The Personal System/2 or PS/2 was IBM's second generation of personal computers, which was released to the public in 1987. It was the result of a bold and ultimately disasterous business decision. Although the open architecture of the earlier IBM PC and its succesors had been a great success, and IBM were the biggest single PC manufacturer, most of the market was buying faster and cheaper IBM compatible machines made by other firms. IBM's PS/2 was designed to remain software compatible, but the hardware was quite different. It introduced the technically superior MicroChannel bus for higher speed communication within the system, but failed to maintain the open AT bus (later called the ISA bus), which meant that none of the millions of existing add-in cards would function. The new IBM PS/2 machines, in other words, were not IBM compatible.
In addition, IBM planned the PS/2 in such a way that for both technical and legal reasons it would be very difficult to clone. Instead, IBM offered to sell a Microchannel licence to anyone who could afford the royalty—but that they would not only require a royalty for every PS/2 compatible machine sold, but also a payment for every IBM compatible machine the particular maker had ever made in the past.
The PS/2 models 25 and 30 were ISA-based (in other words, essentially IBM AT-like systems in a different form factor); the higher models were equipped with the Microchannel bus. All models used ESDI or SCSI hard drives, in the case of the entry-level ones, an unusual proprietary ESDI interface that was incompatible with industry standards and tied customers to IBM for spare parts. PS/2 models 50 and 60 used the Intel 80286 processor while the PS/2 models 70 and 80 used the Intel 80386 processor.
Although 3.5" 1.44 megabyte floppy disks were becoming common in the industry by 1987, the PS/2s were the first IBM models to use them as standard. While the disk format itself was standard, IBM chose to use a non-standard form for the disk drives, resulting in very high repair costs as a standard drive could not be retrofitted to a PS/2. (The IBM part was functionally identical to but about five times more expensive than a standard 3.5" floppy drive.)
PS/2 systems also introduced a new specification for the mouse interface (which is still in use today and is also called PS/2). The PS/2 keyboard interface was electronically identical to the long-established Baby AT interface, but packaged in a smaller form which was (for reasons still unexplained) made visually identical to the new mouse interface—a design decision that would prove aggravating to consumers for many years to come.
The longest lasting change introduced by the PS/2 models was to display standards. More recent supersets of the then-new VGA and 8514 graphics standard remain as the primary graphics interface in use today.
For IBM, however, the PS/2 experiment was a commercial disaster. With what was widely seen as a technically competent but cynical attempt to gain undisputed control of the market, IBM unleashed an industry and consumer backlash. The firm suffered massive financial losses for the remainder of the decade, forfeited its previously unquestioned position as the industry leader, and eventually lost its status as the largest single manufacturer of personal computers, first to Compaq and then to Dell.
PS2 (usually without the slash) is also a shorthand for the PlayStation 2.