Shown below, Microsoft's first truly competitive version of Windows, version 3.1, didn't arrive until 1990, at which point Redmond had a lot of catching up to do. Through its next few iterations of Windows, Microsoft would often find itself adding features in response to Apple innovations, developing few revolutionary ideas on its own. Apple was first to deliver networking as part of the OS, the first to support desktop publishing with high-quality laser printing, and the first to support 32-bit addressing.
Microsoft was thus not well prepared for the game-changing Internet in the early 1990s.
Windows 95 kills Netscape with bundled IE
As with GUIs, Microsoft at first eschewed the Internet, claiming it was just a fad and that Microsoft's own proprietary Microsoft Network was what people really needed. Tim Berners-Lee's invention of the Web browser, coupled with Mark Andreessen's delivery of the free, commercial-quality Netscape browser in 1994, changed all that. Users flocked to the Internet, immediately grasping the concept of the Web and reveling in the easy-to-use Internet viewport provided by Netscape.
Despite Netscape's popularity, Microsoft continued to ignore the Web when it released Windows 95 in late 1995. Although Windows 95 did support TCP/IP, the default installation did not include it, so Windows users were locked out of the Internet unless they took pains to install the optional TCP/IP component.
In 1996, Microsoft suddenly seemed to notice that 75 percent of the now burgeoning Internet user base ran Netscape on their systems. Abandoning its proprietary Microsoft Network concept, Microsoft bought browser developer Spyglass and hurriedly released a Windows 95 update featuring the newly minted Internet Explorer browser as a built-in component.
As with the first editions of Windows versus Macintosh, early IE versions were no match against Netscape, but by IE 3.0, Microsoft had gained feature parity with Netscape. By late 1998, Windows' embedded IE effectively killed off Netscape, which was acquired by AOL and eventually faded away to software oblivion.