Was there something special about OS/2 that suggested it would be the winner of this war or did WP and Lotus just make the same bad bet at the same time?
Remember the state of Microsoft's operating systems in 1992, when OS/2 2.0 was released: DOS, a purchased operating system that was barely worthy of the name, and a graphical shell on top of it. In other words, a house of cards and just as reliable. Cooperative, not pre-emptive, multitasking. 16-bits when 32-bit CPUs were standard. Contrast to OS/2 that had a 32-bit API, pre-emptive multitasking, and a more robust file system, all with the backing of IBM. That might not be a sure bet, but it was a good one. Turns out it wasn't, but it might have looked like it at the time given that it was inarguably technically superior to Windows 3.x and DOS.
As it turned out, IBM refused to effectively market OS/2 and Microsoft was busy cutting bundling deals with manufacturers while releasing their "munchkins" (look it up, it's well documented) on Compuserve and Usenet. And then Windows NT came out, giving Microsoft a much less laughable operating system in their quiver, and that was pretty much it for OS/2.
Unfortunately, OS/2 could barely load on the PCs of the day (it started swapping while loading), it had very little software, and cost a ridiculous price (from memory, something around $500).
You had to vape your PC to run it.
By contrast, you could pick up a copy of Windows for $40 and run it on top of DOS without losing your DOS software. If you didn't like it, it hadn't cost you much time or money.
And there was a boom in Windows software with lots of cheap programs to try.
Seriously, how would anyone expect OS/2 to win that battle?
Eh, sorry, which Windows version are you on about?
I remember our Pentium 1 75 MHz being shipped with OS/2 Warp. It was dogshit slow (and on top of that, I was an impatient kid). I was used to DOS (which could be fired up from OS/2 but then it didn't work well, and DOS 6.x was known to work better than that version). I was sitting more in DOS 6.x (booted from a floppy) than OS/2 Warp.
Eventually, we bought a Windows 95 pirated copy for about 50 Dutch guilders (not sure how that translates to current currency due to Euro and inflation). It was a low risk deal indeed for the reason you suggested (cheap) however the real deal was expensive and we already paid for an OS, and we had a contact who would press thousands of these (in hindsight, probably related to Twilight CDs etc as both sourced from the infamous TUe network). So we went with that.
We ended up not using it much either because we were used to DOS and didn't find Windows 95 stable. Not that DOS was super stable, it (6.x) was just more stable.
The first Windows version I've ever used which was reasonably stable, was Windows 2000 (yes, I used NT 3.5x and NT 4.x and Windows 2.0 and Windows 3.1). Arguably, it was even more stable than XP which is probably the first version the general consumer used which was reasonably stable.
Now, how much did a copy of Windows 95 cost back in the days? Well, I'd love to read some other sources but the fact we bought a pirated one for 50 Dutch guilders plus the source I found which says Microsoft suggested a retail price of 210 USD suggest a different price than 40 USD for Windows 95 [1]. Which leads me asking which Windows version you're referring to. No offense, btw.
Sorry, my mistake. I was inadvertently thinking of what Microsoft charged PC manufacturers for pre-installation. The retail copies included extra charges to cover boxes, discs, distribution, the retailer's margin, support, returns etc.
Unfortunately I can't find a list of Windows retail prices, but originally Windows was sold much like an application. That is, it assumed you already had DOS installed.
From what I recall, the official retail was something like $99 and you could pick up a copy for around $80 or so. (Some programs came bundled with a run-time copy of Windows, though you couldn't used that copy with a different application.)
Windows 95 upped the price because Microsoft was charging for both DOS and Windows at the same time. On that basis, something like $200 doesn't sound wrong, and that's around the price Windows has sold at ever since. (Unless, of course, you buy a pre-launch offer.)
Software and hardware prices were generally much higher in the old days, of course.
On stability, I found both NT4 and Windows 2000 to be very stable. With other versions, they were stable if they were correctly set up on decent hardware, you only used Microsoft drivers, you were pretty careful, and you restarted every day.
I could usably run Win98-XP for about week. I would never find out how long I could run NT4 because I was dual-booting it ;-)
Eggs are fragile, but they generally don't break if you handle them carefully. It was much the same with Windows...
Thanks for your comment. I don't agree with a lot you wrote, so I'll have to mostly agree to disagree.
You get 2 OS with Windows 9x? Really? Or is it that Windows 9x is just a GUI on top of DOS? At the very least its product tying.
One thing which stood out was how you excused the terrible stability of Windows 9x. For me the fragility of Windows 9x is unacceptable. What's worse is that a lot of people thought this was normal, acceptable behavior for computers. Millions of work hours have been wasted thanks to this instability. Back then Linux desktop had its fair share of issues which were also unacceptable, but instability wasn't one of them.
> You get 2 OS with Windows 9x? Really? Or is it that Windows 9x is just a GUI on top of DOS? At the very least its product tying.
This is an interesting question...
Windows started out (early-mid 1980's) as a graphical layer on top of DOS (Sold separately). To DOS, Windows added memory management, device independent graphics, windowing, multiple processes, and a cooperative multitasking scheme that let the multiple processes run at the same time.
The next 10 years of history (through to Windows 95, 98, and Me) are then largely about Windows taking over more and more functionality from DOS.... but never quite supplanting it. If a Windows 3.1 system launched Windows at the end of DOS's autoexec.bat, Windows 95 did essentially the same thing, but internally and not in a script. (In fact, Andrew Schulman got Windows 95 running as DOS 7.0.)
So the way to view it is that this lineage of Windows is really a hybrid design, with elements of both DOS and Windows.
The Windows NT kernel and OS/2 >=2.0 are both totally different... to the extent they run DOS, they run it as a child process under a native 32-bit OS. (Not 64-bit because x86-64 doesn't support the V86 mode necessary to make virtual DOS machines run.)
IBM was by far the largest IT company of the day and came up with this long-range plan called SAA (Systems Applications Architecture).
SAA tied together all IBM's enterprise systems (except the Unix ones) and it mandated IBM's version of OS/2 on the client.
Some people felt that IBM had sufficient market power to impose it. I assume Lotus did, too. It turned out that IBM was wrong, and Lotus's strategy sank along with IBM's.
OS/2 was part of a strategy to take back control of the PC industry by shifting the whole thing to an IBM-controlled base with PS/2 systems, MCA buses, and the OS/2 operating system.
mikestew has some good points, but flashing back a bit further to 87/88 is also illustrative.
The original PC was released in 1981, followed in 1984 by the PC AT. One of the things the PC AT was supposed to do is bring multitasking and larger (>640K) RAM - mostly thanks to the 80286 processor. The trouble that there wasn't a mainstream OS that used all of the 80286's capabilities until OS/2 came out in 87/88. At that point in time, OS/2 was both the solution to some long-term problems in the PC space and the annointed successor to DOS by the IBM/Microsoft pair that led the PC market at the time.
For a whole range of reasons, OS/2 turned out to be expensive to buy/run and incompatible with most of the software people actually ran. The market therefore kept its momentum mostly behind DOS until August 1990's release of Microsoft Windows 3.0. Microsoft had an internal skunk works project that brought 80286-specific features to Windows, but in a way that was more compatible with DOS and cheaper than OS/2. (Despite some technical limitations.) That's when Microsoft took a risk, and pivoted away from IBM and OS/2 and towards a Microsoft Windows specific strategy. It paid off for them and the rest is history.