WHAT’S THE STORY?
IT was 40 years ago today that IBM launched their first personal computer, instantly transforming the computing market and sparking a long competition with Apple.
In a remarkably short space of time after its launch on August 12, 1981, the PC came to dominate the market and it is still spoken of in reverent tones by computer geeks. If you have one in the attic, you might want to look it out as original examples can fetch up to £450 on Ebay.
THEY WERE LATE ON THE SCENE, WEREN’T THEY?
THE name sort of suggests why. International Business Machines had concentrated almost exclusively on computers for offices and businesses for many years, and the company developed a reputation for being notoriously bureaucratic and unable to respond to a fast-developing and fast-growing market for portable computers.
The IBM 5150, to give it its Sunday name, wasn’t actually the first IBM portable computer – that was the IBM 5100 released in 1975, and was “portable” as long as you could hump 55lbs of metal around. Many people did, and special travel cases were designed for them.
When Apple, Tandy and Commodore streaked ahead with their minicomputers in the late 1970s, it looked as though the IBM behemoth would not be able to respond. But in a transformational move, IBM threw their normal practices out of the window in order to design and manufacture a product that could capture some of the $15 billion market at the start of the 1980s.
IBM also had the reputation of being pricey – the 5100 could cost $20,000 depending on the specifications. So when the company looked at the market, they decided on a home personal computer for an affordable price using standard components – not the ones IBM usually designed themselves – and supplied with non-proprietary software. A company executive, William C Lowe, pulled the project together and is generally known as the father of the IBM PC.
Working in strict secrecy, Lowe and his team came up with a design and a sales plan, and then revolutionised IBM by outsourcing the development of the software to an up and coming technology firm called Microsoft. In addition, IBM did a deal with electronics manufacturer Intel to provide the all-important microprocessors, the “chips” inside the PC. They didn’t know it at the time, but the two link-ups would make Microsoft and Intel two of the most successful companies of all time.
One story which is supposedly true is that when IBM executives first went to Microsoft, they met a young man with a shy manner and large specs and concluded that he was the office boy. It was Bill Gates.
They made him sign a non-disclosure agreement, as IBM always did.
“IBM didn’t make it easy,” Gates recalled much later. “You had to sign all these funny agreements that sort of said IBM could do whatever they wanted, whenever they wanted, and use your secrets however they felt. So it took a little bit of faith.”
He signed it on the spot and that’s why he is one of he world’s richest men.
IBM pushed Microsoft and Intel for rapid developments. The whole project, dubbed Operation Chess, from board approval to the public launch took less than 12 months.
WHAT MADE THE IBM PC SO GOOD?
IN three words, innovation, quality and affordability. The PC was recognisably an IBM machine in miniature on the outside, but the Microsoft-designed software, eventually dubbed MS-DOS, and the Intel processors inside the 5150 put it in a different league to its competitors.
It also came in at a relatively low price of around $1500 for the basic machine. Crucially, IBM had been talking to producers of word processing packages and video games and there was a whole host of these ready for use by purchasers of the PC. At a price, of course.
WHAT WAS THE REACTION?
LOOKING back at the media reaction at the time, it seems to have been a months-long feeding frenzy, with the public lapping up all the stories about how a PC could transform your life.
Apple were worried. They famously took out a full page advert in the Wall Street Journal which read: “Welcome IBM. Seriously.”
Strangely, the home computer market did not fall to IBM at first – that only happened when MS-DOS became the standard software of almost all non-Apple PCs. But the business community loved it and within a few years, upgrading developments made the IBM PC the market leader, far ahead of Apple.
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