Microsoft – From David To Goliath Essay, Research Paper

The electronic computer has been around for over a half-century, but its ancestors have

been around for 2000 years. From abacus to our modern souped up computer with the

Intel Pentium III processor the computer has come an incredibly long way. One of the

most significant events that would affect it?s development would be the teaming up of

IBM and Microsoft to create a new operating system for the microcomputer. The synergy

of these two corporations would change the way we compute today. The noteriety from

this partnership would propell Microsoft into the forefront of sofware design and

development and create an industry standard to be followed by all.

In July of 1980 IBM, a $30 billion dollar giant in the computing industry, offered

Microsoft Corporation, who at the time consisted of a staff 40 (Cashman, 1.37), the

opportunity to design a new operating system for their new IBM ?personal? computer.

IBM had observed an increased market for the personal computer for quite some time

eventhough they had already failed once trying to tap the market with their IBM 5100.

IBM had considered several options regarding the development of their new personal

computer including buying a little known computer game company named Atari. In the

end, IBM decided that they would proceed with their plans to build a new computer line

with a new operating system. On August 12th, 1981 IBM introduced a new computer

called the IBM PC. The ?PC? was short for ?personal computer? making IBM

responsible for the acronym ?PC? (?Inventors?).

Microsoft bought the rights to the another operating system called Q-DOS (Quick

and Dirty Operating System) from Seattle Computer Products for $50,000 without the

company ever knowing that it was for the behemoth IBM (Delany). Bill Gate?s of

Microsoft would talk IBM into allowing his company to retain the rights to market the

MS-DOS (MicroSoft Dirty Operating System) operating system separate from the IBM

PC project. In the agreement IBM would be allowed to use the operating system free of

charge while Microsoft would ?sell? licenses to use the operating system to other

computer manufacturers. By 1984 Microsoft had licensed MS-DOS to 200 personal

computer manufacturers, making MS-DOS the standard operating system for personal

computers and driving Microsoft’s enormous growth in the 1980s that would lead to huge

profits for Microsoft.

After the introduction of the personal computer, sales skyrocketed from 275,000

in 1981 to 3,275,000 in 1982 (Cashman, 1.52). Every software manufacturer would begin

to make their software compatible with Microsoft?s operating system. It would now

become every computer manufacturers goal to make the PC as user friendly and

affordable as possible and nearly every computer manufacturer would accomplish this by

the 90?s. Computers would soon be in our homes and schools as well as our businesses.

In 1982 Microsoft would begin to develop business applications for personal

computers and Multiplan, a spreadsheet application, was introduced. Microsoft would

follow in 1983 with it?s release of Microsoft Word, a wordprocessing application. It was

also in 1983 that Microsoft would start developing the multi-windowed enviroment we

now know as Windows (Microsoft Corporation).

Microsoft did not rest on their laurels. In 1984 Microsoft would be one of the few

software developers to support the Macintosh, a personal computer developed by Apple

Computer Company. Their support of the Mac would result in enormous success of their

Word, Excel and Works application software. Multiplan for MS-DOS would succumb

to the popularity of another application heavy hitter Lotus 1-2-3, developed by the Lotus

Development Corporation which would be acquired by IBM in the 1990?s (Microsoft


In 1985 Microsoft would introduce it?s first version of Windows, a graphical user

interface, (GUI) that enhanced the user friendliess of MS-DOS. A GUI combines text,

graphic, and other visual clues to make software easier to use (Cashman, 1.38). Windows

allowed the user to open applications by clicking on pictures or icons instead of typing

long tedious strings of file names within various paths. Critics wondered if the GUI

would ever catch on but Microsoft perserveared eventhough Windows was slow to gain

acceptance. In 1990 a new improved Windows version 3.0 was introduced. Aided with

more powerful processors and a greater variety of software and pumped up with a $10

million advertising promotion Windows would sell more than 4 million copies in one

year. Microsoft would introduce a networking version of Windows called Windows NT.

This would become the most popular version of the Windows products in the world

commanding more than 25 million users worldwide (Cashman, 1.37).

A recent survey by the U.S. Census Bureau published on September 1999

indicates that there almost 37.5 million computers in the home in the United States as of

October 1997(?Computer?, U.S. Census). Schools that have computers make up a

combined total of more than 8 million (?Computer?). Almost ninty percent of personal

computers sold in the United States and around the world use a Microsoft operating

system (Cashman). With a ninty percent market share of operating systems Microsoft is

dominating the industry here and abroad. It?s quite a magnificent accomplishment

considering the meager beginnings. It?s no wonder Microsoft is the computer industry

giant setting the standards for other software developers around the world.


Cashman, S., Shell, G., Vermaat, M., and Walker, T. (1999).

Discovering Computers 2000 – Brief Addition. Cambridge:

International Thomson Publishing.

?Computer Use in Schools, 1984-1985 and 1997-1998? Market Data

Retrieval, Shelton, Conn.. 15 Oct 2000

?Computer Use in the United States? Sept 1999 21 Oct. 2000

Delany, Frank. ?History of the Microcomputer Revolution – Segment 12 – Deal of the


3 May 1995. 14 Oct. 2000

?Inventors Of The Modern Computer Operating Systems MS-DOS, Microsoft – Tim

Paterson – Gary Kildall? 4 Nov. 2000

“Microsoft Corporation,” Microsoft? Encarta? Online Encyclopedia 2000

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