Around this time (circa 1990), Microsoft's other project, Windows, now at version 3.0, was starting to gain popularity with some users. Previously, Windows had been little more than a task-swapping shell for DOS applications, and was intended to compete with QuarterDeck's DesqView. Users found it appealing becaused it contained some of the GUI elements that were being developed for OS/2. A decision was made to drop all support for OS/2, and go strictly with Windows. However, because of the history they had with IBM, and because they still used so much of their technology (Dynamic Data Exchange [DDE], Object Linking and Embedding [OLE] (now known as ActiveX), and Component Object Model [COM] are all derived from IBM technology), Microsoft still to this day maintains a broad-ranging cross-licensing agreement with them. The Windows NT kernel was partially based on the OS/2 kernel that they created with IBM, and Windows 95 also borrows heavily from this code.
With Microsoft no longer doing development on the user interface, IBM was faced with creating this themselves. In this timeframe, a deal was made with Commodore. Commodore licensed IBM's REXX scripting language for inclusion in their AmigaOS, and IBM took many GUI design ideas from the AmigaOS for their new GUI. With the release of OS/2 2.0, the WorkPlace Shell (WPS) user interface was born. OS/2 was now a 32-bit operating system, with a fully object-oriented graphical user interface. Based on IBM's System Object Model (SOM), the WorkPlace Shell is still the model for all graphical user interfaces, since nothing else has come even close to providing the same functionality. OS/2 2.1 and 2.11 followed, including a version of 2.11 with full Symmetric Multi-Processing (SMP) support, the first desktop operating system to support multiple CPUs. OS/2 2.x won over many Windows 3.x users because of it's ability to run Windows programs seamlessly, while maintaining a stable system, something that Windows had trouble doing. IBM even went so far as to trademark the term "Crash-Proof."
In November, 1994, OS/2 Warp 3.0 was released. It was the first PC operating system to have built-in Internet support. At the time, OS/2 critics said that Internet support was just "more geek crap," but today every major operating system ships with built-in Internet support. The release of OS/2 Warp Connect followed, and included full network support out of the box for all the major protocols, including IPX, TCP/IP, and NetBIOS. At this point, the focus for OS/2 became the "networked computer." When Windows 95 was released in August, 1995, resellers reported record sales on OS/2, as many people saw how Microsoft's hack of the OS/2 kernel didn't quite cut it for real-world, mission-critical usage.
OS/2 Warp 4.0 (codename "Merlin") was released in August, 1996. It's new features included a "beautified" GUI; the new graphical icons and "widgets" were designed by an ex-Apple programmer. The beauty was much more than skin deep, however. Also included were OpenGL support, OpenDoc support, and a full Java Development Kit, which included a Java Virtual Machine, which allows Java applications to be run independent of a browser. For high-end systems, the included VoiceType Dictation system allowed users to navigate their computer and dictate text to their computer without ever touching a keyboard or mouse. Microsoft is just now planning to follow in this path.
Despite vehement claims to the contrary by the press, the development of OS/2 continues. IBM has committed in writing to at least one large corporation that OS/2 will continue to be in development for the next 10 years, a claim that Microsoft cannot make about any version of Windows. IBM is also focused strongly on Java as the development platform of the future, and has become the single biggest investor in its development, outnumbering Sun developers by a factor of 4.