Why SharePoint is popular ?

File Sharing SharePoint originally became popular because it was an easy way to share documents on the web. Many organizations that adopted SharePoint in the 2003 versions capitalized on the ability to upload documents to Document Libaries and share those documents with others.

Company Extranets One great example of this web based sharing, is a company extranet where users are not all in one location or authentication domain. Using form based authentication, accounts can be created for people across physical and company boundaries. By allowing one place for shared documents around a task rather than a corporate entity, SharePoint goes way beyond the common file share.
Content Management There are plenty of other Content Management Systems, but MOSS incorporated the functionality of the previously name Microsoft Content Management System which itself often cost more than MOSS alone. Check out this large list of public websites and blogs hosted on SharePoint And that is not all of them.
Search Search is greatly improved in SharePoint technologies. Search results are security trimmed, relevant and performant unlike the previous version.
Other reason
The OOB features are 1/10th of the whole story. Sharepoint exposes a comprehensive .Net object model that lets you customize the thing to your hearts content. People are coding amazing things with Sharepoint. With the object model, you can build and customize sites via code, in response to external events. You can write custom “web-parts” (controls hosted on special pages) that consume both internal (sharepoint) and external data.

Why companies end up going with Sharepoint:

• they get it a very low cost (oftentimes free) because they are Microsoft partners
• they are already so dependent on Microsoft products that Sharepoint seems to be the logical choice
• a proper vendor evaluation never takes place and instead the company goes with the apparently easiest and lowest cost alternative
• enterprise security from a reliable vendor
• companies know that Microsoft isn’t going anywhere whereas some of the other collaboration vendors in the space might not be around the long
• it was one of the earlier collaboration platforms available (initial release was actually in 2001)
• they focus on what Microsoft says it can do and is good vs what it can really do and is good at (marketing vs reality)

Hope this helps….Happy Coding!!!!