. Digital sold their CP/M as competition to IBM and MS's DOS.
However, Digital Research wasn't subsidized by IBM, and so had to charge for
their OS --while IBM-DOS came bundled with the machine. Cheap is better than
good in America (in most cases) and CP/M86 didn't go anywhere despite being a
far superior product (and the original instead of the cheap buggy copy).
Windows and GEM
Gary Kildall had seen that GUI's (Graphical User Interfaces) were the way of
the future, and he decided to create one. He did his own research, and created
his own product, called GEM (Graphics Environment Manager). Microsoft saw what a
cool OS the Mac was, and was trying to emulate it -- and they also could never
allow Digital Research to succeed and have a product in the PC market. So Gates
started stealing other peoples research and ripping off other peoples designs,
and once again Bill Gates got IBM to subsidize most of Microsoft's development
costs for Windows (and OS/2).
Digital Research had already beat Microsoft to the punch. In fact Digital
Researches' GEM product was likely what motivated Bill Gates to make a similar
product. GEM was far better than anything Microsoft or IBM would deliver on the
PC for 6 years. So, once again, Microsoft fought dirty. Rather than creating a
superior product to GEM and competing fairly, they decided to resort to
marketing tricks, FUD and lies to destroy a superior product.
Microsoft convinced the public that they had a version of Windows that would
be far superior to GEM and would be delivered in "the next 6 months". This kept
GEM's sales down. No one wanted to buy GEM if Microsoft (the makers of DOS) was
going to have something better soon. Application developers didn't want to write
for GEM for the same reasons. 18 months later Microsoft delivered a cheap
version of Windows that was buggy and far from close to the quality and
usability of GEM, so version 2 was promised in another 6 months. Well surely
Microsoft would deliver the second time around, or so the sheep thought, and
developers and buyers stayed away from GEM. 18 months later Windows version 2
came out, and was still a buggy piece of shit. By this time the industry was so
sick of hearing about GUI's, and its promises that were never delivered, that no
one wanted to have anything to do with a GUI -- including GEM. No one bought GEM
or wrote Applications for GEM on the PC, because Microsoft kept lying and
telling people that their "far superior" version was just weeks away. Digital
Research couldn't afford to keep developing for a product that couldn't make
money, and it couldn't make money because MS kept defrauding the public.
About 3 years later Microsoft finally came out with Windows 3 that was so
than the last couple versions, that people bought it. In fact it was almost
equal to the first few versions of GEM. Microsoft had another brilliant (and
unethical) marketing ploy at the same time. They convinced developers that
they were going to do OS/2 development --and got almost the entire rest of
the industry to develop Applications for OS/2. All the while MS was making
Windows, and all the applications for it. Then, at the last minute, they
announced that their entire focus for the future was Windows (which IBM had
paid to develop) and not OS/2 as they had said, and that OS/2 was dead. By
the time other companies learned of Microsoft deceit and its "new focus", it
was too late. Windows 3.0 came out, and MS had the only applications that
would run on it (ported from their Mac version of those same Applications).
So MS captured the GUI market for PC's, and a big piece of the Application
Market, and destroyed many software companies in the process.
other GUI's out there long before Windows besides the Mac and GEM, including
Geo-Works and Visi-On -- so it wasn't only Digital Research that got driven
out of business.
DR-DOS vs. DOS
Gary Kildall was stubborn (or righteous). He had made the disk operating
system for these machines, and he wouldn't give up on that market. While all
this Windows-GEM stuff was going on, Microsoft had lost focus on DOS. But
Digital Research had not. They had kept adding features and functionality, and
changed the name from CP/M86 to DR-DOS (Digital-Researches' Disk Operating
It had been many years since Microsoft had done any (needed) improvements to
DOS. So when DR-DOS came on the market it was a success. It cost less to OEM's
who bundled the OS with their machines -- it did more for users, with more
features and fewer bugs. It was a great product. Microsoft's DOS market share
started to slip from the 90% level down to 80%. A large jump in a small amount
of time. Gates couldn't have that threat and competition, and rather than just
competing by making the best product, Gates again went to extraordinary levels
to win. Microsoft again started the marketing war -- with promises that the next
version of DOS would have more features than DR-DOS. But the industry was not
buying MS's FUD as freely as in the past. When MS delivered their product (and
IF), then people might switch back -- but for now there was a far better
product, and it was DR-DOS.
So Microsoft needed to fight REALLY dirty now -
First they played games with Windows -- remember, Windows ran on top of DOS,
and many people were using both together. So MS made versions of Windows
check to see if they were running on DR-DOS, if they were then Windows would
report warning messages that said something like "Warning Windows is only
Guaranteed to run on MS-DOS". This scared many users away from DR-DOS,
after all according to Microsoft it would not run "Windows". Of course there
were no technical reasons why Windows wouldn't run on DR-DOS, just
Microsoft's' thirst for complete control. Because it was so illegal the
released versions of Windows had this check removed -- but the public Beta's
of the product had those warnings, and that was enough to scare away most
Microsoft miraculously came out with an upgrade to DOS in no time.
Some say they unshelved it and hadn't offered an upgrade in years because
there was no reason to. I find this attitude a little too cynical even for
me. The first versions were very buggy (big surprise), but they did almost
achieve feature parity with DR-DOS. Either way, a lot of research money
started pouring into DOS and improvements, and MS was adding lots of
features, very quickly.
Some of Microsoft's applications suddenly stopped running right under
DR-DOS, coincidence I'm sure, and the final nails in DR-DOS's coffin were
almost in place.
To make sure that DR-DOS would not stand a chance in the marketplace,
Microsoft went out and changed their licensing fees for the OS's (DOS and
Windows). They were arranged in a way that distributors and manufacturers
got substantial "discounts" if theyONLYoffered
MS-DOS (or Windows) -- no DR-DOS allowed. If they offered other peoples
Operating Systems, on aSINGLEmachine,
they either had to pay for MS's operating systems anyway, or lose their
discount completely. This was a way to punish anyone that didn't sell 100%
MS-Products. This was much later ruled illegal and predatory pricing, and
Microsoft was forced (by the Justice Dept.) to change their licensing
practices, but not before the damage was done.
Microsoft again won in the marketplace, and again it was with an inferior
product. Manufacturers couldn't afford to bundle DR-DOS, even though it cost
less. Microsoft forced manufacturers into a choice betweenALLMicrosoft
products -- most could not afford to eliminate all MS-Products. DR-DOS's
reputation had already been harmed by MS's Apps and Windows not working
correctly, and MS-DOS was almost as good as DR-DOS now (at least to the unwashed
masses). So DR-DOS was killed.
Digital Research (Gary Kildall) was screwed, again -- and had a pretty tough
Gary Kildall was killed on July 11, 1994 at the age 52.
There are many conflicting stories as to how he died, many say that he
killed himself (or that was the industry rumors). It seems some were trying
to keep the story quiet, and that has only given the story credence. The
story I believe is that he was shot in a barroom altercation (that had no
relevance to anything else), and that everyone is keeping it quiet do to
some legal issues.
As I hear it, his personality had changed in the final years and he was
pretty broken and bitter. He would get rightly disgusted every time someone
gave Bill Gates credit for his work. Something about having his creations
repeatedly taken from him, and having someone else (Bill Gates) get the fame
and fortune for it (while he got screwed) was too much for him. But he was a
truly brilliant man, who most seemed to like, and who really did
revolutionize the microcomputer market. Unlike others, he did not just get
(and take) credit for other peoples work -- he actually contributed
something to humanity. He will be missed.
Digital Research was later bought by Novel for a song. Novel tried to turn
DR-DOS into a part of their Networking Operating System. However, Novel has the
"Septic-Touch". Every product or company that Novell buys will be turned to crap
in a few years. And so the Novell's' purchase guaranteed DR-DOS's complete
DR-DOS was later bought from Novell byCalderaand
DR-DOS was turned into "OpenDos", and has been put to pasture as a sorta public
domain product. Caldera is suing Microsoft over the whole destruction of DR-DOS
-- something that Digital Research couldn't afford to do, and Novell was scared
to do. (Novell had other arrangements with Microsoft over support for Novell
Networks from Windows -- when Novell started talking tough, Windows suddenly
stopped working with Novell networks -- completely by accident I'm sure. Novell
took the hint and backed down).
It is a disgusting testimonial to American ethics that superior products are
constantly crushed under the jack boot of bigger companies and inferior
products. Not that competition is bad -- when companies win by offering the
superior product (large or small). I would just claim those losses as "evolution
in action". What is sad is thatfaircompetition
is dead when being the biggest is not enough! Some ego's are so fragile that
they must not only be the biggest, they must also be theONLYgame
in town. These people and companies have no intentions of creating quality
products and competing fairly, they must win atANYCOST
-- and the costs to consumers have been high indeed. Think of how much
productivity has been lost, how many jobs and businesses have been destroyed,
how much time has been lost while superior products and companies have been
choked out of existence by marketing lies and inferior products. Think of the
ethics involved when we allow the bully to pick on anyone else with nary a
complaint, and kill them one at a time. I am not for govt. control of our
industry (or any industry) -- but I am ashamed at the actions of the consumers,
our media, and some of our businesses.