IBM and Its PC
In yesterday’s Gyan, I had quoted the no. of employees back in 1984 and today. I had also commented that the numbers didn’t quite extrapolate to what they should have been. The most probable reason for this is the sharp rise and decline for IBM in the PC Market during the 80s. So today’s Gyan is about IBM and its PC.
IBM was ruling the Computers Market world over. Mainframes and related software were bringing major amount of revenue for IBM. In early 70’s, IBM had started working on a small “Personal” computer but the idea had lost its momentum in the bureaucracy of this gigantic organization.
What a company like IBM couldn’t do, a small company started by two young mavericks succeeded in doing. Apple made Personal Computer popular and obviously, IBM wasn’t happy to see Apple stealing the market under their nose. In July 1980, Frank Cary – the then Chairman of IBM - called an emergency meeting of the top brass to discuss about the project to build IBM’s own PC. He had succeeded Thomas Watson Jr. himself to take the charge of IBM. Even though, he was from the Mainframe generation, he perfectly understood the power of personal computer. That’s why he opened a separate department “General Services Division” (G.S.D.) from where everything except Mainframes was manufactured. AS400 was also a product of GSD.
“Where is my Apple?” He used to ask. Again, in this meeting, he got to listen to all cranky excuses about why the dream PC could not come into reality. To add to his fury, an engineer suggested that IBM should buy small computers from “Atari” – a video games company – and sell them with the IBM logo. Finally, a group said that it’s possible to design a PC but they needed funding. Cary barked,” That’s enough. I’ll allot you funding from my own budget but this job has to be done!” He, then, turned to Bill Lowe “Get some good people, find a work place and start working…I want this PC ready in a year from now.”
Bill Lowe started working on PC in Boca Raton in Florida. In his team was Lew Eggbrecht who was working on the Design of the PC based on Intel’s 8088 Microprocessor. Lowe himself was working on the marketing strategy of the PC; questioning himself will the IBM Salesmen like to sell the PCs? Or which OS should be used? Then, he decided to build the PC using off – the – shelf parts. IBM would buy the Microprocessors from Intel and would procure every other hardware component from outside vendors or will manufacture it themselves and assemble them. The main question now was of Operating Systems. Though writing OS was not a big deal for IBM, they wanted to get it written from some third party. The thought behind this was that the PCs would be sold in thousands. Now, if there is any problem with the OS, IBM engineers won’t be wasting their time running around fixing those issues. So let other vendors / third party write the OS… and as time proved, this was a major mistake.
IBM made Microsoft write the Operating System for the new PC. In fact, there were 3 operating systems that used to come along with the PC namely PC – DOS, CP/M and P – DOS but PC – DOS (developed by Microsoft) was given for free, so, naturally, it became popular.
In August 1980, the first prototype of IBM PC was ready. A demo was given to the then IBM Chairman John Opel who had taken over from Cary. Opel wasn’t much impressed with the demo. He was more worried about how to sell the PCs. Now, the project was named as “Project Chess” and the new PC was named as “Acorn” Soon, Bill Lowe was replaced by Don Estridge. PC had become prestige issue for IBM now. At the start of the year 1981 itself, the IBM PC was ready. The team, under Estridge’s leadership, managed a miracle. On 12th August, 1981 IBM launched its PC officially with a formal press release. It had a bunch of softwares like a software similar to VisiCalc, Basic Language, a word processor named “Easy Writer” and a couple of games “Microsoft Adventure” and “Donkey”! (“Donkey” was, apparently, written by Bill Gates and that, it seems, was the last time he wrote any code)
The day when IBM officially launched its PC, Apple ran a page long advertisement in almost all the newspapers across US. It read only 3 letters “Welcome IBM. Seriously…”
The war for the Personal Computer Market had begun. Even, Apple had aces like Mac, Lisa up their sleeves. But as discussed in earlier Gyans, they were far too ahead of their times. Additionally, there were disputes and ego clashes in the Apple II and Macintosh teams which affected Apple big way.
By 1984, IBM was clearly eating Apple Pie! So, finally, after Mainframes, IBM became a leader in PC. By the end of the year 1981, IBM had sold 93000 PCs. IBM enjoyed a market share of more than 25% and the share of Mainframes in IBM’s own business came down drastically to half!
Don Estridge got a lot of publicity as the “Father of the Personal Computer” Lew Eggbrecht, who had worked really hard for PC couldn’t stand Estridge taking credit for the PC. He started negotiating with an IBM client who in turn, taped all the conversation and sent it back to IBM. Eggbrecht who, in deed, was the real father of the IBM PC was fired from the company. Estridge commented, ”We have kicked out a thief amongst us!” Estrige died shortly in a plane crash.
As mentioned earlier, the IBM PC was made up of off – the – shelf products as follows: IBM PC
8088 microprocessor and peripheral chips—Intel
5¼-in. floppy disks—Tandon (Western Digital acquired Tandon in 1998)
Power supply— Zenith (Zenith sold its computer business in 1989 to Groupe Bull, which later sold it to Packard Bell NEC. Packard Bell no longer exists.)
Printed circuit board—SCI
Printer—Epson
Keyboard—IBM (Lexington, KY)
Monitor— Various Asian manufacturers
Software: Microsoft, DRI (Digital Research Intergalactic) etc.
The obvious question is: if everything is manufactured by others and all IBM is doing is just assemble them, then why can’t anyone else do it!? There is a catch… IBM had written the “BIOS” (Basic Input Output System) which carries the specifications of the components as designed and standardized by IBM. So it was not possible to assemble these components because IBM held the key – the BIOS.
But soon, Rod Canion, Jim Harris and Bill Murty from Texas Instruments managed to crack the BIOS and that was the beginning of the end for IBM. Shortly after this, IBM Clones – better known as IBM compatibles – started coming in the market. They were as good as, or rather much better, cheaper and more flexible than the IBM PC. Compaq managed to hit the market with its own PC based on the 80386 microprocessor well before IBM.
IBM started losing its share of Personal Computers market. Neither was it a leader in PC market nor was it ahead in Mainframes, too.
Unknowingly, IBM helped Intel and Microsoft grow!
To know how that happened, watch this space on Monday!
Regards,
Abhishek
IBM was ruling the Computers Market world over. Mainframes and related software were bringing major amount of revenue for IBM. In early 70’s, IBM had started working on a small “Personal” computer but the idea had lost its momentum in the bureaucracy of this gigantic organization.
What a company like IBM couldn’t do, a small company started by two young mavericks succeeded in doing. Apple made Personal Computer popular and obviously, IBM wasn’t happy to see Apple stealing the market under their nose. In July 1980, Frank Cary – the then Chairman of IBM - called an emergency meeting of the top brass to discuss about the project to build IBM’s own PC. He had succeeded Thomas Watson Jr. himself to take the charge of IBM. Even though, he was from the Mainframe generation, he perfectly understood the power of personal computer. That’s why he opened a separate department “General Services Division” (G.S.D.) from where everything except Mainframes was manufactured. AS400 was also a product of GSD.
“Where is my Apple?” He used to ask. Again, in this meeting, he got to listen to all cranky excuses about why the dream PC could not come into reality. To add to his fury, an engineer suggested that IBM should buy small computers from “Atari” – a video games company – and sell them with the IBM logo. Finally, a group said that it’s possible to design a PC but they needed funding. Cary barked,” That’s enough. I’ll allot you funding from my own budget but this job has to be done!” He, then, turned to Bill Lowe “Get some good people, find a work place and start working…I want this PC ready in a year from now.”
Bill Lowe started working on PC in Boca Raton in Florida. In his team was Lew Eggbrecht who was working on the Design of the PC based on Intel’s 8088 Microprocessor. Lowe himself was working on the marketing strategy of the PC; questioning himself will the IBM Salesmen like to sell the PCs? Or which OS should be used? Then, he decided to build the PC using off – the – shelf parts. IBM would buy the Microprocessors from Intel and would procure every other hardware component from outside vendors or will manufacture it themselves and assemble them. The main question now was of Operating Systems. Though writing OS was not a big deal for IBM, they wanted to get it written from some third party. The thought behind this was that the PCs would be sold in thousands. Now, if there is any problem with the OS, IBM engineers won’t be wasting their time running around fixing those issues. So let other vendors / third party write the OS… and as time proved, this was a major mistake.
IBM made Microsoft write the Operating System for the new PC. In fact, there were 3 operating systems that used to come along with the PC namely PC – DOS, CP/M and P – DOS but PC – DOS (developed by Microsoft) was given for free, so, naturally, it became popular.
In August 1980, the first prototype of IBM PC was ready. A demo was given to the then IBM Chairman John Opel who had taken over from Cary. Opel wasn’t much impressed with the demo. He was more worried about how to sell the PCs. Now, the project was named as “Project Chess” and the new PC was named as “Acorn” Soon, Bill Lowe was replaced by Don Estridge. PC had become prestige issue for IBM now. At the start of the year 1981 itself, the IBM PC was ready. The team, under Estridge’s leadership, managed a miracle. On 12th August, 1981 IBM launched its PC officially with a formal press release. It had a bunch of softwares like a software similar to VisiCalc, Basic Language, a word processor named “Easy Writer” and a couple of games “Microsoft Adventure” and “Donkey”! (“Donkey” was, apparently, written by Bill Gates and that, it seems, was the last time he wrote any code)
The day when IBM officially launched its PC, Apple ran a page long advertisement in almost all the newspapers across US. It read only 3 letters “Welcome IBM. Seriously…”
The war for the Personal Computer Market had begun. Even, Apple had aces like Mac, Lisa up their sleeves. But as discussed in earlier Gyans, they were far too ahead of their times. Additionally, there were disputes and ego clashes in the Apple II and Macintosh teams which affected Apple big way.
By 1984, IBM was clearly eating Apple Pie! So, finally, after Mainframes, IBM became a leader in PC. By the end of the year 1981, IBM had sold 93000 PCs. IBM enjoyed a market share of more than 25% and the share of Mainframes in IBM’s own business came down drastically to half!
Don Estridge got a lot of publicity as the “Father of the Personal Computer” Lew Eggbrecht, who had worked really hard for PC couldn’t stand Estridge taking credit for the PC. He started negotiating with an IBM client who in turn, taped all the conversation and sent it back to IBM. Eggbrecht who, in deed, was the real father of the IBM PC was fired from the company. Estridge commented, ”We have kicked out a thief amongst us!” Estrige died shortly in a plane crash.
As mentioned earlier, the IBM PC was made up of off – the – shelf products as follows: IBM PC
8088 microprocessor and peripheral chips—Intel
5¼-in. floppy disks—Tandon (Western Digital acquired Tandon in 1998)
Power supply— Zenith (Zenith sold its computer business in 1989 to Groupe Bull, which later sold it to Packard Bell NEC. Packard Bell no longer exists.)
Printed circuit board—SCI
Printer—Epson
Keyboard—IBM (Lexington, KY)
Monitor— Various Asian manufacturers
Software: Microsoft, DRI (Digital Research Intergalactic) etc.
The obvious question is: if everything is manufactured by others and all IBM is doing is just assemble them, then why can’t anyone else do it!? There is a catch… IBM had written the “BIOS” (Basic Input Output System) which carries the specifications of the components as designed and standardized by IBM. So it was not possible to assemble these components because IBM held the key – the BIOS.
But soon, Rod Canion, Jim Harris and Bill Murty from Texas Instruments managed to crack the BIOS and that was the beginning of the end for IBM. Shortly after this, IBM Clones – better known as IBM compatibles – started coming in the market. They were as good as, or rather much better, cheaper and more flexible than the IBM PC. Compaq managed to hit the market with its own PC based on the 80386 microprocessor well before IBM.
IBM started losing its share of Personal Computers market. Neither was it a leader in PC market nor was it ahead in Mainframes, too.
Unknowingly, IBM helped Intel and Microsoft grow!
To know how that happened, watch this space on Monday!
Regards,
Abhishek
posted by Gyan for the Day! | 7:11 pm
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