IBM’s $5bn gamble: revolutionary computer turns 50 / good reads xpost

[Jesus Malverde]

Fifty years ago today IBM unveiled the first mainframe computer, capable of powering everything from banks to governments. It was so expensive to design that failure would have destroyed the company. Luckily, the System/360 sold in the thousands, and revolutionised computing into the bargain

In 1961 a small group of IBM staff were asked to come up with a plan to ensure the long-term future of the company. Current computers were selling well, but had huge limitations. A whole new approach was needed.

After eight weeks of deliberation they delivered a controversial report to executives which proposed discarding all of the company's previous work and starting from scratch on a new architecture.

Not only would this require a total redesign of IBM’s product range, but groundbreaking manufacturing techniques and new factories. Because the revolutionary machines would not work with old models, existing customers would be forced to upgrade all their equipment. It was a risky proposal. In fact, failure would mean bankruptcy.

It was a surprise, then, when the idea was eventually given the go-ahead. IBM spent more than $5 billion developing the next-generation machine. At the time that represented two year’s revenue. Company president Tom Watson Jr - the son of IBM’s founder - had literally bet the company on it.

http://www.telegraph.co.uk/technology/news/10719418/IBMs-5bn-gamble-revolutionary-computer-turns-50.html