Large computer makers Compaq, Dell and even IBM approached Steve Jobs over licensing of operating system from NeXT, a computer company Mr. Jobs founded after he was ousted from Apple in 1985. Even though he signed a deal, which could have changed the balance of power in the industry forever, with IBM, the NeXT OS did not become popular and the alliance was short-lived.
By 1987 it became apparent that disk operating system (DOS) along with Windows shell for it from Microsoft were becoming industry standards. Even though Steve Jobs has always tried to combine software and hardware in a closed platform, he decided that in a bid to popularize operating system by NeXT, the company he founded in 1985, he needed to do two things that were against his nature: licensing software to another hardware maker and to license this to IBM. In 1987, he met John Akers, chief executive of IBM back then.
"I couldn't resist telling him I thought IBM was taking a giant gamble betting its entire software strategy on Microsoft, because I didn't think its software was very good," said Mr. Jobs in of the interviews with Walter Isaacson for his biography (Amazon, B&N, iBooks).
NeXTSTEP operating system. Image from Wikipedia.
The demonstration of object-oriented NeXTSTEP operating system impressed IBM engineers and executives and after a series of negotiations the deal was struck in 1988: IBM would license the current version of the NeXT OS to use it on workstations. After other large makers of IBM PC-compatible systems, most notably Compaq and Dell, learnt that IBM wanted to use the NeXT OS, they asked Steve Jobs whether they could clone NeXT PC and license NeXTSTEP operating system. In fact, Mr. Jobs received proposals to exit the hardware business and receive additional money for essentially becoming a new Microsoft.
Bill Gates personally and Microsoft as a company got furious about the prospect of losing what essentially became monopoly and started to tell IBM and others that the NeXT OS was incompatible with anything. As a result, after Jim Cannavino became the chief of strategy and development at IBM, the relationship started to cool down. Although NeXT got some money from IBM, it did not got a chance to become a major operating system developer and change the landscape of the computing industry forever. Eventually, Mr. Cannavino initiated the development of OS/2 with Microsoft, which did not succeed, NeXT failed as a company, became a part of Apple, NeXTSTEP transformed into the Mac OS X the rest is history.