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In the early to mid-90s I was an OS/2 user and supporter. The operating system was originally jointly developed by both Microsoft and IBM. Both companies claimed it was the future, including public statements from Bill Gates. So major business application developers (Lotus, Wordperfect, etc) spent millions making programs for OS/2 version 3 (first version with GUI) and ignoring the "dead-end" Windows. Well, there was a conspicuous hold-out -- Microsoft. As far as I know, they never spent a dime developing 32-bit OS/2 versions of its application programs. IMO, they were planning a double-cross of all its competitors, and it worked outstandingly.

But that's just introduction to my question. Are there IBM insiders that have gone on the record to explain in the face of this betrayal, why IBM folded? One week before the release of Windows 95, IBM announced that OS/2 would not compete with Windows. To me, that was worse than what Microsoft did. Shortly thereafter, the IBM software division in Florida was shut down.

From an outsider's perspective (mine anyway), it can only be explained by a civil war within IBM between its American hardware and software groups. I can't find a link, but around 1994 IBM ran double page ads in the major computer magazines imploring portable customers to "Demand OS/2 on your next portable." I did just that, calling the IBM store and tried to order an IBM Thinkpad with OS/2 pre-installed. They would not do it. I did try insisting, and referred her to the current ads. She said something like, "Yes, we wish they wouldn't have done that." BTW this was long before Lenovo bought the rights to Thinkpad and other IBM computers.

What was particularly vexing to me about all this is that OS/2 Warp was clearly superior to Windows, not to mention IBM's decade-long claim that this was their future in the business and home market.

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    OS/2 Warp was clearly superior to Windows and Beta was better than VHS. But marketing matters more than technical in this crazy world. – manassehkatz-Moving 2 Codidact Dec 22 '19 at 1:48
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    OS/2 wasn't unambiguously better than Windows 95. The synchronous input queue, meaning that until the final release any stalled application could hang the entire GUI, anyone? – Tommy Dec 22 '19 at 2:07
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    Microsoft did invest heavily in OS/2. They developed a "Next Generation OS/2" codenamed "N-Ten OS/2" (because it was developed on workstations built around the Intel i860, codename "N10"). It was based on a newly-developed microkernel that could host multiple operating system "personalities" (e.g. OS/2 and POSIX) at the same time. However, IBM thought this OS was too aggressive, they wanted a more conservative small-step evolution of OS/2. Because N-Ten OS/2 was developed with this concept of personalities, it was relatively easy to port Win32 to it, and hence Windows NT was born. – Jörg W Mittag Dec 22 '19 at 13:50
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    Up until the betas of Windows XP, all versions of Windows NT were able to run OS/2 applications natively and had read/write support for HPFS. – Jörg W Mittag Dec 22 '19 at 13:52
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    @manassehkatz-ReinstateMonica VHS was better than Betamax because you could record more on a single cassette, which mattered more to consumers than the slightly better video quality Betamax had. – Ross Ridge Dec 22 '19 at 19:15
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As others have noted, it's difficult to locate statements from IBM insiders dishing exactly why OS/2 was sidelined, but I did find this 1996 New York Times article which quotes John W. Thompson, "the IBM general manager in charge of the software." The Times uses some weasel words ("implied," "all but conceded"), but this may be as close as we will get to a direct quote from an IBM insider:

[Thompson] implied in an interview last week that the company had little choice but to continue supporting OS/2 because I.B.M.'s most important business customers still use it. But the company has all but conceded that OS/2 will not compete for users in the consumer market.

OS/2's estimated 11 million users are a fraction of the 140 million users of Windows, according to the International Data Corporation of Framingham, Mass. But Mr. Thompson said that the 3,000 largest OS/2 customers, which include big banks and insurers, generate 25 to 30 percent of Big Blue's $72 billion in annual revenue, with purchases of other types of computers, services and software.

Mr. Thompson said he presented I.B.M.'s chairman and chief executive, Louis V. Gerstner, all the options concerning OS/2's future, including killing it, at a meeting this spring. The decision to continue supporting it was made, he said, because the company had made a commitment to its clients, many of whom spent a great deal to write custom programs that run on the software. "OS/2 is broader than just an operating system to the I.B.M. company," he said.

It appears the key points are:

  • IBM acknowledged OS/2 had failed to compete in the consumer market
  • OS/2 had some success in the business market (25-30% of $72 billion, although that appears to include "computers, services and software" and not merely the operating system)
  • Given all considered choices (including killing off OS/2 outright), Big Blue decided not to abandon paying corporate clients while quietly exiting the consumer market

The original poster said:

it can only be explained by a civil war within IBM between its American hardware and software groups.

I don't see anything in the Times article suggesting such an internecine conflict within IBM. Rather, Gerstner was offered all options, and doing the financial arithmetic, opted to focus on continued profits and IBM's competencies.

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  • Jim, nor do I. What leads me to the conclusion of a civil war was the expensive advertising campaign by the software group: Demand OS/2 on your next portable! (or words to that effect). I saw these double-page ads in multiple consumer magazines. Yet when I tried to order an OS/2 Thinkpad from IBM direct sales, they refused to sell me one. I should have realized then, mid-1994, that OS/2 was doomed by IBM's own schizophrenic actions. – RichF Dec 24 '19 at 20:04
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    @RichF for instance, Infoworld 22 Nov 1993, p. 90: 'Demand OS/2 preloaded on your next PC.'? books.google.ca/… – rakslice Dec 25 '19 at 9:22
  • @rakslice Thank you for finding evidence! It is not the exact ad I am remembering, but it demonstrates the "Demand OS/2" phrase. ... I'm pretty sure the ads I remember didn't start out with very large text instructing you to Blow your neighbor's ... I think I would have remembered that. 😸 – RichF Dec 25 '19 at 9:33
  • @RichF At the time of that particular ad, ThinkPad was only a year out from being exclusively a line of tablet computers purpose-built to run PenPoint and not a line of laptops at all. I think various parts of IBM at different times learned the lesson of not betting the farm on selling someone gear to run software that they weren't already using... – rakslice Dec 25 '19 at 10:10
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IBM recognized that Microsoft was entrenched in the preinstalled retail and commercial markets, and wisely (sadly, but wisely, because I also loved Warp on my 486DX33) realized that Windows 3.1 compatibility was pointless in the face of the steamroller that was Windows 95.

In other words, some fights can't be won.

Note that soon after this, IBM threw it's weight behind a MS competitor that could win (Linux) in a battlefield that MS didn't dominate (the server market).

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    Question asks for evidence in the form of statements from IBM insiders. I'd assume that contemporaneous computing press might have something. – Roger Lipscombe Dec 22 '19 at 9:45
  • Your assumption would be incorrect. There was an awful lot of popular theories on Fidonet, Usenet, et al. (some of which the press regurgitated) but this was (sometimes woefully uninformed) speculation. There was little to no official word to go on. It was not until the court cases at the end of the 1990s that some of the things that happened inside IBM and Microsoft came to light. Yes, this answer is lacking. No, you won't find substance where you suggest. – JdeBP Dec 22 '19 at 11:04
  • @JdeBP "Yes, we wish they wouldn't have done that." Because of the illegal lock that MS held over the industry. And PC makers knew that people wanted MS, for compatibility with their existing software. – RonJohn Dec 22 '19 at 13:43
  • Threw their weight behind an MS competitor (Linux) > pick the OS of a third party visionary for their new PC > creating a monster that eats their PC business > pick the OS of a third party visionary for their server efforts > what could possibly go wrong – Harper - Reinstate Monica Dec 22 '19 at 17:46
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    You are not addressing the problem in this answer that I and M. Lipscombe have mentioned. The question asks, in boldface, for statements by IBM people. You have provided none. – JdeBP Dec 22 '19 at 19:37
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I think that your question does not give quite enough credit to Microsoft, and the competitive advantage they established over OS/2 by making the Win32 API a common feature of both Windows 9x and Windows NT.

Windows NT was originally envisioned within Microsoft as a successor to OS/2, and the first version of NT was already released by 1993. Essentially, Microsoft was positioning itself to be in front of OS/2 (IBM) in the Enterprise market too, not just the consumer/home PC market. NT had a lot of compelling, advanced, features for the enterprise. So it really was a step beyond OS/2.

And this is where the Win32 API becomes so significant. By targeting this common API, application developers could write compatible software for both consumer and enterprise versions of Windows. Microsoft led the way on this with their own very popular MS Office apps, and other application developers soon followed.

OS/2's lack of support for the Win32 API became the limitation that it would not overcome. It can be argued that IBM had a very good OS product in OS/2 Warp, but they weren't willing to farther their investment by adding Win32 support and going head-to-head with both Windows 9x in the consumer market and Windows NT in the enterprise.

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    This does not answer the question posed. The world has had Why was OS/2 discontinued? questions for roughly a quarter of a century. And there have been people coming up with their own varied explanations, sometimes based upon some utter nonsense, for at least that long. What the question posed actually asks for is statements by IBM people, in boldface no less. No answer has yet given any. – JdeBP Dec 22 '19 at 19:35
  • Their Windows 3.1 emulation was quite good. So good that the version of Word I tried to use under OS/2 didn't install because the installer explicitly used a memory request that would work under Windows but fail under OS/2 (cannot remember details). – Thorbjørn Ravn Andersen Dec 29 '19 at 15:39

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