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If I recall the story correctly, there was some confusion because IBM saw "Microsoft CP/M" running on an Apple II. (MS licensed it from DR and sold it with their "Z80 SoftCard". The Apple II+SoftCard was supposedly the most popular CP/M machine.)

https://www.youtube.com/watch?v=ulQ4CWBfR_g




Paul Allen (Microsoft co-founder) writes about the Z80 SoftCard and the early Microsoft history in his book "Idea Man": http://www.amazon.com/Idea-Man-Memoir-Cofounder-Microsoft/dp...


Thats it (according to Balmer, and Jack Sams who is the IBM exec that went to Digital Research to license it). IBM thought they could licence CP/M from microsoft. MS couldn't license CP/M and sent Jack to the Digital Research house. It was awkward. (Triumph of the Nerds Documentary episode 2 18 minutes in)




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