It is a hot, inhuman day in Boca Raton Florida at the end of it. Timber and nineteen eighty bill gates suddenly panics He has to find a tie in a hurry gauges in a rented car with Paul Alan the two or co founders of a tiny start up called Microsoft, based in El view, Washington they have just arrived you're by plane to meet with IBM top secret group. That's developing a personal computer. There king in a curved low, slung office building. Next, a man made lake gaiety, and drive from the airport, and it occurs to gates that many IBM, always wear ties gates. Who is twenty five, but looks fifth with his skinny frame and map of blonde hair is ensure he even owns a tie Any certainly doesn't have one with it is vitally important to impress the biggest computer company honor

to make them understand. The tiny Microsoft will be sponsible, trustworthy partner gates, and drugs. Alan beefy heavily bearded technical with two years, his senior to look for clothing, Store Alan bottom all they pull over gates, Russia's in and buys the first time he sees. Then he hops back in Car and the two of them race to make the meeting on time there it by an IBM executive named Jack SAM's and his team. all wearing ties, you know Two months ago, when you came by to see us for the first time, I remember you said, don't get too Exe I did. I dont think anything big is about to happen Now I know you are lie suppose so, but I had to be careful. We didn't yet understand what was going on between Microsoft and digital research. In fact, gates is here because he is totally route is old. Friends at digital research gates goes on well,

We hear too clear that up and show you the operating system we got for your pc or I'm sorry. or project chess that your code name for this right is that's that's right. Let's get on with it, we don't have time to measure out in nineteen eighty personal computer We are already taking off IBM is behalf and in trying to play catch up its machines were need a new kind of operating system that can govern how the hardware works with software applications gates may look like a won't, be kid, but he's a shark. She he's a good coder and enjoys creating software What are you really large is winning it business once Aids learned that IBM is looking for a software operating system. He smells opportunity I be maybe laid getting into pieces, but it is a bad but with a lot of power in the market, gauge badly wants to hit Microsoft that engine he doesn't know

operating system, so he buys one a guy named TIM Patterson head, reverse engineer at another companies operating system and created one he called Quicken dirty. operating system or q, dos for short gates bought Jude. from Patterson for seventy five thousand dollars without Patterson why he wanted it so badly in his presentation at Boca, Raton, it doesn't tell SAM's and IBM any of this backstory ok, so our operating system is called Microsoft, disk operating system, but we abbreviated as Emma s DOS You told us that you are going to build a sixteen bit. Machine and EMS Dos meets requirement yes! Well, we tested the early version, you sent us and we think it is what we need now. As discuss we'd, also liked licence you're sixteen bit programming languages and have Microsoft help us coordinate software development. That's great, that's great! So for all that we are asking for it

Dorothy Fee of four hundred and thirty thousand dollars. That's forty! Five thousand for does three hundred ten thousand for the languages and seventy five thousand for consulting in Testing SAM's looks back. bill. I don't mean to suggest you, don't know what you're doing but is that all you really want for this? Well, I was thinking that, instead of asking for a lot more, I just want a clause in the contract that says Frida sell em S door to any other peacemaker Ella yeah. Sure. I don't see why not I'd say we have a deal. Their signatures set Microsoft on a course to become the most powerful company in computing and tease out IBM for disaster. Again is the payments platform built to help your business grow with ads you can accept payments in app online in store touch, free and beyond think about it more

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From wondering this is business wars. David breath we're wrapping up. Six part series, the first computer war and we ve come a long way from the days when Universe and IBM computers occupied entire rooms. Today we can harness all that power in a phone you carry in your pocket will be looking at the first step that brought us to this new world of personal computers. This is Our sixth and final episode, computing gets personal. Savage computer behemoth will eventually be outmaneuvered by a whip. Smart kid who sees it

future that IBM is not dared to yet imagined. Let's go back a few months before Bill Gates is meeting in Florida with IBM, it's the spring of nineteen eighty bill low and IBM employed, IBM skunk works operation in Boca, Raton has travelled. The companies new headquarters and Armagh a suburb of New York City modern building is nestled deep in the woods about a mile down driveway from the nearest wrote it so peaceful here loathing The setting seems more like a retreat for recovering Taipei executives than a place where actual work gets done. Low finds the conference room where is to meet with IBM, CEO, Frank, carry and other top officials low takes her breath. And steps inside Low, usually works on IBM, smallest least impressive products and does more than a thousand miles away from headquarters. The company's glory is in its biggest

pensive, mainframe computers that run giant corporations- banks in Government- it's a great business revenue in nineteen eighty will pass twenty six billion dollars and I be employs an astonishing three hundred forty one thousand people. The company wars money into its research lapse which have one for Nobel prizes in physics. Yet low is here sitting across from carry because the sea was worried, there's an uprising of footing computing technology, buffs more businesses, even consumers. becoming enamoured with personal computers. Back in nineteen, seventy seven to break through double machines. Came onto the market. Radio tiaras. Eighty and apples apples to the first spreadsheet program called visicalc had landed on the market in nineteen, seventy nine proving that pc these can be useful to business. More than seven

grid thousand copies have been sold. IBM, doesn't happen answer to these products: the only portable com Peter IBM offers ways. Fifty five pounds in costs more than ten thousand dollars since low works on small IBM products. Carry is brought him here to present options, low began. My understanding is that IBM needs to get into personal computers very quickly, and you know, IBM, doesn't exactly move fast when it comes to developing new products that accompanies just too complex to turn on a diet. Bale. Of course, I understand that, but we still to do something, and we have to do it fast. Well, I have an idea. You know that the Atari that the big videogame maker two years ago it created a home computer division, it bills small, cheap computers, one in four IBM is to buy Atari the executives glass to each other in disbelief. Atari is gonzo shoe from the hip company best

Four arcade video games like pong in space invaders appreciate the thinking bill, but You can imagine it. Any better ideas, low steals himself, then dives in well. Speaking for our team in Boca Return, we think we know what we would like to do. If we were going to proceed with our own products, We can do it in a year a year. How How are you going to do that inside IBM? We have to throw out thing about the way IBM works the executives, get low, as if he's out of his mind, IBM has to build it personal computer. using readily available components can buy from suppliers, and essentially we assemble the final product now to be secularism, the room. This is radical. Stuff you see IBM build nearly every piece in part for everyone. of its machines Carry says what every one in the room is thinking low,

What's that mean that any other company could, by the same components from the same suppliers and put together a copy of our computer, will fail ass, it does, but this is the new world moves too asked for us to do this. The old fashioned way as carry considers this low pushes on He knows the details are only going to get harder for these executives to swallow, not will. I began by Non IBM part. The machine. this will also run on Non IBM software and personal computer. can't be sold the same ways mainframes with teams. IBM salespeople descending on a corporate customer regular people by pieces and so they want to buy a pc in a store and take it home or to the office. That means the emphases need to be sold in stores by sale staff, who are not IBM employees MO

waits for the executive to get their heads around these ideas, and then he died. the bombshell agenda, one, the thing I should tell you. As soon as we introduce our machine. We have to the design specifications public. What just? The design given away. Yes, that way, programmers around the world can write software that runs on IBM Pc, making it much more useful. I be can't imagine and produce all the different kinds of applications that might run on a personal computer but publishing the specks we can unleash. a whole ecosystem of programmers to do that. Work for us there, we can sell the software to pc owners and made good money to carry thanks for a minute. He's certain IBM must compete in pcs. Here and heard any better ideas for how to do it. The oven.

none. Should this century old company rides on what he does next he looks hard at low. come back into weeks in and tell me what you need we'll get it for you. On August, twenty first nineteen eighty IBM officially gives low the green light to go flat out to develop a pc. Its code name project chess, Low flies back to Broker Raton elated with his success. He know, he has to put a creative thinker in charge of this project. A very Non IBM kind of IBM and he knows just to go to. Capital. One knows life doesn't alert you about your credit card. That's why they created Ino the capital, one assistant that looks out for surprise credit card charges like over tipping duplicate charges or potential odd, been sends an alert to your phone and helps if you need to fix them.

Other way, capital one is watching out for your money when you're, not capital, one. What's in your wallet, capital one dot com for detailed this year has been a doozy. You couldn't possibly anticipated all the curve balls that had been thrown your way and if you are a business owner trying to navigate our collective new, normal you're gonna wanna, hear about I auditor, by safety culture with I auditor, by safety culture getting safely back to MR uncovered, nineteen is a snap I oughta, There is a simple safety check list and inspection at that. Anyone can learn within minutes and it'll help. Keep your co worker and customers safe with it and make sure you're following CDC guidelines, complete covered nineteen safety inspections maintain an audit trail and a whole lot more. There are hundreds of, loaded checklists available to download for free visit safety, culture, dot com to download your free checklist. Today,

as soon as low gets to the office, he find the man he's. Looking for his name is Don estrogen testing is forty three years old and an exuberant lie. Key sandy haired engineer, who seems to effortlessly get well to follow him. He has certain rockstar air about import rebel part glamour after getting his elect go engineering degree from the University of Florida de Joint IBM of the nineteen sixties. on the NASA computers that would help land man on the moon Logan. in his new assignment dad. The guys in our mark said yes to our plan to build a pc using off the shelf parts and software, like you delete it. That's better spent I'm giving a team of twelve engineers and Jack SAM's can help you cut deals with software suppliers. He's really good at that, and since no one here knows anything about personal computers, this should be really interesting immediately, Esther

causes new team together in a conference room he lays out there, forgot challenge. They need have a pc ready for the market in a year and they have to develop in her way. That's never been done and IBM or for that matter by anyone in the computer business he tells them that their biggest chow I will be that they have to think entirely different about computer design. Computer is well personal. It's not a bit This machine we have to about how a non specialist can make quick use of our pc. How people react, to a personal computer. Emotionally is all more important than what they actually do it. The engineers look at Maastricht. The way a dog looks when it listens to its owner, talk with their heads cock, slightly as they hear words that just don't make any sense. Asteroids thanks yeah. It might take these IBM there's a little while to get the idea, so it helped the team, understand pcs

it's the engineers to quickly assemble a prototype, pc and then eggs them do their work on those machines. Rich and his team quickly make two key decisions. First, they call him into a silicon valley. Computer chip maker into a pioneer in making complex microprocessors they carry out Paul. computers functions at the time it was estimated that the number of transistors on these microprocessors could double every eighteen months. Constant making computers more powerful using Intel chips means they'll. Do the work of constantly upgrading microprocessors. This will speed up the time it will take to get the pc to market without any work from IBM and second, The team realises it needs an operating system that can run on the Intel chip and become a platform for soft the applications like spreadsheets inward processing, Lois

Jack SAM's to find the operating system. Supplier, SAM's, eyes to California to try to licence the most popular operating system which, at the time is made by penny called Digital research, but that meeting goes arrived so SAM makes his way to Seattle. In talks too, ash young harbour dropout named bill gates promises he can provide an operating system that works better than digital researchers. Bit by bit. The IBM pc comes together memory chips, floppy disk drives greens, keyboards and other parts flow in from all over the world. The only thing that's IBM about the IBM pc. The final assembly and brand stamped on the outer casing is August, twelve. Ninety,

Anyone just about a year after the pc project got approval from CEO carry. The team has made its deadline. We're at a press conference in the expansive. Aren't ECHO ball room of the Waldorf Historiae Grand New York Hotel with its ornate chandelier, has hosted hundreds of major IBM events over the decades. Estrogen takes the stage gets the honors to unveil a machine. That's been given the very on sexy name of the IBM. Fifty one fifty nobody outside IBM will ever call it that reporters at the press conference already calling a machine. The IBM, PC, onstage Astrid, describes the new private this is a many compact computer at a mini price, with IBM Engineering under the hood. The basic unit costs one thousand five hundred and sixty five dollars, for a little machine like this. It has an amazing amount of memory. Forty killer,

I have read only memory ants, steam kilobytes of user memory by the way today, this less than the size of a single word document file, your small phone has over a million times more memory, but at the time this was impressive If you need to save documents or spreadsheets, you can save them to floppy discs that you can insert in the two disk drive slot two men, and so joint estrogen stage. They are from seers and computer Land The two retail stores that will carry the IBM pc it'll be the first I'm any retail store has ever carried any IBM product. the IBM pc. His egg, sensations while dozens of other companies had beaten IBM into the personal computer markets, not have the cloud and spectre ability, IBM, has person

computers had been hobbyist machines. Suddenly corporations are taking them seriously in two years: IBM overtakes apple as the best selling personal computer. Eighteen, eighty five, the pc division, employs ten thousand people. Ten brings in full point five billion dollars and revenue. The ivy pc, certainly seems like a triumph, but it turns out the short term victory. Setting up a bigger failure because Ibm can't see is how that Mary Triumph sets up a dynamic that will now really cause IBM to collapse? The brilliant of the planned by low interest rates to git to market quickly by using entail chips and Microsoft. Breeding systems means IBM, is seeding control of the technology to those other companies. Those two companies are free to sell their ships and software to any other company and if arrive,

company, buys, entails trips and Microsoft's operating system. That company can make a club. of an IBM pc make a machine that works exactly like and IBM pc. In fact, they can charge less and that exactly what happened? soon IBM faces a swarm of competitors like Compaq and Gateway. Two thousand prices of pcs taken nosedive Meanwhile, the success of the pc starts into sales of mainframes, which are still the bulk of IBM profit as IBM sales slow overall, the company finds it hard to react. Defined tactic. Success in mainframes that started with the system. Three sixty in the nineteen sixties had made, IBM, fat and happy now, too many employees in way too much bureaucracy. It can't reinvent itself

in eighteen, ninety one IBM reports its first loss ever and it's a whopper The company loses two point: eight billion dollars for the year. The board decides that only way to save the company from itself is, bring in a c o from outside the IBM culture that Thomas Watson, senior and junior had created. It is right spring day in nineteen. Ninety three, the Tony is part of Greenwich Connecticut, We're sprawling houses by the water bump up against Marina, packed with sailboat swaying with the waves Louis Kirshner is short Paulding ruggedly built man dressed in a beautifully tailored suit. He will from his house to a black luxury car waiting in his driveway to taken to work in New York City thirty miles to the south is just starting as the new CEO of IBM

For this he was see over food in tobacco company r, J R, Nabiscos IBM Board recruited him too turn the company around Kirshner when's the back door, the car and slides. Then he jumped back. Startled to see someone already sitting on the other side of the seat. He does a double take and then he realizes his passenger is Thomas Watson, Junior and if I ride to work with you in where the otter twists and business history, sooner lives next door to watch it. It's been. fifteen years since Watchin retired as IBM Ceo, a job is father here, for forty years before that girl Watson dont know it. Very well and their proximity has nothing to do with gerstein are getting the IBM. Job Watson watched a rat Lou these people dont know what the hell they are doing. I want you to tear the place up and move quickly. We took bolder

back. In my day and to tell you what to do, but I will tell you that it better be bold. Now, nor has a sense of humour and a preternatural com about him. He said the angry watching and smiled. You know I'm sitting here thinking this is, really special moment. Watson, care but laugh, but on the right, the to feel that something important has happened Kirshner senses that Watson is handing in the keys to the Watson culture there, made IBM great, but now it's time for changed that culture personal arrives at the headquarters. He into the IBM boardroom, for his top executives are waiting for him anxiously they stared at him to be told that they are all fired or that IBM, will be broken up and sold or some other horror. But good No, it doesn't have anything like that in mind,

under tremendous pressure from the media from Wall Street. We're not go to be given a lot of time. The first thing we have to do is shore up the balance sheet and we are going to have lay offs, there's a gasp in the room through its aid here. History. To this point I be has never laid off workers now even during the great depression no. There are a lot of things that this company that have become sacred, some of things are sacred because they are powerful parts of IBM culture and we're going to mess with those, but so of those things are sacred for the wrong reasons and I'm, going to hesitate to kick those out the door, our job, is to find IBM core, protected and change Everything else the meeting is exhausting it's a tiny taste of how much Gardiner is going to have to do to stabilize IBM and then help company rediscover its own greatness. After all,

long day of more such meetings. Kirshner gets back in the are in the driver, takes him to the airport, IBM corporate jet waiting to take Kirshner two, yet more meetings this time with IBM customers. He expects the customers to be em up over IBM failings over the past decade over time Kirshner, would end IBM culture of tediously, studying things before acting salary. would be tied to fast teamwork and results. He will keep the company alive in those days he could not have imagined IBM would be overtaken by the tiny start of Microsoft. Didn't see, gathering cloud computing competition on the horizon or that both of these company would one day be challenged by apple, no The commissioner was not thinking about that view were, but before all that happens, he would go on to successfully guide IBM through a painful transition. Starting with

changing the corporate culture. Finally, on the jet Kirshner settles into one of the leather captains. Chairs and relaxes he's the only one on board. He called The stewardess over to him no. After a day like I've had, I could really use a drink or we have on board well sir. There is no alcohol and IBM airplanes is prohibited to serve alcohol way back in IBM past the companies pay We are Thomas Watson Senior, did not drink and disapproved of drinking so for eighty years alcohol was banned from official IBM life. Kirshner thinks. That is clearly, one of those sacred things that needs to be kicked out: the door Can you think of any one who could change that rule will perhaps you, Sir, it's change did immediately and in that moment Louis Kirshner turns

to be exactly what IBM needs. Hope you enjoy this episode of business wars. That concludes our six episode story. First, computer. Please subscribe apple, pod, gas, stitched, NPR, wonder where every year, listening to this part cast right now to do that, all you have to do is go to the episode notes in just Taffir swipe over the cover and please supporter, show by supporting our sponsors. Won't you! If you, like You heard we love for you to give us a five star rating and the wealth tell your friends how to subscribe. We love hearing from less. You can share your thoughts about his show or suggest some future business words you'd like to hear and fill out Lord Survey, add wondering dot com, slash serving I'm home Brown Kevin mainly with the serious easy author of the maverick and his machine. Thomas since senior and the making of IBM and I doubt it is unscathed.

how a lie in the new generation of upstarts or creating the economy of the future. Karen Low is our senior producer and editor sound, designed by Bay Area sound hours Executive producer is marshal the way and it was clear. by or non Lopez or wondering, hey listeners, its Brooks a friend a host of even the rich, and I wanted to tell you about my brand new podcast love the wondering app like a lot of people. I love listening to podcast when I'm in the car. I recently took a road trip to visit my parents and I was able to completely bench bungle Bongo on the way I listened with laundry plus, which means I was able to listen early and ad free. Also how funny as when you coming you guys she's my favorite. The best part is you can find out why I love it so much all you have to do is download the wondering up right now and join wondering plus for more perks, wondering feel the story,