IBM’s announcement earlier this month that it would drop out of the personal computer business brought up a ghost of technology past that, in a strange way, spoke to me about my own little business.
IBM past might seem far removed from the little eight-page tabloid newspaper that started up 20 years ago. But in fact IBM played a role in its birth. Back in Endicott in upstate New York, my father had worked for a quarter century or so as a customer engineer or CE, as they called IBM repair guys, being called out at all hours of the day or night to come to the aid of companies having problems with their business machines. This was the era of the earliest mainframe computers, so equipment included key punches and collating machines as well as computers themselves.
I enjoyed a childhood enriched by a fairly affluent company town: Golf for a $1 a round at the country club, swimming, and participation in an Explorer post that enabled high school kids to program and run one of those mainframes, a 1401.
Along the way I learned a few lessons from IBM. One was in sales. Back then IBM never sold those machines; Big Blue only leased them and made its huge profits from both the lease payments and the ongoing consulting services that enabled their customers to actually use the machines. When a federal court ruled that the practice was illegal, you would have thought that the world was going to end.
Another lesson was that — at least back then, decades before Enron — it wasn’t a bad idea to invest in the company stock. Like many good IBMers, my father participated in the company’s stock purchase plan, getting the shares at a discount (10 or 15 percent, as I recall) through a payroll deduction plan, and watching the shares grow through dividend reinvestment and stock splits. Along the way he got a few fractional shares, and sold some of them to me, which I bought using profits from my paper route.
I hung onto the shares. They split another time or two, and by the time I was starting the paper I had something like $3,000 in IBM stock. It wasn’t a fortune even then, but it came in handy in launching a small business.
Back in 1984 the critical equipment needed to turn out a newspaper was a photo-typesetting machine. But IBM had started selling personal computers in 1981, and they were beginning to be seen as a business resource. By the time we got around to purchasing one, there was a direct competitor: Apple computers.
Which one to get? Apples were good for graphics and desktop publishing, everyone said. IBMs (or at least the software written for IBMs) were better at crunching numbers. For a newspaper, the choice was obvious, according to the salespeople I consulted: Apple. But, probably because that ghost of technology past was speaking to me, I tried to find a way for IBM to win. And then it dawned on me: Putting out a pretty paper wasn’t our job. What we were selling was information — news you could use for your business and your personal life.
We went with IBM (an XT, I recall, with 640 K of RAM and a 15 meg hard drive — my brother had the conventional 10 meg drive and I wanted mine to be bigger), along with a tractor-fed printer and a color (!) monitor. Clancy-Paul salesman Carl Davies said he would “sharpen the pencil” to get us the best deal. He came back with a smile: the entire package came to about $5,000. While it took several years for us to get some software so that we could do desktop publishing on our PC, we nevertheless began assembling data bases almost immediately. The Business Directory that we publish every year; the calendar of events in every issue, both began as a result of that PC purchase nearly two decades ago.
Today our office is run by a score or more of personal computers — more computers than people but not one of them an IBM. In fact we never bought another IBM PC after that first one. From then on the clones (some with brand names and most with no name at all) took over. No wonder IBM has finally given up the product line.
Is this the end of the IBM world? Hardly. PC sales represented only about 12 percent of Big Blue’s $92 billion annual revenue. Now, industry analysts noted, the company is not simply selling technology but rather selling the services that help its customers use their technology. And IBM saw the sale as not the end but the beginning of a new global enterprise with the Chinese-owned corporation that bought the PC operation.
Could that be another lesson for this little newspaper operation? I think of how much information is now available to everyone, not just to reporters tenacious and persistent enough to ask the right questions and understand the answers. Maybe now we are selling not just the information but also the service of assembling that information in a coherent and entertaining form. It’s the ghost of technology future. And — as I tell my kids — this time of year it’s not a bad idea to listen to the ghostly sounds around you.