What we currently know of as the SCSI interface had its beginnings back in 1979.
Shugart Associates, led by storage industry pioneer Alan Shugart (who was a leader in the
development of the floppy disk, and later founded Seagate Technology) created the Shugart
Associates Systems Interface (SASI). This very early predecessor of SCSI was
very rudimentary in terms of its capabilities, supporting only a limited set of commands
compared to even fairly early "true" SCSI, and rather slow signaling speeds of
1.5 Mbytes/second. For its time, SASI was a great idea, since it was the first attempt to
define an intelligent storage interface for small computers. The limitations must be
considered in light of the era: we are talking about a time when 8" floppy drives
were still being commonly used. 
Shugart wanted to get SASI made into an ANSI standard, presumably to make it more
widely-accepted in the industry. In 1981, Shugart Associates teamed up with NCR
Corporation, and convinced ANSI to set up a committee to standardize the interface. In
1982, the X3T9.2 technical committee was formed to work on standardizing SASI. A number of
changes were made to the interface to widen the command set and improve performance. The
name was also changed to SCSI; I don't know the official reason for this, but I suspect
that having Shugart Associates' name on the interface would have implied that it was
proprietary and not an industry standard. The first "true" SCSI interface
standard was published in 1986, and evolutionary changes to the interface have been
occurring since that time. (You can read more about SCSI standards
here.)
It's important to remember that SCSI is, at its heart, a system interface, as
the name suggests. It was first developed for hard disks, is still used most for hard
disks, and is often compared to IDE/ATA, which is also used
primarily for hard disks. For those reasons, SCSI is sometimes thought of as a hard disk
interface. (I must admit that placing my SCSI coverage in my own hard disk interfaces
section certainly suggests this as well!) However, SCSI is not an interface tied
specifically to hard disks. Any type of device can be present on the bus, and the very
design of SCSI means that these are "peers" of sorts--though the host adapter is
sort of a "first among equals".
My point is that SCSI was designed from the
ground up to be a high-level, expandable, high-performance interface. For this reason, it
is frequently the choice of high-end computer users. It includes many commands and special
features, and also supports the highest-performance storage devices.
Of course, these features don't come for free. Most PC systems do not provide native,
"built in" support for SCSI the way they do for IDE/ATA, which is one of the key
reasons why SCSI isn't nearly as common as IDE/ATA in the PC world. Implementing SCSI on a
PC typically involves the purchase of a storage device of course, but also a special card
called a host adapter. Special cables and terminators may also be required. All of this
means that deciding between SCSI and IDE/ATA is an exercise in
tradeoffs.
SCSI began as a parallel interface, allowing the connection of devices to a PC or other
systems with data being transmitted across multiple data lines. Today, parallel or
"regular" SCSI is still the focus of most SCSI users, especially in the PC
world. SCSI itself, however, has been broadened greatly in terms of its scope, and now
includes a wide variety of related technologies and standards, as defined in the SCSI-3 standard.
Next: SCSI
Standards