Eventually, AT&T and others figured out that Unix could be sold for big money. Companies began implementing their own versions of Unix and keeping their own code secret. Unix began to ``fork'', or split into many versions with varying degrees of incompatibility. By the mid-eighties the Unix community was a disparate set of factions who found it difficult to agree on anything. Around the same time, the IBM PC was becoming popular, gradually moving computing away from the large machines on which Unix ran. Microsoft DOS, and later Windows took over as the dominant desktop operating system. As the PC became more powerful, PCs running Windows began to compete in areas where Unix had been used. Eventually PCs became powerful enough to think of using them as small servers, a use that Novell championed with it's NetWare series of network operating systems for the PC, followed by Microsoft with the development of Windows NT.
The original PCs were not really suitable for running a multi-tasking operating system like Unix. As they became more powerful, apart from gaining enough power to run Windows, some people began to think they might be able to run some form of Unix. One of those was George Tannenbaum, who coded a small version of Unix called minix for the PC. One person who was interested in minix was a computing student in Finland called Linus Torvalds. Linus became frustrated with some of the limitations of minix (many of which stemmed from it's design philosophy of supporting the lowest common denominator) and the licensing, which made it difficult to fix the parts of minix which he thought were broken. Linus decided to code his own operating system based on Unix. The first release was in 1991, when he invited anyone and everyone via the Internet to have a look through his code and help to develop it.
As it turned out, Linus was very good at fostering a community around Linux. He is credited with being very congenial, willing to let others take or share credit for their work and fairly liberal in deciding which additions should go back into Linux itself. These features, along with the rise of the Internet as a means of communicating and sharing data were instrumental in building Linux into a very popular and strong operating system. Linux was placed under the GNU General Public Licence (GPL), which is a copyright, but stipulates that the code should always be made available with the program (and those derived from it). In this way, there is a legal guarantee that the code hiding (and consequent forking) which happened to Unix cannot happen to Linux.
To the user, Linux is almost indistinguishable from other Unices. The rise in popularity of Linux has also helped raise the level of knowledge of Unix amongst millions of students around the world over the last decade. There are now a great number of people working in computing who have Unix knowledge and skills. There are also other free Unices which have benefited from all of this. The most famous are the variants of BSD (Berkeley Systems Distribution) for the PC which have a reputation for quality. As I write this Unix, whether on a PC, a workstation or a big server, is increasing again in popularity. 60% of all web servers on the Internet use Apache (a free web server) running on Linux or Unix, up from a little over 50% a couple of years ago. Around 25% of servers now run Linux, up from almost nothing a few years ago. Amongst Internet service providers usage is even higher (44%) - since Linux comes with source code it can be modified to run on custom rack-mountable hardware which is perfect for serving large numbers of connections. Amongst Universities usage of Linux is also strong - many Universities still have large amounts of Unix expertise and Linux fits in well. Also, Linux is extremely inter-operable with most other systems, speaking most network protocols and able to use many different file-systems, making it perfect in an environment with many computing platforms.
The rise of Linux brings us pretty much up to date. At the time of writing of this history, it is unclear whether this will lead to any significant change on Microsoft's hold over the desktop market. One thing is clear - there are some interesting times ahead.