Microsoft DOS and Windows a Timeline

The operating system that built Microsoft was not written by Microsoft. It was written by Tim Paterson at Seattle Computer Products, and Microsoft acquired it in two payments: a flat fee of USD 25,000 in December 1980, then all rights for an additional USD 50,000 in the summer of 1981. USD 75,000 in total.

The engineering was competent and unremarkable. What was remarkable was a clause: Microsoft retained the rights and licensed the system to other computer manufacturers, calling it MS-DOS.

And because IBM had built its personal computer out of parts anybody could buy and published the circuit designs, there turned out to be an enormous number of other manufacturers. IBM made the market open. Microsoft owned the one part of it that was not.

That is the first thing this film is about: the decisive asset was contractual, not technical.

The second is a pattern. Once you own the operating system, the threat is never another operating system. It is whatever sits on top of yours and makes it interchangeable — a layer above your layer, that the user deals with instead of you. That threat has arrived four times.

The first time, Microsoft built the layer itself: Windows, shipped 1985, running on top of DOS, and by version three in 1990 the relationship had inverted — Windows was what you bought and DOS was the plumbing underneath. A company that replaced its own primary product while owning both ends.

The second time, somebody else built it. The browser ran on any operating system, which would have made Windows interchangeable, and Microsoft's own word for the danger was middleware. It built a competing browser, gave it away, and integrated it into Windows. Commercially that worked. Legally, on 18 May 1998, the United States filed suit.

This film gives all four stages of that case, because any one quoted alone is false to the record: conclusions of law on 3 April 2000 (monopoly illegally maintained); the remedy on 7 June 2000 (separation into two companies); the Court of Appeals on 28 June 2001, which affirmed the monopoly-maintenance finding, reversed attempted monopolisation, remanded the tying claim and vacated the breakup; and the revised proposed final judgment of 6 November 2001, with no restructuring. Microsoft was not broken up. Microsoft did not win.

The third time, the layer left the machine altogether and went into a pocket — and the same mechanism that had made Windows untouchable on the desk excluded Microsoft from the phone. This chapter carries no market-share figure, because none was traced to a primary source.

And the accounts say why. In the quarter reported 29 July 2026, Intelligent Cloud was USD 39.306 billion, up 32 per cent, with Azure up 43. More Personal Computing, the segment containing Windows, was USD 12.854 billion — down 4 per cent, the smallest of the three and the only one shrinking.