IBM's History: The First Personal Computers and Mainframes, Competition with Apple and DEC
The history of IBM: cheese slicers, scales, punch cards and tabulators, computers and artificial intelligence. Why was Steve Jobs afraid of IBM? The Mark I computer was created in 1941, with an IPO in 1962. The IBM 360 Series mainframe was released in 1964. 1981 – the IBM PC architecture. Competition with DEC and a lawsuit with Compaq. Revenue decline in 1992. So, watch episode five of The Polymer Business.
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At the end of the 19th century, inventor Herman Hollerith created the tabulator. This machine serves the same purpose of adding, but has widespread practical applications. In the US, it was actively used for the census. Dr. Hollerith, yes, he earned his doctorate in tabulating machines, and he created an efficient accounting system that ran on electromechanical machines using punch cards.
IBM PC
Nobody believed in the personal computer. After all, until the mid-1980s, most people thought of a computer as a huge piece of hardware, taking up a room, requiring constant maintenance, and solving massive, complex problems. How could it possibly fit on a desktop in an office or at home? No way! And certainly only a madman could imagine a multi-billion-dollar market!
It turned out that the personal computer really did exist. In offices around the world, first on the desks of executives, and by the late 1980s, even on ordinary employees, the IBM PC was firmly established. The strength of the IBM brand lay in its impeccable quality and the very best technology... IBM's strength lay in its worldwide sales network and massive advertising budgets. All competitors were forced to give way; a monster entered the new market. Apple had a particularly tough time.
In 1964, the IBM System/360 mainframe entered the market. It revolutionized the market and set the course for mainframe development for 50 years. This mainframe was copied by several other countries that couldn't buy it directly. The USSR couldn't buy modern computers because it was under embargo. Other countries cloned for economic reasons. This is understandable, as copying is cheaper. IBM spent about $5 billion developing the Series 360, half the cost of building the atomic bomb. Another estimate puts IBM's costs at 5,000 years of man-hours.
At some point, IBM was faced with the challenge of printing on paper. At the time, the typewriter market was full of competitors, so IBM wisely acquired Electromatic. In the 1940s, typewriters became electromechanical, and by the 1978s, electronic.
Steve Jobs and Bill Gates both saw themselves as antithetical to IBM's culture (discipline, black suits, starched shirts and ties), so they wore jeans and wrinkled T-shirts. IBM's business processes were highly refined. It was a model corporation. Some say IBM practically founded the American business school. That's a topic for another series.
IBM's competitors included Compaq, Dell (formerly PC's Limited), Tandy, and Hewlett-Packard.
Smaller competitors included Olivetti, WYSE, Apple, Osborne, Xerox, Epson, Toshiba, Asus, and Acer.
Episode Summary:
00:00 - Introduction
00:24 History of Information Processing
00:54 Census Tabulators
01:14 How Punch Cards Worked in Business
01:47 The Birth of IBM (After the CTR Merger)
01:57 The "Think" Slogan
02:15 Steve Jobs' Response to the "Think" Slogan
02:44 The Mark 1 Computer
03:13 The Post-War 20 Years: Vacuum Tube Computers
03:48 In 1962, IBM Had an IPO and Issued Shares
04:01 Warren Buffett on IBM Stock
04:17 IBM Dictaphone
04:33 The Mainframe Market in the 1960s
04:58 The Mainframe Market
05:05 IBM System/360
05:48 ES EVM – Soviet Mainframe
06:35 IBM Typewriters
07:17 How IBM Lost Its Leadership in the Typewriter Market
08:09 IBM Keyboards – The Best in the World
08:028 IBM Employee Culture and Clothing
08:41 Steve Jobs and Bill Gates vs. IBM
09:03 An Example of a Funny IBM Ad
09:34 The Dilemma of a Major Player
10:40 The Birth of the Personal Computer Market
11:07 The Invention of the IBM PC
11:19 The Architecture of the IBM PC
11:42 What Is IBM's Strength?
11:54 Why Was Steve Jobs Afraid of IBM?
12:43 MS-DOS on IBM PCs
13:14 Why Was Apple So Afraid of IBM?
13:20 Big Blue is Big Brother, it's a dictatorship
13:47 Apple positioned itself as the antithesis of IBM
14:07 The mainframe market decline of the early 90s
14:22 A yellow assembly of IBM PC clones
14:37 Reverse engineering the IBM PC
14:46 Why the IBM PC was an open architecture
15:23 The release of the IBM PS/2
17:01 15 years of IBM PC architecture in review
17:38 The "Gang of 9" strikes back at IBM
19:00 The release of the IBM ThinkPad
19:42 IBM Depp Blue vs. Garry Kasparov
20:54 IBM financial results
21:28 Virginia Rometty – new president
21:51 IBM stock prices
23:05 Events of the last 20 years
24:17 The Watson computer
24:54 Let's sum it up: Conclusions about the good
27:17 A fly in the ointment: conclusions about the bad