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[intro sounds]
This is Microsoft DOS 6.
I love an operating system in a big box.
It's the least you expect for a piece of software that's so significant.
But look a little closer and you'll see something Microsoft wanted us to know about.
Something they wanted us to see.
// Thanks to SquareSpace for sponsoring this video //
Yes, Microsoft were so pleased with this technology, they plonked it in a bright red star.
That's right, for one reasonable price, you not only get a brand spanking new operating
system, you can also conveniently double the amount of hard drive space you have!
Well, I'm sold.
Microsoft may have been keen to show it off, but this wasn't new technology, at least,
not in the greater world of software.
You see, in the first two decades of the IBM PC & compatibles, hard disk space was at a
In the early 80s, 10MB was a very significant amount of storage.
By the early 90s, 100MB was a very significant amount of storage, but with the advent of
Windows 3, and its multitude of applications, people were starting to cry out for more.
For computers running MS-DOS, tools like Phil Kat'z PKZIP was one such solution.
Using it, you could compress your files into a neat little archive.
That archive could save space on your hard drive, or even be used to archive software
to a single, or even multiple floppy disk.
A far cheaper storage medium than hard drives.
But it would be a company known as Stac Electronics who would offer a somewhat revolutionary solution.
Stac Electronics was formed in 1983, initially under the extended name of 'State of the Art
Operating initially out of Pasadena, California, the original 9 founders set to work as a fabless
chip company with products aimed towards backups and the tape drive industry.
They quickly moved onto dedicated compression chips and even expansion cards, that could
handle file compression on the fly.
Using a memory resident software driver, these cards could seamlessly compress and decompress
data creating a much higher capacity disk than under normal conditions.
By 1990, and with processor speeds increasing, the company realised that they could perform
this compression/decompression completely within software, negating the need for expensive
hardware, and released the Stacker disk compression utility in 1991 to do just that.
Sundog Software had attempted something similar a few years prior, with their utility, Squish,
however it was slow and awkward in use.
In contrast Stacker was simple, and actually reduced disk access times, meaning, although
it only needed an 8088 CPU to run, machines with a fast enough processor would actually
perform quicker than without it.
Previously, in 1989, another competitor; Vertisoft Systems had also released a similar product;
Double Disk.
However, this was a more finicky beast, which relied on creating virtual partitions as compressed
volumes, rather than allowing you to compress your entire hard drive in one fell swoop.
The real beauty of Stacker, was that it could almost transparently compress an entire hard
drive and you'd be none the wiser, apart from now having roughly double the space.
By 1992, it was clear that on-the-fly compression was proving very appealing, and various other
competition had landed, including Expanz Plus and SuperStor.
But Stacker was now on version 2.0, and it was even better.
You see, the first version of Stacker used some cunning in operation; it essentially
created a new drive name (D:), leaving the uncompressed host C: drive with a small amount
of space to house the standard DOS boot files.
After initial boot, the Stacker driver would then essentially swap the drive letters over,
making the compressed partition, now the C: drive.
But this left some complications when applications made changes to the DOS autoexec and config.sys
files on the C: drive rather than the D:
drive, which was actually the one used for booting.
Version 2.0 eradicated this problem by automatically maintaining and synchronising the boot files,
and also completely hiding the uncompressed partition.
Priced at $149, Stacker 2.0 was much, much more affordable than buying more hard drive
It also offered the best speed and lossless compression ratios on the market, and even
more importantly was reliable.
Programs like Expanz were sometimes known to cause some corruption when it failed to
estimate remaining disk space effectively on a full drive.
Stacker was therefore the obvious choice whilst still not out-pricing its competition.
Between 1991 and 1992, business was looking rosy, to the tune of approximately $44 million
in sales.
But Microsoft being Microsoft were having none of it.
Wanting a piece of everything, they had decided that their new version of Microsoft DOS, version
6.0, should have drive compression incorporated directly into the OS, rather than users having
to turn to these ghastly third party utilities.
Naturally, their first port of call would be the industry leader, Stac Electronics....
Now, as you might expect, Microsoft hadn't made this decision from a deep desire to innovate.
Most of their work was built on the foundations of others, and this was no different.
In late 1991, Digital Research had delivered DR-DOS 6.0, which not only included task switching
ability, but thanks to a deal with AddStor Incorporated, also featured SuperStor's compression
Of course, DR-DOS's distribution was minute compared to the 100 million machines MS-DOS
was already installed on, but COMPUSA had made a deal to bundle it with all their laptops
and notebooks.
For Microsoft, this was an issue.
The tantalising appeal of free hard drive space, and a pseudo multi-tasking operating
system might impact their market domination, and so in mid-1992, they went and sat down
with Stac Electronics at their California headquarters.
Now, I don't have the exact transcripts of that meeting, but according to various reports,
including a 1993 InfoWorld article, it went something like this;
Hello Stac Electronics, we're Microsoft, we'd like to ship Stacker with MS-DOS 6.0.
-OK Sure, how much will you pay us?
But we'll give you some future licensing deals, maybe.
Look, give us your technology or we'll go to a competitor and leave you for dead
*door slam*
This is very roughly the sequence of events confirmed by Stac Chairman, Gary Clow.
Microsoft would later claim that they had offered Stac $1 million a month in licencing
fees, but that Stac had demanded four times this amount.
Regardless the meetings amounted to nothing, and so Microsoft decided to go down a different
Enter our old friends Vertisoft, and their disk compression utility, DoubleDisk, which
was now at version 2.5, and very firmly the budget compression software in the market,
priced at just $99.95.
Being significantly on the backfoot, Vertisoft were apparently more open to a deal with Microsoft,
and the cogs were set in motion.
Part of the deal Microsoft offered was that Vertisoft could have insider development access,
enabling them to create their own suite of compatible programs, such as Veritisoft's
Space Manager, which added a DoubleSpace Windows interface, along with a suite of performance
In January 1992, PC Magazine described DoubleDisk as "one of those products that isn't impressive
due to exceptional functionality, inspired technology or a slick interface; it simply
does what it promises to do", and that's all Microsoft wanted.
The hard part was out of the way, so all they had to do was incorporate the basic framework
and algorithms into their own utility.
What was this utility called, not DoubleDisk....
I tell you their marketing department was on a whole different plane of existence.
By January 1993, MS-DOS 6.0 was gearing up for it's March launch window, including the
much advertised DoubleSpace.
If you were a user of MS-DOS 6, you might know it better as DBLSPACE.EXE.
When installed, the DBLSPACE.BIN kernel would load automatically through an undocumented
pre-load API, whilst also consuming some of your DOS memory.
But to make it fully suitable for the operating system, Microsoft had to implement a number
of changes, including making it more transparent from a user perspective, and to live up to
it's double claims, having the ability to compress the entire C: drive... well the first
512MB at least.
Anyone who had any more than that was either a god, or frankly, had the money to buy more
hard drives.
However, as soon as a beta copy of DOS arrived in Stac Electronics offices.
They knew they had to do something.
Microsoft might have cut Stac out and decided to licence technology from a competitor, but
Stac had an ace up their sleeves.
On the 25th January 1993, Stac entered a complaint with the courts against Microsoft.
You see, Stac Electronics had been in the game for a long time, and had already registered
a number of patents regarding their compression technology.
The patent they deemed Microsoft was in violation of was US # 4,701,745; the "Waterworth" patent,
first registered on the 3rd March 1986, by Ferranti International PLC, under direction
from Stac Electronics.
The patent infringement applied to the compression algorithm employed by Microsoft's, and somewhat
by extension, Vertisoft's transparent procedure.
In abstract terms the patent is described as;
"A data compression system includes an input store (1) for receiving and storing a plurality
of bytes of data from an outside source.
Data processing means for processing successive bytes of data from the input store includes
circuit means (21-25) operable to check whether a sequence of bytes is identical with a sequence
of bytes already processed, output means (27) operable to apply to a transfer medium (12)
each byte of data not forming part of such an identical sequence, and an encoder (26)
responsive to the identification of such a sequence to apply to the transfer means (12)
an identification signal which identifies both the location in the input store of the
previous occurrence of the sequence of bytes and the number of bytes in the sequence."
It's a variation on the Lempel-Ziv compression scheme, and what it boils down to is the use
of hashing to find matches in a sliding input window.
Now, this is incredibly simplified, but say a file contained the text "The fat cat sat
on the brown mat".
Well, the compression algorithm file would scan the file, find all matching sequences,
and replace them with an identifier.
Like this.
We've now instantly removed five bytes of information.
The patent describes hashing 3 bytes of data at a time to find identical fingerprints.
If you take a look at how Microsoft explain DoubleSpace compression, they talk of a similar
process of finding repeated sequences, and then encoding them as so subsequent
matches all point back to the initial match.
To save further space, the most common values are attributed shorter encoding than the least
All this allows the original data to be restored without loss.
It should be noted that DoubleSpace also saved space by reducing the cluster-overhang found
within a FAT file system, but that isn't the part in question here.
It's not quite like this in reality, in reality the hashing would calculate a fingerprint
for a rolling frame of data in a 8K chunks, or 16-sector clusters, and where the fingerprints
are found to be identical, those points of data would have the same reference.
It's such a rudimentary and obvious method of compression, used in so many compression
algorithms, that it really highlights the problems the US Patent system had in identifying
what was a viable computing patent in those early emerging times.
There was much discussion and uproar about it during the 80s and 90s.
The fact that Stac had only decided to wield this power now, as Microsoft threatened to
crush the whole industry, is testament to the threat they were facing.
This would actually be the first patent lawsuit in Microsoft's history (although not the last),
and the outcome would have significant implications for both the companies involved, and how pre-existing
technology ideas could be implemented going forward.
But this wasn't the only issue Microsoft had conjured by rolling out DoubleSpace.
By May 1993, and with litigation now in full swing, the computing world was suddenly aware
of a significant problem with Microsoft's compression utility.
InfoWorld wrote;
"DoubleSpace uses an estimated compression ratio to estimate the free space available
on a compressed drive.
When DoubleSpace writes 8KB of data, it requires 16 sectors of 512 bytes each, and those sectors
must be contiguous.
If contiguous sectors are not available, this causes a variety of symptoms from lost disk
clusters to unreported disk corruption".
Companies such as Blossom Software had even created utilities to check for these issues.
Combined with the poor selection of DoubleSpace focused repair utilities Microsoft included
with DOS 6.0, it was evident that the OS had been somewhat rushed to incorporate the functionality
as soon as possible.
Microsoft's answer was, in Setember 1993, to release DOS 6.2, which not only included
a version bug fixed version of DoubleSpace, but also bundled a new utility called SCANDISK.
Designed to replace the text based CHKDSK, Scandisk was a graphically pleasing disk repair
program that importantly, could handle DoubleSpace drive issues much better.
The fact they were pressing forward, clearly demonstrated the Stac lawsuit wasn't concerning
them too much.
But what wasn't worrying Microsoft, was definitely worrying the third party compression companies.
By this time, DOS 6 users numbered in the millions, and a reported 62% of those users
were now using DoubleSpace.
That's huge.
What's more, you could buy the entire DOS operating system for half the price of Stacker's
software alone!
The customer base for Stacker and it's peers had effectively been ripped out from under
them, overnight.
The only real customers left were those who wanted the best compression technology on
the market, and could afford to pay for it.
PC Magazines continued to tout the benefits of Stacker over DoubleSpace but it was only
a matter of time before businesses went under.
The Federal court case begin in January 1994.
Almost exactly a year after the original filing.
Throughout the trial, Microsoft would put in numerous counter-claims against Stac, including
that Stac was the one violating technology Microsoft had just acquired, that it was engaging
in civil conspiracy to commit fraud and more significantly, that it had misappropriated
a trade-secret of DOS 6.0, by making use of that undocumented pre-load feature in Stacker
Allegedly, this not only made the software compatible with Microsoft's new operating
system, but also allowed Stac to include a feature allowing users to upgrade their drive
from DoubleSpace to Stacker Disk compression.
Interestingly, one of the pieces of evidence submitted by Stac, was of Bill Gates at a
DOS 6 marketing event, wearing a T-Shirt saying "We came, we saw, we doubled".
This was presented to drive home how important the new technology was to their new OS.
The proceedings rattled on for 4 weeks, but despite the apparent spuriousness of the patent,
it was perhaps Microsoft's aggressive dealing and litigation tactics which swayed the jury,
and by the 23rd February 1994 the verdict went in favour of Stacker Electronics with
Judge Edward Rafeedie ordering Microsoft to pay Stac the amount of $120,000,000 in damages,
which equated to around $6 for every copy of DOS 6.x sold.
However, the jury also agreed with the counterclaim that Stac has misappropriated trade secrets,
and ordered them to pay Microsoft just over £13 million in compensatory and punitive
Of course, it wasn't just Microsoft at fault here, and so Vertisoft, the original infringers
of the patent and who licenced their technology to Microsoft, were also ordered to pay compensatory
damages to Stac in the amount of $670,000, with all other claims dismissed with prejudice.
Stac would immediately request a permanent court order blocking further sales of all
DOS Operating Systems which included DoubleSpace.
This led to Microsoft releasing DOS 6.21, which was identical to DOS 6.2, just without
any disk compression software.
People who happened to be shopping for DOS during this period, apparently, lucked out.
Although if you've still got a copy, you might have just lucked in!
Even so, June 10th saw the Federal court rule that Microsoft recall all unsold versions
of DOS 6 and DOS 6.2, and prevent the sale of any new computers it had already been installed
Of course, Microsoft now realised that it may be in their best interests to actually
work with Stac, rather than fight them, and so after temporarily getting a stay on the
recall injunction, an agreement was reached between the two parties, on the understanding
that Microsoft would not pursue an appeal which could be costly for everyone involved.
The new deal would see Microsoft pay $1 million a month for 43 months to licence Stac's patented
technology, whilst also paying £39.9 million for preferred stock that could be converted
in 2004 with a 15% stake for $9 a share.
Effectively buying a significant chunk of the company.
It also meant that Stac would not need to stump up the $13.6 million counterclaim award.
Gary Clow, CEO of Stac Electronics, was quoted as saying, "Today's agreement immediately
ends our conflict with Microsoft and ushers in a new era of cooperation between the two
Before 1994 was out, DOS 6.22 would be released.
To avoid any confusion, and move on from this whole fiasco, it now included DriveSpace.
Backwards compatible with DoubleSpace, but apparently with a slightly different compression
algorithm and a great new name.
It's almost like Microsoft use word ladders to choose their software names.
DOS 6.22 is my favourite version of DOS, and indeed, I myself used DriveSpace on my 850MB
Western Digital hard drive back in 1995, and found it to be an uplifting and liberating
It's good that we got there in the end.
During this entire period, both Microsoft's and Stac's shares had both fallen and risen,
but understandably Stac's fluctuations were much more sweeping.
Directly after their court win, Stac shares jumped over $2 to $6.50 a share, with Microsoft's
falling just over a dollar to $79.875.
However, Stac's share price situation actually led to another lawsuit for the company, this
time brought forward by it's shareholders.
They alleged that following excellent sales during the previous year, Stac had gone public
in May 1992 at $12 per share, but had done so knowingly just before Microsoft announced
they were incorporating DoubleSpace into their Operating System.
Initially shares had surged to $15, but quickly dropped with Microsoft's announcement and
Stac's subsequent loss of value.
By the end of 1994, the Stac electronics compression technology was actually accepted as a formal
lossless compression standard by ANSI.
Known as Lempel-Ziv-Stac, it combined the sliding window repeated data approach with
Huffman coding, which breaks down longer strings into a series of nodes on a binary tree.
It would later be used as a network compression algorithm under a spin-off company of Stac,
known as Hifn.
As for Stac.
Well, by 1996 they had won and survived their shareholder lawsuit, and would ultimately
continue with their original semiconductor business until 2002 when Stac's remaining
technology assets were sold to the Symantec subsidiary, Altiris.
Of note is that Stac would make the impressive effort to return it's remaining cash to shareholders
before dissolving.
Not something you see a lot of companies doing before they disappear, and perhaps a morally
astute nod to their earlier disagreements.
The mammoth Microsoft, of course, is still with us, and would solider on with DriveSpace
throughout Windows 95 and onwards.
In fact, the remnants of it are still shipped in Windows 10, albeit in a reduced form and
with much less fanfare.
We came, we saw, we doubled.
Man, it's those limitations which really made those decades such an exciting time.
Thanks for watching.
Have a great evening.