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The IBM System/360
The 5-billion-dollar gamble that changed the trajectory of IBM
It was called “IBM’s $5 billion gamble” and a “bet-the-business” move. Good to Great author Jim Collins ranked it as one of the top three business accomplishments of all time, alongside Ford’s Model T and Boeing’s first jetliner, the 707. It was the IBM System/360, a system of mainframes introduced in 1964 that ushered in a new era of compatibility in which computers were no longer thought of as collections of individual components, but rather as platforms.
The System/360 unified a family of computers under a single architecture for the first time and established the first platform business model, which is still embraced today by IBM as well as by technology companies across industries ranging from online search and e-commerce to social media and ride-sharing.
Before the System/360, anyone buying a new computer system had to scrap their existing programs and start from scratch. There were no commercial software companies, and software was customized (or custom written) for each new machine. The System/360 changed that dynamic overnight by separating software from hardware. For the first time, software written for one machine could run on any other machine in the line. This enabled companies to buy a small computer system and add to it as needed. The System/360 created fresh ways of thinking about designing, building and using computer systems, and its influence is still felt today. And it almost didn’t happen.
The System/360 represented a considerable risk for a company not known for taking such gambles. The new line would replace all existing IBM computer products and cost USD 5 billion over four years. Success was far from assured, but IBM knew it had to address fundamental problems within the computer industry. Customers were frustrated with having to spend money every time their computers needed more memory or the ability to run a different application.
At the same time, there was a growing sense that IBM needed to make its business more sustainable. The company’s multiple incompatible product lines were becoming increasingly difficult to maintain and update, so IBM went in search of an entirely new design and business strategy.
In 1961, IBM established a task force named SPREAD (Systems Programming, Research, Engineering and Development) that met in secret at the New Englander Motor Hotel in Greenwich, Connecticut, to figure out how to build the next generation of IBM computers. A new family of mainframes ran the risk of effectively killing off existing IBM computer lines, and not everyone thought it was worth the risk. But after six months of sometimes heated debate, the project moved forward.
The System/360’s chief architect was Gene Amdahl, who also designed the IBM 704, a mainframe primarily used in scientific research. Project leader Fred Brooks, who coined the term “computer architecture,” collaborated with Bob Evans and Erich Bloch, and all three co-won the first-ever National Medal of Technology for their role in developing the System/360.
More flexibility
Launched on April 7, 1964, the System/360 was so named because it was meant to address all possible types of users with one unified software-compatible architecture. This marked a sharp departure from concepts of the past in designing and building computers. The System/360 replaced all five of IBM’s existing computer product lines with one strictly compatible family, using a new architecture that pioneered the 8-bit byte still in use on computers today. Six processor models were announced, covering a fiftyfold range in performance, as well as 54 peripheral devices.
Pioneered the 8-bit byte still in use on computers today
Six processor models were announced
The six models covered a fiftyfold range in performance
The range of models covered 54 peripheral devices
Central memory capacity was 8,000 to 524,000 characters
Additional storage could hold up to 8,000,000 characters
The System/360 delivered higher productivity and flexibility at lower cost. Storage capacity was no longer an obstacle, with a central memory capacity of 8,000 to 524,000 characters and additional storage of up to 8 million characters available. Crucially, the System/360 was also scalable. For the first time, companies could purchase a small system and add to it without rewriting software — growth without reprogramming. This flexibility significantly lowered barriers to entry, leading many companies to buy their first computer.
The gamble paid off almost immediately. Orders for the System/360 rapidly exceeded forecasts, with more than 1,000 purchased in the first month. The System/360 became an industry standard and set IBM on a path to dominate the computer industry for two decades. By 1989, products based on the System/360’s architecture and its extensions accounted for more than half of IBM’s total revenue.
A new generation of computing
More broadly, the System/360 marked the beginning of a new generation of computers with wide application in business, science and government. The System/360 ended the distinction between commercial and scientific computers because it was no longer necessary to match a user’s problem to a specific piece of equipment.
This also marked a turning point in the emerging field of information science and the understanding of complex systems. After the System/360, the talk was less about automating tasks with computers and more about managing complex processes through computer systems. The System/360 also spawned whole computer markets. Companies outside IBM found they could make peripheral equipment that worked well with the System/360, bringing to life an entire industry. The phenomenon would be echoed 20 years later, with IBM’s decision to allow clones of its first personal computer, which launched the PC industry.
Few products in computing history have had the impact of the IBM System/360 — not only on business and technology, but on the way people think about computers.
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