By 1984, when Ma Bell divested and Unix became a supported AT&T product for the first time, the most important fault line in hackerdom was between a relatively cohesive “network nation” centered around the Internet and Usenet (and mostly using minicomputer- or workstation-class machines running Unix), and a vast disconnected hinterland of microcomputer enthusiasts.
It was also around this time that serious cracking episodes were first covered in the mainstream press—and journalists began to misapply the term “hacker” to refer to computer vandals, an abuse which sadly continues to this day.
The workstation-class machines built by Sun and others opened up new worlds for hackers. They were built to do high-performance graphics and pass around shared data over a network. During the 1980s hackerdom was preoccupied by the software and tool-building challenges of getting the most use out of these features. Berkeley Unix developed built-in support for the ARPAnet protocols, which offered a solution to the networking problems associated with UUCP's slow point-to-point links and encouraged further growth of the Internet.
There were several attempts to tame workstation graphics. The one that prevailed was the X window system, developed at MIT with contributions from hundreds of individuals at dozens of companies. A critical factor in its success was that the X developers were willing to give the sources away for free in accordance with the hacker ethic, and able to distribute them over the Internet. X's victory over proprietary graphics systems (including one offered by Sun itself) was an important harbinger of changes which, a few years later, would profoundly affect Unix as a whole.
There was a bit of factional spleen still vented occasionally in the ITS/Unix rivalry (mostly from the ex-ITSers' side). But the last ITS machine shut down for good in 1990; the zealots no longer had a place to stand and mostly assimilated to the Unix culture with various degrees of grumbling.
Within networked hackerdom itself, the big rivalry of the 1980s was between fans of Berkeley Unix and the AT&T versions. Occasionally you can still find copies of a poster from that period, showing a cartoony X-wing fighter out of the “Star Wars” movies streaking away from an exploding Death Star patterned on the AT&T logo. Berkeley hackers liked to see themselves as rebels against soulless corporate empires. AT&T Unix never caught up with BSD/Sun in the marketplace, but it won the standards wars. By 1990, AT&T and BSD versions were becoming harder to tell apart, having adopted many of each other's innovations.
As the 1990s opened, the workstation technology of the previous decade was beginning to look distinctly threatened by newer, low-cost and high-performance personal computers based on the Intel 386 chip and its descendants. For the first time, individual hackers could afford to have home machines comparable in power and storage capacity to the minicomputers of ten years earlier—Unix engines capable of supporting a full development environment and talking to the Internet.
The MS-DOS world remained blissfully ignorant of all this. Though those early microcomputer enthusiasts quickly expanded to a population of DOS and Mac hackers orders an magnitude greater than that of the “network nation” culture, they never become a self-aware culture themselves. The pace of change was so fast that fifty different technical cultures grew and died as rapidly as mayflies, never achieving quite the stability necessary to develop a common tradition of jargon, folklore, and mythic history. The absence of a really pervasive network comparable to UUCP or Internet prevented them from becoming a network nation themselves.
Widespread access to commercial online services like CompuServe and GEnie was beginning to take hold, but the fact that non-Unix operating systems don't come bundled with development tools meant that very little source was passed over them. Thus, no tradition of collaborative hacking developed.
The mainstream of hackerdom, (dis)organized around the Internet and by now largely identified with the Unix technical culture, didn't care about the commercial services. These hackers wanted better tools and more Internet, and cheap 32-bit PCs promised to put both in everyone's reach.
But where was the software? Commercial Unixes remained expensive, in the multiple-kilobuck range. In the early 1990s several companies made a go at selling AT&T or BSD Unix ports for PC-class machines. Success was elusive, prices didn't come down much, and (worst of all) you didn't get modifiable and redistributable sources with your operating system. The traditional software-business model wasn't giving hackers what they wanted.
Neither was the Free Software Foundation. The development of HURD, RMS's long-promised free Unix kernel for hackers, got stalled for years and failed to produce anything like a usable kernel until 1996 (though by 1990 FSF supplied almost all the other difficult parts of a Unix-like operating system).
Worse, by the early 1990s it was becoming clear that ten years of effort to commercialize proprietary Unix was ending in failure. Unix's promise of cross-platform portability got lost in bickering among half a dozen proprietary Unix versions. The proprietary-Unix players proved so ponderous, so blind, and so inept at marketing that Microsoft was able to grab away a large part of their market with the shockingly inferior technology of its Windows operating system.
In early 1993, a hostile observer might have had grounds for thinking that the Unix story was almost played out, and with it the fortunes of the hacker tribe. And there was no shortage of hostile observers in the computer trade press, many of whom had been ritually predicting the imminent death of Unix at six-month intervals ever since the late 1970s.
In those days it was conventional wisdom that the era of individual techno-heroism was over, that the software industry and the nascent Internet would increasingly be dominated by colossi like Microsoft. The first generation of Unix hackers seemed to be getting old and tired (Berkeley's Computer Science Research group ran out of steam and would lose its funding in 1994). It was a depressing time.
Fortunately, there had been things going on out of sight of the trade press, and out of sight even of most hackers, that would produce startlingly positive developments in later 1993 and 1994. Eventually, these would take the culture in a whole new direction and to undreamed-of successes.