By Joseph Pritchard
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Microsoft's legal difficulties multiplied greatly when Apple filed its "Look and Feel" lawsuit in March 1988. One year later Apple wins a preliminary skirmish when a judge rules that Microsoft could only use the visual displays in the very first version of Windows - not those in Windows 2. Q. When Microsoft's stock nose-dived, Steve Ballmer bet $46,200,000 on the company by purchasing 945,000 shares of Microsoft stock. This purchase would later make Ballmer a Billionaire. R. On 31 October 1988 Bill Gates in one of his best decisions hired David Cutler and his development team away from DEC.
By 1984 about 10,000,000 personal computers where shipping a year and most of them had DOS on them. By this time Microsoft had switched to per-machine deals with vendors. Microsoft would give computer makers a price break on DOS if they would also buy BASIC for a large number of machines (most makers way overestimated what their market share would be). Per-machine deals made it virtually impossible for competitors to crack the DOS monopoly. Vendors that were already paying a royalty for DOS on every machine were not going to offer a different operating system except as a high-priced option!
Bill Gates referred IBM to Gary Kildall, the founder of Digital Research, but when they did not reach immediate agreement with him they went back to Gates, who offered to fill their need himself. He licensed a CP/Mcompatible OS called QDOS ("Quick and Dirty Operating System") from Tim Paterson of Seattle Computer Products for $56,000, and IBM shipped it as PC-DOS. Later, after Compaq licensed Phoenix Technologies' clone of the IBM BIOS, the market saw a flood of IBM PC clones. Microsoft was quick to license DOS to other manufacturers, calling it MS-DOS (for Microsoft Disk Operating System).