Term Paper on "Two Milestones in the History of IBM"

Term Paper 8 pages (2289 words) Sources: 1+

[EXCERPT] . . . .

Milestones for IBM

The System 360 and the Personal Computer

Many inventions have changed the world: The automobile, the airplane, the telephone, and the computer. Each in its own way transformed how we live, how we work, and how we communicate. Yet technological revolutions are only possible once the new technology has been seamlessly integrated into everyday life. A product that is too difficult, or too expensive, for general use will remain a curiosity, or a novelty, with little practical application.

The earliest cars were toys of the very wealthy. Made-to-order, they were costly to produce, and difficult to maintain. There was no infrastructure to support them, paved roads were scarce, and gas stations did not exist. Owning and operating a car was almost like being a captain on the high seas - one needed to be self-sufficient. Henry Ford, however, dramatically altered the existing situation. His use of the assembly line made possible the production of reasonably-priced automobiles; motor-driven vehicles that could easily be purchased and used by the masses. The automobile revolution was under way. The computer too, promised to change our world beyond recognition. Its ability to perform complex mathematical calculations at high rates of speed eliminated the need for thousands of hours of tedious work by flesh-and-blood experts. The very first computers, invented in the 1940s, proved useful in wartime. Computations relating to the firing ability of big guns, computations that once took years, could be accomplished in hours or minutes. Enemy codes with millions of possible combinations could be deciphered in far less time than ever before. Victor in the Second World War owed much to the new technology, and it was the scientists and technicians of the International Business Machine Corporation, or IBM, who were responsible for the creation and maintenance of many of these new machines. But a computer that is the size of an entire room, that costs millions of dollars, and takes much time to learn to operate, would be of little use to smaller organizations or individuals. IBM recognized the need for a computer that could be mass-produced, just like Ford's automobiles. It was just this kind of visionary thinking that led to the development of the System 360, and later on, to the successful launching of the Personal Computer.

First manufactured in 1964, the System 360 marked the dawn of a new era in computing, and in the world. Unlike earlier machines that had been produced individually and with unique specifications, the 360 was born on an assembly line. By building thousands of identical machines, IBM could produce each individual machine for considerably less than it cost to manufacture one custom-made example. Furthermore, the System/360's were designed to perform a variety of different applications; applications that could conceivably find a use in many different fields, organizations, and companies. The 360 was also designed to evolve; to be able to adapt to changing technologies and applications. IBM called these dynamic new features, "Open Ended Design."

The new design had to provide a dependable base for a decade of customer planning and customer programming, and continuing laboratory developments, whether in technology, application and programming techniques, system configuration, or special requirements.

Current trends had to be extrapolated and their consequences anticipated. This anticipation could be achieved by direct provision.... [but] might also take the form of generalization of function.

Changing requirements for system configuration would demand a standard interface... But also capabilities for a machine to directly sense, control, and respond to other equipment modules via paths outside the normal data routes.

In many particular applications, some special (and often minor) modification enhances the utility of the system. These modifications (RPQ's) which may correct some shortsightedness of the original design, often embody operations not fully anticipated. In any event, a good general design would obviate certain modifications and accommodate others.

The IBM System/360 was therefore the computing world's first look at a machine that could be used for a wide variety of purposes, and which could be expected to grow and adapt to new situations and needs.

In particular, the IBM 360 helped to create an independent market for computer software. As previously mentioned, the old made-to-order machines were designed for specific purposes, and for specific purposes only. In developing a computer designed to perform generalized functions, IBM needed to ensure that its customers would be able to tailor the System/360 to their own particular needs. Separate application software would make it possible to modify a machine's capabilities. It also made possible the establishment of a whole new industry devoted to producing these specific, narrowly defined applications.

Companies other than IBM could now work together with IBM to develop software that was compatible with the computing giant's machines. Until the advent of the System/360, not only had each machine been unique, but each manufacturer had also made use of highly-individualized operating systems. The decision by IBM to begin "sharing" the 360's operating systems opened up vast new markets, and almost boundless possibilities.

Early commercial applications of computers were associated with in-house programming using higher-level languages; service bureaus were an alternative supplier of computing services. This structure for the supply of software, in which computer manufacturers created "tools" for applications development, users developed applications software, and a residual of users employed service bureaus for their data processing needs was short-lived. Developments between 1965 and 1970, including IBM's success with the System/360 and IBM's decision to unbundle software from its supply of computers, 23 increased the market for multi-installation software sales. The new entrants that formed the base of the independent software vendor (ISV) industry included software tool and utility program suppliers as well as "vertical market" software companies, which provided applications for particular industries and for common software needs such as accounting systems. For these reasons, 1965-70 were the pivotal years in the emergence of the current structure of the U.S. software industry.

As can clearly be seen, the IBM System/360 revolutionized the computer industry and began the process of "computerizing" much of the rest of the world's major industries. Notwithstanding the System/360's success, it was still a mainframe computer, and as such still out of reach for the average consumer - including many smaller companies, and even many larger ones without the necessary profit margins to merit major investments in computers. To take computing to the next level, to make the computer truly ubiquitous required the development of something new - "the Personal Computer." For a number of years, IBM concentrated primarily on the mainframe, a logical focus given that the company's chief market consisted of large-scale, and fairly large-scale businesses. At first it was left to others to exploit the niche of home-based computing. Computer games, budgeting and accounting software, and other applications designed to appeal to the average person were the perfect fit for the new category of machines. These were aimed at people who simply wished to entertain themselves, or to make managing day-to-day life just a little bit easier. These were not computer-savvy individuals, not people with many years' experience working on complex mainframes. It was the success of smaller competitors like Apple Computer that drew IBM into this new market. Yet, the new product line required some significant changes in the way IBM itself did business.

IBM's relatively late entry into the personal computer market gave it some significant advantages. First, it could make use of the second generation of microprocessors (which processed sixteen bits of data at a time instead of eight); this would make the IBM Personal Computer significantly faster than any other machine on the market. IBM chose to use the Intel 8088 chip, thereby guaranteeing Intel's future prosperity.

Although IBM was the world's largest software developer, paradoxically it did not have the skills to develop software for personal computers. Its bureaucratic software development procedures were slow and methodical, and geared to large software artifacts; the company lacked the critical skills needed to develop the "quick -- and dirty" software needed for personal computers.

Suddenly the world industry leader was finding itself confronted with competitors who were more competitive, and better adapted to the new circumstances, than itself. The personal computer necessitated new operating systems, as those already in use were created to meet the needs of large mainframes. Other manufacturers of personal computers had already developed their own operating systems and software prior to IBM's entry into the market. These were becoming established, but at this point in time - the 1970s - the personal computer had not yet fully captivated the public. Though its use was increasing, most people outside of the technical field had not purchased or even used a computer. IBM was thus getting into the new area a little late, but still early enough that it could use its enormous clout to establish an industry-wide standard and become a major player in the world of the personal computer.

The emergence of a dominant design changes the competitive landscape. New designs must win market share from an entrenched… READ MORE

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