$BO$ can be defined as the colimit over $(k,n)$ of Grassmanians $G_k(\Bbb R^n)$ of $k$-dimensional linear subspaces of $\Bbb R^n$ (the limit over $n$ is defined by standard inclusions $\Bbb R^n \subset \Bbb R^{n+1}$, and the limit over $k$ is defined by the operation $X \mapsto X\oplus \Bbb R$ which takes a $k$-plane in $\Bbb R^n$ to the $(k+1)$-plane $X\oplus \Bbb R$ inside $\Bbb R^n \oplus \Bbb R = \Bbb R^{n+1}$.
The direct sum operation defines pairings
$$
G_k(\Bbb R^n) \times G_{\ell}(\Bbb R^m) \to G_{k+\ell}(\Bbb R^{n+m})
$$
that are compatible with respect to taking colimits.
Taking colimits induces a map $BO \times BO \to BO$ defining the $H$-space structure.