Linux for the rest of us.

The Sad Parable of OS/2

Editor's note: March 31 marks the tenth anniversary of the Release of IBM's OS/2 2.0, which was many people's first exposure to a real operating system for Intel-based computers and which for many more was the first illustration of how a superior product does not necessarily succeed. As a memorial to that once-promising product, we publish the following article, written as a magazine piece nearly five years ago, which analyzes the factors that contributed to OS/2's failure as a desktop operating system. Even if you have no interest in OS/2, we believe the story is worth reading, because in many ways it is a parable whose lessons are of use to the Linux community.

Who Killed OS/2?

How Big Blue Blew It, Though Redmond Helped

by Dennis E. Powell

September 1997

To Boldly Go . . .

Lee Reiswig stood in the wing, stage right, about to make his Broadway debut.

Onstage was Kate Mulgrew, the star of one of the new Star Trek spin-offs but today the leadoff cheerleader for a new IBM software product called "OS/2 Warp."

It was a cute idea, really. The software developers in Boca Raton had taken to giving Star Trek-based codenames to prerelease "beta" versions of OS/2 and related products. One of these was "warp," which on the television show meant the speed of light or something. The product being introduced this October morning in 1994 was a graphical operating system for personal computers; its chief competition was the notoriously slow Microsoft Windows. Associating the new IBM offering with the speed of light would stick it to Microsoft a little.

There was the other Star Trek connection, the irony. The original television show had been doomed to cancellation after just one season. But viewers, more like cultists or adherents than mere fans, bombarded NBC with letters, calls, and other demonstrations of their devotion, and Star Trek remained alive for a couple of seasons more.

Likewise, OS/2, an advanced operating system for IBM-standard personal computers, had after early incarnations fallen into some disfavor within the company. But for the loud campaign of IBM employees -- many of whom were not involved in its development or marketing, but who simply liked it -- and a few true believers on the outside who were somehow privy to goings on within Big Blue, the whole thing might have been dropped or at least taken in a direction that would interest few home and small office computer users. This vociferous fanclub called itself "Team OS/2." Their fervor would have given the most devout Trekkie a run for his money, but for the fact that a lot of Team OS/2 members were Trekkies in much the same way that most Ross Perot supporters believe in UFOs.

Now, at the Richard Rodgers Theatre in New York City, hundreds and hundreds of fans were assembled for what could have been either a Star Trek convention or an OS/2 revival meeting. No one was recorded as having worn the pointed plastic ears of the Vulcan, Mr. Spock, but if anyone had it wouldn't necessarily have been noted. These people had already been using a version of OS/2 that had been available for more than two years, and they loved it. More than that, they were deeply suspicious of anyone who didn't love it.

Also present -- though they did not make their witness in the articles they would write later -- were members of the computer press. They had uniformly opined that OS/2 was both superior to anything else available and doomed to failure. The Warp Trekkies were at minimum highly distrustful of and sometimes openly hostile toward the computer press, which in turn looked upon the greater body of OS/2 users as potentially dangerous zealots.

The audience, then, was divided into two camps, each contemptuous of the other. Meanwhile, loudspeakers blared "Time Is On My Side," "Time Has Come Today," and every other once-popular song in which the word "time" somewhere appeared. The idea was to drive home the fact that Microsoft Corporation kept promising delivery of a new, gee-whiz version of Windows that performed all manner of miracles (miracles, it happened, that OS/2 had been performing for years), and kept moving back the release date -- it was already more than a year overdue. OS/2 was here, now, or so the music was supposed to announce. At stage center was a huge hourglass, the very symbol of the slowness of Windows in performing tasks and of Microsoft's slowness in delivering "Chicago," which would be released the following year as Windows 95.

Reiswig, head of IBM's Personal Software Products division, had been with the company since 1966, when he was a 20-year-old trainee. The IBM in which he had grown up was the company of legend, of white shirts, of refusal to comment on products under development, of dealing with corporate computer departments instead of individual users. Conducting a product rollout before a crowd like this one, with an opening act like this one, at a location like this one was a deviation from -- no, it was flinging down and dancing upon -- the dignity of Mr. Tom Watson's computer company. But never mind. Maybe it would work.

To thunderous cheers from the OS/2 Trekkies and polite applause from the computer press, Reiswig walked out onto the stage. He did not seem comfortable, not as he always did when he would drop in from time to time on meetings of local user groups just to talk about what was going on with OS/2. At those times, he was simply amazing, relaxed and confident, the boss of a big piece of a very big corporation who just happened by in Topsiders and khakis and a sweater to bring the few dozen people there up to date. Today, in suit and tie and IBM-white shirt, he seemed almost at the point of cultural meltdown. He had talked happily with OS/2 users before, and he had delivered the kind of insomnia-curing talks that frequently take place in the computer industry. He seemed unsure which this was supposed to be, and at IBM such things are noticed. IBM, after all, was not Apple, where a person was said to be well dressed if he wore shoes to work.

A series of presentations then unfolded, more or less in keeping with the kind of show-biz extravaganza this was apparently supposed to be. David Barnes, OS/2's very best showman, appeared by satellite link and on tape at various locations around the world, apparently demonstrating that OS/2 would work no matter what a country's standard electrical current was. Other IBMers made short, unmemorable speeches about all the computer companies that would be sending out their new machines with OS/2 on them, and all the fine applications for OS/2 that were just weeks away from release.

Then, finally, the surprise. A frenzied, even confused multimedia show, on screens, with flashing colored lights and slides and booming sound, then the orgasmic conclusion: The giant hourglass exploded, showering the audience with little Mylar rectangles that had pro-OS/2 sayings printed on them, fortune-cookie style. The crowd, at least the ones who knew who Captain Kirk was, went wild. Windows is dead! Long live OS/2!

Lunch followed at the nearby Marriott Marquis. Vendors who promised new programs for OS/2 were there. The audience from the Richard Rodgers Theatre was there. Press briefings were held there through the afternoon.

Maybe this would do it. Maybe the world would finally notice IBM's unquestionably superior operating system. Maybe this would work. Nothing else had.

The first review was troubling: The New York Times did mention the release of the new version of OS/2 -- in a three-inch, one-column wire story on page 5 of the business section the following day. This would be in stark contrast to the coverage ten months later when Microsoft finally delivered its long-awaited new version of Windows, by then called Windows 95. Four weeks before the Windows release, the Times devoted page after page to speculation as to its significance, indulging in an orgy of Microsoft worship that made it seem as if the importance of Creation was that it made Windows 95 possible. (Among the Times's many speculations that day, July 31, 1995, was that IBM would pull the plug on OS/2 the following January which, in fact, did not happen; the correction still has not appeared).

Still, the rollout was seen as a success, if not by the Times then by others, breathing new life into what everyone agreed was a troubled product. Reiswig could catch his breath.

Or so he thought.

The story, which may be apocryphal, has it that the discovery was made at Reiswig's own home, as he upgraded a computer there to the new release. The installation seemed at first to go perfectly smoothly. OS/2's weakest link in earlier versions had been its overly complicated installation procedure, but that had all been fixed. New users would have no problem and old users would be able to upgrade right over the existing program, keeping whatever customizations they had made. Because OS/2 is tremendously reliant on a file called "config.sys," smart users always made a copy of that file, usually calling it "config.bak." Should config.sys get corrupted, it was a small matter to rename config.bak to config.sys. All would then be well.

Unless one were installing the new version of OS/2 Warp that had been released that very day. The installation procedure somehow latched on to any file (in the root directory of the boot drive, which is where config.sys lived) named "config.bak" and mixed it in with config.sys, resulting in a computer that wouldn't even boot all the way. According to the story passed around in IBM and OS/2 circles at the time, this discovery was made that night by Reiswig himself when the computer halted mid-boot.

Whether the discovery took place in Reiswig's home or not, the bug was real. It meant that every single copy of the product, including those proudly handed out that day to members of the computer press (the Trekkies would have to buy their own), would have to be recalled.

It was a monstrous screwup. To this day no one seems to know how something so obvious could have gone unnoticed over the months of testing that so vast a program undergoes before it is offered for sale.

However it happened, what should have been OS/2 Warp's day of triumph was followed by days of frantic action, embarrassment, and not wholly successful attempts at damage control.

Disaster by design

Almost from the beginning, OS/2 had had terrible luck. If no one inside IBM could be found to mishandle the product at some crucial juncture, the operating system had plenty of enemies on the outside willing to fill the gap.

"I was always a fan of OS/2, once I got acquainted with its capabilities," says John C. Dvorak, longtime PC Magazine columnist, "and so it was something of a disappointment that as good as the product was in its heyday, it didn't catch on for a number of reasons. It turns out to be a web of intrigue. The reasons for its failure are not singular, but a complex matrix, and I would put Microsoft -- and IBM -- at the top of the list."

An operating system is, in its strictest definition, a program that prepares the computer hardware for the demands that will be placed on it by the applications -- the word processors, databases, and spreadsheets, as well as games, graphics programs, and communications programs -- that will run on it. An operating system has what is called an application programming interface, or API, which is a set of common commands that application programmers must use in order to get in touch with the operating system and, through it, the hardware.

The IBM Personal Computer got its name not because every person was expected to have one but because it represented a considerable departure from the way business computing had been done. Until that time, computer users in businesses used "terminals," which were not computers themselves but which were connected by cables to computers, located in "the computer room" or even off site entirely. A "personal" computer was one whose computing power was right there, on your desk. No cable was needed except one to the electrical outlet. IBM never expected its PC to become a common household appliance. The company's middle name is "Business," and it expected to deal with businesses -- the ones about whom the saying was, "Nobody ever got fired for buying IBM."

"There were some IBM product planners who had a forecast that for the life of the industry there would be 250,000 PCs sold -- during the entire life of the industry," remembers John Soyring, director of worldwide technical projects for IBM Personal Software Products. "Obviously, they got that wrong."

Rather than start from scratch, IBM developers in Boca Raton, Florida, were able to employ off-the-shelf components from outside vendors, thereby greatly reducing development time and resulting in "open architecture," which is to say a design that was not proprietary and that therefore could be copied by others. Introduction of the machine was in sight, but there was still no operating system for it. The story is now legendary about how two guys in Seattle named Bill Gates and Paul Allen, who had made a nice little business for themselves writing high-level BASIC interpreters for microcomputers, snagged the deal. They bought something called "QDOS," for Quick and Dirty Operating System, from a local company, fiddled with it a bit, and licensed it to IBM for use as its PC operating system. They had named their company "Microsoft."

The fact is, PC-DOS -- MS-DOS when licensed to other computer makers -- was never really an operating system. Applications that ran under it dealt directly with memory, with peripheral devices such as printers, video, mice, and modems. A poorly-written application could bring down the whole system. While there were a few programs, called "Terminate and Stay Resident" or TSR programs, that could more or less run while other applications were operating, this was a chancy thing involving considerable user alchemy and no guarantee of success. This was as far as "multitasking" would get, as long as the processor was Intel's 8088 chip, which was not designed to do more than one thing at a time anyway.

But microprocessors were destined to become more complex and powerful, and it was clear that a real operating system, one that provided an absolute buffer between hardware and application software, would be needed.

IBM had a problem here. Its business was built on mainframe computers and their smaller brethren, minicomputers. It did not wish to cut into that business by producing microcomputers -- PCs -- that could do the things that otherwise required more expensive machines. It was to IBM's overall company advantage to keep PCs, well, functionally challenged. But because the PC was "open architecture" and because no other computer company had an interest in maintaining IBM's mainframe computer business, IBM's attempts to put the brakes on PC development slowed only the development of PCs made by IBM. Soon Compaq and others were cleaning IBM's clockspeed, putting the hottest chips that Intel made into new, high-quality computers. It was the first time that IBM faced a major conflict over the PC within its various businesses. It was far from the last.

Under its agreement with IBM, Microsoft could license its software to other computer makers. The company did just that, providing not just MS-DOS but a growing group of "productivity applications" -- programs that do something useful -- led by its word processor, Word. BASIC was made a part of MS-DOS.

In the late summer of 1984, IBM announced its PC-AT, a computer that differed from the original PC in that it was powered by the Intel 80286 processor. The advantage of this chip was that, given the right software, it could run several programs at once. The disadvantage was that the right software didn't exist, and there was no easy way to convert existing programs into 80286 programs. The result was in effect a faster, far more expensive version of the 8088, the original PC chip. Backward compatibility -- the ability for the new computer to run old programs -- was essential. So was a way to make use of the 286's powerful new features.

What followed was a period of high-stakes confusion: A company buyer who purchased hundreds of ATs in anticipation of a solution being found to the software problem risked being stuck if no solution were forthcoming. For the first time, it was possible to be fired for buying IBM, yet buyers took the risk, to the tune of hundreds of thousands of units. In response, IBM promised an operating system that would take advantage of the 286. Microsoft would write it.

To make things worse, Intel came out less than a year later with the 80386, which offered a far more elegant way of running more than one program at once. If an operating system were properly written, it would even be possible with a 386 to run multiple DOS applications at once, no modification necessary. Each program would be led by the operating system to believe that it was running by itself on its own computer. There still was no such operating system, but the architecture of the 80386 was such that it seemed unlikely that new versions of it would be different in any important way. The road ahead was a little straighter than it had been before.

In retrospection, the answer seems obvious: Develop for the 386 and forget the 286 and the 8088. But there were now millions of 8088s and 80286s out there, with the IBM logo on their front and with owners who wanted assurance that they hadn't bought into a dead end. (They had, in fact, done just that. IBM, to its credit, remained loyal to the companies and buyers who had been loyal to it, and indeed remains so, even now from time to time introducing new and more powerful versions of plain old DOS.)

Microsoft found it all but impossible to develop a useful multitasking operating system for the 286. This was not Microsoft's fault -- the design of the chip simply wouldn't allow much useful to be done with it. Indeed, had there never been an 80286, the computing world would be a different place today, and the leading players would probably be different. As it is, the 286, in its only meaningful act of multitasking, at once tripped up IBM and catapulted Microsoft into a whole new world of opportunity.

In 1987, a full year after Compaq had begun shipping desktop machines using the 80386 chip, IBM announced its long-awaited line of PS/2 computers and the new operating system. The line inexplicably included 8088 and 80286 models as well as a few high-end, very expensive 386s. It also included a new system architecture, called Micro Channel. Peripheral cards -- modems, video adapters, sound cards, network cards -- that worked in systems using the PC architecture would not fit in PS/2s. IBM hoped to license the new, more efficient design to other computer makers. Few were buying.

A few months later, IBM finally released the OS/2 it had announced at the rollout of the PS/2 machines. The name was deliberately intended to tie the new operating system to the new line of computers, even though it would not run at all on 8088 machines and ran poorly on 286s. The name suggested that the new operating system would run only on PS/2 machines -- and, unfortunately, it was true that a lot of 286- and 386-based machines not built by IBM simply refused to run the new system.

OS/2 1.0 was not impressive. It wouldn't support hard drives larger than 32 megabytes. It had no graphical interface nor support for a mouse. While many software companies hoped to develop applications for it, few had. It was expensive. And it was very nearly killed at the outset by, of all people, Ronald Reagan.

Reagan believed that Japanese memory chip makers were dumping their product on the U.S. market. In hope of stimulating U.S. chip production, the president threatened heavy tariffs; the Japanese in response "voluntarily" raised their memory prices. A megabyte of RAM that had cost $50 was now $200. High-end computers typically were shipped with one megabyte of RAM. IBM had announced, correctly, that OS/2 required at least four megabytes to run at all well.

Buyers were now given the opportunity to spend at least $600 per machine to upgrade their computers so that they could run an expensive operating system for which there were few applications and that ran DOS applications poorly. Few did so. It was now not just possible to get fired for buying IBM but likely.

Microsoft, meanwhile, had been at work on something called "Windows." In its early incarnations it was laughed off in the computer press, and with good reason: It wasn't much good. Still, it was a graphical user interface, it did support a mouse, and though it was slow and required high-end hardware, it did more or less work at least some of the time. It ran atop DOS, so it brought with it many of DOS's limitations. Attempts to overcome those limitations were flimsy. But it was a useful exercise. Microsoft was learning.

OS/2's graphical mask, called "Presentation Manager," was finally released on Halloween 1988 as part of OS/2 1.1. And Microsoft, at least for a time, believed in OS/2. The second version of Windows was called "Windows Presentation Manager 2.0."

The new OS/2 was instantly crippled by all the existing problems plus a new batch: It included neither communications nor network support, nor did it support databases. For those features, buyers would have to await something called "OS/2 1.1 Extended Edition."

The irony of it all was that OS/2 was a vast improvement on anything that had existed before. Programmers were excited about it. IBM employees were so pleased with it that they would, as hobbies almost, develop little applications for it: Text editors, terminal emulators, a program that would allow it to run old CP/M applications, games, and so on. Among techies, OS/2 was beloved.

Computer users and corporate buyers, meanwhile, decided to sit this dance out. DOS was maturing and worked reliably, and there were many excellent programs for it. Lotus 1-2-3 owned the spreadsheet market. There were excellent database and spreadsheet programs. Networks, though still chiefly "sneaker nets" in which files were transferred by carrying them on floppy disk from one machine to another, were in development and were putting food on the tables of a new industry, computer consultants, who could make networks work -- for a price. Using modems to dial other computers by telephone was a practice enjoyed chiefly by hobbyists, though there were more and more of these. (A recent graduate of the University of Missouri was able to offer a program called "ProComm" as shareware, meaning that people could get it for free, try it out, and if they liked it and wished to have clean consciences they could then register it, paying a few dollars to the program's author. ProComm brought in more than $2 million to the author and his new company, DataStorm, the first year.)

Since its introduction in 1984 the Apple Macintosh had been the machine of choice for graphic designers and others who wished to use computers to make or manipulate pictures. The PC market was wide open for such applications, but it was limited in that PCs running DOS were "character mode" -- they displayed letters and numbers and a few symbols and rudimentary line-drawing and shading characters, but were not in any sense graphical in the way they worked. Companies that wanted to produce graphics programs needed to write huge gobs of code that did nothing but provide a graphical front end for DOS. Microsoft, seeing this need, offered to license to such companies a "runtime" version of Windows. This meant that companies could buy use of a scaled-down Windows that would start when the graphics program started, provide graphical, printer, and mouse services, and shut down when the graphics program did. An added advantage, to Microsoft, was that the graphical programs that used the runtime version of Windows would also run on a full version of Windows. It was an effective way of encouraging software developers to write for the Windows API. Programs such as the very popular CorelDRAW! and Aldus Page Maker were shipped with runtime Windows. It did not seem to matter that the Windows API changed from version to version -- it would be left to the applications developers to produce fixes that would allow old Windows programs to run on new versions of Windows. (Digital Research tried to do the runtime thing with its GEM graphical interface. It never caught on, in part because GEM was awful and because the programs that employed it, led by Xerox Ventura Publisher, were monstrously difficult to use.)

But work on OS/2 didn't end. Version 1.2 was released in 1989, and it did nothing to enhance the reputation of the operating system.

"It was terrible," says IBM's John Soyring. "We were embarrassed to go to customers with it." Those customers had been promised a lean and bulletproof operating system. What they got instead illustrated the growing rift between IBM and its partner in the enterprise, Microsoft.

"We were concentrating on a stable system, technically sound and reliable," says Soyring. "Microsoft was interested in the user interface."

Microsoft's Bill Gates recasts the disagreement, saying that it chiefly dealt with Microsoft's hope that Windows programs could be modified to run as native applications on OS/2 with relative ease, while IBM's demands made this impossible.

It would turn out that both descriptions were correct.

The dispute figured in the companies' decision to go their separate ways when their collaboration agreement expired, which took place in phases until the final split in September 1992. The schism began fairly peaceably about the time the awful 1.2 appeared, but it was not long before it had degenerated to open hostility. Microsoft had very critical things to say about IBM, which complaints were aired on the front page of The Wall Street Journal. IBM worked to calm angry OS/2 customers.

"We had a huge investment by IBM's very best customers, who had bought this thing called 1.2 -- and they weren't happy," says Soyring. "So we had to fix that. We rapidly developed something called version 1.3, which turned out to be an excellent-quality release. We sold over a million copies in just one year of OS/2 extended edition -- and that's selling at a retail price of $695 a copy, so it was a big business all by itself." Version 1.3 was and is a tremendously successful product: it is the operating system used on more than 90 percent of the automated teller machines in use in the world today, as well as specialized airline reservation systems, medical equipment, and even high-end fax machines. It continues to ship as an "embedded system" in such equipment.

The Battle is Joined

Microsoft, for its part, had been working on its Windows product line, which included different versions for 286 and 386 processors. But when Windows was mentioned outside of Microsoft, it was usually in a complaint or as the butt of a joke. Then the company began demonstrating a product called "Windows 3.0." It showed real promise. When it was rolled out in late May 1990, the word of mouth was so enthusiastic that tens of thousands of copies sold before any of the buyers knew much about it.

Windows 3.0 introduced many things to the PC world, not all of them good. It established the industry standard of ridiculously exaggerating the minimum equipment required to use the product -- the Windows box said it required only an 8088 processor. While it was perhaps technically true that it could be made to run somewhat on such a dinky processor, certainly no one ever did any useful work with such an arrangement.

It was pretty -- excitingly so for the time. The deep blue Microsoft Windows screen came up, the installation usually went more or less smoothly, the program to identify and "migrate" existing DOS applications so that they could be launched by Windows wasn't perfect but was a great first effort -- and it had a tremendous Solitaire game.

But it perched atop DOS and, while it added some operating system features to that glorified program loader, it was subject to many of DOS's shortcomings -- plus some of its own. It was supposed to multitask DOS and Windows applications, and there are recorded instances of its actually having done so, but these were remarkable. Mostly, it crashed a lot, for reasons of architecture and of execution. The architectural problem was that Windows employed what was called "cooperative" multitasking. It sounds nice, doesn't? What could be better than programs on a computer all happily cooperating to get things done? The reality was far different. Cooperative multitasking means that all programs had to cooperate or the system would come crashing down. The execution problem came about because DOS applications -- including those from Microsoft; indeed, especially those from Microsoft -- were accustomed to having the machine all to themselves. They would do something that Windows didn't like, and it was time to reboot, a painful 90 seconds which the hapless user could employ wondering how much work had been lost.

And to make things even worse, Windows 3.0 didn't even run Windows programs very well. The existing Windows applications had been written for earlier versions of the product, and Microsoft had been none too careful in working to assure backward compatibility. The company had to rush out a quick fix for its own "Word for Windows" word processor.

Indeed, Windows 3.0 quickly became known for the initials "UAE." These stood for "Unrecoverable Application Error," which is what the pop-up box proclaimed when Windows was just about to crash. It meant the system had gone haywire due to a lack of cooperation -- even if only one program, typically Word for Windows, was running -- and that any work done since the last time it was saved to disk was now about to be lost. Perhaps the most maddening thing about it was the sheer audacity of the little "OK" box: The computer would sit there and do nothing until the user clicked on this box, whereupon the computer would go ahead and finish crashing, now with the user's permission. There was a cottage industry of hacking the code so that the box would have an icon of an upraised middle finger, instead of the Windows alarm icon, and considerably different wording than that supplied by Microsoft, now along the lines that the user had just been screwed by Windows, which was now going to destroy some data. It has been said, and there's good reason to believe, that it was the Solitaire game that kept Windows alive during the first year or so. Users would launch Windows to play the game, which is addictive and which rewards the winner with a spectacular explosion of cards, then close Windows to do actual work in their far-more-reliable DOS applications.

Still, the idea of a graphical interface was an attractive one, and there really was no choice other than Windows. So people mostly left it on their machines and, one by one but then in a flood, native applications capable of perching atop Windows without breaking any of the glass began to appear. UAEs continued to appear, too, but they were taken as part of the cost of being on what had come to be known as "the bleeding edge."

Though IBM and Microsoft had disagreed as to what it would do and how it would look, there had always been plans for OS/2 2.0. It was to be a 32-bit operating system (Windows was thusfar only 16-bit), allowing the operating system to make more robust use of the 80386 and better processors. While IBM's first priority was to clean up the sorry mess that was the (16-bit) 1.2 version of OS/2, work there proceeded, too, on 2.0. The war turned nasty. In Boca Raton, IBM's master software writers realized that due to the residue of the IBM-Microsoft Joint Development Agreement, IBM had full rights to Windows code. This meant that rather than coming up with a way to port Windows applications to OS/2, they could actually build Windows right in to OS/2 2.0. This meant that OS/2 2.0 would run not just OS/2 applications but Windows applications and, through a very solid emulation, DOS applications as well. Dozens of them, all at once.

Reiswig began telling customers privately and then potential customers publicly that OS/2 2.0 would be "a better DOS than DOS, and a better Windows than Windows." Microsoft did not take this quietly. First, word was spread that it was doubtful that IBM could make Windows part of OS/2 at all. Then came the FUD -- fear, uncertainty, and doubt -- about when the new version would become available.

Steve Ballmer, a Microsoft vice president who has been likened to George S. Patton but who sometimes more resembles Charles Emerson Winchester with rabies, announced that if OS/2 2.0 shipped before the end of 1991, he would "eat a floppy disk." Obligingly, IBM did in fact offer OS/2 2.0 for sale before the end of that year, sort of. It was OS/2 2.0 LA, the last letters standing for "limited availability." It was beta code, really, the idea being that it would give big customers a chance to take an early look at the new 32-bit product and help determine where it did not meet expectations, though Ballmer's boast did not go unnoticed and there are still people at IBM who view him as a welsher. If he ate a floppy disk, he did not publicize it. And at the end of March 1992, GA -- General Availability -- OS/2 2.0 was released.

The response was . . . peculiar. It was universally agreed that the new version was superior to anything else on the market. It was a better DOS than DOS, and it ran Windows applications faster and more reliably than Windows did. There were a few DOS and Windows applications that would not run under OS/2, but these were ones that had programmed their way around the obvious shortcomings of the two platforms. And when a DOS or Windows application crashed, only the application itself would die -- OS/2 and any other programs that were running would keep right on chugging along. But to run effectively it needed at least 8 megabytes of RAM, something few computers had. While the price of memory had dropped to less than $100 per megabyte, it was still not an inconsiderable expense -- and many computers would not take that much memory at all. What's more, OS/2 was finicky about the hardware on which it was asked to run. It was not easy to install -- certainly not as easy as Windows 3.0 had been, not by a long shot. And the silly thing came with no user manual! None at all! All the documentation was online, which users thought was a hell of a note -- they were accustomed to opening the manual only when a machine would not work. They didn't need the frigging manual when all was well!

"The worst part of OS/2 was that it was not a good experience for people installing it," says William F. Zachmann, at the time a computer columnist with Ziff-Davis and an early OS/2 advocate. "If it had the fit and finish that it was supposed to have, this kind of problem wouldn't have existed."

And even though it was a tremendous technical achievement, most commentators were skeptical. They'd been down this OS/2 road before, in the late 1980s, and nothing much had come of it. Writing in PC Magazine , Dvorak said that OS/2 2.0 had "the IBM software stench of death." IBM's history of PC software was anything but encouraging, with a succession of programs that were either patently no good or else that IBM abandoned just as their promise began to emerge.

Within IBM, though, and not just within the Personal Software Products division, there had been a whispering campaign, almost an underground, seeking to promote OS/2 2.0 for the standalone desktop computer. The conspirators let it be known in user groups and on local computer bulletin boards that the new version of OS/2 was coming and that it would be incredibly good. They couldn't divulge details -- that was a firing offense -- but they could offer a wink and a nod. Soon, they came to be known as "Team OS/2." After the release of 2.0, Team OS/2 grew to include knowledgeable users who proselytized for the product, demonstrated the product at user groups and in stores, who talked it up, loudly, and who campaigned for its widespread adoption. If it seems weird, the idea of people using their spare time in an unpaid volunteer effort in support of a multi-billion-dollar corporation, well, it was weird. IBM was suddenly inundated with orders for the new operating system, from nontraditional IBM customers -- actual people! There was no product in the pipeline because there was no pipeline. Some eager would-be users waited weeks to make the discovery that OS/2 would not run if your computer had an Oak-brand video card.

Still, these things were to be expected with a major release of a product in which there was sudden and unexpected interest. And OS/2 2.0 was certainly more solid than Windows 3.0 had been almost two years earlier. OS/2 would surely make it on the desktop computer and in due course relegate Windows to the category of interesting exercises poorly executed. Or so it seemed.

The Winning Strategic Play

At the end of June 1992, at PC Expo at the Jacob Javits Convention Center in New York City, IBM had a huge display that touted OS/2 2.0. Microsoft's presence seemed low key by comparison. The company had nothing especially exciting to announce, no flashy new product. What Microsoft had instead was the slam-dunk that would assure it victory in the operating system war.

Buttons.

They looked like political campaign buttons, but instead of the name of a candidate they announced that the wearer demanded Windows preloaded on his or her next computer. They didn't seem like much, but they were the emblem of what was possibly the most significant event in the history of personal computer operating systems.

Up until that time, people who bought IBM PCs or compatibles for the most part got them empty. They came with some version of DOS and maybe a few low-quality "bundled" applications, but it was the user's job to format the hard drive and install DOS, plus the other programs that came with the computer, plus any other programs the user had or bought. This required some degree of technical sophistication, and if the new computer owner didn't have it at the beginning of the process he sure as hell did at the end. This made better computer users, but it also kept a lot of people from buying computers at all. (One company, Vendex Pacific, had even trotted out a tubby, shaven-headed professional wrestler in the late 1980s in television ads to demonstrate that its PC was so easy to use that even an obvious dimwit like this wrestler guy could make it boot up. The campaign didn't work, and Vendex went under.)

But now, with its preload campaign, Microsoft aimed at the market of people who didn't know anything about computers and didn't want to, but who did want to own and use them. Soon computer advertisements used it as a selling point: Buy our computer and all you have to do is plug it in and turn it on and in seconds, in 16 glorious colors, would be Windows! And not long after that, it would be impossible to buy a computer that didn't have Windows on it, first thing. Microsoft could now brag of millions and millions of sales of Windows, which was enough to cause independent software vendors -- ISVs to the trade -- to abandon all else so as to write Windows programs.

It didn't help OS/2 any that it could run Windows programs; in fact, it prevented developers from writing applications for the far more sophisticated and powerful OS/2 API. Why write for just one when you can write for both?

Though it seems obvious now, it was anything but clear to the computer world in 1992 just how powerful preloading would be as a marketing tool. The fact is, most people who own computers today are using whatever came on their machines. A few little programs may have been added here and there, games mostly, or bootleg copies of whatever the brother-in-law uses at work, perhaps a virus scanner purchased hastily in response to reports of viruses, which reports were spread by the people who sell virus scanners, but the programs that arrived on the hard drive are still there and still used. Inertia is a very powerful force, and there needs to be a very compelling reason before a person will go to the store and shell out a hundred bucks or more for the privilege of installing a new operating system that may not even run on his or her computer. IBM discovered this when its OS/2 marketing efforts -- now aimed just a little at the small office and consumer -- crashed into floor-to-ceiling preinstalled Windows. (In a delicious irony, Microsoft made the same discovery years later when it rolled out its long-awaited and long-overdue Windows 95, only to discover that people did not rush out to buy it. Were it not for preload agreements, Windows 95 might very well have been a nonstarter.)

The preload agreements were at least very clever marketing and at most potentially felonious. In order to get a good price on DOS, original equipment manufacturers -- OEMs -- would have to agree to buy Windows, too. But more than that, they would have to pay for DOS and Windows for every computer they shipped, whether DOS and Windows were on it or not. Even Vendex's wrestler would be able to see that no computer maker is going to offer another configuration if he has had to pay for DOS and Windows for the machine already. The combination of a campaign proclaiming the virtues of Windows preloads and sales agreements that virtually forced the OEM who shipped DOS and Windows on any of his computers to do so on all of his computers gave Microsoft a virtual monopoly.

OS/2 was locked out.

IBM vs. IBM vs. Microsoft vs. the Feds

But wait -- didn't IBM make computers? Surely IBM would load OS/2 on its own machines, thereby assuring that at least a substantial percentage of the computers being sold would be running the flagship operating system, right? One would think so. One would be wrong. The IBM PC Company and the IBM Personal Software Products division had this in common: They both sent their profits to Armonk, and if there were no profits, the firings were decreed in Armonk. There was no love lost between them. Each looked upon the other as the enemy -- PSP believing that the PC Company was trying to run them out of business by failing to preload their software, and the PC Company believing that PSP was trying to put them out of business by trying to force OS/2 on them when their customers wanted Windows. It was noticed that IBM apparently didn't think enough of OS/2 to put it on its own machines; a person wanting OS/2 on, for instance, an Aptiva would literally have to beg and demand and threaten. Then, when it all did arrive, it often as not wasn't properly installed and wouldn't run well. (Later, IBM would install both OS/2 and Windows on some of its machines, but made no particular effort to persuade the user to boot one over the other, and many customers were unaware that they had OS/2 at all.)

"It's really simple: if you establish an installed base, people will write for it," notes Will Zachmann. "Microsoft essentially gave away Windows to get that base. IBM didn't give anything away. IBM should have viewed it as a strategic thrust into the future. They should have been giving it to Compaq, to Dell. It should have been on every IBM PC system. The product never had the support of IBM. The marketing was amateurish at best. It was constantly sabotaged from within by IBM. Some of its worst enemies were at the IBM PC Company."

"What's really weird to me about IBM is the blameless nature of everyone in the company," says Dvorak. "No one ever takes responsibility for something not happening right. You can't find a person, you can't find an individual, you can't get a name, you can't find anyone responsible for screwing something up. It's totally impossible because in fact nobody has screwed anything up -- it's an entire mechanism that is almost inexplicable. Somebody once described working with IBM as playing the game of connect-the-dots, because it's just a bunch of discrepant individuals that have a reporting scheme that's virtually untranslatable; you don't know who reports to who, really, and the company's organization is such a screwy mess that it can never be successful in a mass market where you need a lot of focus and direction."

Microsoft, it has been noted for years, lives in a constant siege mentality. Even though it had the operating system market all sewed up -- with the aid of IBM -- it was afraid of OS/2. It talked down its IBM competitor, pronounced it dead every few weeks, and set its software to sabotage itself when installed on OS/2: Word for Windows, for example, had code in its installation program the purpose of which was to determine if it was being installed on Windows or on OS/2; if it was the latter, some of the help and tutorial files were not installed.

"There's no question Microsoft wanted to torpedo OS/2 any way they could," says Zachmann. "There were some people who skirted close to the ethical line. There are some individuals at Microsoft who I believe were a bit over the top. There's no question that it was in Microsoft's interest to have OS/2 fail. They succeeded, with help from IBM. It was IBM's to win."

In 1993, IBM released a version of OS/2 that was designed to install over and to incorporate a user's existing Windows installation. It actually made the Windows run better and more reliably. It was very successful and soon had sold several million copies. Microsoft quickly "upgraded" its Windows 3.1, offering a free diskette that would make 3.1 into 3.11. The lone apparent effect was that it would now no longer work with "OS/2 for Windows," as the IBM product was known. IBM came up with a workaround, and Microsoft thereafter withdrew the offending code.

Additionally, Microsoft had adopted the practice of changing its Windows API or placing undocumented features into it and making this information known only to Microsoft's application developers. In that Microsoft was competing with ISVs in many Windows application program areas -- word processor, spreadsheet, database, and more -- and in that Microsoft now had what amounted to a monopoly on operating environments with DOS and Windows, the ISVs considered this an unfair trade practice. They complained to the Federal Trade Commission, which started an investigation in 1990, considered it for awhile, and then, deadlocked in a 2-2 vote, did nothing.

Surprisingly, the Justice Department's Antitrust Division then opened an investigation into a whole range of what were perceived to be illegal monopolistic practices by Microsoft. OS/2 users took hope in this. The reason was, there were relatively few OS/2-specific applications and users wanted more. Sure, OS/2 would run DOS applications better than they had ever run before. And it would run Windows applications in a stable fashion. But real OS/2 programs -- they were something else! They could be multi-threaded, which is to say were able to do a whole bunch of things at once, increasing productivity and convenience. They were solid. And because the installed base of OS/2 was relatively small, at a few million, and because OS/2 would run DOS and Windows programs, few programmers were cranking out OS/2 apps. (Ironically, one of the few, for awhile, was Microsoft, whose text-based DOS applications were "family mode," which is to say they would install as native OS/2 applications when they were installed under a running copy of OS/2.) If Microsoft were slammed by Justice, it could only help OS/2, resulting in further OS/2 development both by IBM and by ISVs.

OS/2 was very popular in Europe, and several software vendors there released applications. Dvorak says that this has historically been the kiss of death, which is why we don't see lots of programs flowing out of that continent, even though it is chockablock with fine programmers.

"The Europeans are always trying to go and do things their own way, and sometimes they're actually more objective than we are," he says. "They'll go and do an analysis of a number of products and one of them will be superior technically, and the Europeans will actually use that product, which is not the way we do it. The Europeans fall into the trap of buying a lot of offbeat things like Amigas -- which was a good machine, there's no question about it -- but they were also the biggest Atari supporters. It's always something that just doesn't make any sense. They're always coding for screwy platforms that nobody has. I mean, these guys never get it together. These Europeans are just out to lunch."

Developers Aren't Marketers; Neither Are Nuns

There is, it should probably now be noted, a peculiarity in the computer industry, a weird turn whereby people who write very good programs seem talentless as marketers. This seems especially true among the contrarians who seek to come up with better code than that provided by Microsoft. (The few who succeed both as programmers and as marketers are usually bought all or in part by Microsoft -- Foxbase is an example, as is Stac, which made the popular "Stacker" disk-compression program.) Years ago there was a feature-rich, quick, and inexpensive -- good, fast, and cheap -- word processor called "Textra." Reviewers sang its praises, and its benchmark test results were almost unbelievably good. But it was not actively promoted and after a few years it disappeared from the marketplace. A company in Berkeley, California, produced a Windows alternative called "Geoworks." It was a graphical user interface with many operating system features, differing from Windows in that it was fast, reliable, powerful, and it and its entire suite of applications, all graphical, would fit in about 10 megabytes of hard disk space. Reviewers described it as "what Windows should have been" and the like. But the company was slow in producing its software development kit, without which ISVs could not write programs for it; then it was drowned by the Windows tidal wave. Though still technically available, Geoworks is on the back burner, and the company now is concentrating on operating systems for handheld computers, small dedicated computer-like things made by companies that used to make typewriters, and the combined cellular phone-fax machine-pager devices.

But no single program has a more tragic history than does the "DeScribe" word processor. It was arguably the best and most powerful word processor/desktop publisher ever written. It exploited OS/2 fully. It was and is beloved of OS/2 users around the world. The first 32-bit version of DeScribe was released soon after OS/2 2.0 was. It was expensive, at more than $300, but at that time good word processors typically cost that much. For a time there was the presumption that it would ride the coming OS/2 wave to success. But the OS/2 wave never appeared. James Lennane, president of DeScribe, undertook a number of actions that many in the OS/2 world thought were very strange indeed. First, he announced a new edition while at the same time announcing that if it didn't sell 1,000 copies the first month, he would close the company. For some reason this did not spark buyer confidence. Then he announced that the program would contain code that would cause it to expire every six months unless it had been updated by a key disk sent out twice a year by the company -- this, he said, was due to widespread pirating of the software, about which problem he even appeared on television's 60 Minutes to complain. This sparked even less buyer confidence; users did not want to have their work dependent upon their receipt of semiannual diskettes from a company that just a few weeks earlier had threatened to fold entirely. Then even that scheme was withdrawn, and the program was shipped pretty much normally to buyers who were by now wondering if the DeScribe Corporation, maker of great software, were populated entirely by loons. Finally, the company put its product, including versions for Windows and Windows 95, on a CD-ROM and stuck the CD into a book, and sold the whole thing in bookstores for $50. Buyers were invited to subscribe to a service (jokingly called the "DeScribe-of-the-Month Club") through which for a small fee they would receive regular improvements to the program on CD-ROM. Finally, the company announced it was going belly-up. It sent a new CD, containing the best version of DeScribe ever produced, to users as a kind of going-away present.

IBM did better, but not much better. There was a little advertising for OS/2 2.0 by IBM, though companies like Word Perfect took out multi-page advertisements featuring various office workers saying that they were happy about the new version of Word Perfect for OS/2. That campaign quickly ran out of steam, the Word Perfect for OS/2 project was dropped, and diskettes that would cause the Windows version of Word Perfect to run more smoothly under OS/2 were distributed. Corel released a version of CorelDRAW! for OS/2, but it was a port of a version earlier than the current Windows version, and many of its parts were Windows-native. Corel promised that thereafter its OS/2 and Windows programs would have equivalent features and would be released at the same time. The promise was not kept.

Indeed, many companies promised that they would soon release OS/2 versions of their programs. Even Microsoft announced that it would be writing new OS/2 programs once the 32-bit version of OS/2 had sold 2 million copies. OS/2 quickly sold 2 million, but Microsoft never produced the programs, and the whole thing was taken as Microsoft announcing that it didn't think OS/2 would sell that many units -- just more FUD.

Some companies did deliver, but these were expensive "vertical" applications -- programs specific to a particular kind of business, such as medical record keeping, or even custom-written for a particular company. The broad-based consumer programs, though, never appeared in any great numbers. ISVs said they were receiving little or no help from IBM, certainly nothing like the red carpet Microsoft rolled out for them under what was seen by cynics as a policy of keeping its friends close and its enemies closer. By then, everyone feared Microsoft but nobody liked the growing software giant. Some expressed hatred, but only privately, lest Microsoft hear about it. These developers and users were pretty much there for the taking, but IBM was lukewarm.

"IBM would sort of buy support for awhile, but they were inconsistent," says Zachmann. "They're not a reliable business partner. They had a strategy du jour. IBM has an ability to turn gold into lead."

If the software problem was bad, the hardware problem was worse. Operating systems such as OS/2 and Windows require small programs, called drivers, to fit between the API and the hardware, such as a video card, a sound card, or a CD reader. Hardware manufacturers delivered these drivers for OS/2 either slowly or not at all. Microsoft, on the other hand, made sure at first that hardware was supported; after awhile, a company that didn't write drivers for Windows was courting suicide.

Added to OS/2's woes was another Microsoft marketing technique, one that would also be investigated by the Justice Department. Commonly known as the "carrot-and-stick" plan, it comprised a series of promises: Microsoft said it was about to release a new version of Windows so incredibly good that no one would want anything else. The old arrangement, of Windows perched precariously atop DOS, would soon be a thing of the past. Just wait a little longer -- don't be distracted by this talk of OS/2. Release dates kept being pushed back. Just wait a little longer, Microsoft said. It's almost done now, Microsoft said. Any old time now, Microsoft said. And buyers waited.

Yet a group of consumers, small at first but growing, were buying and installing OS/2. They were willing to put up, at least for awhile, with the lack of software and the lack of drivers; they were willing to endure the ordeal that installation often became. And they were doing this with no effort on IBM's part. Between the release of OS/2 2.0 and the release of 3.0, it occurred to marketers at IBM's Personal Software Products division that, hey, with a little work we could sell this thing to actual people!

Thus the showbiz rollout of OS/2 3.0. Despite the terrible config.sys bug, it was a remarkable product, aimed squarely at the consumer market. It included a full Internet access package, a personal information manager, a good little suite of home office applications, useful terminal emulation and fax programs, and better but still not good hardware support. The rollout made much of Microsoft's promises, noting that they were not true and anyway, why wait for what Microsoft might deliver, when IBM has already delivered all that, plus much, much more?

There would be a huge advertising campaign, IBM promised. OS/2 would be preloaded on a wide spectrum of machines, and not just IBM machines, either. This is it, boys and girls! Fasten your seatbelts! Here come the nuns!

The nuns?

Mention OS/2 Warp to someone who has worked around computers for awhile, and chances are they'll look puzzled for a minute and then say, "Oh, yes. The nuns." The fact is, all anyone remembers from IBM's $500 million OS/2 3.0 advertising campaign is a television commercial in which a group of Belgian nuns walk down some stairs in a very austere convent. They are talking -- not in English -- about surfing the Web with OS/2. Viewers learned this through the subtitles. It was the latest manifestation of computer industry advertising, ground broken by the goofy Wang ads of a few years before that had done so much toward making that company what it is today. It had never occurred to IBM, apparently, that an introduction of their product to television viewers might include a description of what the product was, what it did, and why the viewer might have wanted to buy it. The campaign didn't last long.

But the die-hard OS/2 users, though angry at IBM, stayed the course. They were even angrier at the empire whose capital is in Washington -- Redmond, Washington.

"One of the things I noticed, and this isn't meant to stereotype the group, but one of the things that I've found with that particular group is that while they're very pro-IBM OS/2, they're just as anti-Microsoft," noted IBM's John Albee. And rare was the industry magazine that did not comment repeatedly about the fervor of OS/2 users, who the magazines dismissed as crackpot zealots, especially the users who voted OS/2 InfoWorld's product of the year for four consecutive years.

Courtly Hatred and Windows in Mud Huts

At about this time there began a series of peculiar coincidences that sparked the conspiracy theorist tendencies among OS/2 users. It began with PC Magazine.

That publication prints in each issue a software sales chart showing the bestselling programs. For month after month, Windows topped the list. But now, in the autumn of 1994, the best seller was, despite the ridiculous ad campaign and the installation bug, OS/2 Warp 3. And for the first time ever, the chart in PC Magazine was simply -- not there. The magazine's editors said that there hadn't been enough space for it during the two months that OS/2 would have been on top. It was nothing more sinister than that, they said, just an unfortunate coincidence. No one believed them, but no one knew what to do about it, either, though some did pen nasty messages on the postage-paid cards that flutter by the dozens out of copies of PC Magazine, and then drop them in the mailbox, to no apparent effect. But the mysterious disappearance of the charts did galvanize a certain militancy among OS/2 users: The world, controlled by Microsoft, was out to get them. Now they had proof. They would soon lay claim to more proof. It would all become incredibly weird.

It had to do with the Justice Department's antitrust investigation of Microsoft. It was expected that sometime in the spring of 1994, Assistant Attorney General Anne Bingaman, head of the antitrust division at Justice, would announce a whopping big lawsuit against Microsoft. But then came a series of, well, coincidences is as good a word as any, beginning with a visit by Bill Gates to the White House that spring. Soon thereafter Microsoft and Justice began to discuss a settlement. A month later, on July 15, Justice and Microsoft announced that Microsoft would enter into a consent decree and, without admitting any wrongdoing, stop certain practices, among them the per-processor licensing agreements. The computer industry emitted a collective gasp -- this was just a slap on the wrist!

"They go to slap them with something and Bill [Gates] says, `I'm going to stop doing it."' said Albee, IBM PSP program manager. "Well, that's nice -- after you've done 75 million machines, you're going to stop now. I'd argue that the damage had been done already."

Over the next few months, hearings were held by Stanley Sporkin, U.S. District Judge for the District of Columbia. He could not be written off as a crackpot -- before he was district judge he was chief of enforcement at the Securities and Exchange Commission. His job now was to sign off on the agreement. But he, too, thought it was too little, too late, beginning with the per-processor contracts.

"If an OEM sells some PCs with a competitor's operating system installed (e.g., IBM's OS/2), and others with MS-DOS installed, the OEM would pay Microsoft royalties for all PCs sold," wrote Judge Sporkin in a memorandum opinion on Valentine's Day 1995. "In effect, the OEM pays twice every time it sells a PC with a non-Microsoft operating system -- once to the company that licensed the operating system to the OEM and once to Microsoft."

He didn't stop there, not by a long shot. He also launched into the nondisclosure agreements that Microsoft employed and that were mentioned in the consent agreement. Then he blisteringly criticized the Justice Department for what the agreement didn't say.

"The Government has declined to provide the Court any meaningful information concerning the substance of its investigation, i.e., what it investigated and the findings it made," Sporkin wrote. "Microsoft has gone a little further than the Government and tried to allay certain of the Court's concerns. However . . . some of the assurances provided by Microsoft have proved to be unreliable and contrary to fact."

That was just the beginning.

"[T]he Government could initiate a massive antitrust probe and find significant violations in a large market. Then, bowing to political or other pressures, the Government could write a complaint that alleges only minor anticompetitive practices in a very small market and file it contemporaneously with a decree that addresses those limited violations." Sporkin believed that the Justice Department should have gone farther -- much farther.

"The Court cannot find the proposed decree to be in the public interest for four reasons. First, the Government has declined to provide the Court with the information it needs to make a proper public interest determination. Second, the scope of the decree is too narrow. Third, the parties have been unable and unwilling adequately to address certain anticompetitive practices, which Microsoft states it will continue to employ in the future and with respect to which the decree is silent. Thus, the decree does not constitute an effective antitrust remedy. Fourth, the Court is not satisfied that the enforcement and compliance mechanisms in the decree are satisfactory."

Pretty damning. But wait -- there's more. Bingaman, normally viewed as the toughest of litigators, and Microsoft, Sporkin alleged, were in cahoots to keep him from learning what he was supposed to be signing.

"The Tunney Act does not . . . justify the stonewalling that has taken place in these proceedings. . . . `Tunney Act courts' are not mushrooms to be placed in a dark corner and sprinkled with fertilizer. . . .

"[T]he Government fails to show that the proposed decree will open the market and remedy the unfair advantage Microsoft gained in the market through its anticompetitive practices. . . .

"What the decree does not address are a number of other anticompetitive practices that from time to time Microsoft has been accused of engaging in by others in the industry. Since a Court cannot shut its eyes to the obvious, it has asked the parties to discuss these widespread public allegations. The Government has refused, and Microsoft has claimed that the accusations are false.

"The accusations range from charges that Microsoft engages in the practice of vaporware i.e., the public announcement of a computer product before it is ready for market for the sole purpose of causing consumers not to purchase a competitor's product that has been developed and is either currently available for sale or momentarily about to enter the market. Other allegations include charges that Microsoft uses its dominant position in operating systems to give it an undue advantage in developing applications software and that it manipulates its operating systems so competitors' applications software are inoperable or more difficult for the consumers to utilize effectively. . . .

"[A]ll participants concede that consumers and OEMs will be reluctant to shift to a new operating system, even a superior one, because it will mean not only giving up on both its old operating systems and applications, but also risking the possibility that there will not be adequate applications to run on the superior product. If this is true, Microsoft can hold onto its market share gained allegedly illegally, even with the introduction of a competitor's operating system superior to its own. By telling the public, `we have developed a product that we are about to introduce into the market (when such is not the case) that is just as good and is compatible with all your old applications,' Microsoft can discourage consumers and OEMs from considering switching to the new product." Sporkin then quoted two Microsoft employee evaluation forms that had in effect been leaked to the court, in which employees bragged of having pre-announced a product that was at that point far from ready, solely to hurt the sales of a competitor's product which was at that time on the market. But he wasn't done even yet.

"This Court cannot ignore the obvious. Here is the dominant firm in the software industry admitting it `preannounces' products to freeze the current software market and thereby defeat the marketing plans of competitors that have products ready for market. Microsoft admits that the preannouncement is solely for the purpose of having an adverse impact on a competitor's product. Its counsel states it has advised its client that the practice is perfectly legal and it may continue the practice. This practice of an alleged monopolist would seem to contribute to the acquisition, maintenance, or exercise of market share. . . .

"The Court cannot sign off on a decree knowing that the defendant intends to continue to engage in an anticompetitive practice without the Government providing a full explanation as to its `no action' stance. It would almost be the equivalent of a Court accepting a probationary plea from a defendant who has told the Court he will go out and again engage in inappropriate conduct."

Judge Sporkin noted that ISVs requested that they not be named in an amicus curiae brief filed in their behalf.

"Here is a company that is so feared by its competitors that they believe they will be retaliated against if they disclose their identity even in an open proceeding before a U.S. District Court Judge.

"The picture that emerges from these proceedings is that the U.S. Government is either incapable or unwilling to deal effectively with a potential threat to this nation's economic well being. How else can the four year deadlocked investigation conducted by the FTC be explained? What is more, the Justice Department, although it labored hard in its follow up investigation, likewise was unable to come up with a meaningful result." In other words, a slap on the wrist.

"It is clear to this Court that if it signs the decree presented to it, the message will be that Microsoft is so powerful that neither the market nor the Government is capable of dealing with all of its monopolistic practices. The attitude of Microsoft confirms these observations."

Whereupon Sporkin refused to approve the consent decree. To say that all hell broke loose would be to understate things considerably. For a start, IBM and OS/2's users now had it in writing from a Federal District Court that the evil Microsoft had illegally and unethically locked OS/2 out of the market. But the celebration was followed by confusion: So what?

Microsoft and Justice, titular adversaries, filed a joint appeal. While it was being considered, the Warp 3 rollout at the theatre took place, as did the mysterious disappearance of the sales charts. Microsoft continued business as usual, even requiring ISVs who wanted to develop for the just-over-the-horizon Windows 95 to sign an agreement whereby they promised not to write software for any competing environment for three years. IBM sold 5 million copies of OS/2 Warp, many in Europe, but that fact went largely unreported. Anne Bingaman herself was quoted as saying that the decree came five years too late to do much good.

The following June, a federal appeals court ruled that Judge Sporkin had overstepped his authority and assigned the case to a different judge, Thomas Penfield Jackson, who had a freshly inked rubber stamp. Bill Gates soon thereafter visited China where, after meetings with Jiang Zemin, Windows was declared the official operating system of the People's Republic of China. It was quite a coup for Microsoft, scoring a monopoly in the world's largest totalitarian regime. Gates's famous prediction -- "A computer on every desk in every home, all running Microsoft software" -- was going to be true in the PRC, to the extent that Chinese homes had desks and computers.

It is here that the conspiracy theorists have their heyday: At just about the time of Gates's visit, money began flowing from the government of China into Democratic Party coffers. Could it be, the Oliver Stone/2s ask, that Gates was using China to launder payoff money to the Clinton Administration's reelection campaign, in payment for the velvet-glove treatment by the Justice Department? The whole idea illustrates the contempt in which Microsoft is held by OS/2 users, who see Bill Gates as a kind of malevolent Woody Allen character bent on world domination and likely to achieve it. Judge Sporkin's suggestion that the United States Government was powerless to keep Microsoft within the law further fuels the fire, which is after all kindled merely from a series of coincidences involving a company and an administration where peculiar, suggestive coincidences aren't all that rare.

IBM Opens Fire -- On Itself

In any case, IBM took a backseat to no one when it came to doing injury to OS/2 and its consumer users. On July 31, 1995, the very day that The New York Times went all gooey over the still-unreleased Windows 95 and announced that IBM would soon discontinue OS/2, IBM CEO Lou Gerstner told a group of securities analysts something that sounded very much as if IBM were conceding the standalone computer to Microsoft.

"There are people out there who love OS/2 on the desktop," Gerstner said, "but our focus is on our large-enterprise, real serious, line-of-business applications." The New York Times had a follow-up story that seemed to confirm the July 31 speculation. What's worse, industry publications were quick to follow suit, quoting even business users who wondered why IBM didn't seem at all serious about the product.

"It was very, very damaging to OS/2," says IBM's Soyring. "But it also caused an uproar among our customers. First of all, when it was printed it was also published elsewhere, and then magazines like Information Week followed up with a picture of a coffin draped in black with a white lily and a box of OS/2 Warp 3 on it. Which had a very powerful visual impact on people."

IBM's Reiswig responded through an interview, published on the Internet, with Jo Sager, PSP's publicist.

"We are going to do more for the consumer market, particularly a new family FunPack that's coming that has games and edutainment and helpful things to use at home that are exploited with OS/2," he said. "We're doing a game developers' conference to get more games on OS/2. And so, we see a very important connection between the continuum of users, whether they are stand alone or connected or in an enterprise or a big server connected to another server." The Gerstner remarks, Reiswig said, were merely to reassure corporate customers that they had not been forgotten in the push, such as it was, to sell OS/2 to individuals. It was unstated just how corporate users would find cause for alarm in the widespread use of the operating system.

"Lou's statements about desktop were intended to mean that the consumer market and the stand alone user market, desktop users, were our secondary priority, not our primary priority. Our primary priority was client server in the corporate enterprise. Now, we did Warp last Fall to great acclaim in the market, frankly, at the request of corporate customers saying `we want our users to understand the value of OS/2, not just in the corporate environment, we'd like to get that value at home when they are connected and doing things at home.' And so our thrust with Warp was to expand our market from the corporate enterprise space into the consumer and stand alone desktop market, not to sacrifice our corporate market. And that's what we were trying to communicate. The press took that as we were abandoning the desktop. We're not abandoning the desktop, the desktop is fundamental to OS/2's value in the client/server environment."

Much of the computer press continued to do what they had largely done all along -- act as if OS/2 just didn't exist. Reviews of computers and applications made no mention as to their suitability for running IBM's operating system. Articles about OS/2 were few and far between, even those few, while acknowledging the technical superiority of the IBM product, always noted that this didn't make any difference, because the shrinkwrap boxes weren't coming from Redmond, and the product was not preloaded on enough computers to matter.

"There's a huge difference in the way the two companies handled it," remembers Dvorak. "Microsoft created a lot of interest, a lot of pre-publicity; they did a great job of promoting the Windows product before it came out; and IBM was very casual about it, thinking that people were going to flock to them, the guys who built the better mousetrap. It was just poorly handled. IBM had gotten a lot of breaks earlier, before Presentation Manager. You read a lot of stuff about how important OS/2 was going to be, and then they just never followed up on it. There's a huge difference between the way the products were promoted and rolled out. I have nothing but sympathy for OS/2 users, being one myself, but on the other hand c'mon, it was so obvious that this was never going to go anywhere."

IBM did little to counter the lack of coverage in the computer press. Weak denials notwithstanding, IBM had decided that individual users could go pound silicon, though they weren't announcing that fact yet.

"Every so often IBM shows some sign of humanity, but for the most part the big picture keeps indicating that they really don't like dealing with the one guy out there," says Dvorak. "There's all kinds of evidence of this. And you know what? Who can blame them? Many customers are just plain pains in the butt, and it would be nice to just avoid dealing with them. But IBM has taken that to an extreme. They really don't want to talk to you."

"It was a blip on the chart," says IBM's Soyring of the effort to market OS/2 to the general public. "The consumer market is a lot like lemmings. People will start heading in one direction and they'll go where the crowds are going. Most consumers are not technically oriented. Their VCRs are still flashing 12:00 on them because they haven't figured out how to set up the time yet, much less set it to record anything at specific times and dates. They want computers basically set up like an appliance, so it's all preloaded, and you plug it in and it works. Whereas the corporate market is just the opposite."

In September 1995, Reiswig was ousted as general manager of the Personal Software Products division. "Lee absolutely is not retiring," said Sager, which was technically true: Reiswig didn't announce his retirement until the following March. But by now few users believed much that IBM had to say about OS/2.

Rumors had flown that Reiswig's ouster was because the plan to port OS/2 to the "microkernel" project, a grand plan IBM had to produce a universal operating system for all computers, had not proceeded on schedule. But in January 1996, IBM announced that that project had been abandoned.

"IBM pulled a stunt with the Desktop OS, which was going to be OS/2 for that crazy microkernel that was going to run everything," Dvorak says. "It was going to be on the Power PC and every other chip. It was going to be the do-all, be-all killer operating system, and they couldn't even release the thing. IBM was as bad as Microsoft at pre-announcing stuff that wasn't going to happen. It never did happen with them; at least the Microsoft stuff came out, as crappy as it was, and they kept improving it, so you could actually use it."

During this brushfire, Windows 95 had gotten released amid vast fanfare and press coverage that credited Microsoft with everything short of ending hunger (though it had certainly done that in the Redmond, Washington, area) and bringing about world peace. It was as if the broader news media had just now discovered that there were these things called computers, and they could do really neat stuff. It was noted, though lost in the noise, that Windows 95 was still at heart Windows atop DOS, though the two were now more intertwined than ever before. Computer stores across the nation were heavily stocked with the new Windows, boxes of which in large measure just sat there. Not that it mattered -- Microsoft still had its preload agreements, which were largely unhindered by the consent decree. And with all the publicity, everybody who wanted a computer but who knew nothing about computers wanted Windows 95 preloaded anyway. Never mind if it wouldn't pre-emptively multitask existing Windows programs. Never mind if its handling of DOS applications was poor. Never mind if anyone who hoped to do any serious work would have to buy all new applications. Microsoft had pulled it off yet again.

IBM didn't even much bother to respond. In the fall of 1996, OS/2 Warp 4 was released. Anybody who bothered to find out -- there weren't even Belgian nuns croaking the news to us in Flemish this time -- learned that while the Bonus Pak of cute little applications that had accompanied Warp 3 was now gone, in its place was the IBM speech-recognition package that had only a couple of years before cost $1,000 all by itself, and a headset and microphone to make it work. It was now possible to dictate to the computer and see the words appear on the screen, for pasting into any application. Very sexy indeed. And it was possible to tell the computer what to do -- within reason -- and it would do it! Also enclosed was a CD-ROM containing sample applications of various sorts, demos and betas, designed to show that ISVs were still developing for OS/2. It was the best version of OS/2 ever, but IBM seemed unwilling to try to sell it to people. There was a little ho-hum advertising, but IBM's heart didn't seem to be in it and while existing users were eager to upgrade, potential new users were mostly uninterested. Hell, potential new users had never even heard of it.

The OS/2 push to the desktop had run out of steam. Existing users waited for something to happen, but soon IBM wasn't even willing to allocate the resources necessary to cheerlead, to come up with decent promises. Instead, it talked about something code-named "Bluebird." Even the Star Trek codename was gone.

And by the summer of 1997, IBM seemed ready to tell consumers to get lost.

"We are not encouraging the writing of productivity applications," on the OS/2 API, says John Albee of PSP. What about the consumers who have invested heavily in OS/2? "When we talk with those folks, which we have, we recommend that they consider another operating system. The reality is that we're not going out there, trying to get new applications on OS/2; we're concentrated on the business side."

What Now?

IBM decided in 1996 that it would not chase additional Windows compatability; that moving target would sop up vast resources, always be a step or two behind the latest Windows release, and in IBM's view provide nothing useful for its business customers. Instead, such OS/2 development as takes place will concentrate on the multi-platform Java technology.

"For the last several years we've been advising software developers not to write to any operating system API that specific," says Soyring. "We have been telling them to use an object-oriented class library that's independent of an operating system. We do that for our own development at IBM; we use the Open Class Library from IBM. It's available on OS/2, it's available on NT, it's available on Windows 95, it's available I think on HP-UX and Solaris and on IBM's mainframe and minicomputers. And what it does is allow us to write source code that can be recompiled for other operating systems. And now Java takes it one step further; not only can you get source code compatability, you actually get the binary executable code after it's actually been compiled, that will run across different operating systems."

This in turn has sparked a renewed skirmish in the Microsoft vs. Everybody Else war: When Microsoft pumped $150 million into Apple in the summer of 1997, it was not an act of charity. It aided Microsoft in three ways. The first is keeping a token competitor alive, to be pointed to when claims of a Microsoft monopoly are raised. Perhaps more important is the effect on the Java consortium. IBM, Netscape, Sun, and Apple were its leaders, but now Apple is expected to embrace a similar but incompatible standard, ActiveX, established by Microsoft. And some in the industry, particularly Dvorak, are convinced that Apple will move its Macintosh operating system to an Intel chip and modify it so that it will run Windows 95-98 applications.

There is another version of OS/2 planned, though whether it will be delivered and what it will look like remain anybody's guess. IBM's big commitment is to "Bluebird," now officially called "Workspace on Demand."

"I want to make it very clear: we are investing in OS/2 both as a desktop operating system and as a server operating system," says Soyring. "However, we're evolving both to be network operating systems. The first major step in that evolution was our recent announcement of a product called Workspace on Demand. Workspace on Demand is that evolution of converting OS/2 into a network operating system. In fact, we've even changed the brand name." Goodbye OS/2 Warp, hello OS/2 WOD, or maybe just WOD.

This new product is everything a huge business, such as an international bank -- the biggest OS/2 customers, by the way -- could want: All the software and data files live on the server. The computers attached don't even need hard drives; they download everything from the network. No matter which terminal you're using, your own personal desktop arrangement will be sent when you log in. Very much like a graphical version of the old IBM mainframe-terminal days. The individual computer users, the ones who have been OS/2's allies, the ones who had learned enough about computers to actually install and configure the thing and who like to have their own software on their own computers in their own homes or small businesses, those people are locked out. There will be no OS/2 for them. With WOD and embedded variations of version 1.3 on ATMs and in fax machines, OS/2 isn't actually dead, but it has become so specialized that for many users it might as well be.

"There are some fantastically talented people who contributed to OS/2," says William Zachmann. "The cow gave good milk, but then kicked the pail over."

There continues to be a shareware market for OS/2 applications, and in Europe, where OS/2 Warp is especially popular, a company called Star Division has a powerful and remarkable new suite of OS/2 applications that is unlike anything ever seen on the OS/2 platform before. But without continuing improvement, technological advances will soon relegate OS/2 to the technical Dark Ages. A pity, really. And what of the tens of thousands, maybe hundreds of thousands, perhaps even millions, of OS/2 users? They face a dilemma. They hate Microsoft. Absolutely despise Microsoft. Many are switching to Linux, an ingenious version of the Unix operating system. Some were considering Macintoshes until Microsoft bought in to Apple to the tune of $150 million. A lot of them may have to swallow hard.

"There are a number of things they can do," says Dvorak. "The real hacks out there, who really love to be on a separate track, maybe will discover what a wonderful operating system Linux is. And I think a lot of them will gravitate toward that, because that's the kind of fun OS for people who really like to play around. The people who really use OS/2 on a professional basis will probably find Windows NT pretty comfortable, because it is OS/2. And then the general OS/2 user, the end user who liked OS/2, will actually find, even though they may dislike Microsoft, I think they'll find themselves very comfortable with Windows 95. It offers a lot of the nerdy features that OS/2 has, and they've done a very good job of improving it and making it look good and feel good. It still really sucks when it comes to multitasking compared to OS/2, but the multitasking is acceptable -- it's crummy, but it's the only thing that's wrong with Windows 95."

Who killed OS/2? Like the victim in Agatha Christie's Murder on the Orient Express, the body has many wounds. The difference between the novel and the reality is that in the novel, none of the wounds was self-inflicted.

Post Script: In the years since this article was written, independent developers have kept OS/2 on life support, with projects such as eComStation , which seeks to produce updated versions of the operating system and applications that run under it, and Project Odin , which works to provide a way to run 32-bit Windows applications under OS/2. But claims that OS/2 is alive and well are mostly of the sort of claim that imparts such characteristics to Elvis Presley. The ironies abound: A hopeful community waits in hope that a federal judge will slap down Microsoft and level the playing field. Quality even now does not govern the success of operating systems or application software. IBM, which failed with its Microkernel project, now offers a single operating system with all of its computers except the consumer desktop models. A better desktop operating system exists -- John C. Dvorak mentiuoned it, and this site is devoted to it -- and already the talk is that it's only good for businesses and less of a desktop operating system than even OS/2 was. What was it about "those who fail to learn from the lessons of history . . ."?

Posted March 2002

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