3 Things IBM Did to Shape the PC's Future

I joined Creative Strategies in 1981, the year the IBM PC was born, and was asked to add IBM to my research portfolio. In those days there were no PC analysts, so I was one of the first, a role I have relished for 35 years.

Three decades ago, I doubt IBM had any idea how revolutionary its product would be. In fact, the original business plan forecasted selling around 200,000 PCs during the product's entire lifespan.

By the second year it was on the market, though, the IBM PC was a monster hit, and Big Blue needed to figure out how to grow this business. I was asked to work with its research teams on a go-to-market expansion strategy, giving me an inside look at the birth of the PC.

Earlier this month, IBM's PC turned 35, but three other pivotal points in the company's history also helped shape our PC landscape today.

The first was the development of PC clones. In the beginning, IBM was selling PCs as fast as it could make them and, besides the Apple II, it was the only game in town. But in 1982, a small start-up in Houston led by Rod Canion, Jim Harris, and Bill Murto created Compaq Computer, and the first IBM PC clone was born.

Compaq's entrance into the PC market triggered an avalanche of other copycats who offered a cheaper alternative to the IBM PC. As you can imagine, this worried IBM. Since components for the IBM PC were off-the-shelf and anyone could license MS DOS from Microsoft, IBM's position in the marketplace faced dilution as competitors jockeyed for PC buyers.

This was essentially the first open-source hardware project. IBM invented a working standard, and companies around the world made the platform better and more available via new technologies. It wasn't IBM's ideal scenario, though. So the second pivotal point came when it tried to make the IBM PC architecture proprietary and force all PC vendors to license it from them.

At that time, the PC used a bus called ISA, which, along with the older technology built into the PC's original design, could not rival the increasing processing and information demands of the newer PCs. But in 1987, IBM decided that it needed to retake control of the PC architecture and the PC market by introducing Micro Channel Architecture (MCA), the cornerstone of the transition from 16- to 32-bit computing. IBM patented the MCA technology, so if others wanted to use it, they would have to license it. In essence, this time around, the company wanted to force everyone through an IBM proprietary technology and introduced its PS/2. In doing so IBM could not only earn a fee from every PC sold but would have a say about how all PCs would be designed in the future.

But while many of the other clone vendors were ready to surrender to IBM, Compaq's Canion took a stand. He struggled with this dilemma because he knew how important IBM was to the business world, and—if I remember correctly—even some members of his board wanted to adopt MCA. But Canion refused, which turned out to be a very important decision. Instead—and with strong support from Michael Dell, Intel, and some other clone vendors—Compaq began working on its own 32-bit bus that would be open to all. As they say, the rest is history.

The third pivotal point came when IBM decided to get out of the PC business altogether and sell to Lenovo in 2005. I have to admit that I was highly skeptical of the move, but the decision has been a good one for IBM, and has allowed Lenovo to become the No. 1 PC vendor in the world. Lenovo gave IBM's core PC business the kind of attention it needed to help grow the PC market significantly.

Since then, Lenovo, Dell, HP, and the other PC vendors have helped make the PC the cornerstone of business computing. Even though PC sales are down, I do believe that 2-in-1s and convertibles can help spur somewhat of a resurgence in PC demand in the next 2-3 years as businesses and consumers alike discover that these portable form factors deliver the most versatile computing experience. PCs have a lot of life left in them and are not going away any time soon.

For more, check out The Golden Age of IBM PCs and The Strange World of IBM PCs in the slideshows above.