..in this case, MS was right. IBM stuck to the 286 more out of conservatism and lack of vision regarding processor development than loyalty to the "installed base", which was DOS. If DOS compatibility were the key issue, as it was for Microsoft, they would have got on the 386 wagon, with its virtual 8086 mode, then and there. IBM far overesitmated the longevity of the 286. They may have been basing their projections of the life cycles of big iron equipment and so failed to understand how rapidly PC hardware would evolve.