IBM PC Turns 20IBM PC Turns 20

The atmosphere was wistful and willful at the Tech Museum of Innovation in San Jose, Calif., Wednesday night as a roomful of PC pioneers reflected on their invention, revisited old battles, and prognosticated the future of the machine that turns 20 this Sunday.

OK, so technically IBM didn't invent the personal computer. That distinction belongs to Xerox's Palo Alto Research Center, which beginning in 1973 built more than 1,000 Xerox Altos: experimental desk-side computers connected by Ethernet cables, hooked to laser printers, programmed with the object-oriented Smalltalk language, and running WYSIWYG word processors. But the arrival of the IBM PC Aug. 12, 1981, ushered in the era of low-cost, individualized, expandable computers, backed by the biggest name in the business.

The result changed the way America and the world works, and made billions for the PC industry's pioneers. In San Jose Wednesday night, Microsoft chairman Bill Gates, Intel chairman Andy Grove, Lotus Development Corp. founder Mitch Kapor, and other computing titans gathered for drinks, dinner, and a panel discussion marked by reflection and riposte.

"I may have invented it," said Dave Bradley, one of a dozen engineers IBM dispatched to Boca Raton, Fla., in 1980 to build a personal computer, recalling the Control-Alt-Delete reboot sequence. "But Bill made it famous. It's the log-on for [Windows] NT."

Ouch. When IBM commissioned its secret Chess project in Florida that year, Apple Computer was selling $200 million of personal computers a year, in an era of centralized mainframe and minicomputers. The 1979 arrival of the VisiCalc spreadsheet on the Apple II (invented by panelist Dan Bricklin), cemented that machine's popularity for business. Meanwhile, the hobbyist market was burgeoning. The primitive Altair 8800, introduced in 1975, was a minor hit. And in 1980, Tandy Corp. sold $175 million of its TRS-80 computers at Radio Shack stores.

Compaq founder Rod Canion said seeing a TRS-80 running VisiCalc at a Radio Shack helped inspire him to quit Texas Instruments Inc. and form Compaq in 1982. Said Gates, "Literally the day I dropped out of Harvard, I had to explain to my parents why. And I said, 'If I don't get in now, this is going to happen overnight.' I was dead wrong--it didn't happen overnight. But it was nice to get in ahead of time."

IBM didn't want to miss the boat with PCs, as it had when it failed to capitalize on the minicomputers that ate into its mainframe business. Bradley, who still works at IBM and wrote the original PC's ROM Bios, says the company wanted to move quickly and emulate the nascent PC market by building its computer mostly from off-the-shelf components and software. Two key parts: Intel's 8088 microprocessor and Microsoft's MS-DOS operating system.

The original PC was priced at $3,000 for a standard configuration that included 64 Kbytes of memory, a single disk drive, and a green-on-black display. A business version--with two disk drives, a color screen, and a printer--cost $4,500. The system was grossly underpowered compared with Xerox's Star, a commercial version of the Alto introduced in early 1981. But Stars cost $16,000 apiece and were designed to be networked together in a sophisticated "office of the future."

By entering the market at a bargain-basement price, and throwing Big-Blue-sized marketing clout behind it, IBM sold 200,000 PCs during the first year, nearly matching its five-year projection. The hardware and software design was also publicly documented, and thus expandable. "No one believed in differentiation more than IBM," said Grove. "And this departure set the industry in motion."

Said Bradley to panelist Ray Ozzie, CEO of Groove Networks Inc. and the author of Lotus Notes: "We wanted people like you and Mitch [Kapor], and the hardware industry, and everybody to participate." Also in the audience: Microsoft researcher Gary Starkweather, who invented the laser printer at Parc in the mid-70s, former Parc researcher Alan Kay, and Compaq CEO Michael Capellas.

To date, more than 500 million PCs have been sold. U.S. sales this year are expected to fall 6.3% to 45.3 million units, according to market researcher International Data Corp. But worldwide growth should climb 5.8% to 138 million units.

The PC pioneers say there's plenty of work left to do. "One area we have not done well, collectively, is making the technology usable by ordinary folks," said Kapor. "This is a cross-platform problem." According to Ozzie: "Ninety-nine percent of what we do with other people [at work] is E-mail. Is E-mail really a heavy-duty use of the PC? I would say, no."

Intel founder Grove wondered if affordable prices could keep pace with the benefits of new tools. Practically every PC application today traffics in alphanumeric data, he said. But multimedia communications applications that go "way beyond that" could strain the costs of network connections. "The PC will adapt, but will the pipes?" asked Grove. "I'm a little concerned that Moore's Law has not infected this area."

On stage, explained Grove, sat "the stand-alone PC generation." Perhaps he was passing the guard.

We remember being mad that IBM had co-opted the 'personal computer' name, and were convinced that IBM's entry into the market would ruin the industry. How about you? What did you pay for your first PC? Share your memories in the Water Cooler discussion forum.