Microsoft first claim to fame was an alliance with Apple, which had introduced the Apple II as a competitor to the Radio Shack TRS-80, the first personal computer. Microsoft Basic quickly bewcame a standard for PCs and its most popular rendition was Applesoft Basic for the Apple II. I've also heard that Microsoft helped Apple develop its mouse-driven graphical interface, but am not sure of this, as I have never been able to afford a Macintosh. Later on, Apple unsuccessfully attempted to sue Microsoft, claiming that Windows violated its copyrights for the Mac OS.

Later on, IBM and Intel entered the market with the now famous PC, aimed at besting the Apple II in the marketplace. The original idea was that IBM would put PC-DOS on all its machines, while MS-DOS would be preinstalled on non-IBM machines. Microsoft coauthored MS-DOS and PC-DOS with IBM, and also coauthored its first business-grade operating system: OS/2. Microsoft's GW-BASIC became the alternative to IBM BASIC-in-ROM.

Microsoft also developed Windows at the same time, and decided eventually to drop its participation in the OS/2 project, leaving that all to IBM and taking Windows all to itself. It later developed Windows-NT, which was originally supposed to be called "OS/2 New Technology". It still uses a file system closely related to the OS/2 HPFS. Both HPFS and NTFS have the same system ID, as most Linux users know.

As you can see, Microsoft came to prominence as a result of offering an alternative to two previous companies' attempts to monopolize the market -- Apple and IBM. Later Apple and IBM signed cooperation agreements regarding the Power-PC. The most important agreements, though, were those between Apple and Microsoft. Microsoft has never felt threatened by competition from systems that cost MORE than its favored Intel platform, so it rescued Apple, recognizing a ready market for Microsoft Office.

The rescue of Apple had another benefit for Microsoft. It allowed them a leg up in their own competition against Novell for Network Operating Systems, since Novell Netware had no capability to link with Macintosh computers. Windows networking became an alternative to Novell networking, and this culminated in the development of NT Server with the Back Office Suite -- a collection of programs that could operate on NT Servers, making it a worthy competitor to Novell Netware, whose function was limited to file and print services plus authentication and permission control.

Over time, Microsoft has engaged in certain practices that, in the opinion of Judge Thomas Penfield Jackson and many others, are monopolistic, probably the most blatant of which is the forced bundling of Windows with PCs manufactured by major vendors. Click here to read on.