CP/M: From Z80 to 8086
In 1974, Gary Kildall demonstrated an operating system called CP/M in a backyard workshop in Pacific Grove, California. Within a decade it was the standard software running the microcomputer business - and within another two years, the company that built it had lost the operating system contract that defined the next thirty years of computing to Microsoft.
This video follows that history chip by chip and company by company. Kildall's CP/M split into a fixed core and a swappable hardware layer, letting it run on incompatible machines from different manufacturers - which is why the Osborne 1 (3 April 1981) and the Kaypro II (20 May 1982), both built around the Z80 processor, could both run it. A retail trade in boxed floppy-disk software, including WordStar and dBASE II, grew up around CP/M's shared interface.
Then Intel's shift to 16-bit processors - the 8086 (1978) and the cheaper 8088 (1979) - pushed the industry toward machines CP/M had not been built for. In 1980, IBM approached Digital Research about an operating system for its secret Project Chess personal computer. The meeting that followed, on 22 August 1980, did not produce a deal: Dorothy Kildall balked at IBM's non-disclosure agreement, and the circumstances of that day remain disputed in the historical record, which this video treats as disputed rather than settled.
IBM went to Microsoft instead. Microsoft licensed, then bought outright, an operating system called 86-DOS from Tim Paterson at Seattle Computer Products - itself modelled closely on CP/M's own published interface - and supplied the result to IBM as PC-DOS. When the IBM PC launched on 12 August 1981, PC-DOS cost $40 against CP/M-86's $240, and Digital Research's own version for the IBM PC specifically did not arrive until April 1982, eight months later. Pricing, timing and the relationship IBM had already built with Microsoft combined to hand the PC operating system market to Microsoft by the mid-1980s.
No figure appears without its date and source.
Educational documentary. Not financial or investment advice.
In these topics
Tags
Chapters
- A world with no shared operating system
- Kildall builds CP/M
- The idea that let one system run on incompatible hardware
- The clone explosion
- The software and disk economy
- Intel moves to 16-bit
- IBM approaches Digital Research
- The meeting that didn't happen
- Microsoft buys 86-DOS
- The IBM PC ships, August 1981
- CP/M-86 arrives too late
- Why Digital Research lost
Sources and credits
Photo credits (Wikimedia Commons)
- Gary A. Kildall historical plaque, 801 Lighthouse Avenue, Pacific Grove, California - site of Digital Research's origin: Piotr J. Flatau, Public domain - https://commons.wikimedia.org/wiki/File%3AKildall_801lighthouse.jpg
- Adam Osborne posing with the Osborne 1, Oakland Tribune press photo, April 1981: Bill Crouch (-1998), Public domain - https://commons.wikimedia.org/wiki/File%3AAdam_Osborne_and_Osborne_1.jpg
- IBM 5150 Personal Computer with IBM 5151 monochrome display and keyboard: Vintageibmmt, Public domain - https://commons.wikimedia.org/wiki/File%3AIBM_5150_PC.JPG
- Period 8-inch and 5.25-inch floppy disk drives (Qume, Tandon), early 1980s: Swtpc6800 en:User:Swtpc6800 Michael Holley, Public domain - https://commons.wikimedia.org/wiki/File%3AFloppy_Disk_Drives_8_5_3.jpg
Primary sources
- ETHW, 'Milestones: The CP/M Microcomputer Operating System, 1974' (accessed 4 Oct 2026) - fall 1974 demonstration, Pacific Grove backyard workshop, John Torode, Intel 8080.
- Wikipedia, 'Digital Research' and 'Dorothy McEwen Kildall' (accessed 4 Oct 2026) - 1974 incorporation, co-founded by Gary and Dorothy Kildall.
- Computer History Museum archive, CP/M source materials (accessed 4 Oct 2026) - the BDOS/BIOS split, from CP/M v1.4.
- Wikipedia, 'Osborne 1' (accessed 4 Oct 2026) - shipped 3 April 1981, Z80, CP/M, $1,795 launch price.
- dfarq.homeip.net, 'Kaypro II launched May 20, 1982' (accessed 4 Oct 2026).
- Wikipedia, 'WordStar' and 'dBASE' (accessed 4 Oct 2026) - CP/M releases, 1978 and 1980.
- Wikipedia, 'Intel 8086' and 'Intel 8088' (accessed 4 Oct 2026) - 1978 and 1979 releases.
- Wikipedia, 'Gary Kildall' (accessed 4 Oct 2026) - Project Chess, the IBM approach, the 22 August 1980 meeting.
- IEEE Spectrum, Bob Zeidman, 'Did Bill Gates Steal the Heart of DOS?', 31 July 2012 (accessed 4 Oct 2026) - the disputed Kildall-whereabouts story, Jack Sams's account.
- The Digital Antiquarian, 'The IBM PC, Part 2' (accessed 4 Oct 2026) - IBM's Boca Raton, Florida development site; corroboration of the disputed-meeting account.
- Wikipedia, 'Tim Paterson' and '86-DOS' (accessed 4 Oct 2026) - QDOS begun April 1980 at Seattle Computer Products, modelled on CP/M's published interface; Microsoft's December 1980 $25,000 license and 27 July 1981 $50,000 outright purchase.
- Windows Central, 'Microsoft bought MS-DOS... July 27, 1981' (accessed 4 Oct 2026) - corroborating the purchase date and figure.
- The Register, 'The IBM PC on 12 August 1981' (accessed 4 Oct 2026) - launch date, PC-DOS $40 vs CP/M-86 $240.
- Wikipedia, 'CP/M-86' (accessed 4 Oct 2026) - CP/M-86 released November 1981; IBM PC version available April 1982.
Not regulated financial advice.