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The short answer, according to common beliefs is:

Windows - "Wide Interactive Network Development for Office work Solution".

NT - New Technology.

However, the NT part never really meant anything. But it was expanded to stand for "new technology," though it really means nothing today other than to identify the family of Windows operating systems. One popular belief is that Dave Cutler, one of the developers was making a pun out of VMS by incrementing each letter by one and giving WNT. There was also a CPU called the NT chip, and Microsoft was supposedly going to write a version of Windows for it, but they never did, and interest in that processor dwindled.

Windows 95, 98, and ME (millennial edition) were all based on Windows 3.1. They were 16 and 32-bit hybrid OSs and looked better. But they all sat on top of MS-DOS. Windows ME tried to hide this fact better, but it was still just an OS shell sitting on top of DOS. While Windows 95 was being written or a little before that, they were writing Windows NT as well. The idea was to market it to the commercial world and market Windows 9x for home users. NT had its own kernel and did not depend on DOS in any way, and it had a number of improvements over the Windows 9x line. As the NT GUI became more like 9x, and Windows 2000 came about which was based on Windows NT, Microsoft decided to merge the 2 families and provide a single operating system for all its markets. That is how XP came about. XP had home and corporate flavors, but they were the same OS.

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