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For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle Computer Products, which it branded as MS-DOS, though IBM rebranded it to PC DOS.

Following the release of the IBM PC in August 1981, Microsoft retained ownership of MS-DOS.

Since IBM had copyrighted the IBM PC BIOS, other companies had to reverse engineer it in order for non-IBM hardware to run as IBM PC compatibles, but no such restriction applied to the operating systems.

Due to various factors, such as MS-DOS's available software selection, Microsoft eventually became the leading PC operating systems vendor. Meanwhile, the company was at work on a 32-bit OS, Microsoft Windows NT, which was heavily based on their copy of the OS/2 code.

However, it was MS-DOS that solidified the company's dominance.

After negotiations with Digital Research failed, IBM awarded a contract to Microsoft in November 1980 to provide a version of the CP/M OS, which was set to be used in the upcoming IBM Personal Computer (IBM PC).

In 1990, due to the partnership with IBM, the Federal Trade Commission set its eye on Microsoft for possible collusion, marking the beginning of over a decade of legal clashes with the U. It shipped on July 21, 1993, with a new modular kernel and the Win32 application programming interface (API), making porting from 16-bit (MS-DOS-based) Windows easier. Department of Justice, Antitrust Division filed a Competitive Impact Statement that said, in part: "Beginning in 1988, and continuing until July 15, 1994, Microsoft induced many OEMs to execute anti-competitive "per processor" licenses.

Internet Explorer was not bundled with the retail Windows 95 boxes because the boxes were printed before the team finished the web browser, and instead was included in the Windows 95 Plus! In October 1997, the Justice Department filed a motion in the Federal District Court, stating that Microsoft violated an agreement signed in 1994 and asked the court to stop the bundling of Internet Explorer with Windows.It develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and services.

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