In 1985, Microsoft introduced Windows operating system, priced at $99. It was comparatively slow as was its competition and most users stayed with the popular MS-DOS. In the late 1880's, Intel's 386 and 486 microprocessor made the graphic users interface practical.

In March 1988, Apple filed a lawsuit alleging that Microsoft's Windows 2 had violated the Macintosh’s copyrights. If the suit were upheld, all future user interfaces would have to be "different". This would stifle innovation, and after three years, the suit was dismissed.

Microsoft was achieving dramatic growth and by the end of 1989 was a company with 4,000 employees and revenues of $803 million, and profits of $170 million. Some 2 million copies of Windows 2 were outselling IBM's OS/2 operating system, largely due to Microsoft's better marketing techniques.

Upgrading software packages, which were increasingly more sophisticated generated increasing revenues as users traded up. In May of 1990, Microsoft introduced Windows 3 with much fanfare. It included 400,000 lines of code compared to the 110,000 of Windows 2.

In 1991, IBM announced a new version of OS/2-release 2. It had cost $1 billion to develop and was designed to replace all previous operating systems including MS-DOS and Windows on all IBM compatible computers. This was followed in 1994, by Apple's MacOS and made it available to all third-party developers for the first time. IBM sought to gain the organizational skills, and appealing software in competition with Microsoft, by buying Lotus Development Corporation for $3.5 billion, the largest for software takeover to date. Apple became "like IBM" and counted on its new MacOS to give it new life.

While IBM brought the first important standard to the personal computer industry, its PC was not as user-friendly as the home and business user's wanted. Likewise, Apple had set a new graphical interface, and its Machintosh continued to sell well. In 1993, more that $1 billion of software was sold for Apple's products, but this couldn't capture much of the $7 billion of total expenditure of microcomputer software.

With increasing similarity of IBM and Apple operating systems, however, the product differences between Apple and its competition are fading. It may take Bill Gates to rescue Apple.