Here is a summary of the birth of the Commercial Computer Industry in the early 1950s. This follows a similar track that was presented in the video series The Machine that Changed the World.
For more information about the creation of ENIAC, the first electronic general-purpose digital computer, see the Yahoo directory for ENIAC .
When the ENIAC was revealed to the world in 1946 most people saw the need for only 6 or 7 computers in the entire world. Yet the creators of ENIAC, J. Presper Eckert and John Mauchly, saw computers being used by science and business.
ENIAC, with 18,000 vacuum tubes, was the size of a small house and cost about $3,000,000 in today's money. It was also very difficult to use. To reprogram this computer, thousands of switches needed to be reset and much rewiring had to be done.
Few people were interested in funding this venture, but the team finally received an initial investment from Eckert's father. Thus, Eckert and Mauchly formed the first comercial computer company.
Before electronic computers, most information was processed with punched cards and tabulating machines. Pressured to complete the official census on time the U.S. Census Bureau signed a contract to buy the first computer from the Eckert and Mauchly Company. The price was $300,000. The pair of ENIAC creators called this new computer the UNIVAC, which is short for Universal Automatic Computer.
While developing this computer, the designers also developed information storage devices other than punched cards. They used magnetic tape and mercury tanks.
While Eckert and Mauchly were working in the U.S., the J. Lyons Co of England, a very large wholesale food company, became Britains first computer company. This supplier of tea and pastries was faced with the need to streamline their administration operations. Areas such as inventory control, payroll, and invoicing were becoming too costly and too complex for clerks to manage. Therefore, in 1948, the J. Lyons Co. decided to build their own computer.
A deal with Cambridge University, which was developing the EDSAC computer at the time, gave this company the expertise they needed. By 1951 the Lyons Electronic Office or LEO was in operation. It could complete in 7 hours, the work that 200 clerks needed a week to finish.
Soon other companies in England were interested in the LEO. This started the Lyons corporation into the computer industry.
Meanwhile, back in America, the development of UNIVAC was 2 years behind schedule. Over budget and short of time, the company sought for more customers to help finance the growing development costs.
The Prudential Insurance Company agreed to purchase one of their computers. At that time new government tax regulations were requiring all insurance companies to recalculate much of their paper work. Rather than hire an army of clerks to do these calculations, this company signed up to buy a computer.
After lingering financial problems, Eckert and Mauchly were forced to sell their share of the company on Feb. 1st, 1951. UNIVAC now became the property of Remington Rand, a company best know for its electric razors.
The installation of the first UNIVAC at the U.S. Census Bureau was little noticed by the public. In an effort to capture the nations attention and that of potential buyers, Remington Rand loaned UNIVAC to the CBS television network to predict the outcome of the federal election. When only 5% of the votes were cast, UNIVAC correclty predicted an overwhelming majority vote for Eisenhower. Yet the broadcasters did not announce these results immediately because they did not believe them. When the votes for Eisenhower began to pour in, they revealed UNIVAC's prediction. Soon after Remington Rand received orders for 9 more computers.
Thomas Watson Sr., president of IBM insisted his company should stick with punched cards and tabulating machines. Only after strong urging from his son, Thomas Watson Jr. did IBM begin to develop a computer line. In 1953 they began with a production of 6 scientific computers, and in 1954 they came out with their first business computer.
IBM computers were slower and less efficient than UNIVAC but the company's greatest advantage was its sales force. The Model computer is the Model T of the computer industry. In one year they made 1000 sales. The genius of this system was that it fit into the existing system of punched cards and tabulating machines.
By 1956, IBM surpassed Remington Rand as the largest computer company in America. By the end of the 1950s, it had captured 90% of the computer industry.
The next crisis that the young computer industry faced was the problem of software development. Developing the programs to apply these universal computing machines was costing as much as 2 to 3 times the cost of the hardware. Add to thisthe fact that there was a serious shortage of trained programmers.
The solution was to make programming languages easier. So high level programming languages were developed. These new languages were closer to English making it much easier for the programmers to create programs and work all the errors out.
The two most significant programming languages developed at this time
were Fortran , a language easy for scientists and mathematicians
to use, and Cobol, which was designed for business applications.