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IBM’s Mainframe Dominance IBM’s rule over the 1960s mainframes was as total as Microsoft Windows & Office dominate PCs today It was decidedly  not  due  to  technical superiority! BUNCH group devotees swear they had equal or better price performance, MIPS, memory, storage, peripherals, etc. IBM’s revenue during the 60s  grew  about as rapidly as the length of men’s hair (&  inversely  to the length of ladies skirts!)
What Gave  Big Blue  the Lead? It was  IBM’s  corporate emphasis on  sales & marketing  gave them dominance in Healthcare as well as most other industries: Sales : Known for the best  paid , trained & supported $alesmen Easily recognizable in their expensive suits, starched white shirts and shiny wing-tip shoes! Marketing Huge advertising, T & E, and “other” budgets as well… IBM spent  millions  in marketing versus the BUNCH Group’s thousands, creating an  image  of superiority that stuck. Leading to the famous ‘60s mantra: “ Nobody ever got fired for buying IBM…”
Just How Big? The earliest document I could find in my archives of old HIS magazines was in 1987, when figures were published from Sheldon Dorenfest, whose “Guide” to the HIS industry lives on today as HIMSS Analytics. This chart shows how IBM’s annual revenue in Healthcare for 1985 ( red ) and 1986 ( blue ) about equaled the entire total of their next six competitors combined! Their bubble finally burst in the early 1990s, when IBM recorded its first quarterly loss in decades… Today, “service” outsells hardware.
System/360 “Breakthrough” The System/360 was IBM’s mainstay 60’s mainframe, both in terms of technical details & marketing hype -  Technical : 19 memory options, 40 peripherals, remote telecom,  b illionth of a second cycles, 8 meg core, 5 meg DASD… Hype :  Only Steve Jobs can create such a media sensation today: “… 100,000 businessmen in 165 US cities attended today’s System/360  announcement...”
System/360 Pricing Like Microsoft in the 90s, IBM ran afoul of anti-trust monopoly investigations several times due to their pricing policies of lease rather than purchase, and bundling of hardware with OS & utilities. Lawyers as good as their salesmen saved the day however, as the “consent decree” forced the unbundling of hardware and software, and gave clients the option of buying or leasing each. Typical 360 prices? Ranged widely by model: 360-20, 360-40, 360-50, etc.,: Monthly rentals = from $3K to  $115K Purchase = from $133K up to  $5.5M - (note $1 in 1960 economy ≈ $6 in today’s!)

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HIStory 7

  • 1. IBM’s Mainframe Dominance IBM’s rule over the 1960s mainframes was as total as Microsoft Windows & Office dominate PCs today It was decidedly not due to technical superiority! BUNCH group devotees swear they had equal or better price performance, MIPS, memory, storage, peripherals, etc. IBM’s revenue during the 60s grew about as rapidly as the length of men’s hair (& inversely to the length of ladies skirts!)
  • 2. What Gave Big Blue the Lead? It was IBM’s corporate emphasis on sales & marketing gave them dominance in Healthcare as well as most other industries: Sales : Known for the best paid , trained & supported $alesmen Easily recognizable in their expensive suits, starched white shirts and shiny wing-tip shoes! Marketing Huge advertising, T & E, and “other” budgets as well… IBM spent millions in marketing versus the BUNCH Group’s thousands, creating an image of superiority that stuck. Leading to the famous ‘60s mantra: “ Nobody ever got fired for buying IBM…”
  • 3. Just How Big? The earliest document I could find in my archives of old HIS magazines was in 1987, when figures were published from Sheldon Dorenfest, whose “Guide” to the HIS industry lives on today as HIMSS Analytics. This chart shows how IBM’s annual revenue in Healthcare for 1985 ( red ) and 1986 ( blue ) about equaled the entire total of their next six competitors combined! Their bubble finally burst in the early 1990s, when IBM recorded its first quarterly loss in decades… Today, “service” outsells hardware.
  • 4. System/360 “Breakthrough” The System/360 was IBM’s mainstay 60’s mainframe, both in terms of technical details & marketing hype - Technical : 19 memory options, 40 peripherals, remote telecom, b illionth of a second cycles, 8 meg core, 5 meg DASD… Hype : Only Steve Jobs can create such a media sensation today: “… 100,000 businessmen in 165 US cities attended today’s System/360 announcement...”
  • 5. System/360 Pricing Like Microsoft in the 90s, IBM ran afoul of anti-trust monopoly investigations several times due to their pricing policies of lease rather than purchase, and bundling of hardware with OS & utilities. Lawyers as good as their salesmen saved the day however, as the “consent decree” forced the unbundling of hardware and software, and gave clients the option of buying or leasing each. Typical 360 prices? Ranged widely by model: 360-20, 360-40, 360-50, etc.,: Monthly rentals = from $3K to $115K Purchase = from $133K up to $5.5M - (note $1 in 1960 economy ≈ $6 in today’s!)

Editor's Notes

  1. LIKE MS in the 90s Watson Sr sold pianos in upstate NY!
  2. LIKE MS in the 90s Watson Sr sold pianos in upstate NY!
  3. LIKE MS in the 90s Watson Sr sold pianos in upstate NY!
  4. $5M = SMS’ start-up capital!!
  5. $5M = SMS’ start-up capital!!