How IBM and DOS came to dominate the industry

Last Updated on November 28, 2018 by Dave Farquhar

Revisionist historians talk about how MS-DOS standardized computer operating systems and changed the industry. That’s very true. But what they’re ignoring is that there were standards before 1981, and the standards established in 1981 took a number of years to take hold.

The reality is that in 1981, IBM and DOS was just one player, and while businesses did embrace IBM (or its clones) and MS-DOS, during the early 1980s you were just as likely to find a Z-80 based microcomputer running CP/M, a Tandy, or an Apple computer, or even a DEC workstation in a business setting. And in the late 1980s and into the 1990s the Macintosh was more common in businesses than it is today.

The class of 1977

The first mass-produced PCs hit the market in 1978. While all of them claimed to be first, in reality the Apple II, Commodore PET, and Radio Shack (Tandy) TRS-80 Model I all came on the market about the same time. (The Apple I, from 1977, was just a board, not a complete computer.) All three machines sold briskly, to a combination of hobbyists, businesses, and home users. The successors to those three machines would duke it out for years in the home. Business came to be dominated by computers based on Intel 8080 and Zilog Z-80 CPUs from a variety of manufacturers. Kaypro and Osbourne were the most famous. Vector Graphic is the most criminally overlooked. All ran the CP/M operating system and were somewhat compatible with one another.

Apple went so far as to run an ad welcoming IBM to the microcomputer market, thanking them for bringing legitimacy to it. And of course, by 1982, you could buy IBM clones such as the Compaq Portable.

The rise of cheap clones

While there were plenty of clones available before 1985, proprietary offerings from other companies remained cheaper. In the mid 1980s, inexpensive clones manufactured in the Far East, such as the Leading Edge Model D (manufactured by Daewoo) and the Blue Chip Personal Computer XT (manufactured by Hyundai) appeared, giving IBM compatibility at a price competitive with Commodore or Atari. Although forgotten today, the Model D got rave reviews from computer magazines and even consumer magazines like Consumer Reports for its high degree of compatibility at an unheard-of price. For $1,495, you got a 4.77 MHz 8088 processor, 640 KB RAM, and dual 360K floppies. For comparison’s sake, a Commodore 128 with a 2 MHz 8-bit 8502 processor, 128 KB RAM, and dual floppies would have cost $950 the same year.

And in 1985, Tandy introduced the Tandy 1000. Tandy hoped it would ride the coattails of the IBM PCjr into the home. While the PCjr flopped, the jr-compatible 1000 sold well. Its successors sold even better.

Availability of IBM-compatible computers at Radio Shack spurred adoption, because at the time, Radio Shack was the only nationwide consumer electronics chain. And the Leading Edge Model D sold briskly as well, spurring something of a price war. Suddenly, IBM-compatible computers were cheap enough that people could think about buying one for the home, and you could buy them in stores that didn’t have commissioned salespeople wearing three-piece suits. Businesses bought them and people bought them for home as well. It was practical to buy a computer like the one you had at the office and take work home.

Fancy some games?

Prior to 1985, you didn’t see a lot of IBM and IBM-compatible computers in the home partly because there weren’t a lot of games for them. The price hurt too, but an Apple IIe wasn’t much less expensive than an IBM PC. There were people willing to spend money on a computer, but they wanted something other than a spreadsheet to play with. And while there were literally thousands of games available for an Apple II or a Commodore 64 (by the end of the decade both platforms had racked up libraries in excess of 10,000 titles), the count for the IBM PC in the early 1980s numbered in the hundreds. King’s Quest, Zork, and Ultima were all good games and available for PCs, but there really was very little outside of those series. And they were also available for the Apple II.

So there weren’t PCs in the home because there weren’t games for them. But there weren’t games for them because there weren’t PCs in the home.

Tandy wasn’t going to sell a computer without making sure there were games available for it, so that helped. And the Leading Edge Model D was so cheap that some people bought it without even researching what kinds of software ran on it. So by 1986 and 1987, lots of companies were making entertainment software for the growing installed base of IBM-compatible PCs.

Competition slowly fading out

Apple, Atari, and Commodore fans mostly ignored what was happening. They still had the bigger libraries and significant marketshare. I remember reading a lament in Run magazine, a Commodore rag, in 1986 complaining that the general press divided the computer field into Apple, IBM, and Tandy, and ignored everyone else. But Commodore was still selling more than a million 8-bit computers a year so they weren’t exactly hurting (yet). The August 1987 issue of Compute! told its readers they could expect to see a lot more entertainment software for IBM compatibles very soon. But its editorial content and advertising was pretty evenly divided between Apple, IBM and compatibles, and Commodore audiences. Atari got some print as well.

And in the August 1988 issue of Info, a Commodore and Amiga magazine, an editorial talked about the looming threat of Tandy. The Amiga was safe, for a time. The Amiga was competing against a 286-based Tandy, and the Amiga had more processing power, better graphics and sound. But it warned that in a year, the Amiga would be competing against a 386-based Tandy that would have more processing power. The combination of a 386 CPU, VGA graphics, and an Ad Lib sound card made for a good games machine indeed. And in 1990, PCs got a usable GUI in the form of Windows 3.0.

And we all know what happened. The 8-bits from Apple and Commodore made it into the 90s but faded quickly. The Atari ST and Amiga lasted a bit longer–I still have Amiga software I bought at Babbage’s in Crestwood Plaza in 1991 and 1992. But by 1992, pretty much anyone who was buying a new computer was buying a Macintosh or a PC. The editorial in the June 1992 issue of AmigaWorld lamented that the majority of new Amigas were being sold to someone who already had one or six. Why? I think it was 3D gaming. Once id software released Wolfenstein 3D and Doom for PCs, the Amiga and ST lost their edge.

By 1994, both the ST and Amiga were off the market. And by the late 1990s, PCs reduced the Macintosh’s marketshare to a single digit prior to Steve Jobs’ return from the wilderness. But even the Jobs-reinvigorated Apple remained the #2 player in a duopoly.

The PC won the war. But it wasn’t the blitzkrieg many historians say it was. Blitzkriegs don’t take 13 years.