A discussion of the different versions of Windows cannot be complete without also talking about DOS. This is because early Windows versions were an add-on or extension to DOS, and actually required DOS to be preinstalled on a system in order to run. Later Windows versions included DOS internally, which was gradually minimized until virtually all of the legacy 16-bit DOS and Windows code was replaced by entirely new 32-bit and 64-bit code in Windows NT, Windows 2000, and later.

Before Windows existed, MS-DOS was the most popular operating system for PCs, and DOS continued to be the most popular OS from 1981 when the PC was introduced until well after 1995 and the appearance of Windows 95. All versions of Windows before Windows 95 actually required MS-DOS to be preinstalled on the system because many of those earlier versions of Windows were more of a DOS graphical user interface extension than a complete standalone operating system. And although Windows 95, 98, and Me were sold as standalone operating systems (no prior DOS required), they actually included MS-DOS and used portions of 16-bit DOS code. Windows 95 included MS-DOS 7.0, Windows 95B and 98 included MS-DOS 7.1, and Windows Me included MS-DOS 8.0.

Windows NT was the first truly standalone fully 32-bit version of Windows that wasn't based on MS-DOS. Because Windows 2000 and XP are the successors of Windows NT, they are also not based on MS-DOS or 16-bit code in any way.

Even though later versions of Windows aren't based on MS-DOS or include 16-bit code in the internal workings, in many ways DOS still plays a role in running certain diagnostic or utility programs, or especially when partitioning and formatting certain types of disks and drives. For example, when you format a floppy disk as a bootable "system" disk in Windows XP by checking the Create an MS-DOS Startup Disk option, Windows XP automatically copies the MS-DOS 8.0 system files to the disk at the completion of the formatting process.

Evolution of DOS

When the IBM PC was announced on August 12, 1981, IBM indicated that three operating systems would be available for their new PC. They were

• IBM Personal Computer Disk Operating System ($40)

• Digital Research CP/M-86 ($240)

• SofTech USCD p-System w/Pascal ($695)

Of those three operating systems, only the IBM Personal Computer Disk Operating System (normally abbreviated as PC DOS, or just DOS) was immediately available. The other two operating systems weren't available until several months later, and were priced significantly higher as well. As you can imagine, due to both availability and price, it was pretty clear that the PC DOS operating system would be the one used by most people on their new PCs.

Although PC DOS was marketed and sold by IBM as an IBM product, most people know that Microsoft actually supplied the core code of PC DOS to IBM in the form of MS-DOS. What many people don't know is that Microsoft first licensed, and then purchased MS-DOS from another company called Seattle Computer Products. One could say that Seattle Computer, Microsoft, and IBM were all intimately involved in the early development and evolution of DOS; however, when you go back far enough, PC DOS owes its existence primarily to one man.

From 1978 through 1980 Tim Paterson worked for a small company called Seattle Computer Products (SCP) developing computer hardware and software products. In June of 1978 Intel introduced the 8086 processor, and shortly thereafter Paterson designed an S-100 bus computer system using the 8086 for SCP. The hardware consisted of three S-100 cards; a CPU card, CPU support card, and a memory card. These cards were designed to be installed in an S-100 chassis, and would then operate together as a complete 8086 computer system.

At that time Microsoft's BASIC-80 (Beginners All-purpose Symbolic Instruction Code for the 8080 processor) was one of the most popular programming languages for microcomputers, so it was only natural to port that language to the new 8086 processor. In May 1979 Paterson spent a week at Microsoft working with a programmer named Bob O'Rear to port Microsoft BASIC-80 to the new SCP 8086 system. The result was Microsoft BASIC-86, one of the first software packages available for the 8086 processor. BASIC-80 and BASIC-86 were unique at the time in that they included a built-in File Allocation Table (FAT) file system originally written by Bill Gates. This meant that they could run standalone; that is, with no operating system or other software required. Both the 8086 computer system and Microsoft BASIC-86 were completed and sold by Seattle Computer starting in November 1979.

While BASIC-86 would run standalone on the new 8086 computer, other languages would require an operating system in order to run. At the time Microsoft had been selling FORTRAN and COBOL for CP/M systems using the Intel 8080 processor, and it wanted to port those operating systems to run in the 8086 like BASIC. Unfortunately that would not be possible without an operating system.

At the time, Digital Research's CP/M (Control Program for Microcomputers) was by far the most popular operating system for microcomputers, and everybody including Microsoft and SCP expected Digital Research to port CP/M over to the new 8086 processor. Unfortunately Digital Research was taking too long, so in April of 1980 Paterson got tired of waiting, and decided to write his own DOS for the 8086, calling it QDOS for Quick and Dirty Operating System. QDOS 0.11 was first released by Seattle Computer Products in August 1980. Paterson continued improving and refining QDOS, which SCP renamed 86-DOS and released in December 1980 as 86-DOS 0.33.

During the summer of 1980 IBM began working on Project Chess, which was the codename for the top-secret IBM PC project. Needing software for its new machine, IBM approached Microsoft to provide BASIC (Beginners All-purpose Symbolic Instruction Code), FORTRAN (FORmula TRANslation), and COBOL (COmmon Business Oriented Language) for the PC. However, before IBM would divulge the details about the secret project, it required that Microsoft sign a very strict non-disclosure agreement. Once the agreement was signed, IBM discussed details about the new system. Original plans apparently called for an 8-bit processor; however, Bill Gates pushed for IBM to use the new 16-bit Intel 8086 instead, which would allow access to up to 1GB of RAM instead of the 64KB limit imposed by 8-bit processors. IBM ended up settling on the Intel 8088, which was essentially a lower-cost version of the 8086 that ran 8086 software.

Then the discussions turned to an operating system. Microsoft knew that BASIC-86 could run standalone on the new system, but Microsoft's other languages were designed to run under Digital Research's CP/M-80 operating system. IBM asked Microsoft if it could provide an OS as well, but that was a major undertaking, and Microsoft knew that Digital Research had already been working on CP/M-86. If DR could provide CP/M-86, then Microsoft could port its languages over and meet the tight IBM deadlines. So Microsoft told IBM to visit Digital Research and talk to them about CP/M-86 for the new PC.

Legend has it that when IBM went to visit Digital Research, Gary Kildall (the author of CP/M and principal of the company) stood them up and was out flying his plane. The truth is that Kildall was more of a programmer than a businessman, and he usually left his wife Dorothy McEwen in charge of any business dealings at DR, and the IBM meeting was no exception. The problem wasn't Kildall's presence so much as it was the restrictive non-disclosure agreement. When IBM presented DR with the same non-disclosure agreement that Microsoft had already signed, McEwen and the DR attorneys thought that the terms of the agreement were too strict and they refused to sign. Without a signed agreement, IBM could not divulge any information about their secret PC, so the deal with DR for CP/M-86 was essentially dead in the water.

At this point Microsoft realized that any delays in IBM finding an operating system for the new PC could give IBM reason to cancel the entire project, and consequently Microsoft's deal to provide the languages. In late September of 1980 Microsoft principals Bill Gates, Paul Allen, Steve Ballmer, and Kay Nishi met and decided that they should take the risk and try to provide not only the languages that IBM wanted for the new PC, but also the operating system as well. The problem was that they didn't have the time or manpower to develop a completely new operating system from scratch along with porting over their languages. Microsoft knew it needed a ready-made 8086 operating system, and from their past dealings with Tim Paterson at Seattle Computer Products, they knew just where to get one.

Microsoft made a call to SCP and quickly licensed 86-DOS for unlimited use by a "secret customer" for a one-time fee of $25,000, and in turn licensed the DOS to IBM for a one-time unlimited use fee of $80,000. Although this made a profit for Microsoft, to IBM this was quite a bargain, and would allow IBM to charge a relatively low fee for the operating system to its customers. In consideration of the low license fee, Microsoft bargained to retain the rights to license the operating system to other manufacturers as well. Microsoft believed it could make MS-DOS the industry standard for all PCs based on the 8086 or 8088 processor, and this type of deal would allow Microsoft to retain control over DOS. IBM and Microsoft signed what would probably become the most important deal in computer history on November 6, 1980.

Paterson continued work on 86-DOS at SCP, while at Microsoft Robert O'Rear took the code from Paterson and began modifying it to work on the prototype PC they had been sent. In April 1981 SCP released 86-DOS 1.0, and the very next month Paterson left SCP and was hired by Microsoft to work full time getting 86-DOS ready for Microsoft's still-secret customer. Although there were suspicions, it wasn't until Paterson arrived for work at Microsoft that he knew for sure the secret customer was IBM. Now at Microsoft, Paterson worked once again with Bob O'Rear, cleaning up the code and fulfilling IBM's demands for quality and features. They worked closely with several people at IBM, including David Bradley who was responsible for writing the ROM BIOS code used in the PC. Paterson and O'Rear finished the core of what IBM would call the Personal Computer DOS (also called PC DOS) 1.0 in July 1980. IBM also wrote several additional utility programs to go with DOS 1.0, including the MODE, COMP, DISKCOMP, and DISKCOPY commands, as well as several demo programs in BASIC.

On July 27, 1981 (just over 2 weeks before the IBM PC and the new DOS would be officially introduced) Microsoft decided it would be best if it closed up any loose ends by purchasing 86-DOS outright from SCP for $50,000, thus giving Microsoft full ownership. One condition of the sale was that SCP could retain a perpetual royalty-free license to MS-DOS for themselves. This license would later result in a legal battle that was eventually settled in 1986, with Microsoft paying SCP another $975,000 to purchase that license back. This meant that Microsoft essentially paid SCP just over $1 million dollars total for full ownership of MS-DOS, a very wise investment when you consider that in June of 1986 Microsoft estimated that half of their $61 million annual revenue came from MS-DOS licensing. MS-DOS licensing eventually turned into a multi-billion dollar cash cow for Microsoft.

The IBM PC and PC DOS 1.0 were officially introduced on August 12, 1981, kicking off a family of personal computers that today we simply call PCs. Meanwhile, Paterson continued working at Microsoft on PC DOS 1.1 (which was called MS-DOS 1.25 by Microsoft). PC DOS 1.1 was released in June 1982 along with double-sided floppy drives for the PC. DOS 1.1 was also the first version licensed by Microsoft to other PC OEMs (Original Equipment Manufacturers) as MS-DOS 1.25. One of the first PC-compatible systems with MS-DOS was the Columbia Dataproducts Computer in July 1982, but many others soon followed.

Microsoft licensed MS-DOS to any OEM who wanted to make a system compatible with IBM, which eventually made Microsoft the largest software company in the world. While Windows is by far the most popular OS for PCs today, it wasn't until Windows 95 came out in 1995 that Windows went from being a loss-leader to becoming a huge hit. You could say that up until the release of Windows 95, MS-DOS paid all the bills.

After finishing PC DOS 1.1 (also known as MS-DOS 1.25) and doing initial planning on PC DOS 2.0, Paterson left Microsoft on April 1, 1982 and went back to work at Seattle Computer Products, while Mark Zbikowski took over the development of DOS at Microsoft. DOS 2.0 was virtually a complete rewrite of DOS and introduced many new features including hard disk support, hierarchical directories, and installable device drivers. Zbikowski also designed the executable (*.EXE) file format used in MS-DOS, and used his own initials as the two-byte signature "MZ" (4D5Ah) which can be found at the start of all *.EXE files. IBM wrote and added several utilities of its own including FDISK, TREE, BACKUP/RESTORE, COMP, DISKCOMP, DISKCOPY, MODE, and GRAPHICS, and the final product was eventually released by IBM as PC DOS 2.0 on March 8, 1983.

Paterson eventually left SCP again and went back to work at Microsoft; in fact, he worked for Microsoft at least three times: '81'82, '86'88, and '90'98. Besides his initial work on DOS, Paterson worked on other projects such as Visual Basic and Java. Today Paterson runs his own company called Paterson Technology (www.patersontech.com). In 2001 Paterson gained additional fame as he built the "Hexidecimator" robot, which competed on the BattleBots TV show.