Let’s face it: We’re spoiled by our plug-and-play world. We expect peripherals to work on any device—Mac or PC—and if the newest smartphone isn’t compatible with our old charger, then you’re going to hear about it. We can thank IBM for this life of ease. On April 7, 1964, IBM President Thomas Watson Jr. announced the creation of the IBM System/360, the first mainframe computing system designed for hardware and software compatibility.
It’s not an overstatement to call the System/360 a game-changer. In the business classic Good to Great, author Jim Collins ranks it with the Model T and the Boeing 707 as one of the top business accomplishments of all time. Companies hesitant to invest in expensive computers for fear of obsolescence could now start small and grow their system with their business. McDonnell Aircraft Corporation bought the first System/360 Model 30 in 1965, and Ford Motor Company used System/360 machines to introduce concepts we also take for granted now, including a central warranty system and Ford Motor Credit retail loans.
IBM's gamble pays off
Creating the System/360 was a huge gamble for IBM. Not only did it cannibalize IBM’s existing product lines, none of which were compatible and each of which had its own sales and support team, but also it cost a lot of money. IBM initially budgeted $2 million for System/360 development, but the final cost was more than $5 billion—in 1960s money.
The gamble paid off. IBM launched the computer revolution and dominated the industry for two decades. And the System/360 even appeared as a guest star on Season 7, Episode 4, of Mad Men, when it displaced our beloved Sterling Cooper creative team in their lounge. Talk about disruption!
Tech Time Warp is a weekly feature that looks back at interesting moments and milestones in tech history.