The next chapter in this abbreviated history covers the period 1985 to 1990. This was when Microsoft and IBM both cooperated and fought over the future operating system for PCs. 1985 was when Microsoft brought out Windows 1.0, but this was merely a graphical interface for DOS. The PC needed a new operating system to take advantage of Intel’s new chip designs. This was meant to be OS/2 and a co-developed graphical interface called Presentation Manager. Microsoft simultaneously worked with IBM on OS/2 and Presentation Manager, while also beavering away on new versions of Windows. Windows 3.0 came out in 1990, by which time the Microsoft/IBM alliance was really at an end. It was a huge opportunity for Microsoft. Although most observers felt that the Apple Macintosh had a better graphical interface, the PC was cheaper and already had the lion’s share of the business market. Microsoft had little difficulty in establishing Windows as the de facto standard for GUI applications on the PC, and in the ensuing scramble to migrate applications from DOS, Microsoft managed to grab the market share for its own products, particularly with the Office suite of Word, Excel, and later on Access. In 1995 Microsoft sealed its PC dominance with the introduction of Windows 95. Amazingly, Windows 95 combined 32-bit multi-threaded computing with excellent DOS compatibility. For sure, in some ways it was a house of cards and far less stable than Unix, OS/2, or for that matter Windows NT, but if you consider Windows 95 as a combination of marketing, design and compatibility, it was really very good. At that point it was hard to see how Microsoft could ever be challenged on the desktop.

It’s worth noting though that even at this stage, Microsoft’s dominance was only in a narrow, albeit profitable field. You were likely to be looking at a Windows desktop, but behind it lay a Novell network, or an Oracle database, or a link to an IBM mainframe. Still, it was good business for Microsoft; and the company was gradually extending its reach in other areas too. Windows NT was its grown-up server operating system, first released in 1993, was becoming popular by 1995. SQL Server is the Microsoft client-server database, running only on Windows NT, with constantly increasing market share, although well behind Oracle and IBM. With the PC rapidly becoming more powerful, the future must have looked very bright from Redmond. Windows NT would gradually encroach more and more into minicomputer territory, Microsoft Office would continue to be the primary application for office productivity, and competitors such as Novell, Adobe, Lotus and Apple had nowhere much to go.

Problems for Microsoft

Of course it wasn’t that simple. The face of computing has changed markedly since 1995, and Microsoft is more vulnerable. I’ll quickly identify some of the main factors.

1. The Internet

First, the Internet happened. It was already there, but in 1995 its significance wasn’t so obvious. Microsoft aimed to tempt people away from the dangerously open world of HTML into the safe proprietary haven of MSN, the Microsoft Network, which had its own system for handling internet documents, multimedia, discussion groups and more, all subscription-based. However, MSN never took off, and people much preferred the chaotic, open, free diversity of the Internet, increasingly viewed through Netscape’s Navigator web browser. Microsoft moved quickly, scrapped MSN, and built Internet Explorer into the heart of Windows, well, sort-of. Netscape was defeated, but the Internet had all sorts of other consequences for Microsoft. For starters, it was born and largely runs on Unix.

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