IBM and Microsoft settle over the OS/2 debacle
Ah closure..
Friday, July 1, 2005 by Frogboy | Discussion: WinCustomize News
WinCustomize.com is funded largely by software developer Stardock (whom I work for). Stardock, which today makes popular Windows enhancement and utilities software didn't start out that way. From 1993 to 1999 Stardock mostly made software for IBM's OS/2 operating system.
In those days, the "OS Wars" were very spirited and bitter at times. IBM and Microsoft were vying to be the successor to DOS. Microsoft's answer at the key moment was Windows 3.1. IBM's solution was OS/2. Windows obviously won, but when one looks at it in hindsight, one has to wonder how this occurred.
In 1993, users had two choices. They could run DOS + Windows 3.1 which was, to put it charitably, not very stable. Windows 3.1 could run Windows programs and it could run most DOS programs (though not games, for that, users would have to exit back to DOS to play them).
The second choice was OS/2. OS/2 could also run Windows programs. And it ran DOS programs far better than Windows could and in many cases, even better than DOS (because it could give DOS programs more "conventional" memory). Even DOS games ran under OS/2. On top of that, OS/2 had an object-oriented desktop shell called the Workplace Shell (which Windows 95 borrowed heavily from to make "Explorer"), had preemptive multitasking, protected memory, a flat memory model, an accelerated game environment called DIVE (before there was a DirectX), and could run true 32bit OS/2 programs which supported multithreading.
So how did OS/2 lose? OS/2 was so far in advanced of Windows at the time. It could run all the software Windows could run and then some. It was more powerful. It was faster. It was pushed by IBM. It was cheaper even. This is something Linux advocates should think about, btw. For all the touting Linux (or Mac) users give their respective OSes, it is unlikely that any OS will ever have as big of an advantage over Windows as OS/2 did in 1993. And yet it lost.
Again, how did OS/2 manage to lose out? The answer is complicated. For one thing, Microsoft was able to leverage the power of inertia and make special deals with OEMs. IBM had to license Windows for a set price from Microsoft. There were OEMs at the time who claimed that Microsoft was selling DOS 6 + Windows 3.1 to them for $10 and including Office with it if they agreed not to have any systems with OS/2. Meanwhile, IBM was supposedly having to pay Microsoft $20+ for each copy of OS/2 in licensing fees and IBM, operating under a previous anti-trust consent decree couldn't blatantly sell OS/2 at a loss like Microsoft was doing with Windows at the time.
By the time OS/2 was starting to pick up ground, Windows 95 had arrived and a year later, Windows NT 4.0 arrived which, while not quite as good as OS/2, was "good enough" and Microsoft had gotten the third party support through every effort they could think of (and every "effort" later got them into trouble).
So now IBM and Microsoft have settled their differences with Microsoft paying IBM $850 MILLION. I guess one has to wonder whether all those OS/2 ISVs who also suffered immensely could seek settlements. 
Reply #2 Friday, July 1, 2005 11:20 PM
MS may have won yet again, but will its customers or society ever benifit from its lions share of the market by beating competitors into the ground? Yes, the technology is made available to the world, but at what cost and to whom?
Reply #3 Saturday, July 2, 2005 4:04 PM
I think that the correct amount
Reply #4 Sunday, July 3, 2005 3:38 AM
The payment is large. But yeah, one has to wonder if that's a big hit or just chump change to them (MS). I'll question that bit until someone can accurately answer that for me.
OS/2 should've won... but had they won, I don't think Linux or Mac OS X would be where it is today. Maybe it's fate or maybe it's fortune. But IBM has invested some good R&D and development into helping Linux become a very good server OS platform. At the same time, one wonders if Apple could have thought up their innovations that far ahead had OS/2 been the dominant OS.
Well, you can bring up all the what-ifs and theories into this one. One thing is certain, it's good IBM is finally being compensated for the OS/2 losses. So what's next on the anti-MS (blindman/n00b style) agenda?
Reply #5 Sunday, July 3, 2005 12:18 PM
Reply #6 Sunday, July 3, 2005 11:26 PM
| WinCustomize.com is funded largely by software developer Stardock (whom I work for). |
Brad can't you just come out and say you OWN Stardock? After all you do...
Reply #9 Tuesday, July 5, 2005 11:59 PM
Reply #10 Sunday, July 10, 2005 9:49 AM
I work for one of those OS2 ISVs - Citrix. They've done pretty well for themselves, especially considering IBM pulled the plug on OS2 days before we were supposed to ship our first product. Adapt or die.
2nd comment is about BEOS. No doubt they were hurt by MS tactics, which are actually pretty common practice in every other industry I have worked in. But they also made some huge mistakes, namely not supporting developers at all - anyone wanting to develop for BEOS had to buy full price OS licenses and pay for any dev tools they needed. One way MS got to be a company that can afford to pay $850m is that they gave away a lot of software in the early days so there would be lots of Windows developers out there.
Anyway, my 2 cents
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Reply #1 Friday, July 1, 2005 10:28 PM