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Thomas Watson Sr. & Jr. 1945-1956

IBM CEOs: Leadership ⇔ Challenges ⇔ Transformations in the IT Century

Thomas Watson Sr. & Jr. 1945-1956
(Highlights – Milestones – Excerpts)

Watson Jr. returned to IBM in January 1946

Electronic Numerical Integrator and Computer (ENIAC)  – EDVAC – EDSAC – BINAC – UNIVAC threat to IBM

ENIAC formally accepted by the U.S. Army Ordnance Corps in July 1946 - shut down for refurbishment and memory upgrade November 1946.  

Electronic Discrete Variable Automatic Calculator (EDVAC): contract to build the new computer signed in April 1946 

IBM 603 the first Commercial Electronic Calculator on the market: September 1946

ENIAC transferred to Aberdeen Proving Ground, Maryland, in 1947 – in continuous operation until October 2, 1955

Within a year the IBM 603 replacement was the highly successful IBM 604 Electronic Calculating Punch sold by the thousands

IBM Selective Sequence Calculator (SSEC) – a hybrid - in full operation: January 27, 1948 until August 1952. Replaced by IBM 701.

New York Times, July 1, 1948: Shockley, Bardeen and Brattain invented the transistor at the Bell Laboratory

IBM 407 Accounting Machine introduced July 19, 1949 – almost three decades in the product line. Withdrawal from the market Dec. 17, 1976

ENIAC – EDVAC - UNIVAC: 19 significant competitive computer projects under way

IBM World Trade Corporation (WTC) implemented as a wholly owned IBM subsidiary in early 1949

Watson Jr.: Review Task Force of “18” in 1949.

Mid-1949: Universal Automatic Computer (UNIVAC) with magnetic tape regarded as potential threat to the IBM EAM market 

EDSAC England May 1949: first operational full-function computer Moore school design based at Cambridge University, England.

September 1949: Tom Watson promoted to executive VP

Business Volumes 1949

Tom Watson’s team members 1950 recruited: push into computers as fast as possible

Korean War broke out in late June 1950.

“Defense Calculator” IBM 701 – the most expensive project in IBM history (10x the size of Dad’s SSEC) – decision end of December 1950.

Expired and unexpired patents by Company, circa 1950

EDVAC in operation 1951 until 1961

Watson Jr. succeeds his father to join the Business Advisory Council in 1951 – tremendous public compliment.  

Remington Rand two years ahead of IBM

Top level of IBM in 1951: Thomas J. Watson Sr., George Phillips, Tom Watson Jr., Al Williams, Red LaMotte, Arthur K. Watson (Dick Watson)

IBM actively recruits black employees starting 1952 – 1965 the number of black colleges and universities in the IBM recruitment program grows to 30.

January 15, 1952: Tom Watson became President – Watson Sr.’s advice to Tom …

January 1952: John von Neumann became a consultant to IBM – Institute for Advanced Study: “IAS” Computer the model for “IBM 701.” 

January 21, 1952: Department of Justice filed an antitrust suit against IBM.

UNIVAC: IBM in “panic mode” – cost overrun IBM 701 – there were moments when Tom Watson thought “we were all on board the Titanic.” 

Remington Rand – EMCC and ERA: unquestioned leader in electronic computers

April 29, 1952: IBM 701 Announcement (aka “Defense Calculator”: Korean War 25 June, 1950-27 July 1953) unveiled on April 7, 1953.

On election night in November 4, 1952 UNIVAC on TV: predicts Eisenhower to win presidential election  

Al William as treasurer to Tom Watson who had added up the financial results for 1952: “Boy, you’ve got a problem.” Al singled out Cary.

The years 1953 and 1954, when UNIVAC was the big name in the market place, were to remain unforgettable for many at IBM.

July 2nd, 1953: IBM Type 650 Magnetic Drum Calculator announcement – the workhorse of modern industry – last unit manufactured in 1962.

Building an Equal Opportunity Workforce – 1953

1954: 40th anniversary of Thomas J. Watson’s Leadership

The critical SAGE years 1952-1954 – Semi-Automatic Ground Environment – the most important sale of my career - fully deployed in 1963.   

Tom Watson’s view of Senator John McCarthy – Thomas J. Watson Sr.’s reply

October 1954: Census Bureau quietly received its second UNIVAC (the 13th to be built) – years later Tom Watson recalled “having been absolutely panicked.”   

Spring 1954: IBM 702 contra UNIVAC in a horse race - Learson turned this quandary into a triumph.   

March 28, 1955: Tom Watson on the cover of Time Magazine – “we consistently outsold people who had better technology because of the secrets of our sales approach … That was where IBM had its monopoly.”  

In little over a year – in 1955 – we started delivering redesigned computers IBM 702: they made the UNIVAC obsolete- we soon left Remington Rand in the dust ; Computer and electronic companies: ranking 1955

Tom Watson negotiates Consent Decree signed by IBM lawyers on behalf of IBM with the Department of Justice in January 1956.

February 8, 1956: IBM Rochester announced as the location of its newest facility.

May 8, 1956: Watson Sr. gave the IBM CEO position to Tom Watson;
Dick Watson became IBM WTC CEO a week later: “I am not retiring …”

IBM’s sales in 1956 were 734.3 M$ and its profits 68.8 M$. It ranked 48th on Fortune’s list of the nation’s largest firms. (“Giants of Enterprise” by Richard Tedlow published in 2001). Employees 1956: 72.504. 

Williamsburg, Virginia, conference - key figures in the organizational revolution: Tom Watson, Williams, La Motte, Dick Watson, Wisner Miller, Learson

June 19, 1956: Thomas Watson Sr. died of a heart attack. Obituary June 20. Funeral: Sleepy Hollow Cemetery. Legacy: lessons to learn.