Personal computer

The invention: Originally a tradename of the IBM Corporation,

“personal computer” has become a generic term for increasingly

powerful desktop computing systems using microprocessors.

The people behind the invention:

Tom J. Watson, (1874-1956), the founder of IBM, who set

corporate philosophy and marketing principles

Frank Cary (1920- ), the chief executive officer of IBM at the

time of the decision to market a personal computer

John Opel (1925- ), a member of the Corporate Management

Committee

George Belzel, a member of the Corporate Management

Committee

Paul Rizzo, a member of the Corporate Management Committee

Dean McKay (1921- ), a member of the Corporate

Management Committee

William L. Sydnes, the leader of the original twelve-member

design team

Shaking up the System

For many years, the International Business Machines (IBM) Corporation

had been set in its ways, sticking to traditions established

by its founder, Tom Watson, Sr. If it hoped to enter the new microcomputer

market, however, it was clear that only nontraditional

methods would be useful. Apple Computer was already beginning

to make inroads into large IBM accounts, and IBM stock was starting

to stagnate onWall Street. A1979 BusinessWeek article asked: “Is

IBM just another stodgy, mature company?” The microcomputer

market was expected to grow more than 40 percent in the early

1980’s, but IBM would have to make some changes in order to bring

a competitive personal computer (PC) to the market.

The decision to build and market the PC was made by the company’s

Corporate Management Committee (CMC). CMC members

included chief executive officer Frank Cary, John Opel, George Belzel, Paul Rizzo, Dean McKay, and three senior vice presidents. In

July of 1980, Cary gave the order to proceed. He wanted the PC to be

designed and built within a year. The CMC approved the initial design

of the PC one month later. Twelve engineers, with William L.

Sydnes as their leader, were appointed as the design team. At the

end of 1980, the team had grown to 150.

Most parts of the PC had to be produced outside IBM. Microsoft

Corporation won the contract to produce the PC’s disk operating system

(DOS) and the BASIC (Beginner’s All-purpose Symbolic Instruction

Code) language that is built into the PC’s read-only memory

(ROM). Intel Corporation was chosen to make the PC’s central processing

unit (CPU) chip, the “brains” of the machine. Outside programmers

wrote software for the PC. Ten years earlier, this strategy

would have been unheard of within IBM since all aspects of manufacturing,

service, and repair were traditionally taken care of in-house.

Marketing the System

IBM hired a New York firm to design a media campaign for the

new PC. Readers of magazines and newspapers saw the character

of Charlie Chaplin advertising the new PC. The machine was delivered

on schedule on August 12, 1981. The price of the basic “system

unit” was $1,565. A system with 64 kilobytes of random access

memory (RAM), a 13-centimeter single-sided disk drive holding

160 kilobytes, and a monitor was priced at about $3,000. A system

with color graphics, a second disk drive, and a dot matrix printer

cost about $4,500.

Many useful computer programs had been adapted to the PC

and were available when it was introduced. VisiCalc from Personal

Software—the program that is credited with “making” the microcomputer

revolution—was one of the first available. Other packages

included a comprehensive accounting system by Peachtree

Software and a word processing package called Easywriter by Information

Unlimited Software.

As the selection of software grew, so did sales. In the first year after

its introduction, the IBM PC went from a zero market share to 28

percent of the market. Yet the credit for the success of the PC does

not go to IBM alone. Many hundreds of companies were able to produce software and hardware for the PC.Within two years, powerful

products such as Lotus Corporation’s 1-2-3 business spreadsheet

had come to the market. Many believed that Lotus 1-2-3 was the

program that caused the PC to become so phenomenally successful.

Other companies produced hardware features (expansion boards)

that increased the PC’s memory storage or enabled the machine to

“drive” audiovisual presentations such as slide shows. Business especially

found the PC to be a powerful tool. The PC has survived because

of its expansion capability.

IBM has continued to upgrade the PC. In 1983, the PC/XT was

introduced. It had more expansion slots and a fixed disk offering 10

million bytes of storage for programs and data. Many of the companies

that made expansion boards found themselves able to make

whole PCs. An entire range of PC-compatible systems was introduced

to the market, many offering features that IBM did not include

in the original PC. The original PC has become a whole family

of computers, sold by both IBM and other companies. The hardware

and software continue to evolve; each generation offers more computing

power and storage with a lower price tag.

Consequences

IBM’s entry into the microcomputer market gave microcomputers

credibility. Apple Computer’s earlier introduction of its computer

did not win wide acceptance with the corporate world. Apple

did, however, thrive within the educational marketplace. IBM’s

name already carried with it much clout, because IBM was a successful

company. Apple Computer represented all that was great

about the “new” microcomputer, but the IBM PC benefited from

IBM’s image of stability and success.

IBM coined the term personal computer and its acronym PC. The

acronym PC is now used almost universally to refer to the microcomputer.

It also had great significance with users who had previously

used a large mainframe computer that had to be shared with

the whole company. This was their personal computer. That was important

to many PC buyers, since the company mainframe was perceived

as being complicated and slow. The PC owner now had complete

control.