Before continuing the history of video gaming with the activities of the Tech Model Railroad Club and the creation of the first truly landmark computer game, Spacewar!, it is time to pause and present the first of what I referred to in my introductory post as “historical interludes.” In order to understand why the video game finally began to spread in the 1960s, it is important to understand the evolution of computer technology and the spread of computing resources. As we shall see, the giant mainframes of the 1940s and 1950s were neither particularly interactive nor particularly accessible outside of a small elite, which generally prevented the creation of programs that provided feedback quickly and seamlessly enough to create an engaging play experience while also generally discouraging projects not intended to aid serious research or corporate data processing. By the time work on Spacewar! began in 1961, however, it was possible to occasionally divert computers away from more scholarly pursuits and design a program interesting enough to hold the attention of players for hours at a time. The next four posts will describe how computing technology reached that point.
Note: Unlike my regular posts, historical interlude posts will focus more on summarizing events and less on critiquing sources or stating exactly where every last fact came from. They are meant to provide context for developments in video game history, and the information within them will usually be drawn from a small number of secondary sources and not be researched as thoroughly as the video game history posts. Much of the material in this post is drawn from Computer: A History of the Information Machine by Martin Campbell-Kelly and William Aspray, The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM by Kevin Maney, and The Innovaters: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution by Walter Isaacson.
Defining the Computer
Human computers working at the NACA High Speed Flight Station in 1949
Before electronics, before calculating machines, even before the Industrial Revolution there were computers, but the term did not mean the same thing it does today. Before World War II and the emergence of the first electronic digital computers, a computer was a person who performed calculations, generally for a specialized purpose. As we shall see, most of the early computers were created specifically to perform calculations, so as they grew to function with less need for human intervention, they naturally came to be called “computers” themselves after the profession they quickly replaced.
The computer profession originated after the development of the first mathematical tables in the 16th and 17th centuries such as the logarithmic tables designed to perform complex mathematical operations solely through addition and subtraction and the trigonometric tables designed to simplify the calculation of angles for fields like surveying and astronomy. Computers were the people who would perform the calculations necessary to produce these tables. The first permanent table-making project was established in 1766 by Nevil Maskelyne to produce navigational tables that were updated and published annually in the Nautical Almanac, which is still issued today.
Maskelyne relied on freelance computers to perform his calculations, but with the dawning of the Industrial Revolution, a French mathematician named Gaspard de Prony established what was essentially a computing factory in 1791 modeled after the division of labor principles espoused by Adam Smith in the Wealth of Nations to compile accurate logarithmic and trigonometric tables to aid in performing a new survey of the entirety of France as part of a project to reform the property tax system. De Prony relied on a small number of skilled mathematicians to define the mathematical formulas and a group of middle managers to organize the tables, so his computers needed only a knowledge of basic addition and subtraction to do their work, reducing the computer to an unskilled laborer. As the Industrial Revolution progressed, unskilled workers in most fields moved from using simple tools to mechanical factory machinery to do their work, so it comes as no surprise that one enterprising individual would attempt to bring a mechanical tool to computing as well.
Charles Babbage and the Analytical Engine
Charles Babbage, creator of the first computer design
Charles Babbage was born in 1791 in London. The son of a banker, Babbage was a generally indifferent student who bounced between several academies and private tutors, but did gain a love of mathematics at an early age and attained sufficient marks to enter Trinity College, Cambridge, in 1810. While Cambridge was the leading mathematics institution in England, the country as a whole had fallen behind the Continent in sophistication, and Babbage soon came to realize he knew more about math than his instructors. In an attempt to rectify this situation, Babbage and a group of friends established the Analytical Society to reform the study of mathematics at the university.
After leaving Cambridge in 1814 with a degree in mathematics from Peterhouse, Babbage settled in London, where he quickly gained a reputation as an eminent mathematical philosopher but had difficulty finding steady employment. He also made several trips to France beginning in 1819, which is where he learned of De Prony’s computer factory. In 1820, he joined with John Herschel to establish the Astronomical Society and took work supervising the creation of star tables. Frustrated by the tedious nature of fact-checking the calculations of the computers and preparing the tables for printing, Babbage decided to create a machine that would automate the task.
The Difference Engine would consist of columns of wheels and gears each of which represented a single decimal place. Once the initial values were set for each column — which would be determined by setting a polynomial equation in column one and then using a series of derivatives to establish the value of the other columns — the machine would use Newton’s method of divided differences (hence its name) to perform addition and subtraction functions automatically, complete the tables, and then send them to a printing device. Babbage presented his proposed machine to the Royal Society in 1822 and won government funding the next year by arguing that a maritime industrial nation required the most accurate navigational tables possible and that the Difference Engine would be both cheaper to operate and more accurate than an army of human computers.
The initial grant of £1,500 quickly proved insufficient for the task of creating the machine, however, which was at the very cutting edge of machine tool technology and therefore extremely difficult to fashion components for. The government continued to fund the project for over a decade, however, ultimately providing £17,000. By 1833, Babbage was able to construct a miniature version of the Difference Engine that lacked sufficient capacity to actually create tables but did prove the feasibility of the project. The next year, however, he unwittingly sabotaged himself by proposing an even more grand device to the government, the Analytical Engine, thus undermining the government’s faith in Babbage’s ability to complete the original project and causing it to withdraw funding and support. A fully working Difference Engine to Babbage’s specification would not be built until the late 1980s, by which time it was a historical curiosity rather than a useful machine. In the meantime, Babbage turned his attention to the Analytical Engine, the first theorized device with the capabilities of a modern computer.
A portion of Charles Babbage’s Analytical Engine, which remained unfinished at his death
The Difference Engine was merely a calculating machine that performed addition and subtraction, but the proposed Analytical Engine was a different beast. Equipped with an arithmetical unit called the “mill” that exhibited many of the features of a modern central-processing unit (CPU), the machine would be capable of performing all four basic arithmetic operations. It would also possess a memory, able to store 1,000 numbers of up to 40 digits each. Most importantly, it would be program controlled, able to perform a wide variety of tasks based on instructions inputted into the machine. These programs would be entered using punched cards, a recording medium first developed in 1725 by Basile Bouchon and Jean-Baptiste Falcon to automate textile looms that was greatly improved and popularized by Joseph Marie Jacquard in 1801 for the loom that bears his name. Results could be outputted to a printer or a curve plotter. By employing separate memory and computing elements and establishing a method of program control, Babbage outlined the first machine to include all the basic hallmarks of the modern computer.
Babbage sketched out the design of his Analytical Engine between 1834 and 1846. He then halted work on the project for a decade before returning to the concept in 1856 and continuing to tinker with it right up until his death in 1871. Unlike with the Difference Engine, however, he was never successful in securing funding from a British Government that remained unconvinced of the device’s utility — as well as unimpressed by Babbage’s inability to complete the first project it had commissioned from him — and thus failed to build a complete working unit. His project did attract attention in certain circles, however. Luigi Manabrea, a personal friend and mathematician who later became Prime Minister of Italy, invited Babbage to give a presentation on his Analytical Engine at the University of Turin in 1842 and subsequently published a transcription of the lecture in French. This account was translated into English over a nine month period in 1842-43 by another friend of Babbage, Ada Lovelace, the daughter of the celebrated poet Lord Byron.
Ada Lovelace has been a controversial figure in computer history circles. Born in 1815, she never knew her celebrated father, whom her mother fled shortly after Ada’s birth. She possessed what appears to have been a decent mathematical mind, but suffered from mental instability and delusions of grandeur that caused her to perceive greater abilities than she actually possessed. She became a friend and student of noted mathematician Mary Somerville, who was also a friend of Babbage. It was through this connection that she began attending Babbage’s regular Saturday evening salons in 1834 and came to know the man. She tried unsuccessfully to convince him to tutor her, but they remained friends and he was happy to show off his machines to her. Lovelace became a fervent champion of the Analytical Engine and attempted to convince Babbage to make her his partner and publicist for the machine. It was in this context that she not only took on the translation of the Turin lecture in 1842, but at Babbage’s suggestion also decided to appended her own description of how the Analytical Engine differed from the earlier Difference Engine alongside some sample calculations using the machine.
In a section entitled “Notes by the Translator,” which ended up being longer than the translation itself, Lovelace articulated several important general principles of computing, including the recognition that a computer could be programmed and reprogrammed to take on a variety of different tasks and that it could be set to tasks beyond basic math through the use of symbolic logic. She also outlined a basic structure for programming on the Analytical Engine, becoming the first person to articulate common program elements such as recursive loops and subroutines. Finally, she included a sample program to calculate a set of Bernoulli numbers using the Analytical Engine. This last feat has led some people to label Lovelace the first computer programmer, though in truth it appears Babbage created most of this program himself. Conversely, some people dismiss her contributions entirely, arguing that she was being fed all of her ideas directly by Babbage and had little personal understanding of how his machine worked. The truth is probably somewhere in the middle. While calling her the first programmer is probably too much of a stretch, as Babbage had already devised several potential programs himself by that point and contributed significantly to Lovelace’s as well, she still deserves recognition for being the first person to articulate several important elements of computer program structure. Sadly, she had no chance to make any further mark on computer history, succumbing to uterine cancer in 1852 at the age of thirty-six.
Towards the Modern Office
An Office in the B-Logo Business Systems Department in 1907, showcasing some of the mechanical equipment revolutionizing clerical work in the period.
Ultimately, the Analytical Engine proved too ambitious, and the ideas articulated by Babbage would have to wait for the dawn of the electronics era to become practical. In the meantime, however, the Industrial Revolution resulted in great advances in office automation that would birth some of the most important companies of the early computer age. Unlike the human computer industry and the innovative ideas of Babbage, however, the majority of these advances came not from Europe, but from the United States.
Several explanations have been advanced to explain why the US became the leader in office automation. Certainly, the country industrialized later than the European powers, meaning businessmen were not burdened with outmoded theories and traditions that hindered innovations in the Old World. Furthermore, the country had a long history of interest in manufacturing efficiency, dating back as far as Eli Whitney and his concept of using interchangeable parts in firearms in 1801 (Whitney’s role in the creation of interchangeable parts is usually exaggerated, as he was not the first person to propose the method and was never actually able to implement it himself, but he was responsible for introducing the concept to the US Congress and therefore still deserves some credit for its subsequent adoption in the United States). By the 1880s, this fascination with efficiency had evolved into the “scientific management” principles of Frederick Taylor that aimed to identify best practices through rational, empirical study and employ standardization and training to eliminate waste and inefficiency on the production line. Before long, these ideals had penetrated the domain of the white-collar worker through the concept of “office rationalization,” in which managers introduced new technologies and systems to maximize productivity in that setting as well.
The first major advance in the drive for office automation was the invention of a practical typewriter. While several inventors created typing machines in the early nineteenth century, none of these designs gained any traction in the marketplace because using them was slower than writing out a document by hand. In 1867, however, a retired newspaper editor named Christopher Latham Sholes was inspired by an article in Scientific American describing a mechanical typing device to create one of his own. By the next year Sholes, with the help of amateur mechanic Carlos Glidden and printer Samuel Soule, had created a prototype for a typing machine using a keyboard and type-basket design that finally allowed typing at a decent speed. After Soule left the project, Sholes sent typewritten notes to several financiers in an attempt to raise capital to refine the device and prepare for mass production. A Pennsylvania businessman named James Densmore answered the call and provided the funding necessary to make important improvements such as replacing a frame to hold the paper with a rotating drum and changing the layout of the keyboard to the familiar QWERTY orientation — still used on computer keyboards to this day — to cut down on jamming by spacing out commonly used letters in the typing basket.
After several failed attempts to mass produce the typewriter through smaller companies in the early 1870s, Densmore was able to attract the interest of Philio Remington of the small-arms manufacturer E. Remington & Sons, which had been branching out into other fields such as sewing machines and fire engines in the aftermath of the U.S. Civil War. First introduced by Remington in 1874, the typewriter sold slowly at first, but as office rationalization took hold in the 1880s, businesses started flocking to the machine. By 1890 Remington had a virtual monopoly on the new industry and was producing 20,000 machines a year. In addition to establishing the typewriter in the office, Remington also pioneered the idea of providing after-market service for office products, opening branch offices in major cities where people could not only buy typewriters, but also bring them in for repairs.
With typed loose-leaf pages replacing the traditional “letter book” for office correspondence, companies soon found it necessary to adopt new methods for storing and retrieving documents. This led to the development of vertical filing using hanging folders stored in upright cabinets, which was first publicly demonstrated by Melville Dewey at the Chicago World’s Fair in 1893. While vertical filing proved superior to the boxes and drawers previously employed in the workplace, however, it proved woefully inefficient once companies evolved from tracking hundreds of records to tens of thousands. This time the solution came from James Rand, Sr., a clerk from Tonawanda, New York, who patented a visible index system in which colored signal strips and tabs would allow specific file folders to be found quickly and easily. Based on this invention, the clerk established the Rand Ledger Company in 1898. His son, James Rand, Jr., joined the business in 1908 and then split off from his father in 1915 after a dispute over advertising spending to market his own record retrieval system based around index cards called the Kardex System. As the elder Rand neared retirement a decade later, his wife orchestrated a reconciliation between him and his son, and their companies merged to form the Rand Kardex Company in 1925. Two years later, Rand Kardex merged with the Remington Typewriter Company to form Remington Rand, which became the largest business machine company in the world.
A Burroughs “adder-lister,” one of the first commercially successful mechanical calculators
A second important invention of the late nineteenth century was the first practical calculator. Mechanical adding machines had existed as far back as the 17th century when Blaise Pascal completed his Pascaline in 1645 and Gottfriend Liebnitz invented the first calculator capable of performing all four basic functions, the Stepped Reckoner, in 1692, but the underlying technology remained fragile and unreliable and therefore unsuited to regular use despite continued refinements over the next century. In 1820, the calculator was commercialized for the first time by Thomas de Colmar, but production of his Arithmometer lasted only until 1822. After making several changes, Thomas began offering his machine to the public again in 1851, but while the Arithmometer gained a reputation for both sturdiness and accuracy, production never exceeded a few dozen a year over the next three decades as the calculator remained too slow and impractical for use in a business setting.
The main speed bottleneck of the early adding machines was that they all required the setting of dials and levers to use, making them far more cumbersome for bookkeepers than just doing the sums by hand. The man who first solved this problem was Dorr Felt, a Chicago machinist who replaced the dials with keys similar to those found on a typewriter. Felt’s Comptometer, completed in 1885, arranged keys labelled 0 to 9 across ten columns that each corresponded to a single digit of a number, allowing figures to be entered rapidly with just one hand. In 1887, Felt formed the Felt & Tarrant Manufacturing Company with a local manufacturer named Robert Tarrant to mass produce the Comptometer, and by 1900 they were selling over a thousand a year.
While Felt remained important in the calculator business throughout the early twentieth century, he was ultimately eclipsed by another inventor. William S. Burroughs, the son of a St. Louis mechanic, was employed as a clerk at a bank but suffered from health problems brought on by spending hours hunched over columns adding figures. Like Felt, he decided to create a mechanical adding machine using keys to improve this process, but he also added another key advance to his “adder-lister,” the ability to print the numbers as they were entered so there would be a permanent record of every financial transaction. In 1886, Burroughs established the American Arithmometer Company to market his adding machine, which was specifically targeted at banks and clearing houses and was selling at a rate of several hundred a year by 1895. Burroughs died in 1898, but the company lived on and relocated to Detroit in 1904 after it outgrew its premises in St. Louis, changing its name to the Burroughs Adding Machine Company in honor of its founder. At the time of the move, Burroughs was selling 4,500 machines a year. Just four years later, that number had risen to 13,000.
John H. Patterson, founder of the National Cash Register Company (NCR)
The adding machine was one of two important money management devices invented in this period, with the other being the mechanical cash register. This device was invented in 1879 by James Ritty, a Dayton saloon owner who feared his staff was stealing from him, and constructed by his brother, John. Inspired by a tool that counted the revolutions of the propeller on a steamship, “Ritty’s Incorruptible Cashier” required the operator to enter each transaction using a keypad, displayed each total entered for all to see, and printed the results on a roll of paper, allowing the owner to compare the cash taken in to the recorded amounts. Ritty attempted to interest other business owners in his machine, but proved unsuccessful and ultimately sold the business to Jacob Eckert of Cincinnati in 1881. Eckert added a cash drawer to the machine and established the National Manufacturing Company, but he was barely more successful than the Rittys. Therefore, in 1884 he sold out to John Patterson, who established the National Cash Register Company (NCR).
John Henry Patterson was born on a farm outside Dayton, Ohio, and entered the coal trade after graduating from Dartmouth College. While serving as the general manager of the Southern Coal and Iron Company, Patterson was tasked with running the company store and became one of Ritty’s earliest cash register customers. After being outmaneuvered in the coal trade, Patterson sold his business interests and used the proceeds to buy NCR. A natural salesman, Patterson created and/or popularized nearly every important modern sales practice while running NCR. He established sales territories and quotas for his salesmen, paid them a generous commission, and rewarded those who met their quotas with an annual sales convention. He also instituted formal sales training and produced sales literature that included sample scripts, creating the first known canned sales pitch. Like Remington, he established a network of dealerships that provided after market services to build customer loyalty, but he also advertised through direct mailings, another unusual practice. Understanding that NCR could only stay on top of the business by continuing to innovate, Patterson also established an “innovations department” in 1888, one of the earliest permanent corporate research & development organizations in the world. In an era when factory work was mostly still done in crowded “sweatshops,” Patterson constructed a glass-walled factory that let in ample light set amid beautifully landscaped grounds.
While Patterson seemed to genuinely care for the welfare of his workers, however, he also had a strong desire to control every aspect of their lives. He manipulated subordinates constantly, hired and fired individuals for unfathomable reasons, instituted a strict physical fitness regimen that all employees were expected to follow, and established rules of conduct for everything from tipping waiters to buying neckties. For all his faults, however, his innovative sales techniques created a juggernaut. By 1900, the company was selling 25,000 cash registers a year, and by 1910 annual sales had risen to 100,000. By 1928, six years after Patterson’s death, NCR was the second largest office-machine supplier in the world with annual sales of $50 million, just behind Remington Rand at $60 million and comfortably ahead of number three Burroughs at $32 million. All three companies were well ahead of the number four company, a small firm called International Business Machines, or IBM.
Computing, Tabulating, and Recording
IBM, which eventually rose to dominance in the office machine and data processing industries, cannot be traced back to a single origin, for it began as a holding company that brought together several firms specializing in measuring and processing information. There were three key people responsible for shaping the company in its early years: Herman Hollerith, Charles Flint, and Tom Watson, Sr.
Herman Hollerith, whose tabulating machine laid the groundwork for the company that became IBM
Born in Buffalo, New York, in 1860, Herman Hollerith pursued an education as a mining engineer, culminating in a Ph.D from Columbia University in 1890. One of Hollerith’s professors at Columbia also served as an adviser to the Bureau of the Census in Washington, introducing Hollerith to the largest data processing organization in the United States. At the time, the Census Bureau was in crisis as traditional methods of processing census forms failed to keep pace with a growing population. The 1880 census, processed entirely by hand using tally sheets, took the bureau seven years to complete. With the population of the country continuing to expand rapidly, the 1890 census appeared poised to take even longer. To attack this problem, the new superintendent of the census, Robert Porter, held a competition to find a faster and more efficient way to count the U.S. population.
Three finalists demonstrated solutions for Porter in 1889. Two of them created systems using colored ink or cards to allow data to be sorted more efficiently, but these were still manual systems. Hollerith on the other hand, inspired by the ticket punches used by train conductors, developed a system in which the statistical information was recorded on punched cards that were quickly tallied by a tabulating machine of his own design. Cards were placed in this machine one at a time and pressed with an apparatus containing 288 retractable pins. Any pin that encountered a hole in the card would complete an electrical circuit and advance one of forty tallies. Using Hollerith’s machines, the Census Bureau was able to complete its work in just two and a half years.
As the 1890 census began to wind down, Hollerith re-purposed his tabulating system for use by businesses and incorporated the Tabulating Machine Company in December 1896. He remained focused on the census, however, until President McKinley’s assassination in 1901 resulted in the appointment of a new superintendent that chose to go with a different company for 1910. In the meantime, Hollerith refined his system by implementing a three-machine setup consisting of a keypunch to put the holes in the cards, a tabulator to tally figures, and a sorting machine to place the cards in sequence. By 1911, Hollerith had roughly one hundred customers and the business was continuing to expand, but his health was failing, leading him to entertain an offer to sell from an influential financier named Charles Flint.
Charles Rantlett Flint, the man who forged IBM
Charles Rantlett Flint was a self-made man born into a family of shipbuilders that started his first business at 18 on the docks of his hometown of Thomaston, Maine. From there, he secured a job with a trader named William Grace by offering to work for free. In 1872, Grace made Flint a partner in his new W.R. Grace & Co. shipping and trading firm, which still exists today as a chemical and construction materials conglomerate. During this period, Flint acted as a commission agent in South America dealing in both arms and raw materials. He also became keenly interested in new technologies such as the automobile, light bulb, and airplane.
In 1892, Flint leveraged his international trading contacts to pull together a number of rubber exporters into a trust called U.S. Rubber. This began a period of intense monopoly building by Flint across a number of industries. By 1901, Flint’s growing roster of trusts included the International Time Recording Company (ITR) of Endicott, New York, based around the recently invented time clock that allowed employers to easily track the hours worked by their employees, and the Computing Scale Company of America of Dayton, Ohio, based around scales that would both weigh items by the pound and compute their total cost. While ITR proved modestly successful, however, the Computing Scale Company ended an abject failure. In an attempt to salvage his poorly performing concern, Flint decided to define a new larger market of information recording machines for businesses and merge ITR and Computing Scale under the umbrella of a single holding company. Feeling Hollerith’s company fit well into this scheme, Flint purchased it as well in 1911 and folded the three companies into the new Computing-Tabulating-Recording Company (C-T-R). The holding company approach did not work, however, as C-T-R was an unwieldy organization consisting of three subsidiaries spread across five cities with managers that ignored each other at best and actively plotted against each other at worst. Furthermore, the company was saddled with a large debt and its component parts could not leverage their positions in a trust to create superior integration or economies of scale because their products and customers were too different. By 1914, C-T-R was worth only $3 million and carried a debt of $6.5 million. Flint’s experiment had clearly failed, so he brought in a new general manager to turn the company around. That man was Thomas Watson, Sr.
Thomas Watson, Sr., the man who built IBM into a corporate giant
By the time Flint hired Watson for C-T-R, he already had a reputation as a stellar salesman, but was also tainted by a court case brought over monopolistic practices. Born on a farm in south central New York State, Watson tried his hand as both a bookkeeper and a salesman with various outfits, but had trouble holding down steady employment. After his latest venture failed in 1896, a butcher’s shop in Buffalo, Watson trudged down to the local NCR office to transfer the installment payments on the store’s cash register to the new owner. While there, he struck up a conversation with a salesman named John Range and kept pestering him periodically until Range finally offered him a job. Within nine months, Watson went from sales apprentice to full sales agent as he finally seemed to find his calling. Four years later, he was transferred to the struggling NCR branch in Rochester, New York, which he managed to turn around. This brought him to the attention of John Patterson in Dayton, who tapped Watson for a special assignment.
By 1903, when Patterson summoned Watson, NCR was experiencing fierce competition from a growing second-hand cash register market. NCR cash registers were both durable and long-lasting, so enterprising businessmen had begun buying up used cash registers from stores that were upgrading or going out of business and then undercutting NCR’s prices on new machines. For the controlling monopolist Patterson, this was unacceptable. His solution was to create his own used cash register business that would buy old machines for higher prices than other outlets and sell them cheaper, making up the lost profits through funding directly from NCR. Once the competition had been driven out of business, prices could be raised and the business would start turning a profit. Patterson tapped Watson to control this business. For legal reasons, Patterson kept the connection between NCR and the new Watson business a secret.
Between 1903 and 1908, Watson slowly expanded his used cash register business across the country, creating an excellent new profit-center for NCR. His reward was a posting back at headquarters in Dayton as an assistant sales manager, where he soon became Patterson’s protégé and absorbed his innovative sales techniques. By 1910, Watson had been promoted to sales manager, where his personable and less-controlling management style created a welcome contrast to Patterson and encouraged flexibility and creativity among the 900-strong NCR sales force, helping to double the company’s 1909 sales within two years.
As quickly as Watson rose at NCR, however, he fell even faster. In 1912 the Taft administration, amid a general crusade against corporate trusts, brought criminal charges against Patterson, Watson, and other high-ranking NCR executives for violations of the Sherman Anti-Trust Act. At the end of a three-month trial, Watson was found guilty along with Patterson and all but one of their co-defendants on February 13, 1913 and now faced the prospect of jail time. Worse, the ordeal appears to have soured the ever-changeable Patterson on the executives indicted with him, as they were all chased out of the company within a year. Watson himself departed NCR in November 1913 after 17 years of service. Some accounts state that Watson was fired, but it appears that the separation was more by mutual agreement. Either way, it was a humbled and disgraced Watson that Charles Flint tapped to save C-T-R in early 1914. Things began looking up the next year, however, when an appeal resulted in an order for a new trial. All the defendants save Watson settled with the government, which decided pursuing Watson alone was not worth the effort. Thus cleared of all wrongdoing, Watson was elevated to the presidency of C-T-R.
Watson saved and reinvented C-T-R through a combination of Patterson’s techniques and his own charisma and personality. He reinvigorated the sales force through quotas, generous commissions, and conventions much like Patterson. A lover of the finer things in life, he insisted that C-T-R staff always be impeccably dressed and polite, shaping the popular image of the blue-suited IBM sales person that would last for decades. He changed the company culture by emphasizing the importance of every individual in the corporation and building a sense of company pride and loyalty. Finally, he was fortunate to take over at a time when the outbreak of World War I and a booming U.S. economy led to increased demand for tabulating machines both from businesses and the U.S. government. Between 1914 and 1917, revenues doubled from $4.2 million to $8.3 million, and by 1920 they had reached $14 million.
What really set IBM apart, however, was the R&D operation Watson established based on the model of NCR’s innovations department. At the time Watson arrived, C-T-R remained the leading seller of tabulating machines, but the competition was rapidly gaining market share on the back of superior products. Hollerith, who remained as a consultant to C-T-R after Flint bought his company, showed little interest in developing new products, causing the company’s technology to fall further and further behind. The company’s only other senior technical employee, Eugene Ford, occasionally came up with improvements, but he could not actually put them into practice without the approval of Hollerith, which was rarely forthcoming. Watson moved Ford into a New York loft and ordered him to begin hiring additional engineers to develop new products.
Ford’s first hire, Clair Lake, developed the company’s first printing tabulator in the early 1920s, which gave the company a machine that could rival the competition in both technology and user friendliness. Another early hire, Fred Carroll from NCR, developed the Carroll Press that allowed C-T-R to cheaply mass produce the punched cards used in the tabulating machines and therefore enjoy a huge profit margin on the product. In the late 1920s, Lake created a new patentable punched-card design that would only work in IBM machines, which locked-in customers and made them unlikely to switch to a competing company and have to redo millions of cards. Perhaps the most important hire was James Bryce, who joined the company in 1917, rose to chief engineer in 1922, and ended up with over four hundred patents to his name.
After a small hiccup in 1921-22 as the U.S. endured a small recession, C-T-R, which Watson renamed International Business Machines (IBM) in 1924, experienced rapid growth for the rest of the decade, reaching $20 million in revenue by 1928. While this placed IBM behind Remington Rand, NCR, and Burroughs, the talented R&D group and highly effective sales force built by Watson left the company perfectly poised to rise to a dominant position in the 1930s and subsequently conquer the new computer market of the 1950s.
They Create Worlds 