The Rise of the Wintel Empire

— -- For better or for worse, odds are that you are reading this Web article on a computer that runs Microsoft Windows and has Intel inside. But did you ever wonder how this “Wintel” standard came to dominate PCs? Surprisingly, the answer has much to with following Apple’s lead.

IBM introduced the first PC as we know it today—running a Microsoft operating system on Intel’s chip architecture—in 1981. But IBM’s machine was not the first PC per se; in fact, Apple Computer had carved out a strong niche business since 1976.

“IBM saw that Apple had started to get a pretty good franchise with these little tiny boxes,” said Roger Kay, a senior analyst who follows the desktop PC market for International Data Corp. “They thought, ‘Oh gee, maybe it isn’t all in mainframes, and we better get into it.’”

Because Big Blue had been practically synonymous with computing for decades, the company had ready-made brand awareness with consumers, giving it an enviable advantage over the competition, says Paul Fouts, associate dean of the Geno School of Business at Golden Gate University in San Francisco.

However, at the time IBM was working on the PC in the 1970s, the company was also under investigation by the Department of Justice for possible violations of antitrust law. Moreover, an earlier antitrust decree dating back to a 1956 investigation meant IBM could not exclude competitors’ software from its mainframe platform.

“They wanted their new system to meet the same rule structure that was in place in their big mainframe system,” Fouts said.

To avoid further federal scrutiny, IBM enlisted Intel to help build the infrastructure for its new PC; a little-known company called Microsoft was called upon to provide the operating system.

“In the early days, Microsoft couldn’t have done it without IBM, and IBM could have picked anybody. They were king makers,” said Fred Davis, a computer historian and CEO of Lumeria.