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Even more so than the mini-computer market which preceded it, the micro-computer market when it began in the late 1970s was led by a host of small, innovative companies, often start-ups. With the market proved by the earliest manufacturers, larger companies soon began to take a hand, sometimes successfully ( Tandy, Hewlett-Packard), sometimes not ( Texas Instruments, DEC). One by one, the majors in the "big iron" market—mainframe and mini-computer makers—recognised the emergent boom in the micro-computer market.
By the early 1980s, the chaos and incompatibility of the first years had given way to a smaller number of industry standards, including the S-100 busThe S-100 bus was an early computer bus designed as a part of the Altair 8800, generally considered today to be the first " personal computer". The S-100 bus was the first "industry standard" bus for the microcomputer industry, and S-100 computers, proces, CP/MCP/M C ommand P rocessor for M icrocomputers was an operating system for Intel 8080/ 85 and Zilog Z80 based microcomputers. It was created by Digital Research, Inc. founded by Gary Kildall. The combination of CP/M and S-100 bus computers patterned on the, the Apple II, Microsoft BASICMicrosoft BASIC is the foundation product of the Microsoft company. It first appeared in 1975 as Altair BASIC, which was the first BASIC (and indeed the first programming language) available for the MITS Altair 8800 hobbyist microcomputer. The Altair BASI in ROM, and the 5.25 inch floppy drive. Despite the presence of informal standards which allowed a fair measure of interoperability between different machines from different manufacturers, no single company controlled the industry, and fierce competition ensured that innovation in both hardware and software was the rule rather than the exception. Most of the software used today is directly derived from the ideas that grew out of this creative bonanza—the obvious example is the spreadsheetA spreadsheet is a rectangular table (or grid) of information, often financial information. It is, therefore, a kind of matrix. The word came from "spread" in its sense of a newspaper or magazine item (text and/or graphics) that covers two facing pages, e, but there are countless others.
In 1981 the largest and oldest computer firm of them all, IBM, finally entered the microcomputer market, with a machine that was created by a small sub-division of the firm and was very unusual by their standards, insofar as it was largely sourced from outside component suppliers, technically unambitious, very similar to a number of existing 16-bit 8088The Intel 8088 is an Intel microprocessor based on the 8086, with 16- bit registers and an 8-bit external data bus. The processor was used in the original IBM PC. The 8088 was targeted at economical systems by allowing the use of 8-bit designs. Large bus-based micro-computers, ran third-party operating systems, and above all, had an open architectureOpen architecture is a type of computer architecture that allows users to upgrade their hardware in all of the computer components (for example the IBM PC has an open architecture). This is the opposite of a closed architecture, where the hardware manufac. It was called the IBM PC and it became the most successful single computer of all time.
The key feature of the IBM PC was that despite its technical mediocrity and higher than market price, it had IBM's enormous public respect behind it. It was an accident of history that the IBM PC happened to have an Intel CPU (instead of the technically superior Motorola 68000 that had been tipped for it, or an IBM in-house design), and that it shipped with IBM PC-DOS (a licensed version of Microsoft's MS-DOS rather than the technically superior industry-standard CP/M-86 operating system), but an accident that was to have enormous significance in later years.
Because the IBM PC was an IBM product with the IBM badge, personal computers (as they were beginning to be called) became respectable. It became much easier for a conservative business to justify buying a microcomputer than it had been even a year or two before—and easiest of all to justify buying the IBM Personal Computer.
Because the architecture was open (an idea pioneered by Apple in the early years but suddenly abandoned by them when the Apple II gave way to the Mac) it was possible for third-party manufacturers to design and market add-in cards to bring new functions or enhance existing ones. Within a couple of years there were thousands of different third-party add-in cards available for every imaginable purpose, from hundreds of manufacturers both large and small.
Industry competitors took one of several approaches to the changing market. Some (such as Apple, Atari, and Acorn) persevered with their independent and quite different systems. Others (notably world number two Digital, Hewlett-Packard, and Apricot ) concentrated on making similar but technically superior models. Other early market leaders (such as Tandy-Radio Shack, Texas Instruments and Commodore) stayed with outdated architectures and proprietary operating systems for some time before belatedly realising which way the market wind was blowing and switching to the most successful long-term business strategy, which was to build a machine that duplicated the IBM PC as closely as possible and sell it for a slightly lower price, or with higher performance. Given the very conservative engineering of the early IBM personal computers and their higher than average prices, this was not a terribly difficult task at first, bar only the great technical challenge of crafting a BIOS that duplicated the function of the IBM BIOS exactly but did not infringe on copyrights.
The two early leaders in this last strategy were both start-up companies: Columbia Computers and Compaq. They were the first to achieve reputations for very close compatibility with the IBM machines, which meant that they could run software written for the IBM machine without recompilation. Before long, IBM had the best-selling personal computer in the world and at least two of the next-best sellers were, for practical purposes, identical.
For the software industry, the effect was profound. First, it meant that it was rational to write for the IBM PC and its clones as a high priority, and port versions for less common systems at leisure.
Second (and even more importantly), where software written in pre-IBM days had to be careful to use as plain a sub-set of the possible techniques as practicable (so as to be able to run on any hardware that ran CP/M), with a major part of the market now all using the same exact hardware (or a very similar clone of it) it was practical to take advantage of any and every hardware-specific feature offered by the IBM.
Independent BIOS companies like Award, Chips & Technologies, and Phoenix began to market clean room BIOS that was 100% compatible with IBM's, and from that time on any competent computer manufacturer could achieve IBM compatibility as a matter of routine.
From around 1984, the market was fast growing but relatively stable. There was as yet no sign of the "Win" half of "Wintel", though Microsoft were achieving enormous revenues from DOS sales both to IBM and to an ever-growing list of other manufacturers who were illegally forced to buy an MS-DOS licence for every machine they made, even those that shipped with competing products! As for Intel, every PC made either had an Intel processor or one made by a second source supplier under licence from Intel. Intel and Microsoft had enormous revenues, Compaq and a thousand other makers between them made far more machines than IBM, but the power to decide the shape of the personal computer rested firmly in IBM's hards.