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Custom AI agentsWe build and run an agent for one jobSoftware FactoryCustom software built with AI agentsPricingAboutBlogIBM built the PC, but Microsoft kept the right to license DOS to other computer makers. As clones spread, Microsoft got paid again and again. The lesson: own the layer your customers keep using, not the one-time box.
Microsoft got rich instead of IBM because IBM sold the hardware once, while Microsoft kept the right to license its operating system, MS-DOS, to every other company that built a PC. IBM thought it had sole rights to the software. It did not. When other makers started cloning IBM's machine, they licensed DOS from Microsoft. Within a year, Microsoft had licensed MS-DOS to more than 70 other companies (Centre for Computing History; DocuSign).
Video: “IBM Built the PC. Microsoft Got Rich.” by Dooza (@thedooza) on YouTube. Watch on YouTube.
On 6 November 1980, Bill Gates signed a contract for Microsoft to create an operating system for IBM's new PC. Microsoft did not write one from scratch. It bought existing software, 86-DOS, from Seattle Computer Products and hired its author, Tim Paterson (Centre for Computing History).
The purchase came in two steps. CBS News reports that Microsoft first paid $25,000 for 86-DOS, also called Q-DOS, and then, on 27 July 1981, paid $50,000 for full rights to it. That was only a couple of weeks before IBM's PC launch on 12 August (CBS News). Microsoft renamed the software MS-DOS (Wikipedia). Sources give different totals, so the safe summary is the one in the video: about $50,000 for the rights.
The licence to IBM was not exclusive. DocuSign's history of the deal says IBM was under the impression that it had sole rights, but Microsoft had included a clause that let it sell the same operating system to other companies (DocuSign).
That one line decided who would earn from the PC boom. IBM owned the machine it sold. Microsoft owned the software layer that any IBM-style machine needed.
Other companies began copying IBM's hardware. To run the same programs, their machines needed the same operating system, and Microsoft was free to license it to them. Within a year it had licensed MS-DOS to 70 other companies, many of which were already cloning IBM's hardware platform (DocuSign; Wikipedia).
IBM built the machine. Microsoft owned the one part every machine needed.
This is our takeaway. A one-time sale pays you once. The layer your customers keep using pays you again and again, and it is the part a competitor cannot easily copy. For most small businesses, that layer is not the product in the box. It is:
Ask the IBM question about your own business: if someone copied what you sell tomorrow, what would they still not have? Spend more of your time on that.
Follow-ups and process are the work that slips when you are busy. Dooza Crew is free and runs in an app: install it from Google Play on Android, sign in, and use your agents. A lead AI agent works with helper agents that can browse the web and write files for you.
You stay in charge. Before anything is sent or paid, you approve it.
IBM sold PC hardware, but its licence for the operating system was not exclusive. Microsoft kept the right to license MS-DOS to other companies, including makers cloning the IBM PC, and licensed it to more than 70 companies within a year.
No. Microsoft bought an existing system, 86-DOS, from Seattle Computer Products, hired its author Tim Paterson, and renamed it MS-DOS.
CBS News reports that Microsoft paid $25,000 for 86-DOS and then, on 27 July 1981, about $50,000 for full rights to it. Sources give different totals.
Bill Gates signed the contract to create an operating system for IBM on 6 November 1980. IBM launched its PC on 12 August 1981.
Own the layer your customers keep using, such as your customer list, your follow-ups and your process, not only the one-time product. That is what keeps paying you and what competitors cannot easily copy.
A lead AI agent plus helper agents that browse the web, write files and ask you before they send or pay. Free: install the app and start.
In Q2 2007 Nokia sold 50.8% of the world's smartphones. The iPhone went on sale June 29, 2007. In September 2013 Microsoft agreed to buy Nokia's phone business for €5.44 billion. Our take: Nokia lost because it waited.
In late 1979 Steve Jobs saw the mouse at Xerox PARC. Xerox's mouse cost $300 to build and broke within two weeks. Apple asked for one under $15. The lesson: inventing is not the win. Shipping a cheap, usable version is.
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