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International Business Machines Corp. (IBM): This Company & Genentech Introduce a New Era

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On this day in economic and business history …

International Business Machines Corp. (NYSE:IBM) knew it had something big on its hands when it introduced the System/360 series of mainframe computers on April 7, 1964. Legendary International Business Machines Corp. (NYSE:IBM) executive (and son of that other legendary International Business Machines Corp. (NYSE:IBM) executive) Thomas J. Watson Jr. called the launch “the most important product announcement in the company’s history.” International Business Machines Corp. (NYSE:IBM) hosted a launch event that would put today’s to shame — a coordinated nationwide reveal attended by more than 100,000 businessmen in 165 cities across the United States.

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Watson told the world:

System/360 represents a sharp departure from concepts of the past in designing and building computers. It is the product of an international effort in International Business Machines Corp. (NYSE:IBM)’s laboratories and plants and is the first time International Business Machines Corp. (NYSE:IBM) has redesigned the basic internal architecture of its computers in a decade. The result will be more computer productivity at lower cost than ever before. This is the beginning of a new generation — not only of computers — but of their application in business, science, and government.

Watson was right. System/360 was not a single mainframe, but an entire series of them, with capabilities and costs running the gamut from workhorse to wonder. It was the first time that computers had been designed with upgrades in mind, as the entire range of System/360s shared the same base instruction set and could thus be upgraded without forcing users to learn to use something unfamiliar. System/360s were available at monthly rental costs that ranged from $2,700 to $115,000 — compared with purchase prices of between $133,000 to $5.5 million — and users could feel confident that no matter which machine they ordered, they could always upgrade later as their data processing demands grew.

The System/360 family became extremely successful in the market, producing some of the strongest business (and stock price) gains in IBM’s history. IBM also created a number of industry standards with the System/360 family. Some have since been superseded by newer designs, but the 8-bit byte was possibly the most durable — it remains the standard to this day.

IBM continued to deliver and support System/360s almost up to the release of its PC in 1981, as the last mainframes were delivered to customers in 1978. It’s still possible to run applications for System/360 machines in the present day, as IBM’s modern System z mainframes are fully backwards compatible with their groundbreaking ancestors.

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