Overview
In the most common usage scenario, the user would have one hard drive in the computer, with all the space allocated to one partition (usually as drive C:). The software would compress the entire drive contents into one large file in the root partition. On booting the system, the driver would allocate this large file as drive C:, enabling files to be accessed as normal.
Microsoft's decision to develop DoubleSpace and add it to MS-DOS was probably influenced by the fact that DOS-based operating systems from other manufacturers (IBM and Novell) had started including disk compression software in their products.
Instead of developing its own product from scratch, Microsoft licensed the technology for the DoubleDisk product developed by Vertisoft and adapted it to become DoubleSpace. For instance, the loading of the driver controlling the compression/decompression (DBLSPACE.BIN) became more deeply integrated into the operating system (being loaded even before the CONFIG.SYS file).
Microsoft had originally sought to license the technology from Stac Electronics, which had a similar product called Stacker, but these negotiations had failed. Microsoft was later successfully sued for patent infringement by Stac Electronics for violating some of its compression patents. During the court case Stac Electronics claimed that Microsoft had refused to pay any money when it attempted to license Stacker, offering only the possibility of Stac Electronics to develop enhancement products.
Read more about this topic: Drive Space