Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 17
Thinking some more about IBM, I think I will go back even farther in the past than Time Sharing on IBM/360 machines of the 1960s or so.

There are some things I think of that IBM did way back when, probably after Herman Hollerith.

1.) They made card punches, gang punches, ans sorting machines that sorted punched cards. They made calculators that could be programmed with plugboards to do routine business calculations. But so did Remington Rand. Why did IBM become famous and make more money? They had the best salesmen in the world, and they sold or leased the equipment better than the competition. How? It was not that they took the CEO of the prospective customer golfing, bought his wife fur coats, etc. It was because they took the trouble to understand the customer's business better than the customer himself, so the equipment they offered solved the real problems the customer had. The creation of "the cloud" does not change this.

2.) When it became useful, in the late 1940s, to make stored program machines, now known as computers, this fit right in. IBM appeared to be a computer manufacturer, but they did not see themselves as such. They so themselves as providing the customer with solutions to problems. And if they had to manufacture hardware and programs for the hardware to help the customer, they did so. They did not perceive their customers wanting hardware, they perceived that their customers wanted solutions to problems. So they did not sell hardware, they leased it. This had several benefits both for the customers and for IBM. The benefit for the customer was that the customer did not have to cough up $4 million for a 5000 vacuum tube IBM 704 with about 100K bytes of RAM, but could pay $500/hour to lease one. The benefit for IBM was that they had the capital so they could afford to lease their machines. That was a big moat because the competition could not afford to lease their stuff, so they had to sell it. (Later some customers and the economics changed and eventually IBM was forced to optionally sell their machines, which they did.)

3.) IBM never made the best computers. They did not make crummy ones either. They always tried to be second best. Let the competition be at the bleeding edge, running up development expenses trying the newest ideas. IBM could then copy (I do not mean patent infringement) the best ideas and use them, but they were almost always behind the time. The defense department and the aircraft industries often bought state of the art machines. I assume the NSA did and does too. From the point of view of scientific computation, the Burrough 5500 (and later) series machines were much better. So were the Control Data machines such as the 6600. But most people never even heard of them. What they did was provide good value (in terms of solving the customer's problems because they understood the business of the customer better than the customer sometimes did) for the money.

4.) To me, cloud computing is just the tipping of the balance, one more time, between where the user is and where the compute power is. At first there was a computer in a room with a bunch of people running it. And people in offices nearby preparing programs for it, and clerks punching the programs and data into cards. One person at a time could use the machine.

Later, they found ways to time-share them so you could operate the machine from a (not very) remote location with a Teletype machine. To do that effectively required large storage on the computer and that started to be possible in the late 1950s. And when modems became available, you could be as far away as you could afford the telephone bill, and you could get sometimes 30 characters a second through it. So a bunch of users could share a single computer. That worked for a while. A benefit of that setup was that all the hardware types could be located around the computer, and the users were protected from dealing with that. When hardware or operating system stuff needed changing, the team of trained people did it. The users were not concerned.

There were issues, and dealing with the bureaucracy of the computer center became annoying. Around that time, mini-computers such as those made by Digital Equipment Corporation and Computer Control Company , which typically cost under a $1 million and often under $100,000 came out, and people could sometimes get their own and share them with a dozen or two people. But then you needed support people around each mini computer or group of mini computers.
You had, by then, already little clouds with a mini-computer in it and remote teletype class terminals clustered around them.

When personal computers came out, starting with Xerox-PARC, then Apple, then IBM, and even Sun Microsystems, everyone wanted their own. And many got them. They may have been more fun, but management of all those computes was a severe headache. No two computers had the same version of the same software, no one did the backups anymore, you could not be sure if security fixes were put in, and so on. But by 1980 or so the all started getting hooked together with the ARPA net, if you could get a connection to it, that is.

So we got pretty much to the current situation a few years ago, which works pretty well, but has headaches and security problems too. So now they are going to put larger machines into the Internet, or some such network, and name it a cloud.

It is deja-vu all over again.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.