History
The IBM task force assembled to develop the PC decided that critical components of the machine, including the operating system, would come from outside vendors. This radical break from company tradition of in-house development was the key decision that made the IBM PC an industry standard. But it was done out of necessity, to save time. Microsoft was selected for the operating system.
IBM wanted Microsoft to retain ownership of whatever software it developed, and wanted nothing to do with helping Microsoft, other than making suggestions from afar. According to task force member Jack Sams, "The reasons were internal. We had a terrible problem being sued by people claiming we had stolen their stuff. It could be horribly expensive for us to have our programmers look at code that belonged to someone else because they would then come back and say we stole it and made all this money. We had lost a series of suits on this, and so we didn't want to have a product which was clearly someone else's product worked on by IBM people. We went to Microsoft on the proposition that we wanted this to be their product."
IBM first contacted Microsoft to look the company over in July 1980. Negotiations continued over the next months, and the paperwork was officially signed in early November.
Read more about this topic: IBM PC DOS
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