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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 This slow computer was based on designs and technology that was years out of date - but it had one magic variable, the letters - I-B-M.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 piper).
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 the deal.(1) Gates 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 as well.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.
[Read IBM's choice, for a more detailed version whole story, or Gates a Genius for related articles]
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) -- they did not have 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 of his OS (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 event.
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 much less stinking 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.There were 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 System).
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 users.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 they ONLY offered MS-DOS (or Windows) -- no DR-DOS allowed. If they offered other peoples Operating Systems, on a SINGLE machine, 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 between ALL Microsoft Products, or NO Microsoft 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 time.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.
Post Mortem
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 destruction.
DR-DOS was later bought from Novell by Caldera and 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 that fair competition 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 the ONLY game in town. These people and companies have no intentions of creating quality products and competing fairly, they must win at ANY COST -- 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.
Links to further information: -
- Digital Research - the Untold Story
- Gary Kildall History
- MS-Hard-Ball
- Caldera Lawsuit, Caldera Website, OpenDOS
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