But if you look at the market for business PCs back in 1981, it was completely open anarchy surrounding the CP/M-80 "8-bit PC standard". There were hundreds of vendors, including some big names in the computer industry. (IBM certainly didn't care about Commodore and etc. And as the article mentions, this took tons of support time from understaffed DR.)

So I think IBM quite strategically wanted to define the "16-bit PC standard", which they controlled for most of the decade. And Microsoft was the most compliant vendor. (There were antitrust restrictions on IBM too...)

On a larger level, it sounds like DR thought 16-bit was just a repeat of the early 8-bit computer industry and didn't really understand what IBM was up to.

It's interesting to me that this story hasn't had a lot of reaction.

It is the reason that Linux exists. It's the reason BSD came second. It's the reason for OS/2 and Windows 3 and Windows NT.

CP/M-86 was badly late: it followed over three years after the release of the 8086, the official successor to the 8080, the device that made Intel's fortune.

There was a single default OS for the 8080: DR's CP/M.

It was the industry standard, and the early business microcomputer industry ran on it and essentially nothing else. (But it needed at least a single floppy drive, which meant it was for £1000+ business computers, which in turn is why BASIC-in-ROM dominated in the inexpensive home-computer space: Commodore PET, Apple II, TRS-80, and their various 1980s successors.)

The Z80 was a tweaked 8080. Business was waiting on the 8080 successor that could handle more RAM -- which shipped as the 8086 in 1978.

DR didn't have an OS for it. It wasn't binary compatible: you couldn't run CP/M-80 on it, like you could with a Z80.

This article explains why DR didn't do that.

As a result, a cheap 3rd party compatible OS dominated, and that made the fortune of Microsoft, and that (alongside IBM's poor contract negotiation, which permitted MS to sell it to whoever it wanted) created the x86 PC industry.

DOS is why the 286 was a bit of a flop. That drove the 386.

(Aside: and, briefly, the Atari ST and Commodore Amiga -- and the Acorn Archimedes, whose CPU became the most popular best-selling CPU family in the history of humanity, and is why Intel is in financial difficulties now.)

The original all-32-bit 80386DX was too expensive. So, again, DOS drove the development of the cheaper 16-bit-bus 80386SX for cheap DOS 386s which didn't multitask and didn't run GUIs but ran DOS really well.

That market of cheap commodity 386 PCs is the soil in which Linux grew.

But in the late 1980s, the BSD folks were still focussed on minicomputers and things and they missed the PC gravy train.