How IBM Lost the PC to Compaq, Intel & Microsoft

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[bretthagey]

We were considering buying a pair of 386 PS2's from IBM back then. We wound up getting clones for half the price. They stood no chance the way that market mutated and evolved so rapidly.

[catsspat]

Lesson 1: Backward Compatibility.
Lesson 2: Backward Compatibility.
Lesson 3: Backward Compatibility.

[bearcb]

Great, accurate video. I worked at IBM as a chip designer at the time, and was angry about how hard it was to design a MicroChannel interface, even with the technology available at the company. It was probably designed like that on purpose, to raise the bar for small newcomers. As the video correctly stated, MCA was faster, but there was no demand for that speed back then. MCA had a great advantage that could be a selling point, but wasn't milked enough: it was truly plug and play. At the time adding a new ISA expansion card could be a nightmare, with interrupt and DMA clashes between boards, having to flip DIP switches until they were gone.

[thetype]

A $5, 000 computer in 1984 would cost $13, 000 today!!! People don't realize how special and rare computers were all through the 80's, you were lucky if the company you worked at could afford multiple computers!

[JohnDlugosz]

The big problem with OS/2 on the '286 wasn't that it was getting "too big", but rather DOS compatibility.
The '286 was designed to boot in real mode and move to "protect" mode and never look back. There's no instruction to move back to real mode! There is _nothing_ like a virtual real mode that still keeps the protected-mode OS in control.
So, we had the "penalty box". You could have exactly 1 DOS session, which could not be windowed and, IIRC, stopped all multi-tasking -- the entire OS/2 system was pushed aside while it ran DOS in (actual) real mode. Oh, and that DOS-in-OS/2 could not see the long file names at all.
In order to return to real mode, the CPU was reset. It used the keyboard's 8042 microcontroller to toggle the reset line. The BIOS noticed it was a soft reset in this context and skipped the POST etc. and assumed everything was already loaded into memory and just started at a standard address.

[timthompson]

Great nostalgia for me. In 1984 I was in the USMC and part of ZDS’s contract to sell clones to the military included offering them to all military personnel at 50% off. I borrowed $2500 ($7500 in today’s money) from my mother to get one. It had two 5.25” floppies, no hard drive, and CGA graphics. You could read the file names as they slowly scrolled by on a DIR command. Demand was so high that I didn’t receive it until a month after I left the corps. As an electronics technician, after leaving the military, most companies I worked for didn’t even have a PC in the company at the time, so I had a great head start. I taught myself assembly and FORTRAN and wrote programs to help at work. It wasn’t until 1992 that I started my first job where I actually had a computer on my desk at work. It was a lot of fun over the years riding the wave of upgrades as technology improved. Great video!

[williammitchem]

There I was 1979 at the beginning of the computer revolution. I sold 6 TRS-80s in one month . October, I believe. I worked for Radio Shack. Those were the days heady...

[Miss__Understands]

IBMs first mistake was assuming they'd only sell 25, 000 PCs. The only thing they made after that was more mistakes. And every GOD dmmn one was due to greed and arrogance.

[Markimark]

IBM is to PCs, as Kodak is to digital cameras! Both companies in the 1980s were innovators in breakthrough technology, but their management underestimated competitors and refused to listen to consumer demands! Although Compaq has been absorbed by HP, while Microsoft is bigger than ever, because they were able to adapt and diversify their business!

[iraqigeek]

It's interesting how IBM in It's attempt to milk the PC followed the same strategy as AT&T did with UNIX. You'd think senior management at IBM would at least be aware of how that attempt played out.

[coraltown]

I loved working in the industry back then. All things were possible and all things were exciting; we were like techno kids in a candy store.

[MarkoCloud]

I was a tech for IBM in the early 2000s and even then with the PCI bus THE standard, windows being shipped on 99% of IBM's own PCs, internally, the "superiority of microchanel and os/2 hype was still being hammered in to us hard. They made a mistake, they knew it, they didn't budge, and literally held the wheel while they drove the IBM PC business into the ground. Also, there was an article on Vice a few years ago about OS/2' still running on the NYC subway system and how it's basically preventing them from being able to add new payment methods that were popping up. Meaning they took all the customers they could along for the freefall ride.

[spyderlogan]

The sheer hubris and arrogance of IBM and the proprietary Micro-Channel Bus. I remember very well those early '80's. I was working for Data General Corporation whose minicomputers were still selling well then, but by the mid '90's that was to end in a sad, quiet collapse. Wang/Prime/DEC. Poof. Gone.

[Cyco_Nix]

IBM has always been too hard-headed for their own good. Amazing engineers, but wanted to control everything for both the industry and the end user.

[franciscovarela]

I bought a Columbia must be 40 years ago now. Great machine at the time, upgraded it with a 5MB HDD eventually. The sound produced when my programs accessed the hard disk was very satisfying.
I worked for a shop writing BASIC programs and remember when we got our first Compaq portable. Very impressive, I was wowed with the graphics capability and the jazzy ray trace of the Compaq logo when the machine booted.

[joesterling]

We called it "the BS/2" back in its day. IBM was obviously trying to make everything else obsolete, and have nothing that already existed work with it. They even made the PS/2 computer cases too narrow for the then-ubiquitous 5.25" floppies. 3.5" or bust. Of course, startups like the company I worked for at the time would have none of that.

[tomholroyd]

From the programmer's perspective, the 386 was the first one that actually worked. There was no going back

[chekim]

In those days, startup investment was counted in million with single-digit or fraction of it. Now it's always triple-digits or otherwise not worthy of being reported in the news. Some AI startups were fed several billions without any prospect of a profit within 5 years. Go figure!

[michaelmoorrees]

This is part of the personal computer lore presented in the book Accidental Empires by Robert Cringley, and the subsequent documentary Triumph of the Nerds, back in the early 1990s. Yes, IBM's big mistake, was hesitating to go to the 386.

Where I worked, at the time, we had IBM Technical Reference Manual. Used it mostly for referencing the hardware, so to make plug in cards. The BIOS source listing was an appendix in that manual.

29:08 - Love that, that picture also has the older 8" Floppy. That's why it got its name, because the 8" was really floppy !

[filanfyretracker]

And the 3.5" floppy stays with us today as the save icon. Which does make one wonder, How long will it be the save icon. I have not had a PC with an FDD in ages, I do remember having one with both 5.25 and 3.5.