Shepardson Microsystems

Shepardson Microsystems, Inc. (SMI) was a small company producing operating systems and programming languages for CP/M, the Atari 8-bit family and Apple II computers. SMI is most noted for the original Apple II disk operating system, Atari BASIC, and Atari's disk operating system. Shepardson Microsystems was founded by Robert Shepardson in Saratoga Springs, New York.
CP/M.
The company got its start in the microcomputer arena by producing a series of BASIC programming language interpreters for the burgeoning S-100 bus computer market. Their first product was Cromemco 16k BASIC, which, as the name implies, was intended to run on Cromemco Z-series Z80-based computers with 16 kB of RAM.
As machines shipped with ever-increasing amounts of RAM, due largely to the replacement of SRAM with the much denser DRAM in the mid-1970s, SMI further expanded their version as the 26 kB Cromemco Structured BASIC, while a cut-down 12 kB version was released as CP/A Business BASIC.
At the time they were written, Microsoft BASIC was widespread but not as universal as it would be by the early 1980s. SMI's BASICs were based on the concepts and syntax of Data General Business Basic (which was very similar to HP Time-Shared BASIC), as opposed to Digital's BASIC-PLUS that formed the basis for MS BASIC. As a result, SMI's BASICs incorporated a different way to handle strings and input/output, a difference that would be seen in their later languages for the Atari.
Apple Computer.
On April 10, 1978, Shepardson Microsystems signed a contract with Apple. For $13,000 -- $5,200 up front, and $7,800 on delivery, and no additional royalties—Shepardson Microsystems would build Apple's first DOS—and hand it over just 35 days later. For its money, Apple would get a file manager, an interface for Integer BASIC and Applesoft BASIC, and utilities that would allow disk backup, disk recovery, and file copying. Apple provided detailed specifications, and early Apple employee Randy Wigginton worked closely with Shepardson's Paul Laughton as the latter wrote the operating system with punched cards and a minicomputer. That deal enabled release and sales of Apple's Disk II drive.
Atari, Inc..
Atari, Inc. planned to follow up its successful Atari VCS computer game system with a more powerful home computer (The Atari 400 and 800), to be introduced at the January 1979 Consumer Electronics Show. This required the development of a BASIC interpreter. A version of Microsoft BASIC for the MOS 6502 had been licensed for this purpose, but the task of retrofitting the code into an 8k cartridge proved too difficult.
Atari turned to Shepardson Microsystems to help with the port. But after struggling with it themselves, they proposed a new BASIC instead of using Microsoft BASIC. Atari proceeded to contract with SMI not only for Atari BASIC, but the Atari Disk Operating System (Atari DOS) as well. Development of both products were completed ahead of schedule.
When Shepardson Microsystems ported BASIC to the Atari, their work was so quick that they had it finished before the contract was signed — and the contract had room for a $1000 penalty or bonus if the work appeared after a date in April 1979. They already had it done by the December 28, 1978 delivery of the contract.
In early 1981, SMI concluded that their BASIC and DOS products were not viable, and permitted them (with the Atari Assembler Editor product) to be purchased by Bill Wilkinson and Mike Peters, who formed Optimized Systems Software. The new company then proceeded to enhance the products and sell them as third-party applications.