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IBM's Gamble In The 60's Continues To Reap Rewards

Forty years ago, IBM gambled its future, dedicating an unprecedented $5 billion for the development and manufacture of a new line of computers: the System/360, the first IBM mainframe.

Forty years ago next week, IBM unveiled the results of a multibillion-dollar bet that transformed the world of computing. The company overcame false starts and in-fighting to usher in a new era of technology by introducing the System/360, the first IBM mainframe.

IBM gambled its future, dedicating an unprecedented $5 billion for the development and manufacture of a new line of computers that would eventually commercialize such staples of the modern computing world as system compatibility and transaction processing. The investment, which would equal tens of billions of dollars today if adjusted for inflation, exceeded what the U.S. government spent on the Manhattan Project to develop the atomic bomb in World War II.

Fred Brooks Jr. was given the responsibility of creating a new high-end platform for the Data Systems Division, and his group designed the 8000 series. After a presentation to IBM management in January 1961, the 8000 series was rejected by Learson and Evans, who believed that any new product line ought to unite the Data Systems and General Products divisions under a common platform. The decision to kill the 8000 series devastated Brooks and his division. "We fought for six months whether to go with the 8000 series or some vague, ill-defined, new product line," Brooks says.

Brooks saw that IBM was losing ground at the high end of the market to competitors, in part because of the Stretch failure. He believed a new 8000 series could be in place by the end of 1961 to revitalize IBM's efforts. A completely new product line, particularly one as ambitious as the one proposed by Learson and Evans, would likely not be ready until 1964 or 1965. "We thought we needed to do something right then," he says.

The divisions were at war. Brooks and the Data Systems Division decided to move forward with the 8000 series on their own. "When I went to Poughkeepsie in early 1961, they were lined up four-square against me," Evans says. "It wasn't exactly hate, but it was fierce competition."

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