MS-DOS History

In 1980, when IBM was building its new personal computer code-named "Acorn", they needed an operating system and a computer language.
At the time one of the most successful computer languages for microcomputers was Altair BASIC, written by Microsoft, and the dominant operating system CP/M, a product of Gary Kildall's Digital Research.
In 1980, IBM approached Bill Gates to write BASIC for their new computer and approached Gary Kildall for the operating system.
Microsoft was only too happy to comply. They had already created a version of BASIC for the 8086, which had been displayed by Seattle Computer Products, a computer hardware company, at the 1979 National Computer Conference.
Legend has it, that when IBM first approached Digital Research, Kildall was out of the office flying one of his planes, and never met them. This was not strictly true - although he was out flying, he showed up for the meeting, a little late. He had a discussion with the IBM representatives on a flight back to their office in Florida. They never reached a deal. Kildall wanted more than the $200,000 IBM was willing to pay, to get a royalty-free license in perpetuity.
So IBM went to back to Bill Gates, and asked whether Microsoft could do the operating system as well.
At the time, Tim Paterson of Seattle Computer Products had written an operating system called "QDOS," an acronym for "quick and dirty operating system, for the 16-bit, Intel 8086 (according to Byte Magazine it was “thrown together in two man-months”). QDOS was in every important respect a clone of CP/M rewritten for the 8086.
Microsoft purchased the rights to QDOS from SCP for $50,000, and tweaked it so that it could run on the 8088. (The 8088 chip was a subset of the 8086 family and could run on the same software with minor alterations).
Gates sold DOS to IBM for $50,000 and persuaded them that he should retain the rights to license the system to other computer manufacturers.
The rest as they say is history. The ‘other computer manufacturers’ made the millions of PC clones, and had to buy a copy of MS-DOS from Microsoft for every PC they sold.
Kildall was furious. He claimed that DOS was a copy of all the best features of CP/M, but unfortunately software copyright law was not mature at the time, and there was precious little he could do about it.
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In 1981, Tim Paterson quit Seattle Computer Products and found employment at Microsoft.
In 1994, Gary Kildall, by now an embittered man struggling with alcohol, died in a Monterey bar from injuries sustained to his head. An inquest called the death "suspicious," but no one was charged.
An Inside Look at MS-DOS
The Dross of the DOS
The Man Who Could Have Been Bill Gates
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