If you ask the average person what operating system your computer could have they'd say that if it's a PC it has Windows, and if it's a Mac it has macOS. All home computers are Macs or PCs, but how did it get this way?

In the 70's everyone was making home computers. Tandy was a leather supply goods company established in 1919, but they made computers. Montgomery Ward was a retail chain that decided to make their own store brand computers. Commodore, Atari, NEC, Philips, Bally and a million other assorted companies were selling computers. They generally couldn't talk to each other (if you had software for your Tandy it wouldn't work on your Commodore) and there was no clear market winner. The big three though were Tandy (yeah the leather company made some great computers in 78), Commodore and Apple.

IBM was the biggest computer company of all, in fact just the biggest company period. In 1980 they had a market cap of 128 billion dollars (adjusted for inflation). None of these other companies came close, but IBM's success was built off of mainframes. 70% of all computers sold worldwide were IBM computers, but 0% of it was from the home market.

IBM wanted to get into this growing and lucrative business, and came up with a unique plan. A cheap computer made with commodity parts (i.e. not cutting edge) that had open architecture. The plan was that you could buy an IBM Personal Computer (TM) and then upgrade it as you please. They even published documentation to make it easy to build add ons.

The hope was that people would be attracted to the low prices, the options for upgrades would work for power users, and a secondary market of add ons would be created. If some 3rd party company creates the best graphics card of all time, well you'd still need to buy an IBM PC to install it on.

IBM was not in the home software business, so they went to Microsoft. Microsoft produced MS-DOS (based on 86-DOS, which they licensed) but did not enforce exclusivity. That meant that Microsoft could sell MS-DOS for any of their competitors too. This was fine because of how fractured the market was. Remember, there were a lot of competitors, no one system dominated and none of the competitors could share software. Porting MS-DOS to every computer would have taken years, and by that point it would be outdated anyways.

IBM saw two paths forward. If the IBM PC did well they would make a ton of money. Third party devs like Microsoft would also make a lot of money, but not as much as IBM. If it failed, well then no one was making money. Either way the balance of power wouldn't change. IBM would still be at the top.

IBM however did not enjoy massive profits. It turns out that having cheap components and an open architecture where you could replace anything would... let you replace anything. A company like Compaq could just buy their own RAM, motherboards, cases, hard drives, etc. and make their own knockoff. It was easy, it was popular, and it was completely legal! Some people could order parts and build their own computer from scratch. If you've ever wondered why you can build your own computer but not your own tv or toaster, this is why. IBM had accidentally created a de facto standard that they had no control over.

In 1981 IBM's PC was worth 2.5% of the marketshare. By 1995 IBM PC compatibles were 95% of the marketshare, selling over 45 million units and IBM had to share the profits with every competitor. Apple is the only survivor of this time because the Macintosh was such an incredible piece of technology, but that's a different story for a different time.

And Microsoft? Well building an OS is much harder than putting together a few hardware components, so everyone just bought MS-DOS. With no exclusivity agreement this was also legal. That huge marketshare was now the basis for Microsoft's dominance.

IBM created a computer standard and gave the blueprints to every competitor and created a monopoly for Microsoft to boot. And that's why every computer you buy either is made by Apple with Apple software, or made by anyone else with Microsoft software. IBM is back where they started, having left the home computer business in 2005.

It's easily the biggest blunder in computer history. Other blunders have killed companies but none were quite as impactful as this one.

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Source: Wikipedia