Microsoft was founded in 1975 by Bill Gates. The comany's first major operating system was MS-DOS, a command-line system (the user is presented with only text on the screen and uses the keyboard to type commands to the computer). IBM made computers by developing hardware around a CPU made by Intel. DOS was designed to run on these computers, generically known as PC's, so they were also involved with the development of DOS. When other companies began producing "clones" of the IBM hardware, the market for PC's became competative, and MS-DOS sales increased, contributing largely to Microsoft's early profits. These clones gave birth to a term, "IBM-Compatable", which may be familiar to computer users of the late eighties to early nineties.
Perhaps the most fundamental idea of Windows is the GUI (Graphical User Interface). The first GUI was developed by Xerox for their Alto computer. Immediately following that, Apple developed the Lisa (the name represents both the computer and the OS). The Lisa was introduced in 1983 at the price of $9,995, and was often regarded as being slow. This largely attributed to its failure as a commercial product, but was a milestone for Apple, because it is essentially the first-generation ancestor of what is now the Mac. Then, in 1985, Microsoft released Windows 1.0. Various other GUI's were developed for various other computers such as Atari, Commodore 64, and Amiga.
Microsoft announced Windows in 1983, but didn't release 1.0 until 1985. The OS was more like a program, as it was started from DOS (the computer would first be booted into DOS, then the user would type the command that would launch windows). Windows 1.0 could run several DOS programs simultaneously (called multi-tasking, not usually possible when running DOS alone), and could run programs written specifically for Windows, themselves utilizing the benifits of a graphical interface. Other versions of Windows are covered on the Windows Versions page.
