Guide to X11/Political History
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There were 10 versions of X, corresponding to 10 versions of the protocol between clients and server. Then came the eleventh version, X11. This version sustained many additions and continues in use today.
Control of the X11 spec and reference implementation passed between several organizations: MIT X Consortium, X Consortium, Open Group, and X.org. The OS vendors (mostly Unix and VMS) would take the reference implementation, modify it, add an X server for their OS, and give the modified version a non-free license. These non-free versions deployed themselves on servers and workstations.
As home computers with cheap Intel 386 processors (helped by Microsoft DOS and Windows) spread, so did cheap or free Unix implementations (Minix, Xenix, Linux, FreeBSD, NetBSD) for them. Thus Thomas Roell and Snitily Graphics Consulting Service created the X386 server and donated it to X11R5, that is X version 11 release 5 of the reference implementation. From there, XFree86 produced an X11 implementation with a free license, thus the "Free" in its name. Eventually, XFree86 added ports to Alpha, PowerPC, and SPARC. XFree86 spread to several free and commercial Unix variants including Mac OS X and Cygwin.
Window managers and widgets
Meanwhile, as X11 spread, several persons wrote software for it, including window managers. The reference implementation contained "twm", a simple window manager. Several persons wrote window managers either by modifying twm or starting from nothing. Many of these window managers, such as fvwm, afterstep, and windowmaker, had free licenses. These were distributed and maintained separately from X11 or XFree86. Some Linux distributions provided several of them.
The reference implementation also contained the Xt (X toolkit) framework and the Xaw (Athena) widgets using this toolkit. The primitive, black-and-white buttons, scroll bars, and menus used by Xaw dissatisfied Macintosh and Windows users. So some persons made variations like Xaw3d and distributed them as patches to X11. Others rejected Xt and made their own widgets, creating toolkits like FOX, FLTK, GTK+, and Qt. OpenOffice.org still uses its own widgets.
Motif and CDE
The OS vendors at the Open Group combined efforts and created the Motif window manager and widget toolkit. From there, the vendors made a Common Desktop Environment. Though Motif and CDE appeared in several commercial OS distributions, they had a non-free license, so many Linux and *BSD users avoided it. As Linux and XFree86 advanced, Motif and CDE waned.
GNOME and KDE
The K Desktop Environment, based on the Qt widget toolkit, and the GNU Network Object Module Environment, based on the GTK+ widget toolkit, became freely licensed alternatives to Motif and CDE. The GNOME and KDE developers encouraged improvements to XFree86 and also cooperated through http://www.freedesktop.org. Eventually, XFree86 and freedesktop.org displaced x.org for development of X11.
Other toolkits and window managers also took notice of freedesktop.org and continue to compete against GNOME and KDE.
The Open Group ended free licensing for X11 reference implementation. They later reintroduced the free license, but most X11 development had already moved to XFree86, which remained free. Later, a dispute between XFree86 core team members caused most Linux distributors and OpenBSD to abandon XFree86. The x.org reference implementation decided to become an XFree86 fork called Xorg.
Today, X11 community remains fragmented between Xorg and other X11 implementations, and also between GNOME, KDE, and other window managers, but X servers and clients from different factions work well together.