Who Invented the Computer? William Lowe and the IBM 5150
Who Invented the Computer? This is the forty-sixth installment in our ongoing series.
The 1970s were a heady time for the microcomputer industry. Originally built for hobbyists, the machines were making inroads into homes, schools, and even offices as manufacturers like Apple, Commodore, and TRS continuously pushed the envelope with innovations and upgrades.
Unbeknownst to the enfant terribles happily toiling away in California’s Silicon Valley, however, an eight-hundred pound gorilla was about to cross the playground and step firmly into their sandbox.
Big Blue Steps Up
As a new decade dawned, the eighth-largest company in the world, IBM, was the preeminent manufacturer of mainframe computers. Widely referred to as “Big Blue,” the company had no interest in microcomputers.
Five years earlier, they had dabbled in the field by releasing an experimental portable system, the IBM 5100. The machine came with a 16-bit processor, 64 kilobytes of memory and a built in 5-inch monitor — but at the cost of $10,000, and tipping the scales at slightly more than 55 pounds, consumers completely ignored the “portable” computer.
Things began changing in 1980 when the Atari corporation offered IBM the opportunity to rebrand and sell one of Atari’s computers as its own. William Lowe took the offer to management, who said no. Lowe then suggested that IBM purchase Atari outright, modify one of their machines, and slap an IBM sticker on it. The board again declined, saying of the idea, “That’s the dumbest thing we’ve ever heard of.”
The thought of an IBM microcomputer would have ended there if not for CEO Frank Cary, who was intrigued. He met with Lowe privately, promising to fund a microcomputer project out of his own budget. Cary gave Lowe 12 months to come up with a prototype and told him to keep the project quiet.
Granted complete autonomy for the project and reporting only to Cary, Lowe threw the IBM playbook out the window. His plan was to circumvent the company’s staid corporate culture and bureaucracy by running the project in the manner of a Silicon Valley startup.
Carefully selecting 12 IBM employees considered to be nimble, outside-the-box thinkers, Lowe swore each to secrecy, and relocated them to company labs in Florida. Codenamed, “Project Chess,” the team named it PC for short.
To speed the development process, Lowe mandated that the new machine should be built with off-the-shelf components. IBM would make the case and keyboard. Unlike other microcomputers of the time that regularly required repairs, Lowe’s goal was “to give customers a reliable machine with zero defects.” He mandated that the team thoroughly test each component of every machine.
The IBM 801 Risc processor was still in the experimental stage so the PC crew settled on the Intel 8088 microprocessor — it was fast, proven, inexpensive and could be purchased in bulk. Keeping it in the same family as the failed 5100, the new machine was christened the “IBM Personal Computer 5150.”
It was an impressive accomplishment, with a 16-bit processor and 16 kibibytes (1024 bytes per kibibyte) of memory capable of being expanded to 256 kibibytes. It also had a full-size keyboard that was comfortable to use. Weighing a mere 4 pound, the keyboard made a pleasant bump and click sound when the keys were pressed. It also had five expansion slots and a high-quality monochrome display — all for the low price of $1,565.
An Immediate Sensation
Just one year to the day after they began, Lowe’s team unveiled their creation on Aug.t 12, 1981, at the Waldorf Astoria in New York City. About 100 people showed up to see the 5150 in action and it was an immediate hit. A Byte Magazine writer in attendance described the 5150 as being “as close as I’ve ever seen to being all things to everyone.” A British reviewer called the PC “the most professionally put together system I’ve ever seen,” and predicted grandmothers everywhere would soon be writing software for it.
To launch the new computer, Lowe hired the Lord, Geller, Federico, Einstein marketing firm, which created one of the most famous commercials of all time to help sell the 5150. The commercial featured a Charlie Chaplin lookalike who used the PC to make his business and personal life simpler.
IBM accepted orders for more than 40,000 units that first week. By Dec. 31, more than 750,000 PCs had been sold. Production had a difficult time keeping up with orders. As 1982 got going, an impressive one machine was being sold every minute of over business day. During the next four years, IBM would make improvements to the 5150 and, by 1984, the PC was at the top of the microcomputer industry driving company revenues to $46 billion.
But in the rush to design and build the PC, Lowe’s team had made a mistake. It was a mistake that would cost them dearly in the end.
In order to make their 12-month deadline, Lowe’s team reached out to 24-year-old Bill Gates of Microsoft and asked him to write an operating system for the 5150. Busy building his own company, Gates instead suggested that Lowe’s team should purchase QDOS (Quick and Dirty Operating System) from computer programmer Tim Patterson.
Lowe refused, suggesting instead that Microsoft buy the OS themselves and that IBM purchase licenses as needed. Microsoft bought QDOS, modified it and began selling MS-DOS licenses to anyone willing to pay. By the end of 1981, other manufactures started horning in on IBM’s business by selling clones of the PC at slightly lower prices. They purchased DOS licenses from Microsoft to run their machines.
At first the competition made little difference. IBM had wisely copyrighted their input/output system (BIOS), and since other manufacturers did not have a BIOS, all clones were incompatible with the 5150 and its software. Clones could run MS-DOS and certain applications on top of it, but not much else. Any company that copied IBM’s BIOS was immediately sued for copyright infringement.
Unfortunately for IBM, while it was illegal to copy BIOS, reverse engineering was completely legal. Which is exactly what the Compaq Computer Company accomplished in May of 1982 with the release of the “Compaq Portable.”
Other companies were soon hard at work reverse engineering their own BIOS and by 1984, a fully IBM-compatible BIOS was being sold commercially. PC clones began springing up everywhere and IBM was in trouble.
The presence of ever more clones on the market was not what killed the PC. That blame rests with IBM itself. By the latter-part of 1983, Lowe was replaced and his small, innovative team was wrapped into the “Entry Systems Division” (ESD) — in the process the PC was ensnared in the slow-moving bureaucracy for which IBM was well-known.
The ESD grew to include 10,000 employees most of whom seemed focused on playing it safe with new ideas and passing them up through the time consuming and frustrating process of multiple levels of testing and approval. Large corporate sales also fell prey to the IBM bureaucracy, getting bogged down in legal negotiations and interminable fulfillment agreements.
The one product developed by the ESD was the “PCjr,” specifically intended for home use. As computers go, it was a total dud. The PCjr was unable to run most IBM PC programs, it had no expansion slots, and a terrible keyboard that users nicknamed the “Chiclet Keyboard” because of its small, flat, rectangular keys that resembled Chiclet candies. It was a failure so complete that even company employees refused to purchase one at a huge discount.
The company would continue selling PCs for more than a decade, but its failure to be nimble and move as quickly as smaller competitors would cause their share of the microcomputer market to continue declining. IBM finally threw in the towel in 2004, selling their PC business to Lenovo.
In the end, the big blue gorilla was pushed out of the sandbox. Today, IBM PCs remain collector’s pieces available on eBay and other online sellers. Although clones are the machine of choice for most businesses and individuals, its undeniable that the PC made the company a huge pile of money and simultaneously secured IBM’s place in computing history.