How Microsoft Was Built: What the Record Shows, and What's Still a Question

Cricket has its roots in the fight over open document formats, the belief that your documents belong to you. To understand that fight, it helps to know how Microsoft was built. This post comes from a sourced timeline I put together. It keeps documented facts apart from open questions and includes my own firsthand account from the contact-manager wars.

DOS: Bought, Not Built

Dec 1980: Microsoft paid Seattle Computer Products (SCP) $25,000 for a non-exclusive license to Tim Paterson's 86-DOS (QDOS).
Jul 27, 1981: Two weeks before the IBM PC launched, Microsoft bought all rights for another $50,000, or $75,000 total.
Aug 12, 1981: The IBM PC shipped with PC DOS. Microsoft's license to IBM was non-exclusive, so it could sell MS-DOS to every clone maker. That term built the fortune.
1986: SCP sued for $60M, saying Microsoft hid the IBM deal to buy DOS cheaply. It settled while the jury was deliberating, with Microsoft paying about $925,000.
Open question: Did 86-DOS copy CP/M's interface? Gary Kildall thought so, but it was never litigated, and Paterson denies it.

Source: Seattle Computer Products (Wikipedia)

Key Acquisitions and Licenses

1987: PowerPoint, from Forethought Inc., $14M
1988 and 1991: Microsoft Mail, from InterMail (1988) and Consumers Software's Network Courier (1991)
1988–89: SQL Server started as a licensed port of Sybase SQL Server
1988: Windows NT: Dave Cutler's DEC team was hired. Instead of suing, DEC was paid $65–100M after its engineers saw similarities to VMS.
1995: Internet Explorer licensed Spyglass Mosaic code
1996: FrontPage, from Vermeer, $133M
1997: Hotmail, about $500M
2000: Visio, $1.375B
2001–02: Dynamics: Great Plains, about $940M (2001), and Navision, $1.33B (2002)
Later deals: Skype ($8.5B), Nokia phones ($7.2B), Minecraft ($2.5B), LinkedIn ($26.2B), GitHub ($7.5B), Nuance ($19.7B), Activision Blizzard ($68.7B)

Source: List of mergers and acquisitions by Microsoft (Wikipedia)

Outlook: Built In-House

To be fair to Microsoft, I found no record that Outlook was acquired. Outlook 97 (Jan 1997) was a renamed and upgraded Exchange client combined with Schedule+, built on mail products Microsoft had bought earlier. The only Outlook that came from an acquisition is the 2014 mobile app (Acompli).

Source: Microsoft Outlook (Wikipedia)

The Antitrust Record

1991–92, AARD code: Windows 3.1 betas hid code that showed false errors on DR-DOS. Caldera sued, and the settlement was later shown to be $280M. (source)
1994, Stac: After reviewing Stac's code in licensing talks, Microsoft shipped DoubleSpace. A jury found patent infringement and awarded Stac $120M. (source)
1999–2001, U.S. v. Microsoft: The court found monopoly power and that Microsoft withheld APIs from Netscape. The appeals court upheld monopoly maintenance but threw out the breakup. (source)
2004, EU: €497M fine plus interoperability orders, upheld in 2007, with more than €1B in later non-compliance fines. (source)
2007–08, OOXML: Sweden voided its vote over offered "marketing contributions." The first ISO ballot failed, and votes flipped after the Geneva meeting. Norway's body overrode its own committee. ISO approved it in Apr 2008 and rejected four national appeals. (source)

My Firsthand Account

These are my own recollections. I haven't found published records that confirm them, so read them as testimony.

The Hynes luncheon: At an OS/2–Windows developer luncheon at Boston's Hynes Auditorium, I heard Bill Gates promise a "Chinese Wall" between Windows and Office development and equal, open access to DLLs and APIs.
Nov 1992, PowerLeads!: Paul Dean and I built PowerLeads!, one of the early Windows contact managers. COMPUTE! covered it in Nov 1992, when more than 600 contact managers were on the market. (COMPUTE! article)
Building PowerLeads!: I joined Paul after the basic app was built. Together we took it to market and added editions for real estate, mortgage brokerages and securities brokerages. Jim Meader's brokerage in San Carlos, CA was the first to put PowerLeads on every desktop. With Windows 3.11 we released a network version with a powerful scheduling engine. I wrote all the scripting, so agents could automate weeks of mailings, follow-up calls and, finally, a face-to-face presentation. That was unheard of at the time.
From contacts to XML: Software Today built on that work with direct data linking and sync. Real estate then ran about 300 MLS systems that couldn't talk to each other, or to brokers, agents or buyers. With Jim Meader, I worked with Realtor.com directors on a nationwide MLS XML schema. It connected them and put the whole market's listings online. That's where my work with XML began.
The Outlook announcement: As I remember it, once Microsoft announced Outlook, contact-manager sales and investment froze before there was even a beta.
DLL roulette: Developer contract terms on DLL updates kept breaking Office competitors' products.

Questions Worth Digging Into

Does anyone have notes, a recording, or press coverage from that Hynes luncheon?
Did the Outlook preannouncement freeze the category the way courts found preannouncements hurt Borland and DR-DOS?
Do any 1990s developer contracts still exist that show the DLL update terms? Courts did find delayed API access to Netscape, and the EU ordered interoperability fixes.

The Bottom Line

Microsoft bought DOS legally, and the fortune came from the non-exclusive IBM license. It built Word, Excel, Windows and Outlook itself, and bought or licensed much of the rest. The proven tactics are AARD, the Stac infringement, withheld APIs and monopoly maintenance. "DOS isn't done till Lotus won't run" remains unproven.

That history is why open formats mattered then, and why Cricket keeps your highlights and notes on your own computer, exportable in open formats, today.

Sources

This is history, and I want to get it right. If you have corrections, documents or memories from those years, please leave a comment.

~ge~

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