DOS was structured such that there was a separation between the system specific device driver code ( IO.SYS) and the DOS kernel ( MSDOS.SYS). One major reason for this was that not all early PCs were 100% IBM PC compatible. Microsoft originally sold MS-DOS only to original equipment manufacturers (OEMs). CP/M faded, with MS-DOS and PC DOS becoming the marketed operating system for PCs and PC compatibles. Side-by-side, CP/M cost US$200 more than PC DOS, and sales were low. IBM responded by offering an agreement: they would give PC consumers a choice of PC DOS or CP/M-86, Kildall's 8086 version. Digital Research became aware that an operating system similar to CP/M was being sold by IBM (under the same name that IBM insisted upon for CP/M), and threatened legal action. IBM continued to develop their version, PC DOS, for the IBM PC. Microsoft later required the use of the MS-DOS name, with the exception of the IBM variant. Within a year Microsoft licensed MS-DOS to over 70 other companies, which supplied the operating system for their own hardware, sometimes under their own names. This became Microsoft Disk Operating System, MS-DOS, introduced in 1981. Microsoft purchased 86-DOS, allegedly for US$50,000. The system was initially named QDOS (Quick and Dirty Operating System), before being made commercially available as 86-DOS. There, programmer Tim Paterson had developed a variant of CP/M-80, intended as an internal product for testing SCP's new 16-bit Intel 8086 CPU card for the S-100 bus.
Gates in turn approached Seattle Computer Products.
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