In 1985 Microsoft released Windows, an operating system that extended the features of MS-DOS and employed a graphical user interface. Windows 2.0, released in 1987, improved performance and offered a new visual appearance. In 1990 Microsoft released a more powerful version, Windows 3.0, which was followed by Windows 3.1 and 3.11. These versions, which came preinstalled on most new personal computers, rapidly became the most widely used operating systems. In 1990 Microsoft became the first personal-computer software company to record $1 billion in annual sales.
As Microsoft’s dominance grew in the market for personal-computer operating systems, the company was accused of monopolistic business practices. In 1990 the Federal Trade Commission (FTC) began investigating Microsoft for alleged anticompetitive practices, but it was unable to reach a decision and dropped the case. The United States Department of Justice continued the probe.
In 1991 Microsoft and IBM ended a decade of collaboration when they went separate ways on the next generation of operating systems for PCs. IBM chose to pursue the OS/2 operating system (first released in 1987), which until then had been a joint venture with Microsoft. Microsoft chose to evolve its Windows operating system into increasingly powerful systems. In 1993 Apple lost a copyright-infringement lawsuit against Microsoft that claimed Windows illegally copied the design of the Macintosh’s graphical interface. An appellate court later upheld the ruling.
In 1993 Microsoft released Windows NT, an operating system for business environments. In 1994 the company and the Justice Department reached an agreement that called for Microsoft to change the way its operating system software was sold and licensed to computer manufacturers. In 1995 the company released Windows 95, which featured a simplified interface, multitasking, and other improvements. An estimated 7 million copies of Windows 95 were sold worldwide within seven weeks of its release.