It was released on November 20, 1985, but not many people stumped up the $99 price. It was a very simple program, by today's standards, but it was also constrained by the capabilities of the installed base of IBM PCs. Many of them had only a 4.77MHz Intel 8088 processor, 256K of main memory, and a 320 x 200 pixel CGA display capable of showing only 4 colours: usually magenta, cyan, white and black. (EGA screens with Enhanced Graphics were less common.)
Windows 1.0 came with a number of applets, including Calendar, Cardfile, Clipboard, Notepad, Terminal, Calculator, Clock, Control Panel, Windows Write, Windows Paint and the Reversi game. It would also work with the Microsoft Mouse, launched in 1982. However, IBM PC DOS (aka MS DOS) software dominated the market, and most users preferred DOS-based TSR (terminate and stay resident) programs such as Borland's Sidekick, which first appeared in 1983.
Interestingly, Microsoft wasn’t attached to Windows, supporting other projects. Apparently Microsoft even backed the idea of making Mac software normative.
At the time, Microsoft might even have preferred to support Apple's Macintosh, launched in 1984. Bill Gates had appeared on stage at the Mac's launch and aimed to become the leading supplier of graphical Mac applications such as Word and Excel, which didn't run in Windows. In 1985, Bill Gates wrote a memo to Apple boss John Sculley urging him to license Mac OS and make it an industry standard, with Microsoft's support. Microsoft might lose $40-$80 in sales of DOS and/or Windows but it expected to sell Mac users $400-$800 worth of applications instead.
Microsoft also had a third operating system in development. DEC, the minicomputer giant, had fallen out with Dave Cutler, its star programmer and developer of the VAX VMS operating system. Gates told Cutler he would back him, and to bring his team to Microsoft to develop the world's next great operating system. Cutler left DEC for Microsoft in October 1988, and started programming what eventually became Windows NT (New Technology).
Things changed when the Windows team came up with a winner in Windows 3.0. This broke free of the limited address space available to DOS under IBM's PC memory map (640K), and could run multiple DOS programs using the "virtual x86" mode in Intel's 80386 processor. Windows 3.0 was launched in 1990 and was an instant hit, selling about 4 million copies in its first year, and 6 million copies the next year. More than 5,000 applications were launched for Windows, and PC manufacturers started to preload it on a growing number of machines.
And there we go.