Although MS-DOS and PC DOS were initially developed in parallel by Microsoft and IBM, the two products diverged after twelve years, in 1993, with recognizable differences in compatibility, syntax and capabilities.

[6] Initially, MS-DOS was targeted at Intel 8086 processors running on computer hardware using floppy disks to store and access not only the operating system, but application software and user data as well.

[2] Microsoft, which needed an operating system for the IBM Personal Computer,[9][10] hired Tim Paterson in May 1981 and bought 86-DOS 1.10 for US$25,000 in July of the same year.

[15][16] Microsoft advertised MS-DOS and Xenix together, listing the shared features of its "single-user OS" and "the multi-user, multi-tasking, UNIX-derived operating system", and promising easy porting between them.

On March 25, 2014, Microsoft made the code to SCP MS-DOS 1.25 and a mixture of Altos MS-DOS 2.11 and TeleVideo PC DOS 2.11 available to the public under the Microsoft Research License Agreement, which makes the code source-available, but not open source as defined by Open Source Initiative or Free Software Foundation standards.

[18][19][20][21] Microsoft would later re-license the code under the MIT License on September 28, 2018, making these versions free software.

Microsoft licensed or released versions of MS-DOS under different names like Lifeboat Associates "Software Bus 86"[25][26] a.k.a.

[30] The following versions of MS-DOS were released to the public:[31][32] Support for IBM's XT 10 MB hard disk drives, support up to 16 MB or 32 MB FAT12-formatted hard disk drives depending on the formatting tool shipped by OEMs,[38] user-installable device drivers, tree-structure filing system,[39] Unix-like[40] inheritable redirectable file handles,[41][42] non-multitasking child processes[43] an improved Terminate and Stay Resident (TSR) API,[44] environment variables, device driver support, FOR and GOTO loops in batch files, ANSI.SYS.

[78] While Western issues of MS-DOS evolved around the same set of tools and drivers just with localized message languages and differing sets of supported codepages and keyboard layouts, some language versions were considerably different from Western issues and were adapted to run on localized PC hardware with additional BIOS services not available in Western PCs, support multiple hardware codepages for displays and printers, support DBCS, alternative input methods and graphics output.

Affected issues include Japanese (DOS/V), Korean, Arabic (ADOS 3.3/5.0), Hebrew (HDOS 3.3/5.0), Russian (RDOS 4.01/5.0) as well as some other Eastern European versions of DOS.

CP/M-86 instead supported a relocatable format using the filename extension .CMD to avoid name conflicts with CP/M-80 and MS-DOS .COM files.

Most of the machines in the early days of MS-DOS had differing system architectures and there was a certain degree of incompatibility, and subsequently vendor lock-in.

In the business world, the 808x-based machines that MS-DOS was tied to faced competition from the Unix operating system; the latter ran on many different hardware architectures.

Non-PC-compatible 808x machines were too small a market to have fast software written for them alone, and the market remained open only for IBM PCs and machines that closely imitated their architecture, all running either a single version of MS-DOS compatible only with PCs, or the equivalent IBM PC DOS.

Most clones cost much less than IBM-branded machines of similar performance, and became widely used by home users, while IBM PCs had a large share of the business computer market.

MS-DOS had grown in spurts, with many significant features being taken or duplicated from Microsoft's other products and operating systems.

MS-DOS also grew by incorporating, by direct licensing or feature duplicating, the functionality of tools and utilities developed by independent companies, such as Norton Utilities, PC Tools (Microsoft Anti-Virus), QEMM expanded memory manager, Stacker disk compression, and others.

Unwilling to lose any portion of the market, Microsoft responded by announcing the "pending" release of MS-DOS 5.0 in May 1990.

Microsoft had been accused of carefully orchestrating leaks about future versions of MS-DOS in an attempt to create what in the industry is called FUD (fear, uncertainty, and doubt) regarding DR DOS.

Brad Silverberg, then Vice President of Systems Software at Microsoft and general manager of its Windows and MS-DOS Business Unit, wrote a forceful letter to PC Week (November 5, 1990), denying that Microsoft was engaged in FUD tactics ("to serve our customers better, we decided to be more forthcoming about version 5.0") and denying that Microsoft copied features from DR DOS: "The feature enhancements of MS-DOS version 5.0 were decided and development was begun long before we heard about DR DOS 5.0.

In the due diligence process, Stac engineers had shown Microsoft part of the Stacker source code.

This arrangement made it expensive for the large manufacturers to migrate to any other operating system, such as DR DOS.

One cannot run Win32 applications in the loader system in the manner that OS/2, UNIX or consumer versions of Windows can launch character-mode sessions.

The introduction of Windows 3.0 in 1990, with an easy-to-use graphical user interface, marked the beginning of the end for the command-line driven MS-DOS.

On December 31, 2001, Microsoft declared all versions of MS-DOS 6.22 and older obsolete and stopped providing support and updates for the system.

Starting with Windows 10, the ability to create a MS-DOS startup disk has been removed, and so either a virtual machine running MS-DOS or an older version (in a virtual machine or dual boot) must be used to format a floppy disk, or an image must be obtained from an external source.

Other solutions include using DOS compatible alternatives, such as FreeDOS or even copying the required files and boot sector themselves.

MS-DOS is still used in embedded x86 systems due to its simple architecture and minimal memory and processor requirements, though some current products have switched to the still-maintained open-source alternative FreeDOS.

Users, however, are allowed and fully encouraged to fork the repository containing the MS-DOS source code and make their own modifications, and do whatever they like with it.

From 1983 onwards, various companies worked on graphical user interfaces (GUIs) capable of running on PC hardware.