For many years MS-DOS and PC-DOS were so nearly identical that most people tended to confuse them, and a program written for either one could be virtually guaranteed to work equally well on the other. It is commonplace to see people write "MS-DOS was the operating system for the original IBM PC", for example - which is quite wrong: the IBM PC always shipped with PC-DOS in the traditional IBM blue wrapper. Other companies also produced their own branded DOS versions: mostly just badge engineered MS-DOS under licence from Microsoft, but the MS-DOS based Compaq DOS included significant customisation, notably with version 3.31 which was clearly the most advanced DOS on the market for quite some time (if we ignore the CP/M-86 and DR-DOS family of products).
For DOS versions 1 through 5, the differences between MS-DOS and PC-DOS remained trivial. After the release of DOS 5.0, however, IBM and Microsoft - until then the closest of allies - had a serious falling out. The primary issue was the future of more advanced operating systems - Microsoft favouring Windows because it was easier to market and they owned 100% of it, IBM favouring the much more ambitious and technically sophisticated joint IBM/Microsoft OS/2 project - but the ramifications for the IBM-Microsoft business relationship were broader. From this time on, MS-DOS and PC-DOS would diverge, and for the first time, IBM would start actively marketing PC-DOS to other computer manufacturers and to the public at large.
IBM PSP (their Personal Software Products arm) aimed to make sure that PC-DOS remained one jump ahead of its better-known competitor in the version number race. When MS-DOS 6.0 was released, IBM quickly updated their PC-DOS 6.0 to PC-DOS 6.1. Soon after, MS-DOS 6.0 ran into both stability and legal problems and had to be bug-fixed several times, becoming MS-DOS 6.2, 6.21 and 6.22. In reply, IBM updated to PC-DOS 6.3, which was to become the best-known and most successful version. A substantial number of smaller PC manufacturers switched to PC-DOS at this time, particularly those that had tired of waiting for the long-promised update to the now-elderly DR-DOS 6.0 from Digital Research/Novell.
The final iteration of the DOS wars came with the more-or-less simultaneous release of PC-DOS 7.0 and Novell DOS 7.0. The general expectation was that Novell's feature-rich product would prove superior and more successful: the reality was that PC-DOS was substantially more reliable and easier to configure than either of its competitors, and usually cheaper too. In the short-term, PC-DOS looked like a winner. Microsoft, however, had not suddenly dropped out of the DOS feature war without reason: their plan was to release a version of Windows that would only run on top of their own DOS 7.0 and make it impractical to sell a competing operating system, and Windows 95 did exactly that.
PC-DOS still exists, eking out a tiny market share in the embedded market and in various other niches, and has been updated to version 8.0 (http://www-3.ibm.com/software/os/dos/dos2000/). This version is Year 2000 ready and is also known as PC DOS 2000. As a major part of the PC market, however, it is long past.
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