Meteorologist, oceanographer, Python solvem probler, experimenter, Raspberry Pi tinkerer, geek dad, manager, space enthusiast, ham radio lover, science columnist, ADHDer, synthetic intellect curious, linux admin cosplayer.

Thomas John Watson Jr.

Born: January 14, 1914, Dayton, Ohio Died: December 31, 1993, Greenwich, Connecticut (aged 79; complications following a stroke)

Overview

Thomas J. Watson Jr. was the second president and first CEO of IBM, the man who transformed the company from a punch-card tabulator business into the dominant force in global computing. His authorization of the Defense Calculator project in January 1951 – internally IBM’s most expensive single project to that point – was the decisive act that produced the IBM 701 and set IBM on the trajectory that gave it 85 percent of the U.S. computer market by 1960. He is the person who authorized the bet, sold the machine, and recorded its early history in his 1990 autobiography Father, Son & Co.

Early Life and Education

Watson Jr. was born in Dayton, Ohio, while his father, Thomas J. Watson Sr., was still building the business that would become IBM. He grew up within the IBM culture – company picnics, THINK slogans, dark suits, the quasi-religious atmosphere of his father’s sales force.

He was, by his own account in Father, Son & Co., a poor student and deeply overshadowed by his father. He attended the Hun School of Princeton before enrolling at Brown University in Providence, Rhode Island, from which he graduated in 1937.

After Brown he joined IBM as a junior salesman, following his father into the company, though the relationship between them was famously difficult.

World War II Service

Watson Jr. enlisted in the U.S. Army Air Forces and served as a pilot. He eventually rose to the rank of Lieutenant Colonel and was tasked with flying military commanders, including ferrying General Follet Bradley (director of lend-lease programs to the Soviet Union) to Moscow on several occasions. On these flights Watson Jr. learned Russian, which later served him when he became U.S. Ambassador to the Soviet Union.

His wartime service was a formative experience. He later described it as the period when he discovered what he was capable of independent of his father’s shadow.

IBM Career

Return to IBM and the Electronic Moment (1946–1951)

Watson Jr. returned to IBM after the war and was elected a vice president in 1949. He saw, with unusual clarity for someone inside the IBM culture of the late 1940s, that electronic stored-program computing was going to replace the punch-card tabulator as the foundation of data processing – and that IBM was dangerously behind.

His father, Watson Sr., had responded to the ENIAC’s 1944 unveiling with the Selective Sequence Electronic Calculator (SSEC) of 1948 – a hybrid machine installed as a publicity display at IBM’s Madison Avenue headquarters, not a product. Watson Sr. had also blocked IBM from adopting magnetic tape for years, on the grounds that customers trusted punch cards. Watson Jr. wrote later: “My father initially thought the electronic computer would have no impact on the way IBM did business, because to him punch-card machines and giant computers belonged in totally separate realms.”

Authorization of the Defense Calculator (January 1951)

The Korean War began in June 1950. Washington told IBM it wanted electronic computers for aircraft design, nuclear development, and military manufacturing – not tabulators. Watson Jr. dispatched James Birkenstock (head of IBM’s Future Demands department) and Cuthbert Hurd (director of the Applied Science Division) to tour 22 defense and research installations and determine what was needed.

Birkenstock and Hurd returned with a recommendation: build a general-purpose scientific computer, fund it internally from IBM capital, and keep the patents. The proposed project cost was three million dollars per year – ten times the cost of the SSEC, the most expensive internal project IBM had ever contemplated.

Watson Jr. signed off in January 1951. The project’s internal name – Defense Calculator – was deliberate political cover. Wrapping it in the flag made it harder for the punch-card old guard and IBM’s own Product Planning Department (which had told Hurd throughout 1950 that “no computer could ever be marketed at a price of more than $1,000 per month”) to kill it. The Defense Calculator would rent for eight to fifteen times that.

Watson Jr. later described his reasoning as binary:

“We thought in those early days that we either had to win this one or fail as a company – and that’s why I think everybody put such effort into it.”

IBM President (January 1952)

Watson Jr. was elected President of IBM in January 1952, the same month that engineering at the Poughkeepsie factory reached full scale. He was 37 years old.

The Sales Trip and “Five Orders, Eighteen Orders”

Before committing to full production, Watson Jr. took the Defense Calculator – which existed only on paper – on a sales tour in late 1951 and early 1952. He, Hurd, and a small team visited approximately 20 prospective customers: Los Alamos, Lockheed Glendale, Douglas Santa Monica and El Segundo, Convair Fort Worth, Boeing Seattle, North American Aviation, United Aircraft East Hartford, RAND Corporation, General Electric Lockland, Naval Ordnance Test Station at Inyokern, and others.

By March 1951, the engineering team had discovered that the original target rental of $8,000 per month could not cover production cost. The price had to be raised to $15,000 per month – nearly double. Watson Jr. went back to re-qualify customers at the new price.

He expected five firm orders. He came home with eighteen.

Watson Jr. reported the result at IBM’s annual stockholders’ meeting on April 28, 1953:

“IBM had developed a paper plan for such a machine and took this paper plan across the country to some 20 concerns that we thought could use such a machine. As a result of our trip, on which we expected to get orders for five machines, we came home with orders for 18.”

He later described the moment as “total amazement.” In Father, Son & Co. he wrote: “Customers wanted computers so badly that we could double the price and still not drive people away.”

This statement is the real origin of one of computing’s most famous misquotations. The line “I think there is a world market for maybe five computers,” attributed for decades to Thomas Watson Sr., has never been found in any contemporary source. It almost certainly derives from Watson Jr.’s 1953 remark, garbled and back-projected onto his father. Wikipedia’s IBM 701 article now makes the correction explicit.

A 19th order, from DuPont Central Research, was added later. The final customer list included 15 military contractors, weapons labs, and Department of Defense agencies; only four commercial customers – GE, GM, DuPont, and IBM itself.

IBM CEO (1956–1971)

In 1956, when Watson Sr. retired at age 82, Watson Jr. succeeded him as IBM’s first Chief Executive Officer. Under his leadership IBM grew from approximately $200 million per year in revenue in 1950 to over $7 billion by 1970. By 1960, IBM controlled roughly 85 percent of the U.S. computer market. The System/360 family (announced 1964), conceived and authorized on Watson Jr.’s watch, remains one of the most consequential product decisions in business history.

He stepped down as chairman in 1971.

Ambassador to the Soviet Union (1979–1981)

President Jimmy Carter appointed Watson Jr. the 16th United States Ambassador to the Soviet Union in 1979. He served through 1981. His Russian, acquired on WWII ferry flights, served him in the role. He was principal benefactor of the Watson Institute for International Studies at Brown University.

Autobiography

Father, Son & Co.: My Life at IBM and Beyond (1990, with Peter Petre) is Watson Jr.’s account of his relationship with his father and with IBM. It is the primary source for many details of the Defense Calculator project, the sales trip, and the early 701 period. The book is unusually candid about Watson Jr.’s own self-doubt and the difficulty of succeeding a domineering founder.

Connections to Others

  • Thomas Watson Sr. – his father and predecessor; their relationship was famously fraught but professionally consequential
  • Cuthbert Hurd – Hurd was Watson Jr.’s key technical lieutenant for the Defense Calculator; Hurd directed the Applied Science Division and co-conducted the sales tour
  • James Birkenstock – head of Future Demands; co-conducted the 22-installation tour that produced the Defense Calculator recommendation
  • Nathaniel Rochester / Jerrier Haddad – the engineering architects of the 701 whom Watson Jr. backed against the sceptics
  • J. Robert Oppenheimer – gave the famous “tribute to the mind’s high splendor” speech at the April 7, 1953 IBM 701 dedication, which Watson Jr. organized at IBM headquarters

Sources