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Chapter 15 Software in the 1990's 

15.1 ... Microsoft 

Operating Systems and Windows 

See Appendix B for a description and release dates 
of the different versions of DOS . 

Microsoft released Windows version 3.0 in May 1990 
in New York City with a $10 million promotional 
campaign. This version provided a new file manager, 
networking features, more desktop accessories, new 
screen appearance and new more recognizable icons. It 
was easier to install and provided an easier user 
interface for new users . Within four months a million 
copies were sold. It was a huge success. 

Following the release and success of Windows 3.0, 
Microsoft had additional discussions with IBM in an 
attempt to improve its relationship with the company and 
its participation in the continued development of OS/2. 
In September an agreement was signed that IBM would take 
over most of the OS/2 development, Microsoft would work 
on an advanced future version 3.0 of OS/2 and IBM 
received limited rights to Windows . This resulted in 
Microsoft shifting programmers to Windows development. 
However by April 1991, Microsoft had abandoned OS/2 
completely, and by 1992 the separation was final. 

Object Linking and Embedding (OLE) was a new 
concept introduced into Microsoft products in 1990. It 
was also to be incorporated into a new operating system 
project with the code name of Cairo. Microsoft 
incorporated OLE Version 1.0 technology into PowerPoint 
in the summer of 1990 and to Excel in 1991. 

In May 1991 Microsoft co-sponsored a new Windows 
World Exposition Conference. 

Version 5.0 of MS-DOS was released in June 1991. 
This was an upgrade version only available from 
Microsoft that required a previously installed version 
of MS-DOS. It was a highly successful release. IBM had 
released its own version 5.0 but it had a number of 
problems. The success of the Microsoft products and 


15/2 Part IV 1990's - Current Technology 

other problems resulted in a further deterioration in 
the relationship with IBM during the latter part of 

The highly successful Windows Version 3.1 upgrade 
with over 1,000 enhancements that included support for 
Object Linking and Embedding (OLE) and TrueType font 
technology was released in April 1992 . It was in direct 
competition with the IBM release of OS/2 Version 2 in 
March. However the new release of Windows was a huge 
success that resulted in three million copies being 
shipped in the first six weeks after its introduction. 

Microsoft announced Win32 in July 1992. Win32 is 
an application program interface with a 32-bit flat 
memory model, multithreading, preemptive multitasking, 
interprocess communication features and other advanced 
features . 

Windows for Workgroups is a networking program 
with workgroup capabilities that was released as Version 
3.1 in October 1992. It was not successful, and 
improvements were made that resulted in Version 3.11 
being released in November 1993. 

Version 6.0 of MS-DOS was released in March 1993 
and OLE Version 2 . in 1993. 

Windows NT (New Technology) was announced in May 
1993, and the first release was at Version 3.0. Windows 
NT is an advanced operating system for PC computers . It 
is a 32-bit system incorporating Win32 concepts with 
compatibility for applications written for MS DOS, 
Windows, OS/2 and POSIX. Other features included are: 
security protection to U.S. Government C-2 level, 
portability to different microprocessor architectures, 
symmetric multiprocessing support, built-in networking 
capabilities and support for international multilingual 
applications . The system will operate on Intel 
microprocessors, MIPS workstations and supports the DEC 
Alpha architecture. The software requires 12 to 16 
megabytes of memory and a powerful microprocessor such 
as an Intel 486 or better. Windows NT is a sophisticated 
operating system for workstations and file server 
applications . 

Software m the 1 990 ' s 15/3 

In August 1994, the U.S. Patent and Trademark 
office, approved a Microsoft request to register the 
label "Windows" as a trademark. 

Various improvements were made to the Windows NT 
software under the code name of Daytona. The hardware 
requirements were reduced and the system reliability 
improved. This resulted in an upgrade Version 3.5 being 
released in September 1994. 

The Consumer Products Division released what was 
called a new "social interface" with the product name of 
Bob in March 1995. This new easy to use user interface 
requires Windows, a 48 6 microprocessor and 8 megabytes 
of memory. It uses a living room setting metaphor with 
12 "intelligent agents" or "friends" and 8 integrated 
programs. The "room" can be rearranged and customized by 
the user. An intelligent agent can be selected by the 
user to act as a guide through different tasks. The 
agents observe user actions and get to know the user and 
anticipate the persons needs . The eight integrated 
programs provide a calendar, checkbook, letter writer, 
address book, e-mail, financial guide, GeoSafari and 
household manager. The program has a price of $100 and 
received mixed reviews . 

Chicago was the product code name assigned to a 
new advanced 32-bit operating system. It evolved from 
Windows with some MS-DOS code and some features from 
Windows NT. It incorporated Win32 technology and was 
targeted at the mass consumer market. Microsoft released 
an extensive beta test of the new software starting in 
June 1994. Then after a number of delays the software 
was released as Windows 95 in August 1995. The program 
incorporated a new user interface, 255-character file 
names, preemptive multitasking, multithreading, support 
for "plug and play" to optimize hardware performance and 
integrated network connectivity to the new Microsoft 
Network (MSN) . MSN provides on-line communication to 
commercial services and the Internet. Microsoft 
estimated that more than 1 million copies of Windows 95 
were purchased by customers at retail stores during the 
first four days after the release. 

Windows as a separate graphical user interface for 
MS-DOS essentially ended with the release of the Windows 

15/4 Part IV 1990's - Current Technology 

95 operating system. The functionality of MS-DOS and the 
previous Windows graphic user interface had been 
integrated in the new operating system. 

WINPAD is a new operating system being developed 
for handheld computers . 

Windows NT Workstation version 4.0 was released in 
July 1996. It combined the ease of use of the Windows 
operating system with the reliability and security of 
Windows NT. Windows NT Server is a powerful operating 
system foundation for server applications, such as 
BackOffice, that was released in 1996. 

The Windows CE operating system, is a subset of 
the Windows family that was released in 1997. It was 
developed for a broad range of communications, 
entertainment and mobile devices . 

Windows 98 that had a project name of Memphis was 
released in June 1998. It integrated Internet Explorer 
version 4 and supported numerous new device types. This 
was reported to be the last major version of Windows 
based on the old DOS system. Future versions of Windows 
will be based on NT technology. 

Other Microsoft Product Releases 

Microsoft Office was introduced in 1990. Initially 
it was a discounted suite of applications that consisted 
of Word, Excel and PowerPoint. The applications 
contained in the suit were subseguently changed to 
incorporate a standard user interface and improved 
integration features using Object Linking and Embedding 
(OLE) and Dynamic Link Libraries (DLL) technology. 
Version 4.0 of Office was released in October 1993. It 
contained Word 6.0, Excel 5.0 and PowerPoint 4.0, plus 
Mail and Access in the Professional Office edition. 
Office 95 was released with Windows 95 in August 1995, 
Office 97 in January 1997 and Office 2000 in June 1999. 
Microsoft offers various versions of its Office suite 
and has a dominant position in this market. 

Microsoft issues upgrades to its application 
software to add improvements, new features and correct 
problems at one to two year intervals . Excel for 
Windows, Macintosh and OS/2 was improved with the 
release of Version 3.0 in January 1991, Version 4.0 in 

Software m the 1 990 ' s 15/5 

March 1992 and Version 5.0 in October 1993. Word for 
Windows has also been improved with the release of 
Version 1.1 that included a grammar checker in November 
1991, Version 2.0 in 1992 and Version 6.0 in October 
1993. Microsoft moved from Version 2.0 to Version 6.0 to 
synchronize the Word for Windows version number with the 
MS-DOS version number. PowerPoint Version 3.0 shipped in 
May 1993 and Version 4.0 in October 1993. 

Microsoft released Visual Basic for Windows in May 
1991. Visual Basic is a graphical version of BASIC that 
simplifies the writing of programs for Windows . It was 
subseguently released in three editions: Standard, 
Professional and Enterprise. 

Microsoft introduced a personal finance and home 
banking program called Money in 1991. Schedule + is an 
appointment, scheduling and list management program that 
was released in 1992 . 

Microsoft entered the database segment of the 
application software market when it acguired Fox 
Software and its advanced database program called FoxPro 
for $173 million in March 1992. Then in November, 
Microsoft announced its own database program called 
Access at a significant discount to increase market 
penetration. These actions contributed to the financial 
difficulties of Borland International, who was a major 
supplier of database software for the personal computer 
market . 

Microsoft at Work is a software and architecture 
technology for the connection of office eguipment that 
was announced in June 1993. Eguipment such as copiers, 
fax machines, hand-held devices, printers and telephones 
would be able to communicate with a personal computer 
using Windows software. Microsoft released a system for 
fax machines in January 1995. However, it was not 
successful . 

BackOffice is an integrated series of server 
applications that enables users to access information 
from inside and outside an organization. It can be 
combined with a new system called Microsoft Exchange and 
the Office suites. Microsoft Exchange was released in 
beta test in February 1995. It is an extension of 

15/6 Part IV 1990's - Current Technology 

Microsoft Mail and is a groupware type of program that 
was developed to compete with Lotus Notes. 

The company released a final version of Internet 
Explorer 2.0 for Windows 95 in November 1995. Version 
3.0 was released in October 1996, Version 4.0 in 
September 1997 and Version 5.0 in March 1999. 


The CD-ROM division established in 1985, became 
the multimedia publishing division in March 1992. After 
many delays and changes in project management, the 
encyclopedia with code names of Merlin and finally 
Gandalf shipped with the product name of Encarta in 
March 1993. Encarta now contains a 2 9-volume 
encyclopedia with 26,000 articles, an interactive atlas 
and an illustrated timeline of world history. 

This division has and still is releasing many 
other multimedia CD-ROM products . Some of these are 
Ancient Lands, Art Gallery, Atlas, Cinemania, Complete 
Baseball, Dangerous Creatures, Dinosaurs, Isaac Asimov's 
The Ultimate Robot, Musical Instruments and disks on a 
number of musical composers. 

New Developments 

Microsoft is currently working on a number of 
systems that suggest a convergence of operating systems, 
application software, communication technology, personal 
computers and television. Some of these are the WINPAD 
operating system, TV set-top device software and Tiger 
cable-TV project. The Tiger project is a network server 
system to provide video-on-demand and interactive TV. 

Microsoft' s vision of "Information At Your 
Fingertips," "A Computer on Every Desk and In Every 
Home" and "Windows Everywhere" is becoming a reality. 

Software m the 1 990 ' s 15/7 

15.2 ... Apple Computer and IBM 

Apple Computer 

Apple Computer released HyperCard IIGS in January 
1991 and the System 7 operating system for the Macintosh 
computer in May. 

In October 1991, Apple participated in the 
formation of the PowerPC Alliance with IBM and the 
creation of joint software companies called Kaleida to 
develop multimedia applications and Taligent to develop 
an advance operating system (See Section 19.6) . Apple 
wanted to move in a direction that facilitated the 
interaction between their systems and IBM. 

Apple Computer announced a new strategic plan in 
September 1994, that would expand the Macintosh 
technology base. The company had decided to open the 
Macintosh hardware and software by licensing the 
operating system to other computer vendors in January 
1995. This licensing and an agreement with IBM and 
Motorola in November 1994, to create a new common 
hardware reference platform for computers based on the 
PowerPC microprocessor, was intended to increase market 
share. Another part of this overall strategy was to 
offer independent software developers a broader 
installed base to design applications for the Macintosh 

In February 1997, the company acguired NeXT 
Software, Inc. Apple obtained the NeXT operating system 
to replace its own future operating system with the code 
name of Copland that had been having technological 
problems. The new operating system based on Apple and 
NeXT software technology would have the code name of 
Rhapsody. Avidis Tevanian, who had been a principal in 
the software design at NeXT was placed in charge of the 
new operating system and became a senior vice president 
for software engineering. 

Apple terminated the program to license the 
Macintosh operating system to other personal computer 
vendors and its support of the unified PowerPC platform 
in September 1997. The company had decided that the 

15/8 Part IV 1990's - Current Technology 

benefits of increased market share were more than offset 
by the costs of the licensing program. 

A new operating system called OS 8 was released in 
July 1998 . The new system featured multi-threading, 
PowerPC processor-native finder, spring-loaded folders, 
pop-up windows, contextual windows and an Internet Set 
Up Assistant. This was followed by the release of OS 9 
in October 1999 with over fifty new features. Apple 
indicated that it intended to make a new release of the 
operating system each year with a major change on OS X 
(ten) in 2000. 


In early 1990, James Cannavino had discussions 
with Bill Gates and Steve Ballmer regarding the 
possibility of Microsoft assuming full responsibility 
for OS/2 development. However the discussions were not 
successful. The release of the highly successful 
Microsoft Windows Version 3.0 in May 1990, had a further 
detrimental effect on OS/2 sales. Then in September IBM 
announced that it was taking over most of the 
responsibility for the development of OS/2. Around this 
time Cannavino appointed Joseph Guglielmi as a senior 
marketing executive for OS/2. 

Cannavino received approval from the Corporate 
Management Committee (CMC) to remove Microsoft from any 
future development of OS/2 in early 1991. This position 
was announced in April, accompanied by a statement that 
a new version of OS/2 would run DOS applications better 
than DOS and Windows applications better than Windows. 
The announcement also stated that IBM would release the 
new version of OS/2 by the end of 1991. Coding in the 
new version was now being changed from assembler to the 
"C" programming language. 

In October 1991, IBM participated in the formation 
of the PowerPC Alliance with Apple Computer and the 
formation of joint venture companies called Kaleida and 
Taligent to develop multimedia applications and an 
advance operating system (See Section 19.6) . IBM wanted 
to share Apple' s expertise in personal computer software 
development and provide an alternative to OS/2 and 
Microsoft systems. 

Software m the 1 990 ' s 15/9 

Problems accommodating Window applications delayed 
the release of OS/2 Version 2.0 to March 1992. It 
included the graphics Presentation Manager user 
interface. The price had been reduced to a low of $35 
for Windows users, $99 for DOS users and $139 for all 
others. However sales of the new Version 2.0 were well 
below expectations. Also affecting sales was the lack of 
application programs from other software companies for 
the new operating system. 

OS/2 Warp Version 3 was released in October 1994. 

15.3 ... Other Software 


Corel Corporation introduced new versions of its 
highly successful graphics program CorelDRAW in the 
1990' s. Corel initiated a unigue marketing strategy for 
CorelDRAW by marketing several versions of the program 
simultaneously. Version 2 was introduced in November 
1990, Version 3 in May 1992, Versions 4 and 5 in May 
1993 and May 1994 respectively, then Version 6 in August 
1995. Corel entered the home consumer multimedia CD-ROM 
market in April 1995. Then after the acguisition of the 
WordPerfect and related software in February 1996, the 
company released the Corel WordPerfect suites and 
applications . 

Digital Research 

Digital Research released Version 5.0 of DR-DOS in 
April 1990 followed by Version 6.0 in 1991. Then after 
Digital Research was purchased by Novell, Inc., in 1992, 
DR-DOS became Novell DOS. 


Linus Torvalds, a 21-year-old student at Helsinki 
University in Finland, developed an experimental version 
of the UNIX operating system in 1991. Torvalds posted 
the source code on the Internet and named the new 
operating system Linux. This open-source software was 
widely disseminated and improved upon by many users. By 
1992 it was functioning on Intel processors, had a 

15/10 Part IV 1990's - Current Technology 

graphical user interface and had about 1,000 users. By 
1995, networking capability had been added, the system 
had been modified to run on other processors and now had 
an estimated 500,000 users. In 1998 the number of users 
was estimated to be 7,500,000. 

The dominant commercial supplier of the Linux 
operating system software, is Red Hat Software Inc., 
that was founded in early 1995 by Bob Young and a former 
IBM software engineer named Marc Ewing. The company 
provides manuals, support and other services for the 
Linux operating system. 


Notes is a communications program developed in the 
mid 1980 's by Iris Associates Inc., which was a research 
group that spun off from the Massachusetts Institute of 
Technology. Raymond Ozzie was a principal in the 
development of the software and president of Iris 
Associates. The software technology was bought by Lotus 
Development Corporation in 1988 and released with the 
name of Lotus Notes in 1990. The software enables the 
connection of multiple personal computers, to share 
databases, files and provides advanced e-mail 
capabilities. It is also called groupware. It 
facilitates collaboration by communication and sharing 
of information between groups of people. This software 
was one of the significant reasons for IBM to purchase 
Lotus Development Corporation in 1995. 


In 1993, Marc Andreessen a young undergraduate 
student and Eric Bina, developed a graphical browser for 
the World Wide Web (WWW) called Mosaic at the National 
Center for Supercomputing Applications (NCSA) located at 
the Urbana-Champaign campus of the University of 
Illinois . Mosaic provided a more visual form of WWW 
hypertext presentation, support for images and an 
intuitive user interface for a non-technical user. The 
software was developed for use on a UNIX operating 
system then translated into versions for the Apple 
Macintosh and IBM PC computer platforms. The program was 

Software m the 1990's 15/11 

distributed free over the Internet and received 
widespread use. 

In August 1994, a small company located in 
Illinois, called Spyglass, Inc., that was founded by Tim 
Krauskopf in 1990, obtained the exclusive rights to 
license Mosaic software. 


when James H. Clark was leaving Silicon Graphics 
in January 1994, he told a friend that he wanted to 
start a new high technology company. The friend 
suggested he contact Marc Andreessen, who had just 
graduated from the University of Illinois in December 
1993, where he codeveloped the Mosaic browser. Clark met 
Andreessen and after considering various ventures, Clark 
decided to finance a new company to exploit the 
commercial possibilities of a Mosaic type browser. Clark 
founded Mosaic Communications Corporation in April 1994. 

Andreessen and Clark had recruited the other key 
team members from NCSA that developed Mosaic and a few 
personnel from Silicon Graphics. They then completely 
recreated the Mosaic browser with additional features, 
improved performance and stability for the UNIX, Apple 
Macintosh and PC computer platforms. The company 
released the beta version of the browser they named 
Mosaic Navigator in October 1994. This beta release was 
available free by downloading from the Internet. 

In the fall of 1994, the University of Illinois 
demanded that Clark provide financial compensation for 
using their technology or intellectual property and to 
stop using the name Mosaic. This resulted in the company 
name being changed to Netscape Communications 
Corporation in November. Then to avoid litigation, an 
agreement was reached with the university that provided 
an undisclosed financial settlement in December. The 
first production version 1.0 of the browser was shipped 
in December with a new name, Netscape Navigator. "By 
spring, more than 6 million copies had been downloaded 
by users all over the world" [134 -page 4] . 

James L. Barksdale joined the company as president 
and chief executive officer (CEO) in January 1995 and 
the company went public in August. Other products that 

15/12 Part IV 1990's - Current Technology 

became popular tools for server and authoring Web data 
were also developed. Navigator 2.0 with integrated e- 
mail was released in September and version 3.0 with 
Internet telephone in April 1996. The Communicator 
Professional with HTML authoring and group calendar was 
released in June 1997. 

Since the founding of the company, Clark had 
misgivings about future competitive actions by 
Microsoft. Between September and December of 1994 there 
was an interchange of communications for Microsoft to 
license the Netscape browser. However, Microsoft decided 
to license Mosaic from Spyglass. In the spring of 1995, 
Clark stated that Microsoft was withholding application 
programming interface (API) information applicable to 
Windows 95 that Netscape reguired for release 2.0 of its 
browser. In June, Microsoft advised that the API's would 
be provided if they could obtain an eguity position and 
a seat on the board of Netscape. Clark rejected the 
offer and obtained legal counsel. This and other 
uncompetitive activities led to the antitrust action 
against Microsoft by the Department of Justice in 1977. 
Clark' s concern for the future viability of Netscape led 
to his consideration of forming an alliance or sale of 
the company in 1997. America Online completed the 
acguistion of Netscape Corporation at a cost of $4.3 
billion in March 1999. 


After acguiring Digital Research in 1992, a new 
version of DR-DOS with improved networking capabilities 
was released as Novell DOS 7 in December 1993. Novell, 
Inc., sold its WordPerfect word processing program and 
related suite software to Corel Corporation in January 
1996. Corel paid $10.75 million and 9.95 million shares 
of its common stock for the acguisition. 

Software m the 1 990's 15/13 


In 1991, a small research group was created at Sun 
Microsystems that conceived the development of a new 
system for the consumer market. The system would include 
a portable consumer device and an operating system that 
could interact with any other system. James Gosling was 
assigned to develop the operating system that became a 
project code-named Oak. Project Oak evolved into a 
platform-independent programming language and operating 
system for consumer electronic products. In 1994, the 
language design was repositioned so it could be used to 
build interactive applications for the Internet. The 
language was named Java and was introduced in May 1995. 

Java is based on the C and C++ languages that has 
evolved into a general purpose language. It is portable 
to a variety of hardware platforms and operating 
systems. It is supposedly a "write once, run anywhere" 
language. Java is both a programming language and an 
environment for executing Java programs that has 
received wide spread use. This use has been increased by 
Sun posting the language on the Internet for free 
downloading by programmers. The language has also been 
licensed by a number of large companies such as Apple 
Computer, IBM, Microsoft, Netscape and Oracle. 

Microsoft licensed the Java programming language 
technology from Sun in March 1996. Then in October 1997, 
Sun started litigation against Microsoft regarding its 
implementation of the language and the compatibility 
requirements of the license agreement. This action was 
supported by the court with a preliminary injunction 
siding largely with Sun in November 1998 . 

In mid 1998, Sun introduced a sister technology to 
Java called Jini . Jini was developed by a Sun research 
group led by William Joy. Jini enables a digital device 
to be connected into a computer network, identify itself 
and its parameters. It allows for a group of electronic 
devices to collaborate and combine to form a complex 

15/14 Part IV 1990's - Current Technology 


WordPerfect Corporation introduced DrawPerf ect , a 
business presentation graphics program in February 1990 
and a smaller version of WordPerfect named LetterPerf ect 
in June. In May 1990, the company announced a change in 
emphasis to release a version of WordPerfect for 
Microsoft Windows ahead of a version for the IBM OS/2 
operating system. The company had misjudged the market 
acceptance of OS/2 and Windows. WordPerfect for Windows 
was not released until November 1991 and an OS/2 version 
was delayed until 1993. 


David Filo and Jerry Yang were graduate students 
at Stanford University, when they created a web site and 
a free guide to the World Wide Web (WWW) in early 1994. 
The guide began as a list of their favorite Web sites 
and by the summer had tens of thousands visitors daily. 
As the list grew it was broken into a directory of 
search categories, then subcategories. Filo and Yang 
manually designated the categories as compared to 
computer generated indexes being created elsewhere. This 
resulted in an intuitive and a more selective means of 
locating information. 

It was in the summer that they selected the name 
Yahoo! for the search engine. Yahoo! is a whimsical 
acronym for "Yet Another Hierarchical Officious Oracle." 
By the fall the number of Yahoo! users had increased 
dramatically, but they had no revenue. 

In the spring of 1995, Filo and Yang approached 
Don Valentine' s venture capital company, Seguoia 
Capital, and obtained $4 million of finance capital for 
Yahoo! Inc. Shortly after they started to hire a 
business team and Timothy Koogle was recruited as 
president and chief executive officer. Koogle guickly 
moved to correct the revenue side of the business that 
resulted in a new look for Yahoo! in August. This 
included the addition of advertising, a major change in 
the hierarchy with a reduction in the top level to 14 
major search categories and the addition of a Reuters 
news service. Other services such as weather information 
and stock guotes were subsequently added. 

Software m the 1 990's 15/15 

In the fall of 1995, a second round of investment 
financing for $40 million was arranged. Two of the 
strategic investors were Reuters and the Softbank 
Corporation. In early 1996, Masayoshi Son of Softbank 
increased his investment in Yahoo! to obtain 
approximately 3 0% ownership. The company went public in 
April 1996 and Filo and Yang each ended up with over 15% 
of the company. Koogle has built Yahoo! into a powerful 
portal for e-commerce. 

15.4... The Road Ahead 

Gates book The Road Ahead, [89] articulates the 
future direction of software and new technology as seen 
by the chairman of the dominant supplier of software for 
personal computers. Terms such as cable-TV, information 
highway, information utilities, intelligent agents, 
interactive TV, multimedia, networks, social interface 
and video on demand all suggest a future direction for 
software development. Programming languages dominated 
the 1970' s, application programs and operating systems 
the 1980' s. The 1990' s is adding significant 
capabilities for communication of information. Research 
to facilitate the use of computer technology will 
provide an extension of the mass consumer market to 
include novice home users . Software will be the 
technology that provides the synthesis to extend 
personal computing. 

15/16 Part IV 1990's - Current Technology 

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