Science: IBM's age of miracles is over: Two revolutionary lines each reigned for 30 years. It won't happen a third time, says Martin Campbell-Kelly

Thirty years ago this week IBM astounded the computer world by announcing System/360 - a range of computers that would replace its entire highly successful product line. In a telecast to its sales offices around the world - a noteworthy innovation in itself - IBM's youthful, Kennedyesque president, Thomas Watson Jr, announced a range of six mainframe computers and 40 peripherals - printers, magnetic-tape storage units, disk drives, and so on. The name System/360 'betokening all points of the compass' was chosen to suggest the universal applicability of the new machines.

While a major IBM announcement had been expected, the breadth of the System/360 launch came as a bolt from the blue. Computer pundits were taken aback by its scale. For example, a journalist from the business magazine Fortune, who coined the phrase 'IBM's dollars 5bn gamble', wrote: 'It was roughly as though General Motors had decided to scrap its existing makes and models and offer in their place one new line of cars, covering the entire spectrum of demand, with a radically redesigned engine and an exotic fuel.' It was believed that System/360 was the largest civil R & D project ever undertaken, and 'not even the Manhattan Project, which produced the atomic bomb in the Second World War, cost so much.' Although the development of System/ 360 was a high-risk strategy for IBM, it was a path that it was forced to take to deal with the looming 'software crisis'. By the early Sixties, software was proving more expensive for computer manufacturers to develop than hardware. Yet whenever a new computer model was introduced, most of the existing software had to be thrown away. When users replaced their first-generation computers with transistorised, second-generation models, all the software had to be rewritten. This sometimes cost more than the new computer, and often resulted in horrendous organisational disruption during the change-over.

System/360 - which IBM called the third generation - was designed to be software-compatible throughout the range, from the smallest machine to the largest. For IBM this meant that it would have to write only one set of software for the complete product line; for IBM's customers it meant that their investment in software would be protected when they upgraded. It also meant that once customers had bought IBM they were 'locked in', as they could only move to another manufacturer if they were prepared to scrap their software. Of course, IBM was trapped, too - it would be forced to maintain software compatibility with System/360 for 30 years and more.

System/360 has been described as 'the computer that IBM made that made IBM'. It was an audacious and dazzlingly successful product strategy. IBM already had three- quarters of the world market for mainframe computers, and System/ 360 enabled it to sustain that position for another 20 years. There was, however, an Achilles heel in the strategy. IBM had created an industry standard which left it vulnerable to competition from 'commodity' suppliers of computer equipment.

The first manufacturers to spot this chink in IBM's defences were manufacturers of peripheral equipment who began to sell 'plug-compatible' tape and disc storage devices that could simply be hooked up to any IBM installation. Fortunately for IBM, its capability in electro-mechanical engineering was second to none and this - with its enormous advantages of manufacturing scale - limited the damage to its profits.

IBM had a much tougher time competing with its electronics technology. Electronics was not a real strength in IBM and, although it relaunched its computer range as System/370 in 1970 using state-of-the- art integrated circuits, it remained an organisational weakness. Recognising this, Gene Amdahl - a defector from IBM who had been one of its principal computer designers - decided to manufacture a plug- compatible processor. This would be functionally identical to an IBM mainframe, enabling it to run the same software - whether written by IBM, the customer or a software house. An IBM-compatible processor would be able to replace the very heart of an IBM installation. Eventually it would be possible to run an entire IBM-compatible installation without buying a single item from IBM.

Amdahl made a licensing arrangement with Fujitsu and by 1975 was selling processors with more than twice the price-performance of IBM's. This was the turning point for the Japanese computer industry. Soon Fujitsu was followed by the likes of Hitachi and NEC, selling high-performance, low-price mainframes.

IBM responded by making a huge investment in semiconductor technology and, in 1979-80, relaunched its mainframe range with dramatically improved price-performance. This sent mainframe profit margins tumbling around the globe and was, for example, the principal factor in ICL's near-bankruptcy in 1981. Like Amdahl, ICL turned to Fujitsu for semiconductor technology - and this eventually led to it being taken over by the Japanese company in 1990.

Since then mainframe profit margins have continued to be eroded by the twin forces of Japanese competition in big computers and the burgeoning market for personal computers. Last year declining mainframe profits led to IBM recording the largest loss in corporate history.

In 1996 IBM will celebrate its centenary - assuming it is in any mood to celebrate. Between the two world wars it became stupendously profitable through its phenomenally successful '400 series' punched-card accounting machines. They reigned for 30 years - it was not until 1962 that IBM's computer revenue outstripped the income from its electro-mechanical products.

If IBM had not been able to leap on to the new technology of computers, it would have been doomed to slow decline. Instead it grasped the computer like no other company and became the third largest commercial enterprise in history.

There is a compelling parallel between IBM's pre- war accounting machines and System/360 as it, in turn, reaches the 30th year of its product life cycle - and, surely, approaches its demise.

Alas, as far as anyone outside the company knows, there is no new information technology waiting in the wings to propel IBM another 30 years into the 21st century. Unless it comes up with something, IBM faces the sure fate of any dinosaur.

The author is a computer historian at Warwick University.

Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
Life & Style
life
Arts & Entertainment
Back in the suit: There are only so many variations you can spin on the lives or adventures of Peter Parker
filmReview: Almost every sequence and set-up in The Amazing Spider-Man 2 seems familiar from some earlier superhero film
VIDEO
Arts & Entertainment
Jack Gleeson as Joffrey Baratheon in Game of Thrones
tv
Life & Style
Father and son: Michael Williams with son Edmund
lifeAs his son’s bar mitzvah approaches, CofE-raised Michael Williams describes the unexpected joys he’s experienced in learning about his family’s other faith
Arts & Entertainment
Ian Anderson, the leader of British rock band Jethro Tull, (right) and British guitar player Martin Barre (left) perform on stage
musicJethro Tull frontman leads ‘prog rock’ revival
Sport
Gareth Bale dribbled from inside his own half and finished calmly late in the final to hand Real a 2-1 win at the Mestalla in Valencia
sport
Arts & Entertainment
Who laughs lass: Jenny Collier on stage
comedy... writes Jenny Collier, the comedian whose recent show was cancelled because there were 'too many women' on the bill
News
House proud: keeping up with the Joneses now extends to children's playhouses
newsLuxury playhouses now on the market for as much as £800
News
news
Life & Style
Stir it up: the writer gets a lichen masterclass from executive chef Vivek Singh of the Cinnamon restaurants
food + drinkLichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines
Extras
indybest
Arts & Entertainment
Ken Loach (left) and Mike Leigh who will be going head to head for one of cinema's most coveted prizes at this year's Cannes Film Festival
filmKen Loach and Mike Leigh to fight it out for the Palme d'Or
News
The academic, Annamaria Testa, has set out on her website a list of 300 English words that she says Italians ought to stop using
newsAcademic speaks out against 'Italianglo' - the use of English words in Italian language
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit