What was the deal with OS/2 anyway?

Posted by: Jeremy Reimer on Thu Jun 27 20:56:27 2013.

A lot of people today have some sort of vague idea about what OS/2 was, why it existed, and why it failed. Why did IBM fail to unseat Microsoft Windows? The reasons are many, but mostly it boils down to a very successful big computer company being afraid of disruptive change.

IBM hired Microsoft to write OS/2 because IBM wasn’t confident in writing PC software. But IBM still had control of the design of OS/2, even though Microsoft was writing the code. The 386 chip had been released in 1985, but IBM wanted to write OS/2 to support the older 286 chip instead, a chip that Bill Gates had called "brain-damaged". IBM didn’t want to code for the 386 because they were worried it was too powerful, and would cut into their profitable AS/400 minicomputer business.

So if Gates didn’t like the 286, why did he let Microsoft go along with IBM’s plan? Because at the time IBM bestrode the PC industry like a Colossus. IBM was the "bear" and you were either riding the bear or you were under the bear, so Microsoft was going to ride the bear as long as they had to. If that meant dealing with IBM’s strange decisions, so be it. IBM made the rules for the PC industry, and Microsoft followed. Microsoft owed everything they had to the IBM PC and the clones that followed.

But Microsoft was smart enough to see that the winds were changing. IBM couldn’t hold back progress forever, and the decision to design OS/2 around the 286 meant that legacy DOS apps had to be run in the "penalty box", a compatibility box that could only run one app at a time and didn’t work with many apps anyway. (The 386, in contrast, had a ’virtual 8088’ mode that made multitasking many DOS apps fairly trivial).

So while Microsoft outwardly was promoting OS/2 as the next big thing, inwardly they kept dogging away at their Windows thing and they supported the 386 rather quickly (Windows/386 was in fact a special version of Windows 2.0 that multitasked DOS apps using the virtual 8088 mode, and all future versions of Windows would support this feature).

When Windows 3.0 was getting ready to be released, IBM offered to handle all the marketing and promotion, but in exchange IBM would own the code and the future of Windows. Microsoft wisely walked away from the deal. This was the beginning of the Microsoft-IBM divorce.

Windows 3.0 ended up being a smash success, and Microsoft realized that if they just kept telling other people that OS/2 was the future while they built their own Windows apps and stopped putting any real effort into OS/2, they could eventually own the world. Companies like Lotus that hated Microsoft with a passion just couldn’t wait to support OS/2 and ignore Windows. 1-2-3 for OS/2 (called 1-2-3/G) actually shipped before 1-2-3 for Windows. This gave Excel a chance to come in and just swoop up all the 1-2-3 for DOS users that were without a viable upgrade (1-2-3/G was not only late and missing features but performed extremely poorly) IBM eventually released a version of OS/2 that was coded for the 386 (although it still had 286 code in it for a long time) and tried to market it on their own with OS/2 Warp, but by that time IBM was no longer the standards setter in the PC business.

So what lessons can we learn here? IBM was afraid to push ahead its PC operating systems business because it might cut into sales of the more profitable minicomputer and mainframe lines. Microsoft, a more nimble and agile company, was able to ride this transition while preparing their own more powerful PC operating systems.

These days, Windows is the entrenched monopoly, and mobile devices are the disruptive force. The iPhone and iPad (and Android models) are rapidly becoming more powerful and finding their way into traditional personal computer use cases.

Windows, in this case, is the new AS/400, and the iPad is the new 386 PC. Microsoft doesn’t want to make the same mistake IBM did, so they are trying to make their own "386 PC" with Surface and unify their own "tablet experience" with the old school Windows. Thus you get the sort of odd hybrid that is Windows 8.

The market reaction to Windows 8 has not been positive, but Microsoft is used to playing the long game. Don’t count them out just yet.

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