IBM 50 Years Ago
I have been digitizing documents for many years, decades. If I receive something in the USPS mail, I open it, scan it, and throw it in the recycle bin. I keep the digital documents in Dropbox folders, which I consider a safe and secure place for them. The documents number more than 150,000. I keep them organized in 50+ folders such as aviation, boat, cars, motorcycles, boards, books, education, friends and family, ham radio, health and fitness, etc. Some documents like birth, marriage, and death certificates of ancestors are more than 100 years old. From time to time, I browse through the files for all years of the current month just to see what I find. When I did this in November, I found a letter I had received 52 years ago from Thomas J. Watson, Jr., Chairman of IBM Corporation.
Tom Watson was a great leader and a fine man. I only met him in person once, but I always felt he was there for all the employees. It felt really good to receive a personal letter from him.
When I was in the U.S. Army on military leave from IBM, I remember receiving an unexpected package at Christmas time. I opened the large package as some of my comrades stood and watched. Inside was an Epicurean Gift Box of fruits, nuts, and other goodies. A gift card said Dear John, Merry Christmas, and we all hope you come back to IBM after you complete your military service. It was signed by Vin Learson, then IBM’s chairman and chief executive officer. We were all impressed. IBM felt like family.
I joined IBM in June 1967. The annual report for that year was very positive. Revenue was $5.34 billion, up 26%, and profit was $651 million, up 24%. At the end of 1967, there were 221,866 employees and 359,459 stockholders. As I recall, there were more than 25,000 employees who joined the company that year.
The IBM Electric Selectric typewriter was quite popular, but most of the revenue came from the IBM System 360 line of mainframes which was announced in 1964. A new smaller mainframe, the System 360 Model 25 was announced at the beginning of 1968. The Model 25 was available with “up to” 48K of core (not solid state) memory. That is 48,000 bytes of memory. My iPhone 12 Pro Max has solid state memory of 6 gigabytes. To put that in perspective, the iPhone has 125,000 times more memory.
Data storage for the Model 25 was in a separate device called the IBM 2311, about the size of a medium-sized refrigerator. The 2311 had a removable disk pack 14 inches in diameter. The Model 25 allowed connection of up to four of the 2311s, each with a storage capacity of 7.25 megabytes for a total of 29 megabytes. My iPhone as a storage capacity of 256 gigabytes, almost 9,000 times more storage. The speed and capabilities are not even comparable.
The Model 25 was considered to be a “compact design”, as it was very small compared to much larger IBM System 360 models. You can see from the picture it was not pocket sized, it weighed 1,600 pounds. The purchase price of the Model 25 was $253,000 or it could be rented for $5,330 per month. My iPhone costs $58.25 per month and gets replaced each year. The comparisons are staggering, but in 1968 IBM technology was considered leading edge.
Many people think mainframes are dead. This is hardly the case, with mainframes still hard at work on critical tasks at more than 70% of Fortune 500 enterprises. Mainframes are a small fraction of IBM’s revenue at this point, with the major focus being AI and hybrid cloud services.
1968-1969 were great years. In the middle of 1969 I entered the U.S. Army for two years, six months, and 22 days. More on that another time.