When: 1980
Where: USA
Why: The PC revolutionised the way businesses operate and created a major product category
How: IBM’s iconic PC gave desktop computers credibility with business
Who: IBM’s Don Estridge, his team … and Mr Bill Gates
Fact: Time magazine named the computer ‘Machine of the Year’ just months after the PC’s 1981 launch
Mighty mainframe computers had been around since the early 1950s. These machines took up whole rooms and required specialists to operate and maintain them. They were expensive, and only used by very large corporations and government institutions.
The ‘IBM compatible’ PC, as it became known, succeeded to an unprecedented degree and remains the tool used by almost every business around the world, as well as the device most of us have at home to browse the web, store pictures and music, send and receive email, write documents and so on.
The mid-1970s saw the first consumer computers appear on the market. But these early machines were a different breed to the Windows-fired powerhouses that sit on countless office desks today. So-called ‘micro-computer’ project kits were aimed primarily at subscribers to such niche publications as Radio-Electronics and BYTE magazine: enthusiasts who were interested and skilled enough to build the machines at home. Such early-comers included the SCELBI-8H and the Mark-8 Altair. These machines had to be programmed by the user, and often came with just 256 bytes of Random Access Memory (RAM), with indicator lights and switches serving as the only input/output devices – there were no mice, keyboards or even screen displays.
It was not until the late 1970s that technology had improved enough to make the machines worthy of the tag ‘home computer’. The late Steve Jobs and business partner Steve Wozniak launched the Apple I computer in 1976; their second computer, the Apple II, as well as Commodore’s PET and Tandy’s TRS-80 formed the first generation of microcomputers that were designed and affordable for home or small business use. And they had keyboards and ‘visual display units’ (VDUs) so that people could see what they were doing.
These micro-computers had enough processing power and memory to support the basic programming, word processing and gaming requirements of home users. A cottage industry grew up supplying software and accessories for these computers – games, programming languages, very simple word processors and databases, printers, disk drives and the like. Small businesses began to buy these computers for use in the workplace, though the majority of them were used at home. The computers were big news, as were the entrepreneurs behind the companies making them – which experienced phenomenal growth and profits.
IBM was the global leader in computing at this point, selling almost exclusively to very large companies and governments. It saw the new trend for small microcomputers, and the potential for businesses to use them, and naturally wanted to participate in this new market.
So it came up with a plan to launch its own PC. IBM was well known for doing everything itself – it would not use other suppliers’ parts, it would normally create them all itself. However, it realised that this new market was growing so fast that if it followed its normal approach, it would take so long that it might miss out on much of the new business. So it decided to buy in various components for its new PC, little realising at the time just how big the ramifications would prove to be.
Someone suggested that they contact a small company called Microsoft, and so they met Bill Gates, who assured them that he could deliver a suitable operating system on time.
IBM established ‘Project Chess’: a team of 12, headed by one Don Estridge, which was put together to bypass usual company procedures so the new computer could be developed in a very short period of time. In the end, it took the team just 12 months.
During development, Estridge and his team vacillated over which operating system to use in the new machine. They tried to license the rights to one of the microcomputer operating systems that prevailed at the time, but couldn’t. Someone suggested that they contact a small company called Microsoft, and so they met Bill Gates, who assured them that he could deliver a suitable operating system on time. So Microsoft won the contract. In one of the world’s best-ever business deals, Gates then bought a similar operating system from an unsuspecting small business, Seattle Computer Products, for a modest one-time payment, and adapted it for IBM.
IBM launched its PC in 1981, to much fanfare. And it worked. Businesses large and small bought the computers on the back of IBM’s name. Software developers developed programs for the new computer in the expectation that IBM’s new launch would sell well, fuelling demand. Lotus 1-2-3, in particular, drove substantial sales of the PC, as you can read about in the chapter on spreadsheets in this book.
The launch of the desktop computer is, arguably, the single most important business development of the last 50 years. It has led to many other developments, such as the widespread use of the internet and email, but even before that it revolutionised the workplace – how people did their jobs, and also what jobs they had to do. The PC was powerful enough, and backed with sufficient software, to automate all sorts of administrative functions that had previously had to be done by hand.
And the PC sector exploded into a fast-growing, highly profitable market, with hardware and software manufacturers and resellers, and book and magazine publishers and event organisers all springing up to deliver what businesses globally wanted from this wonderful new technology.
The launch of the desktop computer is, arguably, the single most important business development of the last 50 years.
Of course, some companies benefited far more than others. IBM’s decision to outsource its development work had many repercussions. IBM’s use of bought-in components for its PC meant that it was unable to stop other manufacturers buying a similar set of components themselves and making careful copies of the PC that did not infringe intellectual property rights. A year after IBM’s release of the PC in 1981, the first IBM-compatible computer was released by Columbia Data Products. The Compaq Portable followed soon after, and the gates were open: Dell, Compaq and HP and others were able to manufacture PCs that operated like an IBM machine. And the company that really enabled this to happen was Microsoft, which licensed its operating system to many manufacturers. The term ‘IBM compatible’ was widely used for PCs that would run the same software and accessories as IBM’s PC.
In 1984, Apple launched its Macintosh computer, which used a mouse and the sort of interface we are all used to today – making its computer far easier to use than IBM’s. However, Apple was the only company to supply these computers, which it priced higher than most IBM-compatible PCs; and in a repeat of the video-recorder wars a decade earlier, the better technology lost out to the cheaper computer with more software available for it. IBM, Compaq, Dell and myriad others made vast profits from selling their personal computers; Microsoft became a global giant on the back of sales of its operating systems and subsequent Office tools. Intel, too, grew substantially on the back of supplying almost all the processors at the heart of every PC. And Apple, at one time the leading personal computer manufacturer with its Apple II, dwindled to a small, niche player, though much loved by its loyal followers, often in the creative and education sectors.
The price of PCs fell amid strong competition, and technological advances enhanced the PC’s power and capabilities every year, helping it to establish a legacy almost unprecedented in modern times.
PCs are now a fixture of modern life. Over 500 million were in use worldwide by 2002, and more than two billion personal computers are thought to have been sold since the earliest versions hit the market. These days, PCs are as much a part of home life as they are of the office landscape: at least half of all the households in Western Europe have one. And the number continues to rise; a billion personal computers were believed to be in use in 2008, and this is expected to double by 2014.
Presently, PCs in all their forms – desktop computers, laptops and servers – are the world’s main computing platform. They are used for any and every purpose, from paying bills and accounts, to chatting and playing games.
These days, PCs are as much a part of home life as they are of the office landscape: at least half of all the households in Western Europe have one.
It may not always be this way, with smartphones and tablet computers increasingly performing functions that previously had to be carried out on a PC. By the end of 2011, it is predicted that there will be more people buying smartphones and tablet computers than PCs, with the installed user base sure to surpass that of PCs shortly afterwards. Today it is impossible to say for sure the extent to which computing will move on to these mobile devices, but it is certain that the trend will be substantially towards mobile. It all began with the simple PC though.