IBM Advert - December 1984
From Personal Computer World
On average, there is one new software package written for the IBM Personal Computer every day
IBM's original PC - the 5150 - spawned a whole new era of generic, dull and identi-kit computers which ended up trouncing everything that had gone before. However, this was not so much to do with IBM itself, but more because its 5150 was built from off-the-shelf parts and the BIOS was easy enough to reverse-engineer - first in the Columbus PC and more famously by Compaq, which meant that all sorts of clone manufactures quickly piled in. Only four years had passed since the Commodore PET - the first recognisably-modern "personal computer" - had launched, and hundreds of different machines had come and gone in its wake, especially with the home-computer explosion of 1981-1984, but it wasn't too long before the IBM interpretation of the "PC" pushed almost everything else out of the way.
IBM was however slow off the mark in Europe, allowing companies like Sirius/ACT to do well for a while in the business market, until the 5150 found its way to the other side of the Atlantic in 1982. The follow up was the XT - reportedly targetted at the Sirius - and then the AT. All these machines did well in banks and corporates, if not in the wider market, and came to also define the legions of clones that followed them.
IBM seemed to implicitly acknowledge that its buyers were safe and steady corporate types who "never got fired for buying an IBM" and so seldom seemed to directly advertise particular machines, rather it concentrated on maintaining its name in the market. This was exemplified with this sort of ad (which is actually two pages of a three-page spread), featuring the "Charlie Chaplin" motif that ran for several years, which extoled the virtue of how much software was available for the IBM PC.
In reality, it was software - availability, consistency and compatibility - that allowed the IBM PC to reign supreme. For the first time, users could buy a machine and know that packages they had used before would not only work on any PC, but that their purchases would most likely work on the next PC they bought.
IBM was also slow to develop its PC once it had launched it, and it really needed developing as the original came with a feeble 64K - no more than many "toy" home computers at the time. This was quite a limiting factor when running serious business applications, many of which were rapidly getting bigger. To overcome this, early machines did a lot of memory paging - saving and reading memory from disk, but the low specification also meant that software writers had to cope with 64K as a lowest common denominator. The situation was also made worse by the fact that IBM's earliest PC was floppy-disk only, which only made paging slower - four to ten seconds to get a response by some accounts.
By the time the AT came out in 1983, IBM seemed to have learned from the limitations of the 5150. By now, a hard disk was standard and IBM's AT came with Intel's 80286, which ran three times faster than the 8088 (just think about that: for a machine to go three times faster in 2018 would be like upgrading from a 4GHz CPU to a 12GHz one overnight). Sadly, and much like the 5150 before it, the AT failed to make an appearance in Europe for ages after its US release.
Even by the early spring of 1985, Guy Kewney in Personal Computer World was writing about how financial battles within IBM were preventing the company from selling to its European division at anything sufficiently below the retail price to make it worth selling. Not only that, but it was suggested that unreliable hard disks and chip shortages meant that quite often the machines didn't even work.
The return of AI
At the end of 1984 (appropriately), IBM also announced details of some updated speech recognition technology it had been working on. It could recognise some 5,000 words, could even distinguish homophones based on context ("to", "too", "two") and could achieve up to 95% accurancy on well-spaced conversation. However, in a spooky precursor to Edward Snowden's revelations, it was revealed that it was used by security agencies to automatically eavesdrop on telephone conversations.
The previous version of the system could transcribe no more than 30% of telephone conversations and would quite often produce nonsense. However, what it did do was to save a lot of time when it did work, giving surveillance workers a way of scanning through a phone conversation at a glance, to see if "the conversation was likely to be of interest". As Guy Kewney pointed out in December 1984's Personal Computer World, "the difference between 30% and 90% success rate, with intelligence enough to recognise individual words, rather than just print a phonetic transcript, is phenomenal". IBM reckoned that it was "a reasonable goal" to expect its machine to transcribe continuous speech "ultimately".
A paper-tape version of Eliza - sometimes called the first AI program - by Joseph Weizenbaum, at the Centre for Computing History, CambridgeThis was part of the resurgence of Artificial Intelligence - AI - as a "thing", after the first wave, based largely upon the concept of Expert Systems, had fizzled out by the early 1980s. These early expert "AI" programs were often limited to scenarios where known inputs with statistical probabilities could be matched up with certain outputs, for example 50% of chance of A plus 35% of B and 10% of C means X, and which were commonly used in fields like medical diagnosis, like the earliest "computerised psychologist" Eliza, written by Joseph Weizenbaum in the 1960s.
As an editorial in the September 1982 edition of Practical Computing suggested, Expert Systems were no more than "a fuzzy index to an operator's manual", where that manual may not even contain the page indexed. "If they are regarded as soggy databases, there is no doubt they can be made to be useful in many well-limited areas of human decision. The danger comes when they, and other AI techniques billed for stardom in the 'Fifth Generation' machines are hyped up as the final solution to the world's problems". Just like 2018 then?
PS/2 holds IBM back
By 1986, IBM seemed to be suffering, possibly from the rise of the clones but possibly also because it had slowed down product releases in favour of the development of its new PS/2. The company recorded its worst quarter since around the launch of the 5150 four years before, when it announced annual earnings for 1986 of "only" £2.93 billion (£8 billion in 2019).
This was followed by a drop in profits for the first half of 1987, making it the first time that IBM had recorded a drop in earnings for two consecutive years since the 1930s. The company had undertaken cost-cutting measures and its chairman, John Akers, was optimistic, saying "We have yet to fully benefit from our recent product announcements, retirement incentives and other resource-balancing measures. We remain optimistic about the prospects for both the industry and IBM". The announcements included the launch of PS/2 and a new range of 9370 minicomputers.
The PS/2 was launched during April 1987 and broke away significantly from the architecture of the earlier 5150 PC, XT and AT in its use of Micro Channel Architecture - largely an attempt to introduce a new proprietary 16-bit bus architecture that would not be easily cloneable. Clone manufacturers however rejected IBM's high licensing costs and instead developed their own EISA expansion, which ultimately prevailed, although some of the PS/2's features came along for the ride, like the 6-pin mouse and keyboard connectors which remained prevalent until well into the 21st Century.
It was also hampered by the fact that Microsoft's new OS/2 wasn't actually available at the time of launch, and wouldn't be for several months, and so it initially shipped with an updated version of PC-DOS (MS-DOS). Several models were released, including an entry-level model 30 which used a 7.54MHz Intel 8086, whilst the models 40 and 50 made use of the newer 80286, as well as 640x480 pixel ECGA graphics.
Whilst Microsoft was delayed, Digital Research was clearly hoping to capitalise as it announced that it was to produce its entire range of Gem presentation software for the PS/2, available on the newer 3½" format from June 1987. DR's president and CEO Dick Williams seemed excited about the new machines, saying "These new computers, with enhanced high-resolution graphics and a mouse option, are ideally suited to operated with the Gem presentation graphics product line".
At the same time Microsoft was announcing details of its own PS/2 offerings, the most significant of which was OS/2 - the multi-tasking, single-user operating system for the 80286 and 80386 versions of the PS/2 - which it was expecting to be generally available by 1988. Chairman Bill Gates said of the launch that "MS OS/2 provides the foundation for the next phase of exciting growth in the personal computer industry. [It] will be the platform upon which the next 1000 exciting personal computer applications software products will be built". Also announced was an updated version of MS-DOS - version 3.3 - for regular IBM PCs and all their clones, plus Windows Presentation Manager 2.0.
The launch of the PS/2 was also significant for the UK - or at least Scotland - as it was to be manufactured at Greenock, west of Glasgow, where IBM had been since 1951. This meant that for once IBM could be reasonably competitive, with its entry-level Model 30 starting from £1,300 and the 286 machines with 20MB hard drives at £3,000. These weren't prices that would worry Alan Sugar, but were still a sign that IBM was more serious about competing on all levels of the market.
By 1987, IBM was definitely a significant influence on the market, a situation much changed from five years before when its original PC had been launched, only to see it roundly derided at the time for its run-of-the-mill technology and dullness, with Popular Computing Weekly suggesting that IBM stood for "Incredibly Boring Machines". However, as the market discovered, they were still IBMs, did what they needed to do and eventually sold millions.
Attack on the clones
The PS/2 for its part had been engineered to make it difficult to clone, or as IBM UK's CEO Tony Cleaver said "Innovation of the sort you see in these products is expensive and we believe we have a right to ensure that our ideas are not handed on a plate to our competitors". Popular Computing Weekly helpfully suggested "you won't see a Compstrad Personal Clone/2 coming out, at least not for a year or two".
Even so, there was still an expectation that its technology would eventually make its way into the market at large, even though not all of it was at the cutting edge, as clone company Akhter had already beaten IBM to launch 3½" disks. Akhter's Andrew Seal said of the PS/2's launch that "We're very pleased - we believe the 3½" format is the right technology for the future, and we're pleased IBM thinks so too, because, after all, it is the world leader".
Seal's view was also that the PS/2 wouldn't impact upon its own business, or as he said "in fact it will do the opposite, by breathing life into the PC field, and encourage stability in the business". Bob Garrett of Olivetti, Peter Bayley of Compaq and even Alan Sugar of Amstrad were all on the record saying that the PS/2 would not affect their sales, the theory being, as stated by Geoff Pick of AMT, that "The market that has been set up by IBM in terms of AT/XT compatible machines is now the mass market. What IBM does [now] won't affect that mass market". For once, the pundits were fairly on the money.
Just a few months into what Popular Computing Weekly was referring to as the PS/2's "brief but turbulent history", IBM was already announcing an even-cheaper even-more-entry-level version of the machine in the shape of the Model 25. Aimed mostly at the education sector, the 25 didn't even come with a hard drive, but was also smaller and cheaper but, as usual, IBM was denying that the machine would be released in the UK - even though that might put its price under the magical £1,000 barrier.
At the other end of the scale it also tweaked its up-market 80386-based Model 80. Meanwhile, according to Popular, most of the industry was still wondering what point there was to the PS/2 without Microsoft's OS/2 to run on it. However, some companies were producing add-ons, including one of the first to actually use the new Micro Channel Architecture (MCA) in the shape of the Everex RAM 4000 4MB expansion card.
Mark Simon, managing director of European importer Kudos Systems reckoned that the announcement was good news as "the OS/2 operating system will require a large memory size". Problem was nobody really knew, as the delivery date of OS/2 was not now expected to be until the middle of 1988, some nine months away.
PS/2 hits the High Street
As it happened, the PS/2 was available in the UK from early 1988, and it was even possible to get one of the entry-level models - the PS/2 Model 30 - from Dixons, albeit one of only six of Dixons' shops that had been approved by IBM. This approval of a mere High-Street retailer apparently caused significant friction among IBM's existing dealer network, most of which had had to go through some fairly stringent entry requirements.
IBM's plan had been to relax its requirements somewhat in order to let other dealers "carry the can", however in the end the only rule - which included staff numbers, shop frontage and square footage - that new dealers didn't have to comply with was that of financial stability.
Despite the dealer freak-out, it was still a surprise, at least to Guy Kewney of Personal Computer World, that Dixons was choosing to sell the Model 30 in the first place, not least because it was a business machine and not a home machine, but it wasn't even really a true PS/2, being a more standard 8086 box with 3½" disks and a £2000 price tag.
This was just a tiny bit more than the £600 that the Model 30 was going for in the US, but it did come with a bit of extra software, a printer and some on-site servicing. As Kewney suggested, "that software had better be amazing software".
Meanwhile, the race to clone IBM's new and "less cloneable" Micro-Channel Architecture was already underway. In the April of 1987, there had been a rumour flying around which suggested that one of the first people to buy a PS/2 had been an employee of the company that had enabled the market for PC/AT and 386 clones with its reverse engineering - Chips and Technologies. According to Guy Kewney, the rumour was probably true, as by the beginning of 1988 C&T was producing its own MCA chipset, together with a suitable motherboard to plug it in to.
By the summer of 1988, Compaq was working on its own MCA clone, although earlier leaks about it by Kewney had already caused some angst, including an impressive denial from Compaq's marketing director Peter Bailey, who suggested that Compaq was "not working on it to launch it, necessarily, [but] we are making sure we understand the technology". Kewney reckoned that this was about as plausible as thinking that the company was equally spending millions on fusion reactors or gene splicing, just in case they needed to know how it all worked.
Perhaps Compaq hedging its bets was a reflection of the continue uncertainty over MCA, particularly as while IBM was launching its latest MCA-based Model 70, based on Intel's new 386SX processor - which interestingly IBM seemed to consider was the first "full architecture" processor which could look like a mainframe - Compaq itself seemed to be of the opinion that the older AT bus had "a few more years in it", with its own extensions stretching that to maybe a decade. There was much uncertainty, but as Kewney pointed out, it wasn't as if Compaq could say to its users "don't make up your mind, put off buying a system for nine months or so, and see which way the market goes".
Olivetti was another company that didn't seem quite sure about MCA, even though the rumours in March 1988 were that the Italian company had "scooped the world" by getting a PS/2 licence from IBM in order to build clones. Instead, the company appeared to be spending lots of money launching some bog-standard but absurdley-expensive IBM AT clones in Paris, perhaps as a way of suggesting that it actually didn't have an MCA licence after all.
It eventually turned out that the MCA bus - the proprietary bit of the PS/2 that IBM hoped would make the machine un-clonable - hadn't even been mentioned in discussions between the two companies, and Olivetti seemed to be under the impression that it didn't actually need a licence to produce a PS/2. However, when pressed about the issue, Olivetti's PC division president Filippo Demonte admitted that he "didn't even know if the Micro Channel [Architecture] was patented".
Meanwhile, also at the protoype stage was Western Digital, which showing its own PS/2 chipset. WD had a slight advantage in that its video-graphics-adapter subsidiary Paradise meant that it might be first to produce a full MCA/VGA system. At the same time, Apple was teaming up with DEC in an attempt to break the IBM hegemony. At first sight this might have looked like a valiant attempt to counter IBM's market dominance, however it was suggested that they would simply treat the market "in exactly the same way as IBM does, only more so".
IBM might have disliked the cloners, but at least during the original IBM PC era it had generally they left them to get on with it, and as a company had learned to "live within the law that has tamed it". Whereas Apple, since it gave up on its early licencing programme to third parties, had become highly agressive in shutting down any sort of copy-cat or cloning operation, and was seen as being a lot more supressive of ideas "than IBM ever thought of being".
The PS/2 band breaks up
In 1988, IBM held a major briefing about PS/2 at its Boca Raton, Florida, ESD headquarters. This featured IBM's PC luminaries such as Bill Lowe, Mike Maples, Frank King and Bill Lyons, but by the time the second briefing rolled around in the early spring of 1989, this team had gone their separate ways, with Maples moving to Microsoft, King going to Lotus, Lyons to dBase software house Ashton-Tate and Lowe - the father of the (IBM) PC - moving to Xerox.
The outcome of this turmoil meant a change in the PS/2 administration, with Jim Cannavino taking over the reins. However, unlike their predecessors, who were said to have been open and up-front about IBM's plans, the new leadership was being much more tight-lipped about Big Blue's plans for 1989, so much so that delegates left the conference feeling that they hadn't actually learned anything new.
One thing that did come out, however, was a change in IBM's relationship with NeXT, the company that Steve Jobs, formerly of Apple, had set up. It had previously seemed like NeXT's NextStep operating system might be used as part of IBM's Unix strategy, however with Bill Lowe - who was the NeXT champion - gone, there was suddenly less of an allegiance to NextStep.
More significant though was that the Unix-focused Open Software Foundation - which IBM was a founding member of - now had the Motif X-Windowing system courtesy of SCO. This was said to be so similar to Microsoft's Presentation Manager for OS/2 that it didn't really matter which of the two systems users were trained on - they were considered almost interchangeable - and so between them they very much looked like being a NextStep killer.
The dawn of 486
IBM had traditionally always boasted that "what you see is what you can get today". However, by the summer of 1989 it seemed to be getting fed up with Compaq always getting the credit for whatever the latest "new thing" was, plus it also wanted to reassure the increasing number of maufacturers who were by now producing MCA machines that there really was something better about the architecture. Deciding to leap as far ahead of Compaq as it could, IBM announced a new 486 processor module at an event in New York which wasn't actually available yet, but would be soon - the company reckoned by the end of 1989, although Andy Redfern of Personal Computer World suggested that the first quarter of 1990 was more realistic.
The new machine wasn't actually a completely new 486 machine, but was instead an upgrade for one of IBM's existing higher-end PS/2 machines, the Model 70-A21, which was a relatively unusual micro in that all its CPU and cache RAM were already held on a daughter board. This meant that IBM could swap this out with a new 486-based card and - bingo - it had a new machine, said to be between two and five time faster than a 386 PS/2, depending upon benchmark. It wasn't especially cheap, coming in at £3,077, or around £7,850 in 2019 terms, and that was with a trade-in for the old card. Personal Computer World wasn't sure what IBM planned to do with all the traded-in daughter boards, but thought it wouldn't be too much of an issue as only 10,000 A21's had been sold into Europe anyway.
Also in New York, at around the same time as IBM's pre-announcement, Intel - manufacturer of the CPU chips that IBM and most of the rest of the PC world relied on - was making a pre-announcement of its own. However, it was going one better than IBM by pre-announcing what it thought would be its processor at the end of the 20th century: the Intel i786. Intel's senior vice president David House continued "the i786 will be launched in the year 2000 and will be made up of over 100 million transistors". The mock-up that House went on to demonstrate was not actually that far of the mark, housing four 32-bit CPU cores and with built-in graphics.
There was some concern as to how this would be achieved, as the problem of quantum tunnelling - where electrons started behaving oddly, acting like waves instead of particles and jumping across connections when the scale got too small - was already known, with Andy Redfern of Personal Computer World positing that this would limit CPU scales to around 0.4 microns, or 400 nanometers. Intel's actual big release of 2000 was the Pentium 4, which had a transistor count of 42 million on a 0.18 micron process, but the prediction wasn't all that far out really - the February 2004 version of the Pentium 4 was already up to 125 million transistors at 90nm, or 0.09 microns.
As it happened, quantum tunnelling still doesn't seem to be causing problems, as Intel's arch rival AMD announced a chip built on a 7 nanometer process in July 2019 - that's some 60 times smaller than the projected limit in 1989
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