Paterson. The system became known as the Microsoft Disk Operating System, or MS-DOS.Now because of the licensing agreement between IBM and Microsoft, IBM had no control over Microsoft's distribution of its MS-DOS to other companies who wanted to clone the IBM machine. This decision by IBM is still under great debate. Many industry analysts argue that IBM should have waited for their own software developers to develop an operating system or that IBM should have purchased MS-DOS from Microsoft. However, from a more broad economic picture of IBM's decision, it may have just turned out for the good of Microsoft, IBM and the average computer user. Microsoft's "goal was not to make money directly from IBM, but to profit from licensing MS- DOS to computer companies that wanted to offer machines more or less compatible with the IBM PC"(Gates 49). By allowing Microsoft to sell MS-DOS to other companies, this made IBM's PC the industry "de facto" standard. With other companies scrambling to compete with IBM, Microsoft licensed MS-DOS to these companies and fulfilled one of Microsoft's goals: "to create the standard for the industry"(Jobs 50). Compaq Computer of Houston "launched [the first] clone in 1982 and attained FORTUNE 500 status a scant four years later"(Schlender 42). Hundreds of companies followed.MS-DOS dominated the market much like VHS beat out Betamax and how early TV sales boomed. The more people bought the product, the more companies produced it and with the television, the more sets were sold, the more programming was available. This was a main reason why Apple's Macintosh only controlled 9% of the market(Schlender 40). "The PC story would be far different if Apple had licensed its operating system software to other computer makers early on"(Cook 64). In effect, they had a monopoly on their own system and software. Their lack of competition kept prices up and software selection down. Apple has just recently licensed some Macintosh...
