The Battle of the GUI
At that time, Microsoft was producing an operating system, known as DOS,
which it licensed to IBM and compatible computers.
It was based on an old-fashioned command line interface that confronted users with surly little prompts such as C:\>.
As Jobs and his team began to work closely with Microsoft,
they grew worried that it would copy Macintosh's graphical user interface.
Andy Hertzfeld noticed that his contact at Microsoft was asking detailed questions about how the Macintosh operating system worked.
"I told Steve that I suspected that Microsoft was going to clone the Mac," he recalled.
They were right to worry.
Gates believed that graphical interfaces were the future,
and that Microsoft had just as much right as Apple did to copy what had been developed at Xerox PARC.
As he freely admitted later, "We sort of say, 'Hey, we believe in graphics interfaces, we saw the Xerox Alto too.'"
In their original deal, Jobs had convinced Gates to agree that
Microsoft would not create graphical software for anyone other than Apple
until a year after the Macintosh shipped in January 1983.
Unfortunately for Apple, it did not provide for the possibility that the Macintosh launch would be delayed for a year.
So Gates was within his rights when, in November 1983,
he revealed that Microsoft planned to develop a new operating system for IBM PCs
featuring a graphical interface with windows, icons, and a mouse for point-and-click navigation.
It would be called Windows.
Gates hosted a Jobs-like product announcement,
the most lavish thus far in Microsoft's history, at the Helmsley Palace Hotel in New York.