Part1(if you have not read it,Pls read it first.)

We continue with 2nd part of the DOS story.

Let us go to  Microsoft. Yeah these guys are always in the news for some reason.! The hardware called SoftCard was built with help of Tim Patterson who was working at that time at SCP.  z80 was a microprocessor that was aimed at embedded systems and it was developed by Zilog.

SoftCard came with the Operating System called CP/M.  This is the Microsoft philosophy all in a package. Microsoft was known for BASIC programming language and Digital Research(DRI) by Gary Kiddall for CP/M.(OS). Well Initially aun unwritten understanding was Microsoft sells: BASIC and Gary Kidall sells: CP/M. But in late 1979 DR began selling some of its operating system (CP/M) with non Microsoft BASIC. This feeling was like a betrayal of trust by Microsoft.

Jack Sams thought Microsoft owned CP/M but was told by Bill Gates, Microsoft did not own it. It was owned by a person made Gary Kidall,  who was actually well known for CP/M OS ,whose company Microsoft licensed from.

iphone, iphone7, apple-1737512.jpg

iPhone- Apple reinvents the phone.

The  famous incident is already told in our first post.

The question is how Tim Patterson of SCP got hold of CP/M in the 1st place?





The Deal of the Century: 86-DOS and CP/M

The Intel Processor 8086 had recently released its processor. Problem was that there was no Operating System to run it.  SCP(Seattle Computer Products) wanted the young engineer Tim Patterson to develop CP/M for this processor. SCP got it from Gary Kidall.  Tim ,also known ad father of DOS , developed his version of operating system ,copying API from CP/M. At that time 1980s copying API was not illegal. He called the OS : QDOS-Quick and Dirty Operating System.

A great difference was :

there was a FAT File System in QDOS.

It was later renamed to 86- DOS since previous name did not sound right.  Sounded sneaky for corporates to buy.


Microsoft buys from SCP and sells to whoever it wanted and not have have to disclose clients who were buying 86-DOS.  The clause that mad a difference  was:

“Nothing in this licensing agreement shall require Microsoft to identify its customer to Seattle Computer Products.”


Many software developers think most important thing in Software development is programming skills.(i used to think too, the business guys not that important).

This is only partially true! You need a good employee or some one with a good business background.

SCP was offered royalty of $15,000 per license(if source code was included or else $10,000) if Microsoft sold a copy .

Yeah they did sell to IBM. So SCP got out of the deal was 25000 $.

Tim Patterson joins Microsoft and then 86-DOS is renamed tp MS-DOS.  The OS is licensed to  IBM as PC DOS.

Simply explained:

Microsoft buys all rights of 86-DOS from SCP  for about 50,000 $, which was considered as a great deal for both parties. This was deal of the century.

By 1991 Microsoft was making 200 Million US$ Dollars from a software they bought for 50,000$!


  • Microsoft did not intend to sell Operating System initially. 
  • Microsoft did not build or own CP/M .
  • Microsoft did not build QDOS or own 86-DOS initially.
  • They bought from SCP and sold it to IBM.
  • Some investments and main was business policy that won the game in DOS.

So be careful when you are signing NDA agreements or contracts.

Microsoft wins

“. “If you show people the problems and you show people the solutions, they will be moved to act.”-Bill Gates


The ‘IBM Deal’  with Microsoft was : Microsoft was to sell them an OS and other Software for their coming PC.

But Bill Gates made sure the right were such that the OS

  • was sold under name of :MS-DOS.
  • Microsoft Could sell it to other companies.

These two clauses  made the fate of Microsoft and eventually they toppled IBM.

So you need a good business development manager along with good software developers.

Gary Points to IBM

Gary wanted to sue IBM but later IBM agrees to sell CP/M. Catch that the DOS was sold for $40 with IBM PC and CP/M for 240$.

So who would want to buy expensive products. Business is made with the common people.

This what Microsoft did, they built software for the masses. people should thank Bill Gates for that otherwise I might not have been writing all this.

Bill Gates Education is brief in Harvard(2 years)

  • Pre Law
  • Mathematics
  • Computer Science graduate courses

He does not complete his degree in Harvard but two years there had an impact. 

The Final Say

Techkhala ‘s Point

To be a successful IT entrenepenuers:

We at TechKhala think that just  following points has to be considered:

  • Business Degree (some body in your company does have)
  • Knowledge of Law or Cyber Law.
  • Knowledge of Electronics Engineering and Computer Science
  • Hitting iron when it is hot”. When you see an opportunity take it.!
  • Be humble ,not Proud.
  • Read the Contract or focus on the Business Case or contacts.

Just good software and name is not enough.

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IBM worth :127 Billion US$(April 2021).


Microsoft worth :2 Trillion US$     



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