ThinkPad: A Different Shade of Blue 0672317567

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ThinkPad \ Different Shade of B )U11U1I1£

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ThinkPad A

Different

Shade of Blue

i i Deborah A. Dell J.

Gerry Purdy, Ph.D.

sAms A

Division of Macmillan

Computer Publishing

201 West 103rd Street, Indianapolis, Indiana 46290

Associate Publisher

ThinkPad® Different Shade of Blue

A

Bradley L. Jones

Acquisitions Editor Chris

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2000 by Sams Publishing No part of this book shall

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Indexer International Standard

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of IBM: AIX*, Aptiva*, ARTour, AT*, FlexiMOVE,

HelpCenter*, IBM Global Network, IBM*, Micro Channel*, MQSeries, Mwave*, NetFinity*, OfficeVision*, Operating System/2*, OS/2*, OS/400*, PC/XT, Personal Computer AT*, Personal Computer XT, Plug'N'Go*, Poet*, PowerPC*, PROFS*, PS/Note, PS/ValuePoint*, PS/1*, PS/2*,

S/370, S/390*,

System/370, System/38, System/390*,

Selectric*, SolutionPac*,

System/88*,

RISC System/6000*,

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Proven,

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Workplace

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Shell*,

Warning and Disclaimer Every

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liability

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authors and the publisher

nor responsibility to any person or entity

with respect to any loss or damages arising from the information contained in this book.

Copy Writer Eric Borgert

Layout Technicians Darin Crone Jeannette

McKay

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Jr.

1

Contents Foreword

v

Preface

Part

The

I

xvi

1980s:

A Decade

of Learning

1

The Defining Moment

3

1

The IBM PC: Teaching

2

Compaq: Pie House Luggables

3

The IBM PC Company: From

the Elephant to

Dance 19

a

Small Acorn

4 IBM's Losing Streak

Part

5

Zenith and

6

IBM

n

NEC:

37

Early Portable Innovators

Gets the Message

1990-1992:

of Change

Notebook Computer

Birth of the

8

The ThinkPad

9

IBM

Before ThinkPad

Gets Serious

Bruce

12

Building

13

IBM ThinkPad

Claflin: Mobile's a

Change Agent

Winning Team

Unveiling

a

700C: In the

Game

Masterpiece

16 Influencing the Influencers

Part

75 91

129

139 153

14 Developing the Brand 15

73

119

10 Jim Bartlett: Improving the Bench 1

49 55

The Time

7

29

ni 1993-1995: The Brand Emerges

163

189 201 211

225

17

Errors in Judgment

227

18

Building the Brand

243

19 Entrenching Success

257

20 In Transition

269

21 Joe Formichelli: Back to Basics

279

A Hit That Missed

22

Butterfly:

23

Per Larsen: Consummate Marketeer

24 Paying for the Journey

307 331

343

Contents

iv

25 IBM:

26

I've

Been Moved (to Raleigh)

The Employees: ThinkPad's Backbone

Part IV: 1996 and Beyond:

The Brand Reigns

353

369

379

27 Steve Ward: Operations Master

381

28 ThinkPad After ThinkPad

401

29

The IBM ThinkPad

30

The Journey Continues

431

The

449

iSeries

Authors' Final Insights

421

A Where Are They Now?

467

B ThinkPad Timeline

475

C PC Timeline

481

References

493

Index

497

Foreword The Seven

Qualities of Enduring Brands by

It

a

brings

me

Thomas J. Kosnik

great pleasure to write the foreword to a

product family

—and

book about

—that has changed my

company

a

life:

the

IBM ThinkPad family of notebook computers. I don't often add my "seal of approval" to books that other people write. I turn most requests

down

because, although

buy more than one hundred

I

recommend. In

business books a year, I'm picky about the books I fact, I

think of myself as the people's critic of the business books

Roger Ebert and

category, similar to the role that Siskel have played for the

(the late)

movie industry since 1982.

—which available edu/faculty/kosnik.html — has become

List of Best Books

is

at

Gene

Kosnik's Short

http://ieem.stanford.

a useful reference for the

students, alumni, business executives,

network who read only books that

I

The book the

few books

read makes the that

a year.

Only one

twenty

list.

brand

anyone who

is

on

my

"Highly Recommended"

faces the challenges of building a

team, a global business, and an enduring brand.

book

if

work

requires that

you think of yourself

as a

—

story about the people,

great

your daily

in cars, taxicabs,

rooms, or other people's

should road warriors read this book? Because

if

list.

mobile

It is also a

"road warrior"

you spend considerable time

airplanes, airports, hotel

inside

in

my

Gerry Purdy and Debi Dell have written about

IBM ThinkPad

It is for

a

and entrepreneurs in

it

offices.

Why

describes the

technologies, and competitive

dynamics that have shaped the world in which you work and the portable computing products that you use. If you

own an IBM

ThinkPad, you can learn the inside story about how the brand you trust

came

to be. If

you swear by

a

competing mobile computer

from Dell, Compaq, Toshiba, HP, Apple, and so on, then Sun

Foreword

Tsu's timeless advice to

read this book ing our

lives.

if you

You should

applies.

not

hate computers and believe that they are ruin-

The IBM ThinkPad

riors for other as I did,

know your enemy

story was written

road warriors. If you enjoy reading

you, too, will give

a

it

it

by road war-

much

half as

"thumbs up."

As you read

this

book, think back through the years and retrace

your own path

as a

road warrior. Try to remember what work you

were doing, the mobile computing and communications

tools

you

were using, and the products and companies that you learned love and hate in your

remember your own

own

on the road. Taking time

career

you

story will give

to to

a personal context that

makes the story that Gerry and Debi have created about the

ThinkPad more

relevant,

more

useful,

My own ThinkPad journey started I

and more enjoyable for you. in the spring of 1996,

began two years of cross-country commuting.

ment

my

for

mobile machine:

It

had one require-

had to be the

lightest possible

computer that provided the functionality of its

IBM ThinkPad

light weight, the

from Mobile Insights weight with

light

age.

By

full functionality,

today's standards,

when compared

300MHz

processor,

ThinkPad

that

Over those two marks.

emerged

American Express

the Mobility

bundled in

combined

a sleek, black

to the

ThinkPad 600, with

still

6GB

its

Pentium

The

looks great next to the

IBM

machine.

ThinkPad 560 became the machine

my Internet browser,

with

all

of its book-

my mission-critical mobile machine. Like the card in my wallet, I never left home without

as

it.

on many

a late night at

work, the ThinkPad's brighter, crisper screen stood out it

with

II

of storage.

of memory, and

time, in side-by-side comparisons

compared

pack-

Pentium 166 processor, 16 megabytes

now my primary mobile

and

it

Award

gigabytes (GB) of storage are slightly

years, the

my e-mail

Over

its

96MB

is

that kept It

2

560's elegant design

ThinkPad 600

my choice in the IBM-

two successive years because

for

(MB) of memory, and archaic

560 was

Because of

a desktop.

The ThinkPad 560 won

compatible world.

when

I

my Mac PowerBook

when

I

and the two Macintosh

Forword

desktop systems easier

my

on

I

vii

was using. Not only was the ThinkPad much

back than the PowerBook,

than any computer

I

was

it

on

easier

my

eyes

had ever owned. Those two benefits turned

me from a satisfied, sophisticated customer who liked many mobile brands to a die-hard loyalist for the

IBM ThinkPad.

When my bi-coastal commute ended, I returned to Stanford full time. I began planning for a

with two locales

known

new

course that would link Stanford

for innovative use of

computing and com-

my

munications technology: Sweden and Singapore. In 1998,

ThinkPad 560

me from

traveled with

the Stanford School of

(KTH) in we launched

Engineering to the Royal Institute of Technology

Sweden and the National University of Singapore the

first

as

generation of a course called Global Project Coordination

(GPC). In

GPC,

students and faculty

on three continents work on

projects for real companies, with real funding.

who want to learn more

about

how to use

Internet technologies to coordinate the

now part of a we

are students

cutting-edge mobile and

work of global teams.

I

am

six-person faculty team from these three universities;

design and deliver courses to students in Sweden, Silicon

Valley,

On

any Wednesday night,

p.m. and go to the

GPC class with a group

and Singapore simultaneously.

drop by Stanford

at

1 1

of Stanford night owls, Swedish early birds in

These

real

(it's

8 a.m., Thursday,

Sweden), and Singaporeans just after teatime

Singapore).

We have lively three-way,

(it's

3

p.m. in

interactive class discussions

that literally span the globe.

These global mobile students

are building skills to be future

business leaders through hands-on distance learning. Mobile

com-

—combined with low-cost, three-way interactive video conferencing over the Internet— has made possible 1999 what puting

tele-

in

was technologically not the past. effort, as

I

know

IBM

feasible

that the

and economically not affordable in

IBM ThinkPad

family will be part of this

continues the great innovation, service, value, and

cool industrial design that the brand has

come

to represent.

These

Foreword

viii

qualities

most

have resulted in the

IBM ThinkPad becoming one

successful brands in portable computing.

These

of the

qualities are

included in the Seven Qualities of Enduring Brands, which

have

I

developed and documented. I

developed the Seven Qualities of Enduring Brands from

research and consultations with numerous global high-tech entrepreneurs.

I

wanted to provide the

own companies.

starting their

learn

what

basics to assist

I also

wanted

young people

to help engineers

takes to develop a successful business

it

technology. Thus,

I

beyond the

teach a course titled Global Entrepreneurial

complement

this

academic endeavor with an active consulting practice in the

real

Marketing

Stanford School of Engineering.

at

world. As a consultant,

I

I

help emerging companies with the

cult issues of building successful enterprises. In

and

my

consulting engagements,

Enduring Brands. These

A growing market

•

Innovative technologies

•

World-class products

•

Profound leadership

•

•

I

both

my

classes

Seven Qualities of

A trustworthy brand A balanced business A global learning network

wish that

I

could just hand this

sulting clients, but ers

offer the

qualities are defined as follows:

•

•

I

diffi-

working

in

qualities that

it's

teams at

makes

not

list

to

my

students and con-

as easy as it sounds. In fact,

all levels

it is

how

lead-

of an organization achieve these seven

the difference.

The IBM ThinkPad

achieved excellence in every one of these

seven qualities, through several generations of leaders and support a successful global business at a

time

teams. Moreover,

it

when ThinkPad's

parent company, IBM, was going through one of

launched

the most difficult and wrenching transformations undertaken by

Foreword

ix

The tenacity, resourcefulness, and entrepreneurial spirit of the many people who contributed to the ThinkPad story is a lesson for any of us who think it is not possible to be an entrepreneur when buried in the bowels of a large, any global company in

established

company

history.

—especially

one that must downsize and

restructure to survive.

A Growing Market The market

for portable

computers

is

growing

and the

rapidly,

IBM ThinkPad has "crossed the chasm," as my colleague Geoffrey Moore would say. IBM sputtered with many false starts in 1

ThinkPad came on the scene

portable computing before the late 1992. But, the

IBM ThinkPad

portable computing market in general and the

in particular are

now

part of portables being pur-

chased and used everywhere. Every indicator

—shows

and market share

no longer relegated

It is

a

—unit

sales,

revenue,

growing opportunity. ThinkPads are

to the business environment.

now buying ThinkPad ThinkPads.

in

My students are

and many faculty colleagues want

iSeries,

the premier brand in the growing market of

portables.

Innovative Technologies To have

a successful

brand, one or

more

innovative technologies

are integral to the product offering. In the case of the it

was

a

combination of innovations. Back in 1992,

ThinkPad,

IBM

was the

only portable manufacturer in the world to deliver a 10.4-inch color display.

It

was the only company with

pointing device in the keyboard. black and futuristic in its

style.

From

The

a little

red eraser

industrial design

was

jet

the onset, the team continued

innovation with larger, clearer, brighter displays, thin and light

designs, modularity, and ease-of-use functionality.

ThinkPad, innovation top of everyone's

1.

is

a

word

that

is

To

describe

usually at the top or near the

list.

Geoffrey Moore, Crossing the Chasm (1991) and Inside the Tornado (1995).

Foreword

World-Class Products Every marketing book

IBM

excellence.

about the importance of product

talks

did not just build a

little

better portable. It built

a world-class, multi-generation family of portable

computers that

The thin and light design is easier on our backs The product family has consistently delivered one

are easier to use.

and shoulders.

of the best keyboards, which stroke errors, and

make

screens

the

is

easier

on the

fingers, reduces key-

makes writing more fun and

ThinkPad

easier

less

of a chore.

The

on the eyes than those of IBM's

competitors. Lessening eyestrain provides intangible benefits to us as individual users as

damaging our eyes

we

get a

older and don't want to risk

little

for our careers. It also has potential business

benefits to employers of knowledge workers

by reducing the num-

ber of workdays lost because of visits to the eye doctor or sick days taken for job-related

stress. Scientific studies

conducted that verify the benefits

However,

when

my own that my

in

know

pig, I

am

I

I

am

have not yet been

suggesting might be true.

unscientific research, using

writing on

eyes hurt

less

my ThinkPad

and

I

than

am

me

as a

guinea

less stressed

when

I

use

my

out

other

computers.

I'm not product

a

lone voice in the wilderness in praising the ThinkPad

line.

Numerous

industry watchers believe that no one else

has matched IBM's ergonomics and human-computer interface

(how

a

person interacts with the portable). ThinkPads have con-

sistently

been among the best portable products on the market

from 1992

to the present.

IBM

focused on building world-class

products generation after generation, which, in turn, contributed to a successful brand.

Profound Leadership Most high technology companies

that create successful brands and

businesses have a deep bench of leadership talent.

on one great individual

to

show

environment in which people

at

They do

not rely

the way. Rather, they create an

every

level, in

every function, step

Foreword

up

to lead

when

leader runs at

xi

their turn. Like runners in a relay race, each

it is

maximum

effort

when

it

is

and

his or her turn

smoothly hands off the baton to the next runner so that the team overall can win.

These

leaders also cheer

bers during their leg of the race.

They

on the other team mem-

don't motivate their team-

mates in the same way, but their teammates know that each leader is

all

motivated. are

The teammates become more

fired

up because they

on the same team.

In the case of IBM's ThinkPad, the depth, breadth, and diversity

of leadership talent across multiple generations of the product

line are remarkable.

The

first

leader of product development,

Hajime Watabi, was technologically adept and

work for first

laid the

ground-

the generations of product innovation that followed.

The

general manager, Bruce Claflin, exuded charisma, established

a vision for the

market and the business, and made some very

tough decisions to focus attention and accountability for

results.

Following such technological and marketing leadership, Joe Formichelli demonstrated manufacturing

skills

to

correct the

notorious supply problems surrounding ThinkPad. Customers

were able to get ThinkPads when they wanted them, not later. Finally,

Ward brought

Steve

organization, positioning

it

a

year

operational excellence to the

for the stewardship continued

by

Adalio Sanchez. Each leader demonstrated a proficiency necessary to build also

ThinkPad

into a successful business at

IBM. Each

leader

surrounded himself with an extraordinarily talented team,

set

the bar high, and gave people in the organization an opportunity to

make

a difference.

A Trustworthy Brand Building a brand

is

difficult.

Investments in advertising and other

forms of marketing communications

will

not build

a

brand unless

customers trust the brand, based on their experiences with product usage, customer service, and technical support.

Can you

think

Foreword

xii

of

a

brand that you love to hate because of bad

tomer

service,

and so on?

for that brand? If sitting next to a

bunch of

you

What happens when you

are like

B.S.

I

tried that

word of mouth, which can

like,

brand

to

someone

"That advertisement

product and hated

a defective

see advertising

most people, you turn

you and say something

why." Advertising

quality, lousy cus-

it.

Let

me

tell

is

you

will actually stimulate negative

reduce sales because disgruntled cus-

tomers respond to the ad by brand bashing.

Great products are necessary, but not

sufficient,

to build a

brand. Plenty of brands grow slowly because happy customers

have no incentive, and might even have disincentives, to spread the

good word

to other potential customers. Great brand builders use

marketing to

accelerate the velocity ofpositive

hard customers

to

word of mouth from

die-

other potential customers.

Trustworthy brands are also built through the continuous, two-

way communication between

the people in the

who new marketing

skill

of initiating and guiding

customer-company dialogues. Early on, the implemented

a process for

creating

use them. Very few organizations

the products and the people

have mastered the

company

IBM ThinkPad

group

customer dialogue by creating councils

of leading thinkers in the mobile computing industry. By sustaining a dialogue with these most visionary customers year after year,

IBM was

able to keep a finger

on the rapidly changing

rules of the

portable computing marketplace. Trust increased across this cus-

tomer network, evolving into

a

kind of early warning system that

could signal changes in the marketplace that might impact the

ThinkPad brand.

The IBM ThinkPad team

did the three things that are needed

to build a trustworthy brand. First, they used great industrial

design to build quality products with innovative technology.

Second, they accelerated positive word of mouth through their

Foreword

creative marketing tactics. Third,

xiii

through ongoing dialogs with

leading-edge customers, they improved their ability to anticipate latent

customer needs and create products that delighted cus-

tomers through

a series

of pleasant surprises. As a

result,

IBM cre-

ated a position in the minds of the user (and the prospective

customer) that ThinkPad was a brand people can

trust,

admire,

and enjoy.

A Balanced Business What good

is

innovation or a world-class product

translate into a sustainable, profitable business?

hard to run ThinkPad

most challenging Is it just

as a successful business,

times.

What does

it

mean

by

selling products at a profit? as a luxury

What

if

The team worked even during IBM's

What if market share

most products

selling the

does not

to be a great business?

being number one in market share?

leadership was achieved

if it

at a loss? Is it

meant becoming viewed

that

product that most customers could not afford?

Professor Robert Kaplan at Harvard Business School asserts that a business can be successful in the long

ages itself using a balanced scorecard. 2

The

measures of financial performance (such ity),

customer performance (such

as

as share

loyalty), internal processes (such as cycle

term only

if it

man-

firm should monitor

growth and

profitabil-

of market and customer time and quality), and

organizational learning and innovation (such as employee retention

and percent of revenues from new products).

portable business that, by dollars a year

—and

is

a

all

estimates,

is

IBM

has built a

in excess of five billion

very profitable unit within IBM. As you

read the chapters that follow, see whether you can identify the areas of the balanced scorecard

the areas where

2.

it

where

IBM has performed well and

could improve.

Robert Kaplan, The Balanced Scorecard (Boston: Harvard Business School

Press).

Foreword

A Global Learning Network No one individual or team was responsible for the ThinkPad's sucWith each generation of

cess.

the product family, groups of

designers, planners, and engineers

melded into cohesive teams

develop award-winning products.

A

network of industry

encers molded each team's approach to the market.

An

to

influ-

evolving

network of channel partners delivered ThinkPads to successive generations of customers. Legions of sales representatives touted the

ThinkPad

them

benefits while they assisted clients with integrating

into their organizations.

other organizations or

left:

As

IBM

IBM

to build other companies, they

kept in touch with the teammates they tance of the

ThinkPad network

employees moved on to

—

a

left

behind.

The impor-

web of trustworthy relationcompany and

ships that has spanned product generations and

country boundaries deserves additional

—

is

exemplified throughout the story and

comment.

I

have had the opportunity to com-

pare the operation of high-tech business networks in greater

Boston and the Silicon Valley firsthand, from 1980 to the present. Professor Annalee Saxenian has written a great book on that subject, titled

Regional Advantage.* She compares the Silicon Valley to

the Boston area as a hotbed of high-tech innovation and analyzes

why

much more successful as an One of the major differences

the Bay Area has been so

nomic region than Boston.

Saxenian attributes to the success of Silicon Valley

is its

ecothat

vibrant

network of relationships among engineers, entrepreneurs, venture capitalists,

and global companies willing to invest in

Employees

left

startups.

established companies to join startups, partnered

with their former employers, and sometimes came back

new

business

a similar

if their

went out of business. The Boston area did not have

network. Companies operated more as separate

and when employees

left,

they did not phone

home

entities,

to their former

employers.

3.

Annalee Saxenian, Regional Advantage: Culture and Competition in and Route 128 (Cambridge: Harvard University Press, 1994).

Valley

Silicon

Foreword

I

believe that the

IBM ThinkPad

xv

story

is

a great

example of a

variation of the Silicon Valley success story: a global, mobile network collaborating to build a multi-billion dollar business

brand.

Although

this

phenomenon is not well understood,

that the

IBM ThinkPad

futurists

have described

As fewer companies employees put entire careers,

works. If

we

all

brand

is

a living

offer lifetime

dynamic family

network, everyone inside and outside

example of what some

employment, and fewer

one company

tree of the

for

IBM ThinkPad

IBM who has

contributed to

would be represented. Our potential

tinued learning and innovation

narrowly on just the

believe

businesses are thinking of themselves as net-

create a

the brand's success

I

as the virtual corporation.*

their eggs in the basket of

more

and an enduring

is

much

greater than if

for con-

we

focus

IBM employees on the ThinkPad team in any

given year.

Want

to learn

more? The remainder of

this

book

ties all

seven

of these elements together using a narrative style that most readers will find pleasing.

scoop on

You

get a rare chance to read the inside

how one company

followed the Seven Qualities of

Enduring Brands and created one of the most successful global entrepreneurial ventures in high-tech history. Enjoy your journey!

Thomas J. Kosnik Consulting Professor Stanford School of Engineering

[email protected]

4.

William H. Davidow and Michael York: Harper Business, 1992).

(New

S.

Malone, The Virtual Corporation

Preface Many

books have been written on high tech Up:

as Start

explains

A

down the

Valley Adventure,

Silicon

how more

failures.

Books such

by Jerry Kaplan, which

than one hundred million dollars was poured

drain chasing what was supposed to be the sequel to per-

sonal computing: pen computing. Books such as Apple: The Inside Story ofIntrigue, Egomania,

which appropriately for

Apple Computer and

blasts

blowing opportunity

become

and Business Blunders, by James Carlton,

after

a leader in personal

ing to read.

They

opportunity in

its its

management campaign to

computing. These books are interest-

responses such as "I don't believe this,"

elicit

"Ugh," "Yikes!" and "Oh, no." hard to write

It is

Oftentimes,

not nearly

it is

ceeded, so what

book about

a

is

a

high tech success.

as interesting as a disaster.

there to discuss?"

Why?

"They

suc-

We have been taught to learn

from our mistakes, but we can learn equally well from our suc-

The

cesses.

headlines blast away at the failures but seldom cele-

brate the successes. It

when Lowe said

especially Bill

is

also harder to dig

the story deals with

IBM.

up

factual information,

A former IBM executive,

that getting information

from

IBM

used to be

harder than getting information from behind the Iron Curtain. But,

all

of that

is

changing, as you will see from the interviews and

stories within this book.

And,

finally, it is

hardest to put the pieces

someone

else,

on the creation of the

IBM

of a story together so that people will want to

tell

"You've got to read this book."

We

spent years working with

ThinkPad.

I

am

IBM

a leading analyst in

mobile computing and

a

con-

now developing IBM's mobile services business and was a member of the initial ThinkPad marketing team. During the past three years, we kept saying to each other, "We really should write a book on how IBM created the ThinkPad sultant to

IBM; Debi

and then developed

is

a successful business in

mobile computing."

Preface

The story is

fascinating and every bit as enjoyable as any high-tech

failure treatise. Business lessons

well

—

xvii

for one,

how

it

is

can be gleaned from

this story as

possible to create a successful line of

portable computer products and a recognizable brand in a relatively short time.

We ter

is

set

our goal to write

a story

story in their

The

tone

is

unto

own

itself.

a

book

that

The main

fun to read. Each chap-

is

characters

tell

the

ThinkPad

words. Events sometimes seem almost magical.

"up close and personal."

Some

people said unrefined

things along the way, but these reflect the personalities involved

and the

mood of the moment.

People did not always get along, but

they were always focused on the same goal: to build a very successful line of portable computers, the

profitable

ThinkPad brand, and

and successful business within IBM. And they

a

did.

We began discussions about the book at the Mobile Insights '96 IBM had just won

conference at the Arizona Biltmore in Phoenix. the Mobility tors

and

Award

analysts.

had saved quite Little did

months

for best notebook, selected

Debi approached

a bit

me

by twenty- five

edi-

with the idea because she

of information on the early ThinkPad years.

we know

that

it

would take more than eighteen

to get the necessary approvals to begin the project.

signed a partnership agreement contingent on IBM's approval.

developed an outline and submitted

ment team. However,

a

it

to the

key executive did not

We We

ThinkPad managefeel that it

was the

right time for such a book. According to the terms of Debi's

employment agreement, she could not work on the book without his approval.

We were

our relationship with

told that the effort

IBM

(me

as a consultant

employee) could be negatively affected. uation and determined that climate improved.

it

was not authorized and and Debi

as

an

We thought about the sit-

was better to wait

until the political

Preface

xviii

Luckily for

ThinkPad

fall

who

ThinkPad

that

felt

left

it

at

was premature to have

IBM.

erences to

This

to review the

book

who had

their

Finally, in the

The

only requirement:

book to ensure the accuracy of any ref-

IBM. That seemed

tale

a

IBM ThinkPad management team agreed to allow

to pursue the creation of this book.

They wanted

IBM. Some of the

the business. Others,

personal agendas, changed jobs within

of 1997, the

Debi

nothing ever stays the same

executives

written about

own

us,

fair to us.

needed to be told for

a variety

of reasons. First and

foremost, the participants relate interesting stories about their

and experiences regarding the brand, the process, and

feelings

their fellow

team members. Second, the lessons they learned

might help others to create world-class high technology brands. Third,

IBM deserves to have a book written about one of the more happened

positive things that has

represents an effort of which

IBM should be proud. Although they

did not write the actual book, the story

management team had

This story

in the past decade.

the vision and

is

IBM's.

The ThinkPad

commitment necessary

to

make ThinkPad happen. But, this story

is

not

just

about IBM's journey to create the most

recognizable brand in portable computing history.

roadmap

for

also a

It is

any individual or company that wants to build

a

team,

develop a product or service, and create a brand recognized within its

market.

The Authors'

Insights

summarize the lessons learned

in

—these

each chapter and provide the reader with food for thought lessons can be applied to almost any industry.

One

last

comment, on an aspect of writing

reflects today's business climate. I live

busi-

services business within

IBM.

resides in Delray Beach, Florida.

ness;

Debi

is

I

that

my own

Debi

Whereas

book

in the San Francisco Bay

area;

managing the mobile

this

I

run

use Microsoft Word, Debi uses Lotus

Word

Pro, the

Preface

IBM

standard (Microsoft

prefer

it).

Word was

used because most publishers

We both use an IBM ThinkPad as our system of choice.

This endeavor, accomplished

in a short time, clearly illustrates the

advantages of a mobile environment where you can work and com-

municate any time, any place.

February 1999

J.

Gerry Purdy, Ph.D.

President and

Mobile

CEO

Insights, Inc.

Deborah (Debi) Dell

IBM National

Principal

Mobile and Wireless Services

[email protected]

[email protected]

650-937-0938

561-496-4603

Acknowledgments The

authors acknowledge the help and assistance of James Levine,

our agent,

critic,

coach,

ThinkPad

most of

fan, and,

good

all,

negotiator in helping to get this story molded into a shape that

would

result in a marketable book.

We

wish to thank Bruce

Stephens of International Data Corporation (IDC) for providing statistical

Brodeur

We

data that appears throughout the book.

&

IBM portable com-

Partners for providing copies of all

puting press releases so that

we could check

appreciate

We

facts.

recognize

the research and copyediting provided by Theresa Nozick and the graphical support of Tracey Gilbert. This

book would not have

been possible without the encouragement and support of Chris

USA

Webb, our advocate within Macmillan Publishing

and

his

—notably,

his

excellent team.

Gerry acknowledges the patience of wife, Melanie,

working on

who

this

his family

put up with evenings and weekends spent

—and the support of

book

and her spouse, Paul Sarkozi; Jennifer; Bryan; and Jason.

Kristi

Gerry

his five children

also

Stanford University. Acknowledgment

at the

is

Tom

made

their boss

same time they were working hard

to

Kosnik of the

working on

Gerry wishes

to

entire a

book

to develop a small, but

growing company in mobile computing professional Finally,

Jill

wants to acknowledge the

friendship and mentoring support of Professor

Mobile Insights team, who tolerated

—

and her spouse, Randy Riggs;

services.

acknowledge the friendship, support, and

professional affiliation with

all

members of

the

IBM

Industry

Advisory Council.

Debi

is

grateful to her husband,

ily for their ter's

Fred Adolphson, and her fam-

patience during IBM's massive changes, her latest mas-

program, and the writing of this book. She

David Bradley, Dell,

IBM

is

indebted to Dr.

Senior Technical Staff Member, Dr. Gina

and Peter Golden for their

edits

and critiques of

this effort;

Acknowledgments

their

comments were

xxi

She recognizes the original

invaluable.

ThinkPad team members, who were

so generous with their time

Jim Cannavino, Bruce Claflin, Joe Formichelli, Scott Bower, Maurice Fletcher, Sue King, and Rick Thoman. Debi and

insights:

sends special appreciation to Dolly Salvucci and Jean

DiLeo

on the

the photos they provided, Chris Farrell for his paper Butterfly development project, and

descriptions of the press and

Bob

for

Sztybel for his detailed

media programs. The story would

not have been complete without

Tom

Hardy's extensive com-

ments, written inputs, and edits on the industrial design, an integral aspect of the

Notre

lifelong

ThinkPad's success. She wishes to thank those

Dame

and

IBM

friends

who

encouragement and suggestions during

this

remain phantoms of wonderful memories and is

provided ongoing project and

who

feelings. Finally, she

indebted to Mrs. Irene Dougherty, Mr. Roger Schram, Dr.

William Heisler, Father Matthew Miceli, C.S.C., Richard, and Dr.

her

life

who

Arum Sharma

Anne

Sister

—some of the teachers throughout

taught her to love reading, writing, and the manage-

ment of technology. In addition to the special acknowledgments, the authors thank the following individuals, ries in the

Barr,

Jim

who

Bartlett,

memo-

contributed their time and

writing of this book:

Kevin Clark,

Sam Sam

Albert,

Dusi,

Tim

Rob

Bajarin, Chris

Enderle, Leslie

Jim Forbes, Randy Guisto, Tom Grimes, Heinz Hegmann, Koichi Higuchi, David Hill, Toshiyuki Ikeda, Bob Fiering,

Kanode, John Karidis, Per Larsen, Pete

Lowe,

Leichliter, Bill

John Madigan, Mark McNeilly, Nobuo Mii, Adam Myerson, Jerry Michalski, David Nichols, Joseph Rickert, Janice Roberts, Adalio

Sanchez, Dr. Ted Selker, Chris Shipley, Stoffregen,

Bruce Stephen, Leo Suarez,

Ron Bill

Sperano,

Tsang,

Ken Peter

Tulupman, Kathy Vieth, Steve Ward, Hajime Watabe, Dr. Frank Wilbur, Steve Wildstrom, Mike Wiley, and Jan Winston.

Kudos friends

to the

who

members of

started

it all,

the original

including Patty

ThinkPad team and

McHugh, Mark

the

Hofert,

Acknowledgments

xxii

John Madigan, Dick Greene, Chuck Pecnik, Lew Brown, Gary Buer,

Lou

Geis,

Lucy Hanks, Joyce

Yovin, Paul Turner, Sykes,

Howard Dulany, Jim Sam Lucente, John Wiseman, Bob Gene

Yaffe,

Sachsenmeier, and Dick Powell. Finally,

everyone trial

who touched

the

a

ThinkPad product

heartfelt thanks to line as part

of indus-

design, finance, competitive analysis, planning, engineering,

programming, manufacturing, marketing, or have been named here. Without them,

been possible.

sales

this story

who may not

would not have

About the Authors Deborah A. Dell Deborah (Debi) Dell

currently the national principal-Mobile

is

IBM

and Wireless Solutions for

team of senior

Global Services. With her small

professionals, the practice develops

and enables

IBM's participation in the mobile and wireless market. Working with airtime, hardware, and software providers, her organization develops service and support offerings for the U.S. market.

group

also provides consulting

industry sales teams.

Her team

and

sales

The

support for client and

operates remotely with employees

based in Dallas, Atlanta, Raleigh, Denver, and Peoria. Interviewed in such publications as

Andy

Seybold's Outlook, Computer Reseller

News, Washington Technology, and Wireless Week, she speaker on the topics of brand

is

a frequent

management and telecommuting.

Debi's love of mobility stems from her previous assignment as

manager

product

Computing

Mobile

for

Strategy

and

Development. She was responsible for the worldwide development and implementation of the ThinkPad out-of-box experience, well as

its

as

business strategy, from 1993 through 1995. In addition,

She enjoyed managing the ThinkPad Industry Advisory Council during

its

formative years. She also worked on the development of

IBM's pen systems and their associated marketing programs. Debi

management and

held numerous

Computer Company products such as the

Models 90 and individuals

ness

95.

who

since

PC

its

staff positions in the

Personal

1981 inception. She worked on

AT, the PS/2 Model 30, and the PS/2

She was mentored

in her early career

by

several

helped her learn the personal computer busi-

—especially George Andersen, Dennis Andrews, Dr. David

Bradley,

Cynthia McFall, Scott,

J.

Dick Cook, Howie Davidson, Mike Hyland, Sue King,

Tom O'Donnell, Tom Pitts,

and Pres Stratton

III.

Paul Schlick, Connie

About the Authors

xxiv

She holds

degree in business administration from

a bachelor's

the University of

Notre Dame, graduating

undergraduate women. Inspired by her

Dame the

was

a lifetime objective

ThinkPad and

PC years,

it

a master's

Notre

father, attending

from the age of

five.

In addition to

provided her with one of life's truly

great experiences. And, yes, she

Debi completed

in the first class of

knew Rudy.

degree in business administration

from the University of Loyola, Chicago, while working

Commonwealth Edison Company tive.

She graduated with

as a technical sales representa-

Master of Science degree

a

for

this

program

master's

Bilanych, Steve DelGrosso, and

ThinkPad papers and

—with

in 1995.

her teammates John

Nora Mosher

inspired the

man-

in the

agement of technology from the University of Miami

Work

for

—resulted

dream of writing

this

in several

book.

Raised in southern Florida, her parents encouraged her to pursue her career in the big city

Fred Adolphson,

at

—Chicago.

She met her husband,

Commonwealth Edison and married

in 1978.

After the Blizzard of 1979, they decided to return to Florida,

where she now works from her Defray Beach home. In recent years, she has experienced the joys

working from home

—but

that's

and tribulations associated with

another story!

Gerry Purdy, Ph.D. Dr. Purdy is president and CEO

of Mobile Insights, Inc., a pro-

fessional services firm located in

Mt. View, California. Dr. Purdy

J.

is

also editor-in-chief of Mobile Letter', a publication of

Insights and

mation

MobileTrax Online,

service. Dr.

a

Mobile

Web-based continuous

infor-

Purdy has focused on mobile markets and

products since 1986 and has become recognized as an industry authority in the mobile computing industry.

He

is

often quoted in

publications such as The Wall Street Journal, Business Week,

Week, The San Jose Mercury News, InfoWorld, and The Times.

He

has appeared on

of America.

CBS

New

PC York

Radio Business Report and Voice

About the Authors

xxv

number of

consulting engagements

Dr. Purdy also conducts a for

major firms in the mobile computing and communications

market. Recent engagement clients include

Wireless,

Compaq,

Microsoft,

NEC,

Dell,

Fujitsu,

AT&T

3Com, Apple,

Hayes, HP, IBM,

Intel,

Motorola, TI, and Xircom.

Before founding Mobile Insights, Dr. Purdy was vice president

and chief analyst for Mobile Computing

at

Dataquest. Previously,

he held marketing positions with Connecting Point (now Intelligent Electronics),

Compaq,

Fujitsu (Poqet division), and

Phoenix Technologies. Dr. Purdy has had significant experience producing major mobile computing conferences.

Mobile Insights conferences communications and the

for leaders in mobile

Go

Mobile conference

He

produces

computing and

IT

for leading

decision makers.

Dr. Purdy

is

a

member

Advisory Council, the

of the

IBM Mobile Computing Industry

AT&T Wireless Analyst Council, the NEC

Analyst Exchange, and the Dell Industry Advisory Council. Dr. Purdy earned his B.S. degree in engineering physics from the University of Tennessee (1965), an M.S. degree in computer science from U.C.L.A. (1968), and a Ph.D. in

computer science

and exercise physiology from Stanford University (1972). completed

a

Market Strategy

Stanford University (1987).

for

He

also

High Technology course

at

The

A Decade

The

"

5 th

Wave

1980s:

of Learning

By Rich Tennant

A PCWA&LE COMPUTER? YOU'D BETTER TALK VD OLD BOB OVER 'TWERE. A PORTABLE LONGER 7WN AM ONE MERE."

HE'S

OWNED

The

Some memories are happen

to

Defining

realities,

and are

Moment

better than anything that can ever

one again.

—Willa Cather

It

was always

tion to

work

summon

a challenge to late at

the motivation and dedica-

night but, in early 1990,

it

was even more

so.

Building 31, once at the center of IBM Boca Raton's development efforts,

was nearly empty. Unlike the early days of the

employees were finding focused. Because

many

it

difficult to stay late,

much

IBM PC, less stay

of their friends had been affected by the

various personnel actions that had occurred in Boca Raton, Florida, employees constantly

wondered whether they would be

when manufacturing had moved from Boca to Raleigh, North Carolina, the PC Company had taken headcount reductions every year. Downsizing had become a way of life, not

next. Since 1988,

only in

IBM

but also across the industry.

Walking down the hallway from the coffee machine, believe

how

desolate the offices looked.

was attributable to the hour

some of

—

after

all, it

Some was

I

could not

of the desolation

after 10 p.m.

—but

the forsaken atmosphere was because the offices were

taking on the appearance of temporary spaces.

The Defining Moment

Employees had fewer and fewer personal items decorating offices

when

because no one was sure

their

the next personnel cut was

going to occur. Also, fewer and fewer people could be found in those offices late at night. After felt

that he or she could

IBM

all,

make

what was the purpose?

No one

a difference in the troubles facing

in those days.

Deep

in thought,

I

found myself

on the concrete

reflected

quickly,

I

When

walls.

me

me, nervousness caused

Turning

startled

to spill

by

my own shadow

heard footsteps behind

I

my

hot coffee on

hand.

was relieved to see one of my employees, Denny

Wainright, approaching.

was lucky to have two employees

I

in

department who consistently put their jobs often had to be counseled that

I

my

first.

market planning

Roseann Conforti

did not expect her to

through the night and that she really should not be the the office.

Conforti usually counted

Denny Wainright

to

Wainright seldom

one

in

on fellow team member

walk her out, no matter left

last

work

how

late

she stayed.

before he was sure that everyone (espe-

women) had gone home. He was always department offices to make certain that the

cially the

the one to check

the

area was secure.

IBM

had

a clean

desk policy that required confidential materials

and desks to be locked rity violations that

at night. Failure to

do so resulted

in secu-

were reported to the executive management

team. Wainright wanted to be sure that our department did not

any of the periodic security check the team

audits, so

he took

it

fail

on himself

to

Both he and Conforti were always

offices nightly.

doing things to ensure the reputation of the department.

These thoughts entered Wainright reflected of dress.

He

casual dress

my mind

as I

saw Wainright approach.

his thirty-year tenure

continued to wear

a

with

IBM in his manner

white shirt and a

tie,

even after

was accepted. His actions were always grounded

IBM's three basic

beliefs,

in

with an emphasis on customer service.

The Defining Moment

If

something did not support these

beliefs or contribute to

Wainright would not become involved.

He

had

IBM,

a reputation for

excellence in customer service and product planning. This back-

ground resulted in

IBM

broad knowledge of the

a

Personal

Computer family of products and

the associated service require-

ments. Because of this expertise,

assigned

I

him

to product

nam-

ing and model numbering. These two dimensions of a product

were closely

tied

addressed in the

how

to

field.

service

Although

I

personally

word and hated the

a four-letter

were reported and

issues

naming was

felt that

political battles that usually

accompanied their recommendations, Wainright handled stride.

Product naming was the reason he was working

it

late

in his

on

this

particular night.

After wiping

up the

spilled coffee, I

caught

my

breath.

I

asked

how the "name game" was going. We had been strugname a soon-to-be-announced, pen-based portable com-

Wainright gling to puter.

Quite different from anything

IBM

had ever done, the

development team wanted something that reflected the personality,

the purpose of the system. Wainright had been trying to

name that reflected this new system's meeting the many IBM naming guidelines.

up with

a

For the

first

He

my

pulled a

shirt

little

with the word

worked

at

IBM

capabilities while

time in weeks, Wainright actually smiled.

responded, "You know, Debi,

answer in

come

I

think I've been carrying around the

pocket for the past thirty years.

Look

paper tablet from his shirt pocket;

THINK

He

embossed

during the years

in gold

when

sales

on the

it

at this."

was black

cover.

Having

and service personnel

carried this type of notepad in their shirt pockets, Wainright

always kept a supply of these paper tablets in his office.

Wainright continued, "Deb,

I

we have something that the will be proud of. They really say how we got to the

think

development team and Corporate Naming

may even

get excited about

it.

I

can't

The Defining Moment

—exactly what meeting or what day we came to the same conclusion —but am sure that the right one to carry actual

name

all

this is

I

forward.

I

think you will agree that this

won't be easy getting the its

new

tablet

it

descriptive.

Even

in a

need something

We within

could not

IBM

I

computer needs

know, the computer pad that while using

way

that

better,

is

lets

know

it's

it ties

for. It

move away from

to

worth the

effort.

to be called Think-pad

you do some

to IBM's heritage.

—you

serious thinking

comfortable for you.

like that right

know

worth fighting

IBM PC Company

current numbering scheme, but

"This

is

It's

friendly.

God

knows,

It's

we

now."

the profound effect this

name would have

and across the industry. By capturing the essence of

the pen machine, ThinkPad would be a departure for

naming of personal computers.

It

was

IBM

in

its

also the departure point for

the mobile computing team's journey to create the most recognizable brand in portable

computing

history.

Chapter

1

The IBM PC: Teaching the Elephant to Dance

A

horse never runs so fast as

when he has

other horses

to catch

up and

outpace.

—Ovid

The IBM

Personal

Computer (PC) was

manufactured in Boca Raton, Florida. tial

facility located just off 1-95 's

(some

visitors

believed that

originally developed

IBM

Boca Raton was

Yamato Road

IBM, with

its

exit

on

IBM

and

a pala-

Drive

development lab in

PC facility, but it was just a coincidence). Around a small pond, IBM built two large semicircular

Yamato, Japan, named the

exit for the

office buildings distinctively

With

its

manufacturing

ation site

on the western

was, in essence, a small

designed by architect Marcel Breuer.

facility

on the south and an extensive

side of the property, the

recre-

Boca Raton

site

city.

Visiting this property

was an impressive experience. You drove up

a tree-lined drive, stopped at the

guard gate, identified yourself, and

The

1980s:

A Decade

of Learning

got a pass. Security did not stop there, however. You were never

allowed to traverse the property on your own.

—even

always accompanied you

encounter with the

to the restroom! It felt

CIA than with

IBM Boca Raton, Home

to the

An IBM employee

a

IBM PC.

more

computer manufacturer.

like

an

The IBM PC: Teaching

Contrary to popular

the Elephant to

IBM PC

belief, the

Dance

was not the

result of

divine intervention; three threads entwined to create this technol-

ogy

These threads were the development, marketing, and

icon. 1

new market

research efforts already directed toward a

known the

as

IBM

desktop computing.

The

first

space

thread, development, was

5100 desktop computer.

Developed in Rochester, Minnesota, the 5100 design was conceived from the technologies surrounding the emerging concept

of small computers. At the time that the San Francisco Bay area

was

in the early stage of

research

work

IBM

Intel,

at

becoming known

as Silicon Valley,

PARC, and

Stanford University, Xerox

sent

its

industrial engineers to visit

come back with

research facility and

creative

its

with

start-up

Palo Alto

designs.

These

designs influenced the 5100 (which shipped in 1975), as well as

follow-on products, such as the 5110 and the Datamaster.

Datamaster development the

first

later

retail stores

thread, marketing,

could

sell

this effort

IBM product.

was an experiment

IBM's general business products.

cessor to IBM's placement of the ters,

The

migrated to Boca Raton and was

use of an Intel processor in an

The second

its

IBM PC

in

which

A prede-

in Sears business cen-

introduced the concept of

retail sales to

IBM.

Based out of Atlanta, key marketing personnel were educated on an area of

sales

and marketing unfamiliar to those traditionally

successful "blue suiters."

No

longer would marketing only be to

large corporate customers.

The

final thread, a

1976 research

effort,

combined

a small

com-

puter and a video disk into a home/education/business product. Eventually, a

company

called Discovision picked

work, which did not figure into the ing small computer project influenced the

initial

home computer

effort

1.

Cliff

initial

moved

application

to

PC

up the video disk

effort.

The

remain-

Boca Raton and greatly

development surrounding

a

code-named Aquarius.

Cullum, "History:

IBM

Personal Computer,"

IBM

internal paper (1988).

The

10

According to

Tom

1980s:

A Decade of Learning

Hardy, the industrial engineer on Aquarius,

"A small engineering group, under an Lowe,

computer concept that

started to develop a

memory

cartridge technology.

for Aquarius,

refined one of

I

computer forms

executive by the

Working on

my

utilized

1977 small laptop-size

earlier

Engineering did an incredi-

as the starting point.

components and keyboard into

and making

The

fifty

it

work.

resulting

all

a small space

working prototype was more

percent smaller than the Apple

"We were

bubble

the industrial design

ble job packaging the

than

name of Bill

II

announced

in 1977.

very excited about Aquarius as a way for

IBM

to

leapfrog the competition and take both a technology and design

No

leadership role.

product

idea.

company had anything

close to this

However, the project was not developed beyond the

prototype stage.

new and

other

risky.

Maybe

the bubble technology was considered too

Whatever the reason

disappointed that

it

for

its

demise, the team was

did not proceed further. But,

[industrial engineering] to

it

allowed us

be creative and try something new. This

experience proved valuable in later personal computer efforts."

By

1979, IBM's corporate strategy group had evaluated the

Apple computer phenomenon and urged the Management

Committee (MC)

IBM

to act.

The

strategy group asserted that

many

technical employees were writing software programs for

Apple computers

at

home. 2 During

this

same period, Lowe

assigned another small group in Boca Raton to put together

another

home computer project based on

the Atari 800

home com-

puter. Hardy, as the project's industrial engineer, recalled visiting

Atari in California and learning

how

were packaged. Although Atari invited introduced as an leaks to the

IBM

the

model 800 components

IBM to visit, Hardy was not

representative. This action

was to prevent

market of any potential implications of

a relationship

between Atari and IBM.

2.

James Choposky and Ted Leonis, Blue Magic, The

Politics

Behind the

IBM Personal Computer (New York:

Publications, 1988), 9.

People,

Facts

Power and on File

1

The IBM PC: Teaching

Dance

the Elephant to

Based on an Atari computer board packaged in an an

IBM

IBM box with

Lowe and George Beitzel presented this Management Committee. The initial proposal was

keyboard,

concept to the

1

Bill

poorly received and strongly criticized for

However, part of

its

lack of IBM content.

this presentation intrigued the

MC;

outlined

it

phenomenon and the viability of IBM's participation in this new industry. Lowe concluded this presentation saying that "The only way we can get into the personal computer business is to go out and buy part of a computer company or buy both the central processing unit (CPU) and software from people like Apple or Atari because we can't do this the growth in the desktop computer

—

within the culture of IBM." 3

Lowe and

Beitzel

promised the

within two weeks with an industry.

A task force

IBM

MC

that they

would return

proposal to address this emerging

of thirteen convened in Boca and consisted

of employees from the Datamaster and Aquarius product develop-

ment teams,

marketing organization.

as well as the Atlanta

Datamaster team brought forward

a

concept for

its

The

next machine

based on the Intel 8088 processor. Combining this framework

with the team's knowledge of systems, applications, and retailing, the task force put together the proposal for

became the

IBM

The team

what eventually

Personal Computer.

received the

product forecast was

a

MC's approval

for the project.

major contributing factor to the

The MC's

approval. Familiar with the volumes associated with mainframes,

the executive committee was intrigued by the five-year forecast

showing U.S. volumes of 241,683

units.

Of

course, the

IBM PC

well exceeded this projection, and the story of the forecast

an integral part of the myth and lore associated with

Much

now

success.

speculation goes into the reasons behind such knowledge-

able individuals so underestimating this potential.

3.

its

is

Throughout

its

history,

KG. "Buck" Rodgers and Robert

Harper

& Row

new

understanding emerging

L. Shook, The

Publishers, 1986), 209-210.

product's market

IBM Way (New York:

The

12

1980s:

A Decade

of Learning

markets and projecting their viability has always proved challenge for the

IBM

a

team.

Forecast 80 |

70

|

1

]

Special Bid

2

j

Employee

60

50

40

000 30

20

10 1

1

2

2

2

1982

1983

1984

1

2

1985

Total U.S.:

Employees

16601

Special Bid

13552 211530 241683

Stores All

Channels

6.9% 5.6% 87.5%

The original IBM PC forecast showed a five-year volume, which was achieved in the first year of operation.

With

this

approval came funding and the use of IBM's time-

honored practice of code names. Jan Winston, who in

IBM's portable

Winston neurial

later

PC

efforts,

was

a

nascent

member

later

had

a role

of the task force.

provided a connection from the original entrepre-

endeavor to the burgeoning portable

position as the original director of planning-

PC

effort.

director of planning, he

Boca Raton

From

his

became the

in 1991 with responsibility for

The IBM PC: Teaching

Dance

His strategy decisions

overall product strategy.

work

the Elephant to

laid the

for the use of several technologies in the early

On "The

the topic of code names, first

code name for

for obvious reasons, the

Winston offered

this effort

Bill

Raton laboratory director and head of the task

ground-

ThinkPads.

this reflection:

was the Manhattan

name was changed.

13

Project,

but

Lowe, the Boca

force, established

Project Chess to be responsible for the product code-named Acorn.

Lowe continued

in his role of advisor to the Project

Chess

team, but his other responsibilities as lab director and his eventual

move to run the Rochester lab dictated that he put a strong development manager in place. The eventual outcome was Don Estridge, a dark horse candidate for the position.

"Don

[Philip D.] Estridge

Boca laboratory.

was

a

recognized 'wild duck' in the

He gained fame when

State

Farm decided

to pur-

chase thousands of IBM's Series/1 minicomputers and required a software expert to alter the systems to

State Farm's needs. This

fit

where he had run

success overshadowed a previous assignment into

some

been

in the penalty

difficulties.

In

fact, in

IBM

vernacular, Estridge had

box and certainly wasn't the obvious choice for

this project."

Despite some questions about Estridge's ability to manage this project,

Lowe's decision prevailed, and on September

announced Estridge

as the

manager of

anteed direct communications to IBM's

Because

make

this

presented an

this

1980, he

entry-level small systems.

Estridge was asked to lead and staff Project Chess.

necessary to

4,

MC

He

was guar-

and the resources

product happen.

product was a definite departure for IBM, staffing

initial

resource challenge.

Many

candidates were

concerned that such career moves were very high risk and could negatively affect their careers. process, however,

was

a

The end

result of the recruiting

team of people who

part of the challenge. Project Chess

really

wanted to be

members went forward with

a

The

14

"We

1980s:

A Decade

of Learning

IBM way" attitude that started at the top with the "Father of the IBM PC," Don Estridge. According to Buck Rodgers' book The IBM Way, "They strong

are going to

[the original team]

do

our way, not the

it

were high achievers. But more than

were true entrepreneurs, who didn't hesitate to put

on the

line

These

when

PC

engaging

stories.

One

history with a variety of

of the favorites, without

group called the Dirty Dozen. These

their careers

was presented." 4

a challenging opportunity

individuals peppered the

they

that,

fail,

refers to a

stories resulted in

many more

than twelve people being counted as part of the Dirty Dozen.

Winston

"Three key groups have been

clarified the confusion:

The

associated with the Dirty Dozen reference.

and Estridge's 'inner

Dozen. But, the

real

who were brought

circle'

Dirty

original task force

have both been considered the Dirty

Dozen was

into the project

a

by

group of twelve engineers Sydnes, the

Bill

first

engi-

neering manager in IBM's personal computer history. These engi-

Computer history named Patty McHugh. McHugh was

neers had a far-reaching effect on IBM's Personal

and included

a junior

engineer

to be the ThinkPad's planning

manager through

She brought the 1980s entrepreneurial that significantly

its

formative years.

team

spirit to the portable

changed IBM's history in the 1990s."

Other individuals from

this first personal

computer team

also

migrated into key product development efforts throughout Boca's

development

had

history.

Leo Suarez was such

a significant role in the

ThinkPad

a person;

he also

later

story.

Suarez recalled those early personal computing days: "I always considered myself part of the original a formal

member.

I

was assigned to work with the group, but

not part of the original twelve.

I

on the

PC

original

4. Ibid.

business with

PC,

I

was

was probably part of the original

thirty or forty. So, although I wasn't

been in the

PC group, although not really

one of the 'twelve

IBM

since

its

as well as its follow-ons.

disciples,' I've

inception. I

worked

Following these early

The IBM PC: Teaching

engineering assignments,

I

went

to

the manufacturing plant manager.

were

work

I didn't

Dance

15

as a technical assistant to

He knew

that engineering skills

to building factories that could

critical

machines.

the Elephant to

make

millions of

know at the time that these experiences would pay

off in the area of mobile computing."

On

August

12, 1981,

IBM

announced

its first

personal

com-

puter and, in essence, jump-started the personal computer market

with the

IBM PC,

IBM press

the product originally code-named Acorn.

The

release read:

IBM

Corporation today announced

priced computer system

—the

IBM

its

smallest, lowest

Personal Computer.

Designed for business, school and home, the easy to use system

sells for as little as

$1,565.

many advanced

It offers

features and, with optional software,

may

use hundreds of

popular application programs.

IBM's first recognized brand

Philip

in

personal computing history.

IBM its

price

deemed acceptable

Estridge, called the

Father of the

had learned some lessons from

with

"Don "

its

IBM PC

by the press.

brief foray into retail

The press release led with a home user instead of the business

general business products. to the

decision-maker. For the record, the typical expanded system for

—with color graphics, two diskette price of $4,500 —would have market

business

killed

drives, a printer,

interest before

it

and

a

had

a

The

16

1980s:

A Decade

of Learning

chance to germinate. Interestingly, the

1981

price

range of

$4,500-5,000 remained the market threshold for leading-edge

performance personal computers for the industry's IBM's

decade.

entry into the personal computer market was suc-

initial

own marketing

cessful because of, in part, the efforts of its

Headed by H.

first

team.

L. "Sparky" Sparks, this team was innovative in

approach to marketing

collateral, advertising

its

campaigns, and sales

incentive programs. It was this team, working with

IBM

Corporate

Communications, that brought forward the Charlie Chaplin ad campaign of a "personal computer for every man."

winning campaign,

it

concept that computers are not

who want

award-

quickly solidified IBM's participation in this

dramatically growing technology segment.

individuals

An

It

introduced the

just for corporations

but also for

to increase their personal productivity.

IBM PC, which, number of common indus-

This productivity was made possible with the interestingly enough,

was made with

a

Most of this first machine contained minimal technology proprietary to IBM, according to Dr. David J. Bradley, one of the key members of the original IBM PC team. try parts.

For example, the Microsoft contract

MS DOS

operating system required

for the

IBM

development of the

to develop

pieces of system software: (1) the "boot" sequence that

up the computer, check system system and

(2) a basic

drivers to control the

status,

two major

would

start

and then load the operating

input output system (BIOS) to provide

hardware

as directed

by "system-level

all

calls"

from the operating system during operation. The industry used the term

BIOS for both

the boot and driver system-level software.

Microsoft wanted to keep the operating system independent of any underlying hardware. This system-level software was needed to

tie

the higher level operating system to a specific central processor unit

(CPU) and

to support the core logic that controlled the key-

board, display, and ports.

The IBM PC: Teaching

IBM

copyrighted the

from using

it.

Dance

17

code, preventing other companies

So, although the

Technical Reference a

BIOS

the Elephant to

BIOS code was

Manual, no one

else

could use

published in the it

without getting

proper license from IBM. At that time, IBM's practice was to

retain

the

all

rights to copyrighted material, a practice developed with

S/360 Operating System. Consequently, the

became

With most

IBM BIOS

proprietary.

these restrictions

difficult

on the BIOS code,

it

became one of the

challenges to those companies that wanted to

develop a computer compatible with IBM. Their choices were to license the license

it

BIOS from IBM,

from

a third party that created

IBM's approach to

this core

BIOS from scratch, or its own clean BIOS code.

write a clean

element of the personal computer dra-

matically affected the course of the personal computer industry.

The

Authors' Insights

Three threads entwined

to create the success of the

IBM

PC:

innovative development, profound marketing, and technologically

advanced research. These three divergent plans were brought together from totally separate organizations and

woven

into a

cohesive, market-winning strategy. This strategy convinced IBM's

management to invest in personal computers. Little did know that this decision would change the course of not only

executive

they

the industry, but also

Few

IBM.

industry analysts had believed that

address the personal computer market. As sales

IBM could or would the IBM PC garnered

and market share, consultants and analysts

alike realized that

IBM Corporation was changing. In fact, it was remarked in the press that IBM trying to deliver the IBM PC was like trying to teach an elephant to dance. Few realized that IBM was not only the

learning to dance but also to lead.

18

The

1980s:

A Decade

of Learning

Chapter

2

Compaq: Pie House Luggables

.

.

.

Compaq produced a

portable that not only secured

showed legions of other companies how

to

compete with

its

future but

IBM. 1

—Paul Carroll

The computer industry refused to sit back and allow IBM not only to lead but also to own the personal computer market. The induswas

try

also unwilling to accept that

IBM

with innovative personal computing ideas

was the only company

—nor did

it

believe that

only one brand was going to dominate this market. Thus, to

understand

how IBM

created the world's most respected brand in

personal computing, ThinkPad, you have to understand

how

portable computing was created in relation to the personal

com-

puter.

For

this historical perspective, the story

Texas Instruments (TI) engineers

left to

of how three young

form

a

new company

the emerging world of personal computing has been told

in

numer-

ous times. However, this story adds interesting insight into IBM's eventual participation in the portable market.

1

.

Paul Carroll, Big Blues: The Unmaking of IBM

Publishers, 1993), 71.

(New

York:

Crown

The

20

A

typical

1980s:

A Decade

of Learning

hot Houston afternoon in 1982, skies were overcast,

muggy with threatening thunderstorms. The neers

met

House

at the Pie

main drags

restaurant

Houston.

in north

three

young TI engi-

on FM-1960, one of the

FM stands

for farm

to

because of the expansive growth that occurred after

market, but

air

condition-

ing became viable in the 1950s, these farms were often sold to land developers. Although silicon chips were

names remained. Directions

the street

ways to FM-1960 and then hang

Rod Canion, had presented

Bill

a right

a creative idea in the

The

stated,

cow chips, "You just go down a

replacing

on FM-149."

Murto, and James Harris had

Rosen of Sevin-Rosen, and Dallas.

now

capital firm in

three engineers had decided that

move on from designing

dream.

They

form of a business plan to Ben

major venture

a

a

it

New

York

was time to

portable terminals for TI. IBM's 1981

IBM Personal Computer had legitimized a The IBM PC contained slots to allow for expansion

announcement of the

new

industry.

of the computer's capabilities through the addition of functionspecific boards.

The

was "big business"

engineers had told Sevin-Rosen that there

in developing expansion boards for these

personal computers

—

new

and they had great ideas for expansion

boards.

Ben Rosen and

Sevin reviewed their plan and expressed

L.J.

interest in helping these experienced engineers, with a

track record, to

form

a

proven

new, company. However, Sevin did not

think that the expansion board business would be big enough to

warrant their investment. Rosen told them that they would be

funded

if

they came up with a company that did more than just

build expansion boards for the

PC. "Get

creative,"

he told Canion.

So, Canion, Murto, and Harris were sitting at the Pie that eventful day while

meeting. vative,

The

House

Canion reported the feedback from the

three discussed the need for something really inno-

not just expansion boards for the

IBM PC. They also knew

1

Compaq: Pie House Luggables

2

that,

given the size of IBM's financial coffers, they did not want to

do

machine that competed head-on with the

a

IBM

PC. They

wanted to get one step ahead of IBM and yet stay out of IBM's way and not go into direct competition.

The

conversation continued for quite a while. Then, Canion

damp with Coke

turned over his place mat, pen.

He

stains,

and took out his

began drawing some conceptual diagrams.

The group

IBM PC and ways to IBM PC was clunky and

discussed the positives and negatives of the

address

its

deficiencies. All felt that the

that inside the

box was

a lot

of wasted space. Also,

when

the

com-

puter system was coupled with the required external monitor, the entire package

was big and bulky. Harris, the consummate engi-

neer, felt that a better system could be designed in less than half

the space and at half the weight of the

IBM

PC.

Suddenly, the team started talking about the possibility of building a personal computer in half the space, integrating a monitor,

and putting nine-inch less

a

handle on

monochrome

it.

Harris believed that, by using available

monitors, the whole package would weigh

The system would be light enough for The three had just turned the discussion

than thirty- five pounds.

someone

to carry around.

focus from the personal computer to a portable computer.

They were on portable because

a roll. it

Of course,

this

would require an

system would not be truly

AC

outlet in order to run. It

would, however, be portable enough that people could take

it

home from the office or to a client site for extended periods of time. They were beaming now. They had taken Ben Rosen's recommendations and turned

their idea of an expansion

board into an

—but they did not stop

innovative personal computer

Canion looked up and asked, "What do we

there.

call this

new com-

pany?" Harris considered the design on the place mat and "Well,

it's

a

Can we do something like Murto joined in, "I doubt we

very compact design.

Compact Computer Corporation}"

said,

The

22

1980s:

A Decade

of Learning

could ever get a registered trademark for such a

Canion

that he

felt

had the answer,

—something

we can "How about if we used a

pact

like

Compaq

—you know, with

name."

comMurto concluded,

"Let's use a variant of

get trademarked." different

common

form of the word, something

a q instead of rt?"

The

three stared

each other. Canion concluded, "Let's get back to Sevin and

at

Rosen

as

soon

Canion

as possible.

I'm ready to get going on

this."

Ben Rosen the next morning and

called

related the

events of the preceding day. Rosen responded enthusiastically to

both the product concept and the name. So

Computer Corporation and

it

Compaq

was that

the portable computer industry were

founded.

Their

were located on Perry Road

initial offices

Eventually,

they expanded

Chasewood Bank Building

more

into

in

Houston.

in

space

in

the

an area surrounded by luxurious

housing developments with names such

Memorial Northwest. In addition

Ben Rosen became an

office

as

Champion Forest and

to Canion,

integral part of

Murto, and Harris,

Compaq. Rosen

joined the

company's board and provided ongoing financial perspective to their formative endeavors.

With funding approved and introduced

its first

portable at Fall

was crowded from the opening

new

innovative

Comdex

bell.

1982.

Its

Compaq

small booth

Everyone wanted to see

this

personal computer that included integrated text

and graphics and

By

a technical plan in place,

a nine-inch

today's standards,

it

was

—

green monitor

all

in a single box.

a thirty-three-pound albatross,

but

it

was quite something back in 1982! Imagine what so heavy

it

it

like to create a portable

computer that was

could not really be called a portable. Rather,

a luggable because

more

was

like a

it

weighed close to

thirty

it

was

called

pounds and looked

sewing machine. People made jokes about

how

carry-

ing the luggable lengthened your arms a few inches. Yet, despite

Compaq:

some

early

Pie

House Luggables

development challenges,

it

23

was innovative and pro-

vided users with the ability to take their computers with them.

Compaq

Compaq

Processor

8086

Memory

64KB

Disk

Two 5

Display

9"

Weight

33 pounds

1/4" Floppies

Monochrome

Portable product specifications.

One

of Compaq's

to start. tecture, piece:

Portable

initial

challenges was

how

to get the system

Although IBM's entire system was based on an open archi-

IBM

had maintained one very important proprietary

the start-up software,

(BIOS). Because the engineers, without a

or binary input/output software

BIOS was developed and owned by IBM's license from IBM, Compaq would never be

able to enter the market.

Jim

Harris's software

develop a compatible but independent

BIOS

as

team decided to important

as the

integrated text and graphics capabilities. This entrepreneurial

team made the pieces Pie

House back

fit

together just as

it

was

first

sketched in the

in early 1982.

As orders rolled

in for this innovative portable

computer, man-

ufacturing became another important challenge. Distribution pre-

sented an additional hurdle.

new Compaq

When

portable, they asked,

IBM PC dealers "How do we become the

saw the author-

The Compaq executives took these requests back to Houston to discuss how to handle the burgeoning interest. Murto told Canion, "You know, we really have to figure out how to manage all these dealers who want to carry the Compaq portable. ized dealers?"

The

24

1980s:

A Decade

of Learning

we should get some people in here who have the experience. Someone recently introduced me to a guy at IBM named Sparky Sparks. I talked to him on the phone, and, to my surprise,

I

think

he expressed interest in talking to us." Sparks not only interviewed but also landed, according to the industry press, a significant signing bonus to leave

IBM and come to

He put together a team that would take Compaq into the leagues. He brought in a host of employees from IBM Boca

Houston. big

Raton

to set

first fall

up Compaq's Authorized Dealer program. Compaq's

year of operation in 1983 resulted in sales of $103 million,

the most successful

first

Times were good was due

at

in part to the

year in the computer industry's brief history7

.

Compaq Computer

company's

Corporation. Success

ability to quickly follow the suc-

Compaq Portable with the Compaq the Compaq Plus greatly expanded the

cessful introduction of the

Plus. In

October 1983,

PC with the addition of a ten-megabyte (MB) hard to what IBM had done on its IBM XT desktop sys-

usability of the disk, similar

A dual-display mode

tems.

also allowed users to switch

from high-

resolution text to color graphics.

The expanding business and technology advances required lots of new engineers. Compaq looked to the storehouse of engineering talent around the corner at Texas Instruments. There was an

added advantage to

The had

three founders

this close

knew

a specific staffing

just

costs,

minimal

about everyone there.

need, they called someone at

thought could do the job. option and got

geographical recruiting practice:

him or her

They to

When

they

TI who they

offered the person a nice stock

work

for

Compaq

—no relocation

delays.

Texas Instruments eventually took legal action to prevent

Compaq from such overt recruiting. However, the floodgates were now wide open because not only TI but also the entire high tech industry recognized that Compaq was really going places. With

Compaq: Pie House Luggables

Compaq on

a financial

neers applied on their influx of

new

25

and technological leadership

own

from TI to Compaq. This

to transfer

talent resulted in

the engi-

roll,

Compaq's engineering team being

technically proficient, yet steeped in

At the same time, another very

TI

culture.

was developing

different culture

IBM industry veteran who created the sales and marketing operation for IBM's PC operations, hired Max Toy from IBM as Compaq's vice president of sales. He, in turn, brought in other IBM veterans such as Bob Bauer, Mac Compaq. Sparky

at

Sparks, the

McLaughlin, Jim "Bart" Bartelemeo, and Ross Cooley. These savvy marketing veterans saw the opportunity to cessful

computer start-up that would

likely

an increase in personal financial wealth

would ever get working

at

work

for a suc-

go public and provide

beyond what they

far

IBM.

The IBM marketing and sales team set up a contrasting culture with the TI engineers. Gerry Purdy, at Compaq from 1986 until the end of 1987, attended

numerous meetings where the

contrast-

Max Toy

told Bill

ing cultures were evident. In one meeting,

Murto, "Look

which Murto that

it

Bill, that's just

replied,

"That may be

simply was better to do

When in small

not the way we did

it

true,

it

at

IBM,"

Max, but we found

at

these meetings were over, the

groups and say things such

veterans would say things such

out, we're

TI

another way."

IBM

alumni would gather

"When

as,

are these engineers

ever going to learn that we're trying to run a business here?"

TI

to

as,

"Damn

it,

if

we

The

don't watch

going to turn into another bureaucratic operation

like

IBM

and lose our reputation for building better personal comput-

ers."

Some meetings were

like a tennis

match, with exchanges

going back and forth from one side of the table to the other.

TI and IBM cultures merged into a Compaq. As market success grew, so did the of employees and management alike. Talk centered on being

Eventually, the separate

"can do" culture at pride

The

26

number

A Decade

1980s:

one. Employees within the

of Learning

company began

to believe that

they were part of something special, something that was challeng-

They were

ing the legacy of Big Blue.

excited about the success

and committed to the vision of becoming number one in the

PC

market. Everyone was enjoying career and personal financial

success.

By combining the

best of the old with the

had gone up against the biggest and best ceeded. Despite the

initial

new attitude, Compaq in the

Compaq's external aura was glowing. Compaq was per-

struggle,

ceived as a

company with

a

"can do" attitude. Positive self-esteem

was everywhere and, with recognized industry

coming

driving force behind that they

to

work each

success, pride

in later years, at larger facilities such as a

cess

a

a vital part of

Corporation.

At year end, the company gathered everyone and held

was

day. Individuals forgot

came from TI or IBM; they were now

Compaq Computer

facilities)

world and suc-

internal counter-productive culture

a celebration.

in the factory (and,

major church and public

Rod Canion

was due to the hard work of the entire

related

staff.

how

the suc-

A music video was

played, put together to add to the emotional excitement.

One

of

the favorites was Irene Cara's "Flashdance...What a Feeling" tied to scenes of

employees smiling and giving "thumbs up." Such

meetings solidified the feeling of belonging to the team, of contributing to the overall

Although

company

this positive attitude

success.

was rampant throughout the

company, the senior management exercised caution. The former

IBM

marketing team

fully

expected

success in this market space

now

IBM

to respond to

Compaq's

called portable computers, a con-

cern they shared with Canion and Murto. Ross Cooley told Gerry

Purdy

a

number of

times, "Surely

IBM

will take notice

of what

we're doing and develop a portable computer that will give us a

run for our money."

Compaq:

Surprisingly,

IBM's

Pie

House Luggables

response to

initial

was focusing on satisfying demand for

growing

own

its

infrastructure.

like

Compaq was

slow.

IBM

desktop machines while

its

Although trying to prevent the

clone market from enveloping them,

new markets

27

it

was not

actively pursuing

portable computers. However, a substantial

change was in the wind.

Compaq announced office, just

the Deskpro personal computer for the

two years into

its

history.

Compaq's decision

to

do

a

desktop system was not based on a desire to compete directly against

IBM;

rather,

patible systems

it

was

a

response to the wide range of incom-

manufactured by the other "clone" companies.

In 1986, analyst Portia Isaacson of Future the compatibility issue to the forefront. (the premier

computer trade show) with

Computing brought

Running around Comdex a

copy of Microsoft Flight

PC

Simulator, she would install the software

on

and announce to the

whether the manufac-

press, in real time,

a clone maker's

turer's

system was truly compatible. Imagine! Compatibility simply

meant

that

you could run any popular application on any IBM-

compatible machine!

Compaq, with

its

solid software engineering resources, quickly

entered the already crowded desktop users a higher level of compatibility. line

The

field

and immediately offered

Compaq

even developed

a tag

of "It simply works better," which quickly caught on with users. press declared that

or better than

IBM would upstart

IBM

Compaq

and that

finally

it

provided performance as good as

assured compatibility.

wake up and take notice of Compaq. The

Houston company was becoming more than

little

a niche player.

In retaliation for Compaq's threat to IBM's desktop dominance,

was time for

IBM

to "get serious" about portable computing.

it

8

The

2

1980s:

A Decade

The Authors'

Insights

Compaq's founders

capitalized

on

of Learning

their technological strengths

while taking advantage of their competitors' weaknesses.

They

kept their fingers on the pulse of the market and delivered afford-

wanted

able products that customers

—

a well-tested

formula of

success.

Success

The company's prosperity from around the world. Compaq executives

wonderful

a

is

attracted top talent

knew not only where necessary to

fill

elixir.

to get the best people with the experience

the company's

skill

gaps, but also

how to

individuals incentive to join the fledgling company.

varying

company

Somehow, the

cultures blended together to challenge

the personal computer market. fueled

give these

With strong

IBM

in

leadership, this talent

Compaq's success through the 1980s and

built the cultural

foundation of a formidable competitor.

Compaq's success exemplified qualities of highly

several of Professor Kosnik's

enduring brands (see the Foreword).

participated in the fast-growing personal

possessed the innovative engineering its

own

style

portable computers,

Compaq

for both the company and

you

carried

its

its

first in

do

so.

Compaq grew

the emerging market of

created a unified brand that stood

product

line. Its

name was

a play

on

developed sub-brands for

its

portable computers: Presario for

consumer portables and Armada cautious in

effective.

when Compaq's corcomputing," the company

place. Years later,

porate brand stood for "excellence in

proved

to

leading product was a compact personal computer

from place to

Compaq was

computer market and

of leadership, beginning with the personnel grafts

from both TI and IBM. As the

the fact that

skills

Compaq

its

for

its

its

commercial portables.

brand evolution, an evolution that

Chapter

3

The IBM PC Company: From

a

Small Acorn

Clearly,

our accomplishments are the result not of products, but of

people... who sensed the urgency... and

system relied totally on

who knew

IBMs basic beliefs at every

—

The

success of the

ket growth

Compaq on

IBM

Personal

P.

Don

Computer

that the life-support

turn in the road.

Estridge, August 1981

fueled not only mar-

but also competition such as the emergence of the personal computer scene.

staffing challenges for the

It also

caused dramatic

Boca Raton team. During the early

1980s, IBM's personnel practices

still

touted founder T.J. Watson's

three basic beliefs: respect for the individual, pursuit of excellence in

all

things,

and best customer

service.

The IBM PC management juggled move

their fledgling business forward.

They had

to staff with

IBM

— the time, there were few external profeshires — many of whom did not understand the requirements

employees sional)

these beliefs while trying to

at

(that

is,

The

30

new

A Decade

1980s:

of Learning

Management had to find office space to accommodate employees whose number compounded daily. They of this

market.

had to find ways to recognize the long hours and the with

ily life

a

toll

on fam-

compensation plan grounded in the practices of the

1960s. Despite the executives' efforts, the burgeoning Boca site

was

hothouse for

a

Many marriages failed because employees spent

occasional suicide.

too

many hours

alcoholism, drug problems, and the

affairs,

at the plant or

on the

road.

These times wrought

intense personal problems, in addition to the product and business challenges.

Despite these challenges, staffing continued, growing from the Dirty Dozen to 135 employees at the time of product

initial

announcement. By January 1982, when Estridge was named

divi-

sion director of the entry systems business unit, the organization

had swelled to 330.

It

then grew tenfold in the next twelve months

to 3,300 in January 1983. in 1983, driving the

The most

dramatic expansion occurred

January 1984 head count to almost 7,000 in

Boca Raton and 10,000 employees worldwide.

The tremendous growth careers

on the

line

but also to accept changes in established stan-

Arrangements such

dards.

required employees not only to put

as office space, furniture,

and secretar-

support were affected. Debi Dell, then operations manager for

ial

the

had

PC

business unit, described several instances

difficulty adapting to

such

a fluid

Coming

PC

to

effort after

Sparky Sparks had

Boca Raton from

executives

environment: "I remember

meeting with the director of marketing about joined the

when

New York,

his office.

left to join

He

had

Compaq.

he was not familiar with

the site dynamics and expected to have an executive office similar to the

one he had

"On his was

me

six

arrival,

just left.

he actually measured

his office

and found that

inches shorter than the published office standard.

into his office to

tell

me

to

move one of the walls

it

He called

to achieve the

1

The IBM PC Company: From

standard.

At

a

when we were doubling and

time

and programmers in I

had to

bite

Small Acorn

a

tripling engineers

accommodate the immense

offices to

my tongue.

3

I really

wanted to

tell

staffing,

him what to do with

his six inches.

him

"After I politely told

and that ties

I

was not going to move the wall

had better things on which to spend

funds, he reported

existing

me

IBM

my

limited facili-

to Estridge. Estridge supported

memo

decision and issued a

meet the

that I

my

that eliminated any requirement to

office guidelines.

"Estridge was not one for the trappings that accompany position. In

March

1982, Estridge

became the

division vice president

and general manager of the entry systems business promotion, he was entitled to Despite his pleas,

I

IBM

was asked to put

eight-bar logo,

tomer briefing interest of

Rand had

center,

and

its

IBM's corporate

With

this

of offices, which he declined.

a suite

happen, working with Paul Rand.

unit.

a plan in place to

The

make

this

original designer of the

recently completed the

PC

cus-

innovative design had captured the

management. Meeting Rand

facilities

and having design discussions with one of the world's premier designers was a definite career highlight.

"As part of the office design,

we decided

to use a

oval table as the desk. This decision started a trend

business unit executives wanted the

same

table. I

ing once with the product manager for the

group.

He

had

just

had been given

brought onboard

a rickety old rental

constraints resulting

a

him an

all

the

PC

remember meetadvanced systems

new planning manager who

from such exponential headcount growth.

oval table.

involved with a

—

teak

desk because of the furniture

This planning manager got down on find

PC

modern

It's

phenomenon

still

his

knees and begged

me

to

hard to believe that the people

the magnitude of the

so concerned about such trappings."

PC

effort

were

The

32

1980s:

Estridge headed the

PC

A Decade of Learning

effort

he made every attempt to help

through 1985. During his

his tenure,

managers address the growth

challenges by personally staying in touch with his ever-expanding organization. According to Jan Winston, one of Estridge 's key executives, "Estridge

penalty box.

It

had been humbled during

made him a

the feelings of his team.

better manager. It put I

PC

business unit.

ing to anyone ization.

product

He

time in the

him

IBM

in touch with

don't think he ever lost sight of the

who was

importance of each and every individual fledgling

his

Many a night,

who was working late,

a part of the

he walked the

halls talk-

feeling the pulse of the organ-

never forgot to host team celebrations with each

announcement

that

followed

the

IBM

Personal

Computer."

P.

Don

Estridge.

Dell specifically remembered a celebration held at Broward

Community College. The auditorium was Estridge asked the audience to stand.

He

filled to

the brim

when

then proceeded to ask

The IBM PC Company: From

people to

sit

uct effort.

down when

He

room showed

IBM PCjr),

Dozen

for the original Dirty

the

code name for the

IBM PC AT), the Peanut team and so on. He eventually asked

remain standing.

to

IBM PC

team

who

A glance

around

considered them-

—and that alumni group

number with each passing year! this assemblage was "From a small

grown

ing remark to

(the

at least thirty individuals

selves part of the original

has only

team

called out the Circus

code name for the

33

they were identified with a specific prod-

product that eventually became the (the

Small Acorn

a

in

Estridge's clos-

we have

acorn,

grown." Celebrations were not the only reflection of Estridge's concern

and respect for the individual. This attitude was

memo he issued on May 2, the

1984.

The memorandum,

management team, referenced

answering machines.

He

also evident in a

the

addressed to

subject of telephone

told his team:

Effective immediately,

machines removed.

I

I

want

telephone answering

all

do not want any answering devices

ESD

rented, purchased or brought onto

[Entry System

Division] premises.

IBM's deep-seated belief in respect for the individual cannot be carried out by an answering machine. responsible for answering our is

own

We

phones, and

that

individual.

PC team VM/PROFS system

In addition to answering machines, the

couraged in the use of the

communications. Estridge's management

communication

teamwork.

Of course,

meetings and tives

when

all

not possible, our phones should be answered promptly

by the appropriate

to-face

are

as the best

way

style

was

also dis-

for internal

encouraged face-

to share ideas

and build

such communications often led to lengthy

a significant

amount of travel. However,

were part of Estridge's management

"Respect for the Individual."

style

and

these direc-

his pursuit of

The

34

1980s:

A Decade

of Learning

Adalio Sanchez, another participant in these early days,

bered the management

was born

in

Cuba

was two years

at the time.

rememSanchez

1959 but came to the United States when he

in

His family

old.

Boca Raton

styles in

South Florida and

lived for a year in

then moved to the Washington, D.C., area. In 1970, he moved

back to South Florida, where he went to high school.

He

then

attended the University of Miami, graduating in 1981 with a bach-

degree in electrical engineering.

elor's I

He

recalled, "After college,

got an offer to work for IBM. Instead,

Eastern Airlines as an avionics engineer.

However,

to play pilot.

I

I

decided to work for

I

thought

it

was more fun

crashed a lot in the flight simulators.

After playing for about a year and a half and seeing the airline

industry go

IBM's

down

offer. I

the tubes under deregulation,

joined the

a separate division

PC

PC

XT, the

megabyte (MB) hard stayed with

"During beliefs

me

throughout

—respect I

IBM's

facilities. I

IBM PC

on

fast track. left in

my entire IBM

$43

with a built-in ten-

career.

experienced the core tenet of

Through

I

would ever make

as a

IBM

the actions of Joe

for the

PC XT

devel-

manager. Sarubbi was

my career and demonstrated the value of a menHe

I

had above-average

skills

guided and coached me.

1986 to

start the

Panda

Project.

I I

and put

was

me on

really sorry

have always tried

my career, and it my various management assignments."

to use his approach throughout

valuable in

From

started as a design

excitement of that project has

manager responsible

recognized that

when he

was not yet

learned that this premise should be the basis for any per-

a big influence

He

The

for the individual.

sonnel decision that

tor.

first

this early period, I

Sarubbi, the product

opment,

disk.

it

small unit of about a hundred crazy

a

people in IBM's Boca Raton, Florida engineer on the

when

business in 1982

but simply

decided to take

I

proved extremely

1981 through 1984, revenues grew from approximately

million to greater than $4 billion.

The IBM

Personal

— The IBM PC Company: From

Computer

business unit not only grew in

ees and products

—but

became

also

The

Systems Division (ESD).

Small Acorn

numbers

new

a

35

—both employEntry

division, the

expansion led to increasing political

almost directly proportional to the press exposure and

battles,

kudos attributed to Estridge's

mented follow

a

own

Even Estridge himself com-

1984 that the team had been allowed to

in the spring of

its

efforts.

path for too long without the normal corporate

intervention. Continual executive reviews had

imum, except

for the traditional

been kept to

a

mid-February executive

min-

trip to

Boca Raton from the winter-ravaged Northeast. Product development the

IBM PC XT (XT

home

efforts

for Extended Technology), the

PC AT (AT

computer), and the

Each product had

during Estridge's reign included

for

PCjr (IBM's

Advanced

Technology).

own set own unique story and set of players. The

certain elements of success, as well as

of problems. Each had

its

its

product managers sometimes forgot that they were part of the

same business flicts

unit,

vying for resources and funding. These con-

were often resolved with

little

regard for the future. Strategy

decisions sometimes affected resource allocations,

stymied IBM's leadership

which

in the personal computer market.

strategy was to invest in products that

later

The

would grow market share

grow

versus investing in the emerging technologies necessary to

the business.

Despite internal conflicts,

IBM worked

hard to create a solid

business in personal computers and to build a skilled organization.

However, Compaq Computer Corporation had started to hire key

IBM

personnel away from Estridge's team. This newcomer's story

was beginning to influence the future direction of the sonal computer effort.

Compaq was to

make

a

By

1984, the

IBM PC

unit

competitor to be reckoned with, but

the decision to seriously fight

portable computers.

Compaq on

IBM

per-

knew

that

IBM

its

had yet

own

turf

— The

36

The Authors'

1980s:

A Decade of Learning

Insights

Estridge staffed a team committed to "do

it

ment derived not only from sharing Estridge his

right." 's

vision but also

Much later, some McHugh, Dell, Suarez,

tremendous care of people.

tial

team

—Winston,

brought his visionary concepts to the ThinkPad

commitment came together within fuel

a

This commit-

from

of Estridge 's

ini-

and Sanchez

effort.

Vision and

renewed operating model

to

tremendous market growth.

The

original personal

a self-contained unit

computer team demonstrated the value of

spanning market

analysis,

development, man-

ufacturing, marketing, and service and support. Unfortunately, early success

and staggering growth overshadowed some underly-

ing foundational problems and blocked the insights necessary to

maintain a market lead.

Chapter 4 IBM's Losing Streak

IBM didn't

come out with a decent portable until years

long after the well on

its

later, in

1990,

PC market had moved to the much smaller laptops and was

way toward

the even smaller notebook computers. 1

—Paul Carroll

At the are

start

of a journey,

we going

we

always ask

Where

we

going?

How

What are we going to do along the way? business. The IBM personal computer business

to get there?

It is

no

was

at a crossroad in its early history.

different in

kind of competition.

It

was now time

IBM was for

encountering a

management

answers to some very basic questions such as

Compaq

are

Why

to get

did

new

some

IBM

let

get such a head start in the business of portable computers?

Why did IBM let that Houston upstart company build a multi-hundred million dollar business in portables and then allow a similar success in desktop

computers?

A contributing constant

demand

factor to

Why did IBM lose its market edge? IBM

missing

to prove to executive

new PC markets was

management

top market was every bit as important as mainframes,

1.

Ibid.

the

that the deskif

not more

The

38

1980s:

A Decade

of Learning

important than mainframes. This ongoing argument took prece-

dence over any attempt to even show portables

PC

growing

forward thinking and planning. Emphasis was

battle at hand,

Many

not future challenges.

of the original team, disgusted with the

executive

of the

market. Significant political battles occurred almost

daily, obliterating

on the

as a part

lack of vision,

team's

IBM

corporate

found success and monetary

rewards by joining other companies. H.L. "Sparky" Sparks,

was key to the

initial

PC

who

marketing programs, James D'Arezzo,

who was responsible for the Charlie Chaplin marketing campaign, and Max Toy, who was responsible for IBM's PC sales effort, joined Compaq Computer Corporation, IBM's fiercest competitor in this

market space.

realize that allowing

emerging markets and participate

ees to pursue

financial success tributors.

IBM had yet to

was fundamental to retaining

The Boca team was

unsuccessful in

in the its

its

employ-

company's

strongest conefforts to chal-

lenge corporate decisions in regard to strategy and compensation. Additionally, the

PC

business unit had

lems. Significant turf wars, battles

its

among

own

internal prob-

egocentric executives,

and space and resource constraints added to the tension Boca-based operation. During

was relegated

to

numerous

its

growth period, the

off-site buildings,

at the

PC operation

including a vacated

department store where employees joked about holding meetings in Lingerie.

citizens

the

PC

trolled site's

The PC employees were

often treated as second-class site

operation became the Boca

the hosting division con-

all facilities

needs were

independent

PC

site,

and operations. Support was allocated

satisfied, despite the significant

unit was already bringing to

struggle, coupled with the political climate,

time of

management. Before

by the controlling Boca Raton

many key PC managers.

after the

revenue that the

IBM. This

location

consumed the valuable

IBM's Losing Streak

If the truth

be known,

efforts

39

were underway to address emerging

markets, but these were generally hidden within the operating budgets

of authorized projects. IBM's

on

a portable

this

PC

team had

computer well before Compaq emerged

market segment. According to Paul Carroll in

The Unmaking of IBM,

them only

"IBM

Compaq produced

as a leader in

book Big Blues:

his

did a few portable prototypes,

to other IBMers,

showed

got an indifferent response

a portable that not only secured

showed legions of other companies how

to

work

actually started

its

—and

future but

compete with IBM." 2

IBM did eventually enter the portable market. On February 16, 1984, IBM announced its first portable machine, a thirty-plus pound "luggable" late to

that

weighed more than the competition, was

IBM

market, and was too expensive. Even the name,

Portable Personal Computer, coupled with

award-winning Charlie

Chaplin ads, could not work magic on this less-than-stellar offering.

A lack of market acceptance

and an ever increasing inventory

drove the division's executive team not only to reduce

level

its

investment in the fledgling portable segment but also to delay additional product development until the market established

An

important lesson was learned from

itself.

this initial portable

endeavor and reinforced over the next decade: Manufacturing expertise

is

a critical

Kanode captured story.

component of the formula

this lesson in his retrospection

Kanode had worked

tions, including the

in a

for success.

on IBM's portable

number of manufacturing

plasma display division.

Bob

He

posi-

then migrated

from subsystem component manufacturing to system manufacturing.

His

first

AC-powered

portable assignment was the portable that included an

Kanode's recollection of

"We had

a

this

IBM PC

amber orange

display.

box agreed with industry reaction:

product that was the laughing stock of the industry.

was too heavy and too slow. The display was and ergonomics of that box were

2. Ibid.

Portable, an

terrible.

terrible. It didn't

The

fit,

It

feel,

look good,

it

The

40

didn't feel good,

it

1980s:

didn't

A Decade

work good.

just too everything. It wasn't

with you.

It

was

a

of Learning

It

was too

late,

too expensive,

something that you wanted to take

Making note of

disaster."

Kanode's on-the-job experience

these mistakes,

later influenced the

manufactur-

ing decisions determining IBM's mobile journey.

The

IBM Portable PC.

This

first

portable fiasco contributed to the division's turbu-

lence from 1983 through 1986. In August 1983, the entry systems unit was given the mission for not only the Personal also the

System/23 Datamaster, the

5520 Administrative System, the System, and unit's

all

Computer but

IBM DisplayWrite, the IBM IBM 5280 Distributed Data

the software related to these products.

Now,

the

product managers were fighting not only with one other for

resources but also with the newly acquired groups included under the banner of entry systems.

No

longer a start-up operation, the

more than

a billion dollars in

IBM PC

was generating

annual revenue and had become a

IBM's Losing Streak

major part of IBM. As

41

a separate division, the

Entry Systems

Division (ESD) was an operation of 10,000 employees selling

The

customers around the world.

to

beyond Boca Raton ratory. Estridge

had expanded

major part of IBM's Austin labo-

to include a

was no longer

just the division president;

January 31, 1984, he was elected an

The

division

PCs

IBM vice

on

president.

organizational turmoil, delayed product announcements,

and quality problems diminished the Management Committee's support. In 1985, Estridge was reassigned, and William

Lowe, the

PC

the

man behind

original concept

effort as

ESD

employee resistance to

the

IBM PC,

division president.

(Bill)

returned to

Lowe encountered

which only increased with the

his role,

untimely death of Estridge and his wife, MaryAnn, in an August 1985 plane crash. Estridge became the legend, the measure of

what was

essential to lead a nontraditional

IBM

organization.

Lowe

did not have the charisma or time to challenge Estridge 's

legacy

—nor

did he attempt

choice to lead the

Lowe was

PC To

all,

Estridge had been his

effort.

numerous

fighting

personnel arenas.

After

it.

assist

Carberry was brought in

battles, in

Lowe

as the

both the product and

with development, Dr. Robert

head of technology. Dr. Bob,

as

he

was known by the troops, was an extremely creative thinker. Forcing ity

new

projects almost

on

a daily basis, his technical creativ-

contributed to the division's growing problems. Dr.

killed

Bob

often

products already in testing for ones that looked better on

charts, the perennial "chartware." Specifically, a project code-

named

Caribbean was one of the projects cancelled well into the

development process. Caribbean integrated personal computer functions television

form factor with

controls and a trol,

built-in

home

phone were embedded

which could

also

manage

a

automation.

in the television

home-based

in a color

The

system

remote con-

local area

network

The

42

1980s:

(LAN). Caribbean was killed

a

A Decade

of Learning

concept well ahead of

its

time. It was

because of an unrealistic assessment that the 1984 market

required a price point less than $1,000 for such a mil-function unit. It also

went under the cost-cutting knife because of the need

to balance resources across both laboratories, equitably spreading

the available development dollars.

The

investment was not

a total

because the team learned about the wants and needs of the

loss

consumer and some of the technologies were the

IBM

basis of several

patents.

The two not find

a

laboratories,

Boca Raton and Austin, seemingly could

way to work together or to make

their product plans jive.

Lowe nor Carberry were able to bring the laboratories together. Compounding the problem, projects were no longer self-

Neither

contained units as in the

Within each

site,

initial

days of the personal computer.

hardware and software were managed by sepa-

and minimal product

rate organizations with little cross-talk ing.

The product

or system manager no longer controlled

aspects of his or her business.

On

September

19, 1985,

realignment attempted to reunite hardware and software the

sites. It

test-

created lab directors,

more

another

at

each of

clearly defined the

Raton and Austin missions, and increased

site

all

Boca

decision-making

responsibility.

A matrix

approach to development within each laboratory was

established versus self-contained product development organizations.

Product teams were composed of employees from

vertically

aligned hardware, software, planning, and marketing organizations.

Their primary mission was to recapture the eroding

market share. Ironically, amid this chaos, the

began to accept the personal computer

IBM

PC

executive team

as essential to

IBM's

future,

lessening the pressure of executive battles and interference. Interestingly,

one of the

first

ganization was a portable.

products to emerge from this reor-

In April

1986,

the Austin team

IBM's Losing Streak

announced Clamshell,

IBM

the

IBM's

5140

as a

Code-named

PC.

Convertible

laptop weighed twelve pounds and was

first

extremely portable with

be used

-43

built-in handle.

its

The

system could also

desktop computer by adding an external monitor and

attaching an expansion box. Containing 256 kilobytes (KB) of

memory and two 720KB

diskettes, the Convertible replaced the

PC

line.

Portable in the family

In August 1986, at the

day party of the PC, the Convertible had

its

own

fifth birth-

placard and was

described in the following anniversary marketing deliverable:

The IBM PC Convertible. One computer for people who really need

two.

Here's a powerful computer that's

both

When you

a portable

travel, the

PC

and

a desktop.

Convertible works

with a flip-up screen.

Back

at the office, it

works

with an optional desktop monitor. It's

but

light (just over 12 pounds),

a full-fledged

member

of the

IBM PC

family.

With PC-sized keys and a 25-line display. And there's really nothing lightweight about that! Although different teams developed IBM's two entries into the portable market, the Convertible exhibited

problems ciencies.

as the luggable,

Using an

Intel

8088 processor

and

mobile users.

time

when

liquid

the 286 was

crystal

monochrome.

display

Critical to

much needed communications

Finally,

capabil-

although technologically advanced

a leadership feature, the Convertible's 3.5-inch drives

incompatible with

were

the industry's 5.2 5 -inch

standard drives and

The team

immediately went to

resulted in a dearth of software.

work on an

same

modem was not available when the system

announced, preventing the ity for

at a

The

blurred text and was initially

portable operations, the

the

but with additional technological defi-

the norm, applications ran slowly.

(LCD)

some of

external 5.2 5 -inch diskette drive.

The

44

1980s:

A Decade

of Learning

Happy Birthday,

PC!

•i-

"•-

r»v

ri

i|

IjsM PC Convertible The

IBM PC Convertible.

This

fix,

as well as efforts to

arrived after the market had factor.

improve the Convertible's

moved beyond

display,

the "clamshell" form

IBM missed the opportunity to be a significant player in the

portable arena because the marketplace turned to competitors'

products such as Compaq's Lte and Apple's PowerBook. In addition,

because the division's executive management was in the

process of

moving from Boca Raton

Montvale,

New Jersey,

to

its

new

headquarters in

products announced in this timeframe did

not receive the marketing communications attention necessary to

combat the poor

press. Distribution centers filled

with both the

IBM's Losing Streak

initial

Convertible and

its

refreshed successor. Shortly before his

1988 departure, Division President

media was

for his sense of

Bill

Lowe, not known

in the

humor, when asked how the Convertible

deadpanned to the

selling,

45

press, "If

you'd

like one,

I'm sure

we can get one for you." 3 ESD's biggest challenge was not

main competitor, Compaq.

It

was

just the internal struggles

how

also

to keep

and

IBM, with

its

higher operating margins, competitive against a rash of clone companies cost.

making basically the same desktop computer

at a

much lower

As these companies figured out how to make quality products

certified as

buy them

compatible by the trade magazines, businesses began to

in lieu of IBM's products.

Once

again, a

little

upstart Texas

company, Dell Computer, was making matters even more

When

someone ordered

directly to the user.

its

PC, Dell would assemble

By completely bypassing

it

the dealers

difficult.

and ship

it

who were

then selling most of the world's personal computers, Dell could offer personal

computers to the masses

and configured to individual

IBM was

at significantly

lower prices

specifications.

forced to focus on the clone competition in the desk-

top business.

growing billion-dollar business was threatened on

Its

—to redesign the personal computer with proprietary internal bus Micro Channel— made sense, all sides. Its

approach

called

to

at least

IBM. These Micro Channel systems would

patible software

and the

a

MS-DOS

still

run all-com-

operating system, so the user

would not know that it was internally different from any other PC. The primary difference was that the system would work with only IBM-licensed or internally built expansion boards, making almost impossible for any other company to build a truly

compatible

IBM,

PC

it

licensed IBM's

in effect, created a

that protected

BIOS.

unless

135.

IBM-

circuitry.

personal computer system

—one

IBM more than the original PC with its proprietary

IBM now

3. Ibid.,

new

Micro Channel

it

defined compatibility as both hardware and

The

46

1980s:

A Decade of Learning

would make

software, something that

it

much more

difficult for

clone vendors to copy. In April 1987, the Personal System/2 family

of Micro Channel personal computers was announced.

IBM's Micro Channel strategy might have worked except for the users who, for the most part, found that the clone companies

were now making such good personal computers, they did not need to switch to IBM's Micro Channel personal computers.

"Why should ity?"

pay

I

IBM

a

higher price for the same basic capabil-

was argued by many

Systems] managers. If onset, the story

now many

IBM

MIS [Management

Information

had offered Micro Channel from the

might have been

different.

The

times that of IBM's sales and had

clone market was

become

the measure

of true compatibility. Thus, in an effort to raise the bar and create

new standard of compatibility in personal computers, IBM had made a personal computer that was incompatible with the indusa

try. 4

Timing was not the only problem with Micro Channel. Had this

IBM

new technology and

initially

done

describing

its

the introduction of the

a better job

benefits, the

have accepted Micro Channel. In addition, had

of marketing

market might

IBM

invested in

the development of adapter cards that exploited this technology at

the onset, third-party support would have pushed the market. Instead,

IBM made

it

difficult for

other equipment manufacturers

(OEMs) to do business with them. Not until almost a year later did the PC Company announce a program to support Micro Channel card developers.

When

you consider the competitive environment from November 1983 through the Micro Channel announcement in April 1987,

it's

easy to understand IBM's reluctance to pursue the

portable market segment.

Why

spend time and money on

product line that was only ten percent of the larger

On

the surface,

4. Ibid., 150.

it

did not

make

sense. Bill

Lowe

PC

a

new

business?

recently recalled

— IBM's Losing Streak

"We

that

did not focus

on

portability early in the

The

our large system heritage. touch the heart of

47

IBM—it

game because of

computer did not

original personal

caused a revolution. This revolution

shook the company's foundation and challenged the core precepts.

We

had

much

all

less

we could do

to maintain the flow in our desktop line,

strongly pursue the portable market."

Although customers were asking tive portable to their

many

product

line,

IBM

to

add

ESD's management faced too

challenges, both internal and external.

were focused on and the

IBM

this

emerging market

executive

competi-

a viable,

—the

Minimal resources

results

were

team was not pleased with the

telling

results.

A

major change was needed.

The Authors' What would

Insights

have happened

if

Don Estridge had been left to man-

IBM PC unit? What if he had not been killed in that tragic

age the

plane crash in Dallas in August 1985, raising

him

to the status of a

legend? Could his vision and leadership have helped

IBM make

the right decisions in the personal computer and, eventually, the

portable computer marketplace? Clearly, Estridge and his original

team understood the value of continuous market

—

ongoing customer contact

a

fundamental focus

analysis

lost in

IBM's

and late

1980s efforts in the personal computer market. If

we

Brands,

return to Professor Kosnik's Seven Qualities of Enduring

we

find that the

IBM PC

unit lost focus of basic business

fundamentals. Although recognized for providing innovative technologies and world-class products in the growing personal

puter space,

it

com-

did not address the market shift to portable

computers. After Estridge, no profound visionary emerged to propel the business

through the uncharted waters of

changing market. Individual product houses, tories,

a

dynamically

as well as the labora-

operated as standalone units; no integrated strategy was

The

48

ever really agreed on.

1980s:

A Decade

of Learning

A balanced investment strategy was lacking.

Managers could not even get budgets

at the

Additionally, a truly devastating mistake

focus

on the power of the

brand.

It

introduced the

Micro Channel.

It

work.

was made.

level.

The team

ended up "eating one of its own children."

IBM PC

IBM needed

the

lost

IBM PC brand; it undermined its own IBM Personal Systems/2 and the IBM

to correctly evaluate the brand equity that Finally, the

department

had been

It failed

established.

team forgot to leverage the power of its net-

power of its network of dealers, vendors, and

customers to fight the ever-increasing competitive

no longer the only competitor

to fear. Apple,

tide.

NEC,

Compaq was

and Zenith were

delivering creative solutions to the changing requirements of both

the desktop and portable markets.

with the key members of

its

advantages of working with

By

establishing

renewed contacts

network and educating them on the

IBM

over

its

major

PC

competitors,

IBM eventually turned around and established a new direction for its personal computer business.

Chapter Zenith and

5

NEC:

Early Portable Innovators

Victory

is

of competition, not the final

in the quality

score.

—Mike Marshall

Compaq was 1980s.

IBM

not the only key player in the portable game in the

faced strong competition from other companies such

as Apple, Zenith,

and

NEC.

Also, because the

PC

industry had

spawned the trend of employees changing companies every few years,

computer companies were able to add experienced person-

nel with minimal effort.

Compaq had

started this trend with

its

hiring of TI engineers and

IBM

panies soon followed

Industry veterans were those individu-

als

suit.

who accomplished

time and then try veteran.

moved

marketing executives; other com-

a great deal in a relatively short

period of

on; James D. Bartlett was just such an indus-

During the

early portable years, Bartlett

both Zenith Data Systems and

NEC,

insight into these companies. Later a

worked

at

enabling him to provide

member

team, Bartlett provided a nontraditional

IBM

of the ThinkPad

perspective.

The

50

A Decade

1980s:

of Learning

Zenith Data Systems (ZDS) was one of the

IBM

build a clone to the

company wishing to

1980s, a

BIOS

ZDS

PC

either

Compaq had

had to have

taken.

own

its

IBM

a

BIOS, an

They

also devel-

a lot of custom chips instead of using standard industry parts.

was an unusual combination It

was

recalled,

"Our

from Morrow Designs.

down keyboard had two

size cassette battery

LCD

one of the

first

plugged into an

ZDS

It

at the front

5.2 5 -inch

and-white

at the time.

of unusual thinking that led Bartlett to join

this type

He

in 1984.

It

build a

had their engineers write

approach similar to the tack

It

companies to

or had to license the BIOS, the proprietary part of the

PC, from IBM. oped

first

Personal Computer. Back in the early

first

was

portable was the one

like a

we

ZDS

acquired

sewing machine with

a flip-

—very similar to the Compaq Portable.

floppy disk drives and used a huge videotape-

from

display.

camcorder.

a portable

It also

Introduced in early 1985,

had

this

a black-

system was

portable computers that would run without being

AC

outlet."

focused on selling to the government, whereas

its

primary

competitors focused on the business enterprise. Despite the size

and somewhat archaic design of the Morrow-based portable,

won many of the

original

government

with the IRS. These wins portable market, following

made its

it

ZDS

bids, including the first

one

an early competitor in the

initial

offering with a line

of

portable computers under the Super Sports sub-brand.

In 1986,

NEC

recruited Bartlett to do product line

manage-

new line of portable computers. Bartlett reflected, "The opportunity to move from a marketing communications job to a ment for

a

line job at

NEC

was appealing.

I

had Profit and Loss (P&L)

They had lots of internal resources we never had at ZDS. They built their own processors. They built their own floppy drives. They did miniaturization. They had vertical integration. I saw this as a company responsibility for their

new

line of portables.

1

Zenith and

NEC:

Early Portable Innovators

that could be formidable in the mobile business

strong in data communications, which

I felt

— and they were

was going to be very

important for the future of portable computing. guys could really be hot.

"Our

was

It

a great career

NEC

portable product at

first

brought it to market in

less

than

six

5

I

move

thought these for

me.

was the MultiSpeed.

months

after I

got there. It

We was

portable product to have a multiple speed processor.

It

was lighter and smaller than the other luggables on the market

at

the

first

We came in with a product that had a full-size keyboard a numeric keypad. Nobody else had done that. We had inte-

the time.

and

grated software,

ROM [read-only memory]

[PIM] programs, in the screen

To

when you turned

it

IBM lap. On

popped up on

NEC

came out with an ad whose

"We're not too big for your britches" and had

screen below

an

that

on. It was really quite innovative."

illustrate this innovation,

tagline read

management

including personal information

it.

On

the

left side

was

the other side was

was going to

it

somebody with

very nicely and comfortably in the

of a guy's legs with

a picture

Convertible looking as though

lap.

The

a

a split

fall

off his

MultiSpeed that

ad highlighted

its

fit

big-

ger keyboard and larger screen. Bartlett described the successful launch of the

product:

"I'll

very humbling experience at our press

all its

'Why do you think computing when IBM,

the press asked me,

are going to be successful in portable

with 'It's

a

Someone from

conference.

you

never forget

MultiSpeed

technology, hasn't done a product like this?'

a better

question for

IBM than it is

computing hasn't yet become believe that if they

wanted to be

years later helping

I

important to them.

I

in the portable business in a big

more

like the

never had any idea that

make

replied,

me. However, portable

strategically

way, they'd be announcing products course, at the time,

for

I

I'd

MultiSpeed.'

end up

at

Of

IBM six

portables a strategic business for them."

The

52

NEC

its first

for the

new development.

were developing that was

nal they

We

thought

it

would make

have one of them in

my

office. I

ThinkPad 560

NEC

meaning

that

thin, light,

kept it

much

NEC V30

it

like today's

I still

looks so

much

it

first solid-state

disk. It also

PCMCIA cards. It had Lotus

ROM and ran MS-DOS. modem

IBM

machines,

and

It

used

little

1-2-3 built in

weighed four pounds,

The

a battery.

system used the

8086-compatible processor.

were leery of a portable that

time," said Bartlett. "People

didn't include a floppy drive or a rotat-

ing hard disk.

You could plug

was an instant

hit. I

in a floppy using an external cable. It

think we got on the cover of most major

PC mag-

Everyone acknowledged the advanced technology, but we had

a really difficult

time getting them into production. There was

hype from the promotions

months before we got them fewer of them than times as

we

at the introduction,

into production. So,

anticipated.

many if we we did. By the

We

but

it

was many

we ended up

really could

all this

selling

have sold

five

had just been able to get the manufacturing going

than

we found ways

to

make

time

we

got the

first

unit into production,

the display better or add

went very quickly from the UltraLite a

computer.

did not have a hard disk like today's portables but

"The UltraLite was way ahead of its

azines.

a large dis-

today."

including the built-in

faster

because

it

UltraLite was one of the

to the system's

and had

looks very similar to the

ten-megabyte (MB) solid-state hard

a

cards

NEC

"We had been

We discovered a termi-

a great portable

like today's ultraportables. In fact,

had

development of the

ultraportable. Bartlett continued,

centers, a thinktank for

The

of Learning

around one of NEC's Communication and Computing

sniffing

play.

A Decade

known

perhaps best

is

UltraLite,

1980s:

more

storage.

to the UltraLite 286,

We

which had

VGA display and a hard disk. It had a 286 processor instead of an

8086-compatible V30, so

PC—with

essentially the

we moved up

to a very powerful portable

same rough dimensions.

Zenith and

NEC:

Early Portable Innovators

53

"We also developed the ProSpeed family of notebook PCs. This was the

you could swap stations.

of portables that included modular accessories

first line

out.

We

also put forth the

The term docking station was

one pursued controlling the name. necting your portable in the

office

whole idea of docking

actually trademarked, but

We

no

used the analogy of con-

being

like a

space shuttle dock-

ing in space.

"About the time developing a

new

was to add

to the

it

I

line

of portables called

name

NEC

portables Versa.

all

in

The

Authors' Insights

At

name

first,

the idea

UltraLite Versa

dropped the UltraLite brand

They

names

company was

the

Versa.

UltraLite, but the

was too complex. Eventually, and branded

NEC,

decided to leave

one of the best

actually lost

mobile computing in UltraLite.

Both Zenith Data Systems (ZDS) and

It

was

NEC,

a powerful

name."

major players in the

early years of portable computing, brought their

own

visions

and

strengths to this emerging market.

NEC,

market players several key

in particular, taught portable

lessons. First,

it

demonstrated that the correlation of announce-

ment timing and manufacturing volumes was

critical to a product's

NEC's marketing cemented name and the protection of that name

success. Second,

right

brand management. Last but not its

tremendous If

we

least,

the concept of the as

fundamental to

NEC displayed the value of

vertical integration.

relate these points to Professor Kosnik's

of Enduring Brands,

NEC

balanced

its

Seven Qualities

development and market-

ing objectives, capitalized on the value of a recognizable brand,

and leveraged

its

network through

ments. Unfortunately, like IBM, focus on

its

vision.

Perhaps

like

its

vertical integration require-

NEC,

ZDS, had lost new vision would

as well as

IBM, though,

a

propel them to the forefront of the portable market.

The

54

1980s:

A Decade

of Learning

Function

NEC

Processor

NEC V-30

80C88

Clock Speed

9.83

MHz

8/4.77

Operating System

DOS

3.3

DOS

Zenith MinisPort

UltraLite

LCD

MHz

3.3

Display

Electroluminescent backlit

RAM

640 KB Standard

640 KB (1MB)

Floppy Disk

No

2" internal

Hard Disk

1

Modem

2,400 baud (standard)

1

Ports

Weight

1.

to 2

MB

Andy

.3

MB

9-pin serial

25-pin parallel

Expansion

Floppy

NEC

pounds

5.9

UltraLite

Seybold, "Portable 1990): 2-8.

and

silicon

,200/300 baud (optional)

RJ-11 (phone)

some of the innovation found

(December

360 KB/1

silicon

720 KB

Serial

4.4

This comparison of the strates

internal

Backlit transflective

pounds

the Zenith MinisPort

demon-

in products delivered by these companies. 1

Computing

in the

1990s— Part

II,"

Dataquest

Chapter 6

IBM Gets the Message

Like

all

great travelers, I have seen more than I remember, and I

remember more than I have

seen.

—Benjamin Disraeli

As the decade of the 1980s came

to a close, competition

eroded IBM's market share in the personal computer industry. longer were the

IBM PC

in the desktop arena.

with the

had

IBM

and the

IBM PC AT desirable purchases

computer that

its

a terrible job of designing built portables, but they

companies such

as

IBM

Compaq

had

Channel a

chance

failed to deliver

customers wanted. For years,

IBM did

and building portable computers.

It

were not very glamorous and were always

market. Luckily, one person at

company's future success in Cannavino.

IBM Micro

Personal Systems/2 and the

to get a foothold in the desktop market.

late to

No

IBM's attempt to replace these machines

failed miserably, giving

a portable

had

this

IBM

had the vision for the

market. That person was Jim

The

56

1980s:

A Decade

of Learning

James Cannavino arrived on the Entry Systems Division scene Cannavino was born and raised on the West Side of

in late 1988.

Chicago and, joined

IBM

like

many self-made men,

never went to college.

in January 1963, eventually fulfilling his fifth-grade

dream of running

a part

of the world's largest computer maker.

Insight into Cannavino 's decisions as head of the personal

IBM

puter business can be gleaned from a look at the

who

He

affected his career. Shortly after joining

into an individual

from

whom

com-

executives

IBM, Cannavino ran

he thought he could learn continu-

—an executive named Jack Bertram.

ously for the rest of his career

Called Blackjack by his friends and enemies

Bertram was an

alike,

outstanding businessman, a very good technical guy, and a

man

driven to succeed. According to Cannavino, "Jack was the

per-

son that a

was driven

I felt

profound difference

in

at the

same

the

way

IBM Company,

were

a

dime

a

I

first

He made

more guys who made

a big

saw things. Jack Kuehler, then president of

was the

dozen.

was driven.

my view of how business works.

"Besides Bertram, there were two difference in the

level I

first

He knew

guy

to teach

me

that

good

ideas

the difficulties of managing an

organization focused only on good ideas while needing to head in a different direction;

Paul Rizzo taught cial perspective.

he was

me

a

master of management. And,

everything

I

needed to know from

him

a finan-

Paul was one of the finest executives in the com-

pany, with his no-nonsense, financial background... call

finally,

We

used to

a 'shiny ass accountant,' because they sat in chairs for so

long that their pants got that look to them. All three

Kuehler and Rizzo

—influenced my management

—Bertram,

style."

Until the end of 1988, Jim Cannavino's only involvement with personal computers was to influence their designs so that they

could participate in the enterprise-computing model, which he

was managing

at the time.

the mainframe side of

Cannavino, having largely grown up on

IBM, had once

sneered, "If

God wanted

us

IBM Gets

the

Message

to have distributed data processing,

our wrists."

computer business. After

to have personal computers,

to our wrists." 1

PC

my

job,

move

PC

to the

He would have

them

built

in

seem

wrists

mind of

to have a

own."

According to Cannavino, Christmas 1988 and

working for three days, to the Board. It

was

"I actually

New Years

pany, and in retrospect,

line

his

Cannavino himself expounded on the quote, say-

ing, "After taking the

their

in

was modified to "If God had meant

side of the business, his quote

man

would have put brains

That perception changed when John Akers asked him

to run the personal

for

He

57

I

it

1989. Bill

took the job between

Lowe had

left

the

com-

wasn't hard to figure out why. After

got the chance to present 1988's results

a dismal presentation; the Personal

Systems/2

of personal computers wasn't selling, the OS/2 operating sys-

tem was

all

over the

floor,

and the

billion dollar loss. In fact, I

tation until Akers [then

PC Company had incurred a

almost got fired after that

IBM

first

1

.4

presen-

Chairman] reminded the board that

only been in the job for three days.

I'd

swimmingly well

"So, things were not going

for

IBM's personal

systems hardware and software. If you looked at IBM's position at that time, servers,

we had

a

mess with our

and had no portables

part of the

PC

at

all.

industry that had

PC

desktops, had virtually

Our primary become

serious attempts to differentiate the mix.

of the PS/2 desktops in 1987,

between

this

we

a

on

no

that

commodity, despite

With

officially

focus was

the

announcement

entered a major battle

thing called Micro Channel versus the industry-

EISA architecture. However, the architecture war actustarted much earlier with the PC AT's 1984 introduction,

accepted ally

which included

a proprietary

against the fast amassing clone industry. line fueled the

war between

turer at the time,

1.

Ibid., 169.

IBM a leg up The PC AT and the PS/2

bus meant to give

IBM

and the major clone manufac-

Compaq Computer Corporation.

My immediate

The

58

A Decade

1980s:

of Learning

challenge was to decide whether a strategy existed that could reestablish

both

IBM

as a leader in the personal

technology and share perspective.

a

"By the middle of March 1989,

ment of where uisite to

PC

computer market, from

things were and

1

was ready to present

where they needed

my assess-

to go.

A prereq-

understanding the report was the cost structure affecting the

Company. During the

marketed through

its

own

1980s, IBM's personal computers were sales force

and the dealer channel.

dealer channel was established to reach those customers

have access to the

IBM sales force.

who

The

did not

Unfortunately, the contracts with

the dealers were not specific, and the dealers immediately went to the enterprises

where

erage. So, for

all

all

the

intents

money was and where IBM already had covand purposes, we had the dealer channel and

the sales force selling personal computers to the same customers at

SG&A

the same time. IBM's costs at the time costs

(Sales,

General, and Administrative)

were forty-eight percent and the dealer channel

were about twenty percent, so the

PC

business was seeing

SG&A costs of about sixty-eight percent. Think about that for a second

—how could any one make

"So,

my

a

report back to the

buck with that kind of overhead?!

management team addressed not

only this ridiculous marketing overhead but also significant product strategy holes.

IBM,

percent of its profits on ion, the silly. I

believed,

was

recommended

altogether or, at a I

a

company

that

server-related activities; thus, in

PC Company not being in the

also

market.

I

made 125

my opin-

server business was kind of

that they get out of the desktop business

minimum,

really slim

down their efforts

into this

strongly believed that an emerging technology referred

to as portable computers

would dominate where the desktop used

be viewed

The high-premium, high-volume market

as

'king.'

would be mobile personal computers, and port this premise. However, off as a

company

if it

I

I really felt that

exited the

PC

to

had rationale to sup-

IBM would

business altogether.

be better

IBM

"Besides these product holes,

model

59

Gets the iVIessage

I

IBM

did not believe that

for delighting the customers within this

had

a

market space. At the

we made about eighty percent of our profits from 110 large customers who frequendy paid five or six hundred million dollars a time,

year to

IBM. And,

customers

who

in

my opinion, it was very hard to tell one of those

wrote you

just

a half a billion dollar

check that they

were going to get only ninety-day service on their PCs. Either we

were going to have to spend

a fortune to

make

the

PCs

better than

the industry's average, which was almost impossible to do, or

we were

going to have to deliver support that matched the customers' expectations.

Personal computers were not on the same scale of reliability,

usability,

at

much

and integration capability

IBM

products shipping

level the playing field."

The Board responded in the

that the

other

higher gross margins, so numerous changes were going to

be required in order to

IBM

as

PC

that

business.

it

only wanted to see plans that kept

Cannavino reiterated

PC Company had to get back into the

OS/2 plan had

to be revisited,

his strong belief

server market.

The

and some kind of relationship with

Microsoft had to be established. Alternative channels needed to be

developed to offset the decline in the dealer channel. Whereas in

1986 dealers delivered ninety percent of

were delivering seventy percent of tops.

Cannavino predicted

all

PCs, by 1988 they

all

products, including desk-

that, in the

near future, dealers would

account for only a third of the product volume, whereas direct sales

from companies such

slice

of the

IBM

also

retail

and Gateway would take

a big

market and, eventually, the business segment.

had to reduce the expenses associated with

tion channels. Finally,

the

as Dell

its

Cannavino stressed the need

distribu-

to reduce

amount of money spent on developmental engineering

as the

market turned quickly to clones. Clones were not prevalent concept was foreign to

many

in the

mainframe

industry,

and the

of the Board members. However, in

The

60

1980s:

A Decade

of Learning

the personal computer segment of the late 1980s, clone-makers

The

aggrega-

factor in this industry,

growing

delivered sixty percent of the systems to the market.

dominant

tion of the clones was a

much

faster

than any one brand

name company, and

this

growth

had to be stymied immediately. "At the time,

from

Intel's

plan to

had the rights to make derivative products

"We

386 processor," said Cannavino.

make

a series

However,

ucts.

IBM

of

IBM

after serious

put together a

manufactured processors and prod-

contemplation by the Board,

same time, the

told not to proceed. Tragically, at that

we were

CFO

sold

our twenty percent interest in Intel instead of taking advantage of the opportunity to sions

—refusing

grow our

to let

interest. It

me make some

was an odd

walking away from the one company on which be 100-percent dependent.

We

set

of deci-

interesting products and

lost the

we were going

to

opportunity to increase

our position in both Intel and in the personal computer market."

At

meeting,

this

Cannavino

took

also

a

position

on the

Microsoft relationship, addressing the Board: "Look, OS/2 joint effort

between Microsoft and

erated by both companies

They spend more

is

IBM—is

terrible.

a folly.

The teams this

system, was based on 286-processor architecture.

decided that anybody

advanced operating system bly killed

The code

this

gen-

aren't focused.

time fighting about where they're going to go

than working on the product. This product,

tive

—

who bought

—

a

new operating An IBM execu-

PC AT

a definite sales

would get the

gimmick

that proba-

OS/2.

"At the same time,

IBM had

another development group,

much

OS/2 development team, building something

larger than the

called OfficeVision. OfficeVision attempted to integrate the various

—electronic mail, word processors, spreadsheets, shared information way that graphics —

business software databases,

and

effortlessly.

in a

Unfortunately,

it

despite

huge

investments

in

IBM

Gets the Message

61

OfficeVision, the product design points kept changing based

the executive with the

most influence

back and looked

just sat

at

what was happening on the software

"I believe that several things at the

were

true.

Had OS/2 been

386-processor instead of the 286,

Had

mier operating system today. a graphical

anybody had

he would have laughed.

side of the house,

aimed

at the time. If

on

it

initially

would be the pre-

the OfficeVision guys aimed at

product instead of a character-based product, the prod-

uct would have had a chance.

Remember

that there

was no

clear

leader in the market at that time. Unfortunately, both these products

my

were wrong, and, therefore,

was to point

kill it. I its

firmly believed that

customers. If they killed

would hate them for having led

it later,

them down

and then watched

it

OS/2 would it

eventually disap-

immediately, the customers

them down the path and changed

for having led

their mind. If they killed

recommendation on OS/2

the customers would hate

the path, got their applications

not be the industry standard.

The

them on

it,

feeling of

IBM's senior executives was that OS/2 must succeed, and they told

me did.

to 'Build a

To

world

class

operating system.' And, in

the Boca team's credit,

we trimmed

team eventually delivered

a version that

won

the team

the resources, took

them

things back from Microsoft, and consolidated

fact,

into

IBM. The

every industry award

for operating systems.

"OS/2 required ing system.

memory

substantial

The OS/2 team was up

over the

against

PC DOS

memory

were very high and hard disks that were sized very final analysis,

customers had to pay a premium of

dred dollars to run OS/2

operat-

prices that

small. In the

five

or

six

hun-

—the price of OS/2, plus four additional PC

substantial

enough

advanced operating system. So, in

my March

1989 report to the

megabytes of memory, plus

Board,

I

stressed the fact that

a

to run an

OS/2 was virtually all but dead.

cussed the fact that Microsoft was building

its

own

I dis-

product, called

The

62

Windows, and that

going to

fit

1980s:

IBM

A Decade

of Learning

had no participation

much more

the client market

attempt

many

cases,

at

Windows was

were hurting from

OS/2. They got zero return for that

were

able to support

would

it.

adequately than OS/2. In

addition, independent software vendors first

in

financially troubled. Clearly, they

their

effort and, in

would not be

two divergent operating environments; Windows

definitely dominate.

"We

actually got very close to

working

directly with Microsoft

development of an operating system (OS) that

for the

merged Windows and OS/2.

I

essentially

could envision what was going to

if we kept going on the same track. We had solid technolThey had the right strategy. So, I went out and met with Bill

happen ogy.

Gates. In spite of I

had

a

all

the things

you read

in the papers, Gates

number of very good meetings and shared

on the future of the able to get the

IBM

industry.

a

common vision

Things went sour because

Board to approve

and

I

was not with

a closer relationship

Microsoft.

"As

I recall,

Gates and

had agreed that the world needed

I

a true

combination of the best of Windows and OS/2. For us to work

more

closely together,

we had

would have an incentive successful. I got

me

here

him

to find a

to

to agree to

make

way

the

that both companies 3 2 -bit

resulting

OS

—and you're not going to believe

— IBM purchasing forty percent of Microsoft.

If we

had

a

we would both be motiI was higher than a kite. I just knew that

vested interest in the future of Microsoft,

vated to

make

IBM would

it

a success.

see the benefit of this strategy. Boy, was

"I presented the

to the

wrong.

option to purchase forty percent of Microsoft

IBM Board, but they would have nothing to do with

there was so like,

I

much

not-invented-here [NIH].

They

it.

Man,

said things

'We're not going to have some upstart company out in

Redmond, Washington,

tell

invest a cent in Microsoft.'

IBM

what

The Board

We

don't need to

down

the offer, and

to do.

turned

— IBM Gets

the Message

63

went down the

the days of our working closely with Microsoft

wonder what

tubes. I

to

IBM

would be worth

forty percent of Microsoft

today."

During

this

same period, Cannavino was

also faced with

key

His primary laboratory, based in Boca

organizational issues.

Raton, Florida, was reeling from a lot of things. Personal computer manufacturing had been

and resulted in the to Cannavino,

first

"That

done. Trucking parts

them sense.

all

moved

layoff in

[the

down

North Carolina,

to Raleigh,

IBM's recent

According

history.

move] was something that had to be to the tip of Florida

back out again was an expense that

and then trucking

just didn't

The hardware development teams were

make any

split

between

Austin, Texas, and Boca, with quite a set of rivalries between the

two

locales.

Adding

to this fray, the

development team

in

Japan

was starting to come on strong. All three groups wanted to make personal computers.

When

coupled with the growing number of

labs developing chip sets for the

ization increased

"With

this

PCs, the complexity of the organ-

beyond anything ever experienced within IBM.

backdrop,

I

now had my marching orders. I'm

middle of 1989. Our development cycle time for puter was

more than

three years, which

meant

a

that

personal

com-

you had

to see

four years out to be able to build something you could a year, after taking three years to

was

a

death

spiral! I

develop

research

how our

more focused approaches

development

competitors operated.

knew

that

scheme

knew

inherently that

the various segments

—could reduce the

cycle.

that portables

had

a

premium niche

for a desktop replacement laptop.

chance to provide the

with a sustainable foundation. a

to

I

and the emerging portables

"The world was desperate I felt

I

sell for just

decided to force the development teams to

smaller,

servers, desktops,

it.

in the

My view was

in the marketplace. It

PC Company

that the portable had

was going to address the

The

64

1980s:

A Decade

of Learning

business traveler segment, as well as the requirements of anyone

operating where space was constrained. tually

knew

I

that

it

would even-

be an individual's only personal computer. Instead of

all

the

complications of trying to coordinate between your desktop and

your portable, augmented by the then slow transfer I

thought there was

portables.

At

That has

IBM's

rates,

whole niche that would run with

a

just

certainly turned out to be true."

Annual

1989

Senior

Cannavino told the marketing team,

Management Meeting,

"If you give

me

specifications

for a portable, I will deliver that portable in a year."

Marketing

created a set of specifications that would provide the basis for

IBM's next entry into After several the

market space.

this illusive

months of evaluation and management

PC Company

had

1989, the office had

a plan to address the portable

become

reviews,

game. By

so automated by the personal

puter that professional people out on the road found

it

com-

increasingly

necessary to take computers with them so that they could knock

out reports in their hotel rooms. 2 Cannavino recognized

and asked yet

a third

IBM's presence

team

to define a product that

in this ever

this

would

growing market segment,

trend

establish a

market

where major competitors were having great success and where

IBM

had been

dollars a year.

3

a

nonfactor as the market grew to several billion

This third team, once again headquartered in Boca

Raton, was self-contained and had engineers,

planners,

its

own hardware and

software

and marketing support personnel. This

organization was contrary to the

lab's

matrixed approach.

Cannavino selected Bob Lawten, the manager of Special

Development Operations,

to analyze

IBM's previous attempts to

develop a portable computer. According to Cannavino, "Lawten

was

a creative wild

talent like

Suarez."

Lawten 's

IBM PC management

original 2. J.

Leo

man who surrounded

himself with some good

craziness

was founded on the

philosophy of forgetting v

how

Carlton, Apple: The Inside Stoiy of Intrigue, Egomania, and Business (New York: Times Books, 1997), 104.

Blunders 3.

John

Future

A Journey ofAdventures, & Row Publishers, 1987), 241.

Sculley, Odyssey: Pepsi to Apple,

(New

York: Harper

Ideas

and

the

IBM

Gets the Message

65

things were supposed to be done and just doing

needed to be done.

Lawten

He

was

it

the

way

it

a real risk taker.

by looking into what was being developed by

started

IBM Research and in Japan.

Executives were finally asking,

"What

does the customer want in this marketplace?" According to an internal article written

by Pete

Leichliter, a

new

"This effort meant embarking on a

ogy

—for developing

to continually

a product.

The

member of this team, a new methodol-

path

—

developers were encouraged

go back and check with customers. Customers were

asked about their reactions to development's progress and the decisions regarding tionality,

form

factor,

and power. For the

keyboard, display, desktop functime, a

first

PC

development team

kept track of customer requirements in an online database." Suarez, a

member

of

IBM

develop the third

this small

"skunkworks" team assigned to

portable, provided additional insight into

IBM's attention to portable computing. "Building puter at

IBM was like

Suarez.

"None of

a portable

com-

going from mini computers to the PC," said

the people in the traditional desktop

wanted anything to do with developing

PC

area

a portable because, at the

time, the [desktop] volumes were going through the roof. So, they

decided to put a skunkworks group in place to figure basic idea

allow

was to see what

this small

a lot of

money

in portables

Because

The

Compaq was now

and customers were asking for

an all-IBM solution to their computing needs,

management acknowledged

out.

group would come up with to

IBM to play in the portable space.

making

it

IBM

executive

the need for a portable computer in

their product line."

As

a

skunkworks operation, Suarez and the team were

what they could on limited resources. ing with a small group of engineers

He

left to

do

continued, "I was work-

who were

basically told to see

what we could do. The group was designed to do the same thing the original

PC

team did

—develop

an entirely

new computer

The

66

1980s:

A Decade

of Learning

Not many IBM PC

system within a small, separate organization.

managers actually knew what we were doing, because they had so

many other issues to "But,

we

all,

didn't have

enough engineers

there were only four of us. So,

resources, and IBM's

Yamato

resources at the right time.

came up with IBM's

how the

ended up

in

lab

we went

We

We

started

third portable,

do the work.

to Japan,

which

went shopping

happened

for

to have the right

working with them.

We

code-named Aloha. By the way,

present portable computing development laboratory

Yamato

—how the group that does

on ThinkPad portables today came into a

to actually

time had an excess of engineers.

at the

that's

—the growing clones and what to do

We were basically left alone.

about them.

After

deal with

all

the engineering

existence.

They

did such

wonderful job on Aloha that we kept them working on one

portable computer after another.

product innovation with

"We

a little direction

He

told us to

portable, something that portable.

He

have to hand

it

to Bifano.

Compaq were doing sales

would

anointed us to get

would be the next wave

it

just

had the knack for

from

us.

got business direction from our executive,

Lawten's manager.

but

They

He

go off and build

Compaq

out the door, no matter what.

sold us

on the

I

vision that portables

in personal computers.

a small

Bifano,

a truly great

well against the

sell

it

Lou

Companies

like

but successful business in portables,

wouldn't be long before portables would equal or exceed the of desktop computers. Sales are

now

in excess of five billion

dollars a year."

This small team went off to develop

would make

feature they felt

incorporated in the portable. a

plasma

CRT

display,

display. It

none the

less.

it

a truly great portable.

great was a high-quality display

IBM

Research had been working on

which was thinner and brighter than

was not yet

One

color,

but

it

was

a typical

a distinctive display

IBM Gets

the Message

67

IBM's third entry into the portable marketplace, the Personal Systems/2 P70, was announced in the

tive,

most

We

P70 was

successful

a

huge

May

1989.

success," said Suarez. "It

and profitable portables

thought we'd done

"From our perspec-

a really

good

IBM

job. It

was one of the

had done to

was

date.

a solid portable

with strong market demand."

The

IBM PS/2

P70.

Market research supported

IBM

sold

become

enough P70 portables

the

number two

September 1989,

PC

and awarded the P70

Magazine bestowed derfully usable"

start

in

selling

its

first

year of business to

luggable in the market. In

World stated, "This time its

its

Best

Buy award.

IBM

Also, in

did

March

it

right"

1990,

PC

Choice award with kudos of "won-

Editor's

and "the most thoughtfully designed of the 386

luggables." It was not

was the

Suarez's perception, indicating that

enough

to

of a great journey.

become the market

leader, but

it

— The

68

1980s:

A Decade

of Learning

According to Jim Cannavino, "In 1989, the

PC Company made went from

1.2 billion dollars in profit for the corporation. Y\ e

1988 to

billion dollar loss in

1.2 billion dollar profit in 1989. So,

we were collapsing. The management team

the Board wasn't thinking that

convinced that we were. pretty

.

good about themselves.

We

and we were starting to make some price deals.

We were

a 1.4

started

—

.although

I

was

started feeling

making some money,

actually,

we were making

back to winning big accounts. But, although

we were doing all kinds of things that made sense, I still didn't think we had a sustainable strategy. The P70 contributed to some of the turnaround in 1989, but

was needed

was convinced that more

I

effort

in the portable arena."

Lawten's team expanded and was chartered to begin working on successor products.

remained

It

Boca Raton laboratory, eventually causing some cal

within the

a self-contained unit

significant politi-

problems. This did not deter the team from an eighteen-month

development cycle versus IBM's standard development cycle of

November

almost three years. In

1990, the team announced the

Personal Systems/2 P75 486. .As

was

great as the

for naught.

P70 and P75 luggables were,

Once

all

the team's

work

Compaq changed the rules of the the first notebook. The portable com-

again,

portable game, introducing

puter industry would never be the same.

The

Authors' Insights

As the history of IBM's participation

numerous

industry was explored, ered.

IBM's

failure to exercise

in the personal

errors in

computer

judgment were discov-

an option to purchase forty percent

of Microsoft was likely one of the worst business decisions of the industry.

Cannavino 's

realization that

going to succeed and that

on Windows

also

made

IBM

sense.

IBM's OS/2

effort

IT

was not

needed to partner with Microsoft

Had

Microsoft and

IBM

cooperated

IBM

and used the OS/2

like

memory management,

combined

the

tecture,

NT

Windows

Gets the Message

effort

69

user interface, and archi-

might have delivered something

5.0 in the early 1990s. Hindsight

though. It takes vision,

skill,

and luck to recognize and

is

cheap,

capitalize

on

opportunities ahead of their time.

Cannavino saw the future of mobile computing before others

IBM. He

realized that

a leader in this

IBM had the

technical resources to

at

become

emerging segment. Even while the various labora-

tory groups squabbled over ownership of this segment, Cannavino

understood that mobile development needed to be focused and

IBM

funded. Without his vision and sponsorship,

have ventured into the portable market

when

it

might never

did.

Time and

time again, such vision and sponsorship has changed the world in

which we

live

and work.

Sponsorship comes into play in another arena a

company recognize and/or train

utives?

How does

individuals to be insightful exec-

Cannavino mentioned key executives who mentored him

throughout

his career.

toring and "sit beside practices:

assured

as well.

Great companies take the process of men-

me

for a year" to the heart of personnel

planning the line of succession.

when managers

select talent that

is

as

A

successful line

is

good or better than

they are and then stay out of the way. Learning from these assign-

ments, as well as from product successes and cost-effective lessons.

failures,

provides

The

70

The

1980s:

Portable Forefathers:

A Decade

The

of Learning

Technological Advancements of

IBM's Early Portable Computers

IBM

PC

PS/2

PS/2

System

Portable

Convertible

P70

P75

Form

Sewing Machine

Clamshell

Luggable

Luggable

Processor

8086

Memory

128KB

80C88

80386

80486

4.77MHz

20MHz

33MHz

256KB/ 512KB

4/

8/

8MB

16MB

(N/A)

120MB

160/400MB

Storage

(N/A)

Display

Amber/

Detachable

Hi-res

Hi-res

orange plasma

LCD

plasma

plasma

(VGA)

(XGA)

DOS

DOS

Operating system

DOS

3.2

4.0

OS/2

DOS 4.0 /5.0

/5.0 1.3

OS/2

1.3

-

Weight

29

/2.0

/2.0

12.2

20.8

22.1

Internal

modem

Micro Channel

Micro Channel

4/2/86

9/89

11/90

(lb.)

Other

Announced

2/16/84

IBM

Gets the Message

71

As the story progresses, some terms need

clarification. Portable

computer describes individual

a personal

from place

computer that can be carried by an and operated on battery power.

to place

Different form factors have evolved over the years: •

—Referred

Transportable

to as a luggable,

pounds or more, did not ran off AC power. •

Laptop

—Refers

It is

fit

no longer

in production.

It

weighed more than seven pounds

and ran off battery or AC. Laptop press as a generic

name

is

for portable

accurate term for today's portable

Notebook

weighed fifteen and normally

to the original portable that used a

"clamshell" design.

•

it

in a briefcase,

PC—Weighs

now used in the PCs. The more

PC

five to eight

is

PC.

a notebook

pounds, with maxi-

mum dimensions of nine by twelve by two inches. The more popular ones than

five

are "thin

pounds, and are

Notebook PCs have

and

less

light,"

than

1.5

weighing

less

inches thick.

bay in which multiple devices can be inserted and removed. Typical bay options are a CDROM, floppy disk, and battery.

•

a

—A portable system that does not include

Tablet

board and uses

a key-

Larger tablet systems are used in vertical markets, whereas small tablets such as the Palm Pilot and Palm III are used by general busia stylus for input.

ness professionals. •

—Weighs four pounds or

Subnotebook

less. It

might

require an external diskette drive or port replicator to

function of a notebook. Generally, the

achieve the

full

keyboard

small, with less than

is

17mm

between the

keys. •

Ultraportable

—A notebook PC that does not have an

internal bay but does incorporate a standard keyboard

with

19mm

display.

between the keys and

a large

12.1"- 13.3"

1990-1992:

The Time of Change

The

5 th

"OF COURSE

WaVC

IT'S

By Rich Tennant

PORTABLE SIR, LOOK, HERE'S

THE UANDLE."

Chapter Birth of the

And the Little down

Notebook Computer

Blue Engine smiled and seemed

the mountain,

pursued

its

say as she puffed steadily

I thought I could. I thought I could. I thought I could.

rules of the portable

sively

to

U

—Watty

The

7

Piper,

The

game had changed

Little

again.

Engine That Could

Compaq

aggres-

vision to be the industry leader in portables with

1987 introduction of the Portable

II,

which was

lighter than

pounds, and in 1988 with the "lunch box" Portable

"

its

twenty

III, a svelte

four-

teen pounds. IBM's portables response was the solid "lovable luggable"

known

leader

Compaq's

continued

as the

P70, equal to or better than some of market

portables. If the size

as luggables

weighing between

IBM's P70 might have had

was

in the

game with

redefined what

it

and shape of portables had

a

long

life.

a solid line

meant

fifteen

But, just

and twenty pounds,

when IBM thought it

of portable computers,

Compaq

to be a "portable computer."

Meetings with portable purchasers always told the same

They wanted

a smaller

story:

(and lighter) form factor. Questions such as

76

1990-1992:

"Can you guys make

it

The Time

of Change

Can you fulfill our dream

smaller and lighter?

of a computer no bigger than a notebook?" were pervasive. Clearly, users

wanted

weighing

box about the

a

size

1

of a spiral notebook (8.5 "xl

")

and

than ten pounds.

less

A significant technological advance was required to make this happen. Until 1989, all portables had a built-in small CRT that occupied a lot

of space, added weight, and required

lots

of power. Industry talk

of a Japanese advanced display technology foreshadowed a display called the super-twist neumatic

(LCD)

(STN)

This new technology,

to market.

if

portables

less

rumors held

than ten pounds. Expected to use

would be able

to run

computer was approaching

a

on

screen

liquid crystal display

immediately allow the portable computer to be much,

and weigh

flat

much

less

batteries longer.

major breakthrough, and

true,

smaller

power,

The it

would

new

personal

would stim-

ulate the entire industry.

In October 1989,

Compaq introduced its first notebook computer,

the Lte (pronounced Lite) and the Lte 286, joining the ranks of

portable manufacturers such as Data General and

implementation of the notebook form

ecstatic.

was

possible:

factor, this portable

the

first

broke the

six pounds. The industry press Compaq had done what no one thought Once It made a computer that was the size of a notebook. The

ten-pound barrier with

was

GRID. As

a

weight of

again,

headlines from the industry trade magazines heralded the introduction as an innovative "Finally,

Compaq

run on

its

By today's a

40MB

own

a thin, light, portable

we have been wanting

computer that can actu-

internal power."

disk,

display (at a time

the desktop).

—

standards,

hard

within personal computing. Users said,

has developed exacdy what

for the past five years ally

move

it

4MB

was underpowered. of

memory and

an

It

had

a

8. 5 -inch

286 processor,

monochrome

when everyone was converting to color monitors on

It also

included both a hard disk and a floppy drive.

Birth of the

Notebook Computer

i •?§] i ii »??Tfn7^1

J !r uj

•>>! 1

By now, IBM related

book the

286

Memory

4MB 40MB

Display

Monochrome LCD

Weight

6

Other

Full-size

Power Source

Battery with

realized that

lbs.

Compaq was

keyboard

AC

adapter

a threat.

Leo Suarez

IBM's reaction to Compaq's announcement of the Lte note-

that occurred only five

IBM

months

after the successful

launch of

we

Personal Systems/2 P70. "It seemed that right after

Compaq announced

introduced the P70,

Man,

?£^^^HHBHfl

Processor

Disk

77

did the world change

their original notebook.

on us almost overnight. Here we had

just

developed a portable computer that was clearly competitive with

advanced plasma

display. But,

Compaq announced The customer

it

its

was shot right out of the water when

the Lte notebook."

base

no longer wanted

luggables.

was notebooks, notebooks, and more notebooks.

From now on, it The demand for

IBM sales reps when IBM was going to come out with a notebook PC like the

Compaq

Lte was great, and customers were asking their

Compaq.

The world was sis

desperate for a portable from

IBM. More empha-

on the product area was needed, and Jim Cannavino stepped up

to the task.

Cannavino told the executives

at

IBM's 1990 Annual

Management Meeting and the marketing team that if they gave him specifications for a laptop, he would deliver that laptop in Senior

a year.

And

announced design,

They created a set of specifications, eventually L40SX laptop. Also, before finalizing the product

they did! as the

Cannavino

customers

insisted that Lawten's

who were

team spend time with the

requesting IBM's participation in this market.

After meetings with hundreds of customers, the team produced set

of concept drawings.

its

1990-1992:

78

Unfortunately,

it

was

The Time

a laptop,

of Change

not a notebook.

Suarez remembered the situation quite well. "Our

'When

Akers, kept getting calls from customers, deliver

its

We

laptop?'

is

CEO, John

IBM

going to

continuously got notes from Akers

office,

'Where's the laptop? Where's the laptop?' So, our team was asked to

go forward on the

first

laptop. It

was

a crash project.

We

develop a laptop that was slightly larger than a notebook.

may

surprise you. It wasn't because

small as

Compaq.

Rather,

the PCjr keyboard.

it

The

reason

couldn't build a portable as

was because of IBM's bad experience with

The PCjr keyboard

(referred to in the press as this

we

decided to

chiclets)

used tiny button keys

rather than full-size.

The reason for

design was to accommodate various keyboard overlay templates,

which would describe the keyboard actions tion.

This was necessary

in the

pre-GUI

for a particular applica-

(graphical user interface),

mouse-driven applications days. Back then, everything was accomplished at the keyboard.

developed,

it

We decided that, whatever small portable we

had to incorporate the best keyboard

possible.

®3^"*?\MaMmKKBBBHB&HBHMam

IBM PCjr chiclet keyboard. "This requirement drove us to use the slightly larger laptop form factor,

even though

form with

Compaq had just come out with a notebook plat-

a smaller keyboard. In hindsight,

take. But, there

was such

it

was probably

a

a build-a-great-keyboard mentality at

mis-

IBM,

Birth of the

we

Notebook Computer

didn't think that a slightly larger

ference."

On March

26, 1991,

form

IBM

factor

delivered

79

would make any its

laptop, the

dif-

PS/2

L40SX.

The development team had for a full-size keyboard,

announced ing over.

at the

important. I'm

which the L40SX incorporated. However,

same time

The world

addressed the marketing requirement

said,

that the

"No,

notebook form factor was

full-size

more than happy to use

it

tak-

keyboards are not that

a smaller

keyboard

if you

can

reduce the size and weight of the total machine." So, although the

product was

initially a

market success, the form factor was too

however, receive numerous awards for

did,

high-quality keyboard, and look and

According to Suarez, tery-operated

386SX

"We

was

it

developed a lightweight, durable, bat-

laptop with a great keyboard called the

full

was

a laptop in the

really taking off. But,

industrial design,

feel.

PS/2 L40SX. The product was not necessarily in the sense that

its

big. It

a

major success story

timeframe that the notebook

we might have sold more units if of a laptop, we managed to sell more

although

we had built a notebook instead

than one hundred thousand L40SXs, which in those times was fantastic.

We

We had projected to sell only twenty or thirty thousand units. L40SX a true market success when combut we beat our projections. Our customers

never considered the

pared to Compaq's Lte, got a laptop with a

memory and also the first

monochrome

storage

—and

LCD

a really

display,

good keyboard. The L40SX was

system to use liquid crystal display

provide essential system status to the user.

of LEDs because they used

"Throughout can.'

less

adequate processor,

(LCD)

LCDs

indicators to

were used instead

of the system's battery power.

this project, the team's

motto was 'We know we

At the announcement celebration, Bob [Lawten] presented

each of us with a copy of the book The Little Engine That Could, along with a train model mounted on a plaque inscribed with the motto.

one of the few mementos

in

I still

have

at

It's

home.

"Many people don't know it, but we used the L40SX as a 'test bed' our labs for many of the leading edge technologies that ended up

80

The Time

1990-1992:

in the

of

Change

ThinkPad. Some of the patents on the L40 for power man-

agement

are

We

used on ThinkPads today.

still

tested both the

TrackPoint cursor control and the 10.4-inch color

how

we

did test the concepts with focus groups.

to

they would perform.

go with

also built an

but the

a black cover,

display to

We never sold them to the public,

see

"By the way we

TFT

L40SX colored

all

black.

but

We wanted

IBM executives thought that was just

too wild and out of character for the personal computer market.

was not the

IBM

soft off-white pearl that

It

was on the minicomputers

and mainframes. Even though we were doing

all

sorts of innovations

in the lab, the linkages to traditional 'big blue' just couldn't let us go.

So,

we used

Tom

off-white pearl instead of black."

Hardy, then corporate manager of the

offered a different perspective

'IBM

executives'

L40SX

on the color

who made the

IBM

design program,

decision: "I

was one of the

decision that black not be used

on the

product design. By 1990, Richard Sapper, an influential

design consultant, and

I

had already concluded that black should be

the 'personality' color for IBM's

new line

of mobile tablet, laptop, and

notebook products. However, the application of black was conjunction with the specific

new

to be in

design concept and detailing that

Sapper was developing based on the Japanese 'lunch box' concept.

"The L40SX design escalated this issue to

did not follow Sapper's concept direction.

Cannavino because so many concerns

I

existed

L40SX design. We initiated some work sessions to see how L40SX could be adapted. Sapper even made some mock-ups that

with the the

were sent to Boca Raton. However, Law-ten refused to implement any changes to the team's base design. Therefore, tion that the ria

L40SX

did not

required to be the

first

I

held to

my posi-

meet the corporate brand design

IBM

crite-

laptop to introduce the dramatic

black color.

"Introduction of the color black on an tant brand

image statement.

IBM product was an impor-

We wanted to ensure

that

all

aspects of

Birth of the

Notebook Computer

81

the product design were at a certain level of design concept and detailing excellence. Unfortunately, Sapper

design problems with the

although

it

L40SX

and

I

had some serious

that could not be resolved. So,

might have appeared to the development team

arbitrary decision tied to tradition,

it

was an action to protect

to be an a design

element that would be influential and important to the mobile brand."

Tom Hardy. Design was not the only aspect changing the portable arena that Lawten's team wanted to address. Cannavino offered a marketing

view of the portable program:

"We

tried different

marketing pro-

grams with the L40SX. Working with Harvard University, the plan was to seed incoming laptop. But, the

and there were

MBAs

in the

fall

of 1990 with IBM's newest

box was delivered too early lots

of problems.

We

the issues hitting the press before

in

its

development

cycle,

were very concerned about

we were ready

—despite

the

The Time

1990-1992:

82

of Change

nondisclosure agreements each student and the University had to sign.

The

"As

it

system was just not ready for prime time. turned out, the Gulf

War

and other economic pressures

obscured these problems from the press, preventing another black eye in the portable market. a

team of

fifteen

We never made the papers! But, I also had

people resident at Harvard so thatpeople having

problems could get immediate support.

beyond anything

company could

a

interested in the long-term effect

Harvard was

was

a

good

a

way

way

was more

on the product launch. Winning

to get the portable business re-energized. It

starting place, with

we

support was way,

afford to give, but I

its

reputation for delivering future

decision-makers into large enterprises. the box after

The

resolved the

initial

The

students actually liked

development and manufacturing

problems."

The

final success aspect

development cycle,

cycle:

compared

of the

L40SX program was

only an eleven and a half

to the

PC

its

month development

Company's normal three-year

shorter development cycle was the only

way

reduced

cycle.

A

PC Company could

the

get back into the market as a major player. Cannavino started to have serious meetings with the key telling

them

He recalled portables,

done with desktops. These discussions would lead

significant changes within the

was, in

this topic.

done with

that if a shortened cycle can be

surely can be

It

management on

fact, a

first

to

Boca organization.

time of change and uncertainty within

Raton. Following the

it

IBM Boca

voluntary separation program in 1988,

which offered employees two

years' salary

and $25,000, two years of

health benefits, and a $2,500 education allowance, 1991 brought

another significant headcount reduction objective. This employee separation

program was neither

vious programs. Executive

as lucrative

management

nor

tried

of the remaining employees and to soften the

realities

by concentrating on an organization high point sary of the

IBM

PC.

as voluntary as pre-

to improve the morale

of these actions

—the tenth anniver-

Birth of the

Notebook Computer

S3

Pulling the employees together and celebrating the tenth anniversary

lead

became

a site focus.

Debi Dell and Dr. Dave Bradley took the

on documenting the

Employees were asked

ten years of the PC's history.

first

mementos

to contribute their precious

product displays, which were part of the coordinated Boca

remembered the key involved in the

Jan Winston

first

executives,

code names, and

Debi Dell with Dr. Dave Bradley.

(on right).

remember

office locations

decade of operation.

Employees were provided mementos,

far the

site cele-

A questionnaire was developed to see how many employees

bration.

to

to

the day.

On one of the

flyers,

flyers

technology had come since the

was

and a

comparison of how

IBM PC

growth was exponential but did not nearly

a single red rose

announced.

reflect the

advances the

industry would see in the next ten years.

Features Processor speed

(MHz)

Instruction execution rate

August

August

1981

1991

Difference

5

50

lOx

.25

25

lOOx

16KB

16MB

lOOOx

160KB

1.6GB

lOOOOx

(MIPS) System

memory

System storage

The

84

1990-1992:

The

of Change

was not the only focus of the celebration. As part of the

past

August

The Time

IBM

12, 1991, press release,

discussed

its

thoughts on the

future:

In the coming decade, pen-based and wireless computing

new class of The mobile worker is someone

devices will bring computing to an entirely

user

—the mobile worker.

who

does most work standing up or moving around, such

car insurance adjusters or repairmen or

as

someone who meets

with clients face-to-face: architects, lawyers, reporters, and so on. Pen-based computers will need to be able to function

indoors and out, be lightweight and rugged, having no

mov-

ing parts such as spinning disk drives that could be damaged the system

if

computing

is

dropped when moving about. Pen-based

move

will also

to the desktop but will differ sig-

nificandy from mobile computing, acting as a replacement for a

tle

mouse and an adjunct

to the keyboard.

The good news was that the direction was on target, although a litpremature. The bad news was that the executive team behind this

direction

Japan.

would soon be changing, both

Bob Lawten, who

early retirement. Unlike

in the

United States and

L40SX effort, took an encouraged Estridge, who had to spend time in the

led the

penalty box, risk takers in the early 1990s were encouraged to leave

or face the prospect of being "shot." Lawten realized that to

move on and

use his experience in other venues.

With Lawten

's

had

little

departure, the team

became

slightly

it

was time

confused and

development direction following the L40SX. Cannavino

pushed the introduction of IBM's notebook products to replace the

L40SX, but they announced

also fell

several

still

IBM

notebook products: the N51SX, the N51SLC,

and the CL57SX. Despite books

behind schedule. In March 1992,

its

innovative color, IBM's

trailed the industry leaders

too" products by the press.

1

first

black note-

and were pronounced "me,

The market

did not react favorably to

these products, and today few industry pundits could probably even

1.

Carroll, Big Blues, 258.

Birth of the

name them. According was catastrophic

The whole

Notebook Computer

85

to industry observers, IBM's portable plan

at best!

area of portable

computing development was coming

under the scrutiny of senior executives inside IBM. Customer pressure,

supported by the

sales organization,

good notebook computer. After all, not

if

was pushing

IBM to

do

a

Compaq could do it, why could

IBM with all its resources?

During

period of introspection, strong marketing programs

this

were required to push the portables currently in IBM's product

line.

These programs were developed and driven by two

who

later

had major

Maurice

roles

on the ThinkPad brand team: Scott Bower and

Fletcher. Fletcher reflected

mobile market and necessary:

individuals

why

"The Boca

a

on IBM's general view of the

good notebook computer was absolutely

portable team and

Yamato development drove

the product specifications. Mobility had taken

off, especially in

the

U.S. After the L40SX, products developed by Japan for the Japanese

market were

retrofitted for the U.S.

originally designed to be used in tle

Japan

Because these systems were as

desktop replacements,

attention was paid to the weight or battery

battery

IBM

life

were unacceptable

life.

The

lit-

weight and

once again,

in the U.S. market. So,

faced inventory excesses of unmarketable products.

"The

ESD

notebook

business strategy at that time noted that worldwide

sales

opportunity was growing from 2.6 million in 1990 to

5.6 million in 1993. It

the next

month

was

a

market that deserved attention.

I

spent

analyzing the notebook market and developing our

competitive methodology.

We started to use something called Price-

Function-Value (PFV), which represents the relative market value of

the product. "If the

PFV

equaled one hundred percent, the product equaled

the competition. In late 1991 and early 1992,

were

significantly less than

detailed foil (IBM's

all

one hundred percent.

of our notebooks

We

developed a

term for transparency or overhead) presentation

86

1990-1992:

on our positioning and took division.

When we

thirty-five

The Time

it

of Change

to the president of

compared our proposed product plan

against

notebooks by key competitors, we were way behind com-

petition with the present product line.

showed

IBM's marketing

that

we would

"Within two

years,

Even worse, our

analysis

be behind in 1992.

still

we

felt

PC

twenty-five percent of the

would be twenty to

that notebooks business.

The

only product on the

drawing board that appeared to meet the U.S. market requirements

was

a product

code-named

Nectarine. It

had an internal ship date of

September 1992 but no external announce several

recommendations

the U.S. volumes low

emphasize Nectarine

date.

We offered the team

to strengthen the portable plan: (1) keep

on

all

as the

other products except Nectarine and

premier offering,

(2)

enhance Nectarine

specifications to leapfrog the competition, and/or (3) get a third party7

to develop a product for the U.S. as a potential alternative develop-

ment and manufacturing

The development team message that we were serious

source.

was beginning to get the

market and the U.S. was going to be in the

driver's seat.

in

Yamato

about

The

this

U.S.

requirements were to be the basis for the next portable product." Pressure was not coming just from market requirements but from

many want

directions, especially the competition.

to

"meet the competition" by doing

IBM

a copycat

team's decisions to try to leapfrog the competition

ing a greater effect

Lte was truly portable,

it

was perceived

it

you could

buy.

Compaq

The

would end up hav-

was not

Lte notebook. Although the

a state-of-the-art personal

as the best

com-

and most innovative notebook

The market wanted something more, something that

would provide users with an experience office.

notebook.

on the portable computer market than even the

introduction of the original

puter. Yet,

did not merely

closer to

what they had

in the

Notebook Computer

Birth of the

87

MOBILE POSITIONING

KNOWN VISION VISIONARIES

NICHE C/3

•COMPAQ

!

cc LU

Q
n- my sffE&swEgj teus me wt SUOULP BASE CUR tWe&p R)K>ET ON S MY P^CHOANAlYSIS PROGRAM TEU.S ME I tGFEWDTDO MUCH ON CUTSIPE INPUT AND SHOULD TRUST MY /NST/NCTS MORE.

Chapter 25

IBM (I've Been Moved—to Raleigh)

Change

is

inevitable in

a progressive

society.

Change

is

constant.

—Benjamin Disraeli

During an executive meeting and

in the spring of

Compaq was IBM's most dreaded puter space, and

PC

it

was ahead

about Compaq, but

in almost every

somehow

beating us just wasn't sinking quiet any longer, so

Compaq Raleigh,

I said,

in. I

'Let

Wangaratta.

Where

Guadalajara,

Marietta,

Bethesda,

his

team knew every

the reality of why they were I

ask this team.

couldn't keep

Where

does

Where do we manufacture? Fujisawa,

are their sales decisions

are our sales decisions

Company.

product segment.

decided that

me

manufacture? Houston. Austin,

Thoman

competitor in the personal com-

According to Joe Formichelli, "Thoman and

Where

994, Rick

team reviewed Compaq's impact on the

his

statistic

1

Greenock,

and

made? Houston.

made? In Boca Raton, Somers,

and Raleigh. Where's their development

team? Houston. Where's our development team? Kingston, Boca, Austin, Raleigh, and Yamato.'

3

54

1993-1995:

"That's

when

used

I

my

all-time favorite phrase

which means that you have done.

I

The Brand Emerges

to

go

all

It's

a goat

rodeo,

over the place to get the job

was on the phone from eight o'clock

in the

morning

until

eleven o'clock at night just trying to communicate with the different

worldwide groups. At

'What do you want

out,

point in the meeting, someone blurted

this

to do?

Move

everybody to one

described his recollection of this same meeting:

Claflin

"Formichelli certainly understood the

PC

the

site?'"

operations. But,

number of sites

involved in

was Mark Loughridge who had

it

recognized that the cost structure of the

earlier

PC Company didn't work

and recommended laying off five thousand people. The move rec-

ommendation was cost position.

development

just

another step by Loughridge to improve the

The PC Company had cycles,

and increase

This meeting was not the

been considered.

first

sales to survive."

time that

was, however, the

It

undertaken to determine the tors within the personal

to drop people, decrease

feasibility.

first

site

consolidations had

time that

Unlike

study was

many of its competi-

computer market, IBM's

centralized in one location. In the case of

a

efforts

were not

Mobile Computing, the

geographical fragmentation had an even greater effect because

mobile was the only organization with

its

key development arm in

Yamato, Japan. In addition to the time zone difference, communica-

was

tion

—both written

difficult

and spoken. Cultural differences

sometimes surfaced when females from the U.S. team traveled to

Yamato ules.

to negotiate product requirements and

Of course,

inate this

the

site

problem

consolidation within the States would not elimfor the

mobile team.

It

would, however, reduce

number of sites working with Yamato and merge

operations.

Some economy

and asked

me

to

conduct

PC Company to

one

the U.S. -based

of scale would then be realized.

Formichelli recalled, "After the meeting,

the

development sched-

a feasibility

Thoman pulled me aside

study on moving everyone in

location. Because of the confidentiality of

IBM (I've Been Moved— to

Raleigh)

355

was allowed to work only with Jan Winston, Thoman's

this matter, I

Winston and

operations expert.

I

sketched out the concept on the

back of an envelope and then met late into the evening to develop the details

on a blackboard in the meeting room.

PC Company location.

and minuses of each

answer to be Austin because

showed

I

personally wanted the

I liked living there.

moving everyone

that

We reviewed the pluses

to Austin

Our analysis

quickly

was comparable to

a

min-

now swallowing a whale. At the time, Boca Raton had more than five thousand employees. Raleigh, on the other hand, seemed the logical choice. It

was already home to the U.S. personal computer manufac-

turing effort, had an adequate physical plant already in place, boasted

and was halfway between Somers and Boca.

a temperate climate,

"After reviewing the site analysis with

Thoman, we proceeded

We looked at their levels and classifications, salaries, and years to retirement. We conducted the to analyze the

old lifeboat

employee population.

drill: If

you could put only ten people

in the lifeboat,

who would it be? We did this for every brand team, projecting who would go, who wouldn't go, and whom we wanted to go. Winston and

I

detailed the

incentive

moving and

program

living costs, as well as developed an

for critical resources.

We

put

this

whole thing

together in a week."

Jan Winston reflected on

worked hard right

to get

all

his

work

effort with Formichelli:

"We

the information necessary to develop the

recommendation. Joe was

tireless in this

endeavor

—

I

don't

think he ever realized that there are only twenty-four hours in a day.

Having worked with the

since

its

PC Company

inception in the early eighties, this was a difficult task for

many families would be recommendation we brought forward."

me.

I

almost continuously

knew

that

Cannavino recalled the executive ing of the Boca Raton started an industry

site:

disrupted by whatever

attitudes concerning the clos-

"Boca was frustrated

as hell.

They had

and were losing control of it. Their costs were

356

1993-1995:

out of control.

They had

The Brand Emerges

lost their leader,

Don

vision; that plane crash in Dallas really hurt

struggling to

make

look

this business

stood. And, of course, the

from

and

Intel

justified

something they under-

PC environment was a IBM Company. The tech-

a ten-percent tax to it

They were

them.

PC, the whole

big threat to the infrastructure of the

nology guys charged us

like

Estridge, and his

by

calling

it

buy microprocessors

a qualification charge. It

had nowhere to lay off

truly just a tax because these guys

was

their

overhead. So, this was just part of a whole underground effort trying to suck this

"The

PC

thing back into the middle of

original plan of manufacturing in

would have made the decision

The

to

move

it

IBM.

Boca was

bad

a

idea. I

out of there even sooner.

move manufacturing out of Boca in 1988 had do with the capability of people. Combined with the

decision to

nothing to limited

IBM value-add

tion infrastructure

in

PCs, the lack of a high-volume distribu-

made manufacturing

Florida totally unrealistic. access.

On

at the

southern

tip

of

There were no routes and no easy

top of this logistical nightmare, Florida's governor

decided that he wanted his state to have a piece of the action and

added

a tax to all

products shipped out of Florida. By the time the

state realized its error,

IBM had

already determined that manufac-

turing had to go somewhere. If

moved

it

it

had been me,

to Austin, not Raleigh, but that

manufacturing moved,

it

opment would follow Company,

that time

was

"Why at this point?

was only

it.

With

now

a

was before

might have

I

my time. After

matter of time before devel-

the problems facing the

PC

[1994].

For one thing, we were driving

to a reduced

development cycle time. Think about the old three-year develop-

ment

cycle; early

manufacturing involvement was the

the development cycle. Well, what do you do with a

development cycle?

last

year of

six-month

When does manufacturing development start?

When does the last year start? Where were the boundaries and the

IBM (I've

You had

blurs?

actually

do

to

Been

Moved—to

Raleigh)

357

do end-of-life management before you could

a launch. So,

cycles, there couldn't

when you had six-month development

be any boundaries between organizations.

Everything had to be in one place. There was no question about

The

that.

and development ways were

traditional manufacturing

gone. You had to lock in the form factor before you finished product development, because you had to order the

Power

supplies required a

power

nine-month delivery cycle

supplies.

for a six-

You were ordering parts

month product development effort. before you knew what you would be developing. The whole world

how things were developed and manufactured had changed. The handwriting was on the wall regarding the closing of Boca of

Raton

manufacturing moved to Raleigh; the development

after

cycle reduction "I actually

changed the writing from pencil to

ink.

thought that Boca could stay in the server business,

which required

a slightly

longer cycle. But, servers never got into

They never had the pas'We are going to own the

the hearts and minds of the Boca team.

They never

sion.

stood up and

said,

server business.'"

Kathy Vieth was on the this perspective:

fringes of the Raleigh decision

"I'm going to be very harsh. Boca was

Boca was never going to bring back bility,

how

do anything

so

many

glory days.

To

It

a malaise.

was an impossi-

this day, I

have never

excellent people, so committed, could not

well. It got to the point

what to do and why we had to do lost

its

despite the excellent people in Boca.

understood

and offered

it.

where everyone was

The IBM

telling us

executive team had

confidence in Boca knowing what they had to do.

The

only

apparent exception was the ThinkPad team, and no one was going to leave a portion of the

PC Company in

to get out of Boca, out

Boca.

It

was an excellent idea

from under the Boca stigma. In

Boca would never be viewed

as a leader in

my opinion,

IBM ever again.

It

had

its

glory days in the early eighties, and they could not be recaptured."

358

1993-1995:

The Brand Emerges

Formichelli and Winston presented their findings to Jim

Cannavino, Rick Thoman, Jerry York, and told

them

transition.

that

would take about

it

Thoman

responded that

months. Gerstner agreed, saying

Canyon, you

can't

a year

do

it

Lou

and

They make the

Gerstner.

a half to

had to be done within

"When you're

six

Grand

leaping the

in small steps."

it

Formichelli ?ud Winston put transition teams in place to handle the

move

Given that he was

logistics.

ThinkPad brand, Formichelli with the

move over

responsible for the

from

direct involvement

the next two months. In August 1994, the

Company announced Raleigh,

retreated

still

its

PC

intention to consolidate operations in

North Carolina.

At the announcement, the

details

were not completely worked

The initial employee information was sketchy. What was known was that some employees would get offers to move to out.

Others were told that they were surplus (no longer

Raleigh.

required)

and did not have positions

in

Company. Incentive programs were provided of employees. Although

one knew what

it

all

knew

that these

the

relocated

number

for a limited

programs

took to qualify for the additional

PC

existed,

money

no

or pro-

motions. Employees had to commit within sixty days after visiting

home appraisals. By November, the management team knew who was committed to the move and found out that they were going to lose much of the Boca team. Raleigh and obtaining

Patty

McHugh,

still

in her role as

ThinkPad planning manager,

had several meetings with the Boca team to share information. Because of ThinkPad's market success, the team's product line was growing.

The

with working on

To

lighten the

this

mood,

with the

executive team felt that fewer

incentives were necessary for the mobile allegiance to the brand.

affinity

Management

team because of its strong

felt

that the pride associated

team would propel most employees

to

move.

McHugh not only made herself available

for

— IBM (I've Been Moved—to

career discussions but also organized a

members were asked on ways to make the Bruce Claflin, in

to put

on

their

HAT DAY, when the team

"THINK-ing"

his role as president of the

PC Company

He

roundtables to gauge the effect of the decision.

held numerous

One

of the per-

questions that he and other mobile managers were asked

was why the group that was developing and

selling mobility

be geographically located in the same physical location

would

facturing and yet

ment.

work

caps and

transition smoother.

Americas, visited Boca to explain the move.

sistent

359

Raleigh)

The

still

as

had to

manu-

be separated from Yamato develop-

what the team was

decision flew in the face of

marketing to the industry. However,

as

much

sense as this might

have appeared on the surface to make, leaving the planning team

Boca was never an option. The entire

in

consolidated without exception

The

PC Company was

—

well, almost

only exception would be those executives

no need

to

move

to be

without exception.

who

the headquarters operations and

felt

there was

would not leave

New York. Debi Dell remembered I

loved with the

gram

at the

to Raleigh

this difficult period: "I

was doing

ThinkPad team while completing

University of Miami.

a master's

a job

pro-

My husband and I made the trip

and were extremely disappointed.

The

builders took

advantage of the situation, and housing prices increased dramatically after the

IBM announcement

hit the papers.

For

a

house

comparable to our Florida home, the price difference was more than sixty grand.

Of

course, the appraisals

on our Florida home

were depressed because the appraisers had to take into consideration the flood of houses that all,

were going to

hit the market. All in

the financial impact in housing alone was

dred thousand dollars.

My situation was

that of the other employees

panies other than

IBM.

We

who had

not

more than one hun-

much

different

from

spouses employed by com-

had to balance the financial impact

360

1993-1995:

The Brand Emerges

with the potential uncertainty of becoming

one-income house-

a

hold for some period of time. "Before making the decision,

I

had

a great conversation

with Joe

move and its effect on my career. He even offered to delay my move until the end of my master's program as an incentive to eventually make the move. But, unfortunately, there wasn't any way to make me whole financially. Probably the biggest mistake with the PC Company move was the limited numFormichelli about the

IBM

ber of incentive programs.

When

move.

the Boca

learned a lot from the Raleigh

programming

lab

moved

lowing year, the number of financial incentives

number of employees who

actually

to Austin the foltripled, as did the

moved."

Formichelli added to this reflection:

"We

did lose

more key

employees than our projection, but everyone was relocated to Raleigh on schedule.

march

for a

little

was part of the team

I

while.

I

in charge of that death

guess you could say that

I

was partly

My

responsible for the whole Raleigh consolidation process. efforts certainly

changed the complexion of the ThinkPad brand

team, as well as other

PC Company teams."

The ThinkPad team members. In addition

Suarez went to work for

Patty

PORT, and McHugh, after

make

the move, reneged

work

Latin America,

on her commitment and

According to

PC

a

Sztybel went to

Company, but

this

At the time, we had great products,

my

swallowed up in the bureaucracy and

politics

location as headquarters.

left

IBM to work

1994 interview with McHugh,

a great brand. It scared the hell out of

ple of

Bob

she had convinced most of her planners to

were the best in the affected us.

IBM

Leo

Pete Leichliter retired from the company.

for

for Motorola.

of the original brand team

lost several

to Dell, Jim Bartlett lost his entire team;

move

still,

I

definitely

and

a great team,

people that

we would

get

of being in the same

That was one of the reasons

turndowns for Raleigh. Even

"We

I

had

a

cou-

had an exceptional

IBM (I've

accept rate overall. believed that the

Been

Those

Moved— to

individuals

PC Company

361

Raleigh)

who

did not go truly

was not going to

survive. I

know

was something everybody was considering."

that

Two ThinkPad team members who made

the

move

—Mark Cohen and Dick

Green.

The key ThinkPad marketing managers Scott

Bower and Maurice

North America,

for

Fletcher, also decided that Raleigh

was

not the place for them. Bower recalled his decision to leave

ThinkPad and IBM: ThinkPad

ship; in fact, I

the best job in the a

"I

We

good team.

everything

PC

was one of the

had bought land down

Company, absolutely the

were innovative.

we were doing from

a

We

abandon the

to

last

in Raleigh. I

had

We

had

best job.

were marketing almost

ThinkPad

perspective. It

was

a

great part of the business in which to be involved. "I

had bought some land and sent

architects

on

a house.

my

She came back

wife

be

calls

fair, I

ally

from the executive

recruiters,

to

work with

and told

in tears

Raleigh just wasn't going to work out. She told ing the

down

me

me

that

to start return-

from headhunters. To

didn't listen to headhunters while at

IBM.

I

was continu-

challenged and presented with great opportunities, especially

after joining

school, and

ThinkPad. But,

we

really did

at the time,

my

not want to uproot him.

son was in high

My wife had her

362

1993-1995:

own

The Brand Emerges

and we liked the Connecticut

business,

area.

might have gone through with the move

that I

if

Even

so, I

think

the organization

had stayed the same, but everything was changing."

Maurice Fletcher echoed Bower's sentiments:

ThinkPad team

with Gerstner,

a transition

to run the

Company this

in '95 for several reasons.

PC

who

organization.

IBM was

"I

the

going through

had, by then, brought in

We

left

Thoman

a path to make the PC when Gerstner decided that management was changing, as

were on

an independent company

should not be the case. So, the

was the freedom to do what needed to be done. "This change in approach was demonstrated in other areas well.

For example, we worked hard

part of the equipment

on some of the

mission, one of the astronauts

make

Gerstner stated that the only brand

at

Somers headquarters

Upon

IBM

to

receiving the plaque,

had developed

in decades

we would sit in meetings where we not know what we were doing. Our decisions

was the ThinkPad brand.

were told that we did

ThinkPad was

shuttle missions. After the

showed up

presentation to the team.

a

to ensure that

as

Yet,

regarding marketing and advertising were being questioned at every turn. Despite the

brand,

we

growing success and

desirability of the

constantly had to prove ourselves.

ThinkPad

The environment had

changed from one of teamwork with the executive management to very contentious atmosphere.

It

wasn't fan anymore!

"Couple that with Formichelli's push to consolidate everything Raleigh, and

making

my

you had

decision, I

decided not to

a

in

less-than-optimum work climate. Before

went down the

move from

me

a

list

of executives

the headquarters in Somers,

who had

New York.

move was not a good career decision. I started looking outside IBM. I knew that it was unlikely that I would find something within the company that would allow me to remain

That

in

list

told

New York

develop a

that the

and provide

new

business.

me

with the excitement and freedom to

IBM (I've Been Moved—to

"If you ask

the

me what

363

Raleigh)

the team thought of the move, just look at

number of people from

much

the original group

who

left.

We obvi-

move in concept or design. Besides, it did not solve the problem. The move was a reaction by an executive that got picked up by other executives who did not know the PC Company history or its current situation. Getting the ball rolling to consolidate the sites was easier than admitting that we needed to abandon some of our product lines and concentrate on segments where we could be competitive. ously didn't think

of the

IBM had

"ThinkPad had the best-running organization a

seen in

long time. Despite the matrix management approach and the

number of Claflin

sites

involved,

we were

delivering the vision of Bruce

and the products our customers wanted.

We accomplished

something that had been done only one other time in IBM's

IBM

360 changed the way computing was done,

IBM ThinkPad

changed the personal computer market.

tory. Just as the

the

ThinkPad made computing more

The move

personal."

ThinkPad team members

to Raleigh caused

uate the various options available to them. Fletcher,

McHugh,

Leichliter,

IBM.

—such

as

to eval-

Bower,

—decided not only to

Luckily, for

some employ-

such as Debi Dell, another alternative existed that allowed

employees to continue working for Florida.

This alternative was the

started in

IBM

without leaving South

result of a

telecommuting move

IBM's Indiana territory under Michael W. Wiley.

Like most

IBM

managers

"I

knew

Wiley was faced

in the early 1990s,

with significant staffing challenges as

According to Wiley,

IBM

that there

than continuing to downsize as just

Some

and Sztybel

refuse relocation but also to leave ees,

his-

tried to re-create itself.

had to be

we had had

to

a better solution

do

in 1992. I

had

reduced the Indiana team by thirty percent. Through the fore-

sight of

my

operations manager, John

F.

Frank,

we came up with

an alternative to doing the same reduction in 1993.

364

1993-1995:

The Brand Emerges

"Frank had recently stopped by Indiana. As he toured the

facility,

a

new

building in Evansville,

he realized that most of the space

He knew the reason: The sales personnel were out with On farther investigation, he determined that we

was empty.

their customers.

could probably save several million dollars each year by reducing

our real estate holdings and allowing employees to work from

home.

On

his return,

he called

me

with his back-of-the-envelope

knew immediately that this was an alternative to eliminating more staff. I told Frank to go ahead and develop a proposal. Of sizing. I

course, in typical

IBM

had three days

fashion, he

the details of such an alternative.

1993 staff reductions with this

I

to put together

was scheduled to review

my management and wanted

proposal instead.

"We worked outcome was emerged

as

a

telecommuting project before telecommuting had

an industry buzzword.

We moved personnel who dealt homes and supplied them with

the tools necessary7 to be productive: personal computer, mail,

and additional phone

included in this

"We met

initial

lines.

voice

proposal.

now

with Personnel,

called

Human

strongly encouraged us to ensure that these

new

Resources.

liability implications,

They

'telecommuters'

for the occasional in-

and conference rooms for team meetings. The

associated with this proposal were countless.

and

fax,

Office [clerical] workers were not

had access to their managers, on-site space office visit,

The

almost straight through the next three days.

primarily with customers into their

tax

my

to present

issues

We had to investigate

process changes, and employee reim-

bursement guidelines. Working with Personnel, we developed 'mobility guide' to assist both

a

management and employees with

the transition."

WTien Wiley presented the proposal ment, he informed them that

IBM

this

Indiana jobs annually. After

to

Midwest Area manage-

proposal would save about

much

7

fifty

discussion, he received

IBM (I've Been Moved—to

365

Raleigh)

approval to go ahead. Frank and his team had informed Wiley that

they needed nine months to implement the plan; Wiley gave them three.

Through hard work,

the team accomplished the near

impossible, and three hundred Indiana employees were telecom-

muting within ninety days of the approval.

Wiley continued, "We

started the project with

and

80. But, in the fall of 1993,

the

monochrome

versions,

we found out that IBM ThinkPads,

were

available.

cially justify the trade for laptops tivity that field

PS/2 Models 70

We were able to finan-

through the improved produc-

personnel could get while on the road.

We moved

from the realm of telecommuting to the brink of true mobility."

The

5 th

Wave

By Rich Tennant

"ok sure, it's nice working at home.except jmtj boss drives bj everg morning and blasts lift ton to inake sure I'm awake."

366

1993-1995:

The Brand Emerges

Mobility represents an environment in which workers can

work anywhere and

access information and perform their

time.

1

The

mobility project saved

IBM

at

more than

Indiana

any

three

million dollars in 1993 and was projected to save the territory an additional five million dollars in each successive year. But, even

more important,

who no

it

changed the

employees

alternatives available to

IBM meaning

longer supported the concept of

Pve Been

Moved. By 1994, when the Raleigh move was announced, Dell was able to find another position within also

IBM

and remain

found an opportunity to expand IBM's mobile

in Boca.

She

efforts into the

Working

in Wiley's organization

under Ken Stoffregen, she started to link

services with the other

area of services and consulting.

areas of

IBM

that dealt in mobility, including her old

ThinkPad

team. According to Stoffregen, "ThinkPad had been a success with

mobile professionals, but there was another segment workers

—that worked Our

not work.

in

—mobile

environments where notebooks

services offering allowed us to

just did

in the

fill

mobile

hardware portfolio with handheld and rugged devices from partners, products that

ThinkPad was not

field

OEM

interested in developing

at the time."

Another

positive aspect of the

improve or update

its skill

managers allowed for Clark, current tive

base.

move was

Losing many of the original key

staffing replacements.

One

ThinkPad Brand Steward. Clark

on the Raleigh personnel impact: "At the

ing a career path in communications and

management.

the brand's ability to

felt

of these was Kevin

offered this perspec-

time, I

that I

was

wanted

still

pursu-

to get into

My wife was from North Carolina, and we saw oppor-

tunity within the

PC

Company. People were dropping

because they did not want to

move from

New

like flies

York or Boca to

my hand, and volunteered to join the team. I had had some history with the PC Company and felt confident that Raleigh. I

went in,

raised

there was going to be a positive reversal of fortune.

1.

E.W. Martin, "IBM-Indiana, Case Study

I felt

1-4" (1992): 179.

that I could

IBM (I've Been Moved—to

make

a strong contribution

product

joined the

line. I

because

I

367

Raleigh)

understood the history of the

ThinkPad team on

April

1,

been working on the brand image and personality ever

The Authors' The move

1995.

have

I

since."

Insights

to Raleigh

was not without

its

positive attributes. It

provided the mobile group with opportunities for advanced edu-

employees to increase the

cation, a source of highly educated

team's

skills,

and localized management communications. Yet indi-

viduals paid a high psychological price for the stress associated

with either the

move

or being laid

Mental problems, marital

off.

and other signs of stress became more apparent each

discord,

These problems

day. 2

affected not only the team's relationships but also

the competitiveness of the product plans under development at the

No

time.

organization can effectively institute change

employees do not,

change works change

is

if

very

at the

least,

if

embrace the change.

its

No

the employees do not help in the effort, and

not possible without people changing themselves.

Any

organization that believes change can take hold without consider-

ing

how

people will react

deeply delusional.

is

Change can be "managed"

who

track

be successful only

when

necessary and

its

externally

by those who decide

it is

implementation. But, the outcome can

the employees accept the change inter-

Regarding the Raleigh move, the management team, with

nally.

Formichelli actively in the lead, needed to be in constant nication with the employees.

commu-

Management, without exception,

needed to personally experience the move to Raleigh and, thus, help the employees through the adaptation process. this process

IBM

working was

Indiana's

An example

of

telecommuting project

and eventual move to mobility. According to Mike Wiley, the driver behind this program,

home,

2.

just as

they were.

I

"The team knew

was giving up

my

that

I

was moving

big office and the

Judith K. Larsen, and Everett M. Rogers, "Silicon Valley: The Rise and Off of Entrepreneurial Fever," Creating the Technolopolis (Raymond

Falling

W.

Smilor,

George Kozmetsky, and David

V. Gibson, editors), 99—1 15.

— 368

1993-1995:

trappings of

my position.

It

The Brand Emerges

helped them to believe that

I

was one

hundred percent behind the change." True to

their

own management

styles,

McHugh

and Claflin

were proactive in employee meetings and roundtables, sending e-mail notes with updates on the move actions

moved

the

as well as

logistics.

These

ThinkPad team through the change

stages:

shock (angry e-mails, requests for executive interviews), defensive

home

appraisals),

acknowledgment (putting money down on property

in Raleigh),

retreat

(denial,

slow actions to schedule

and adaptation and change (the number of employees who actually

moved and Claflin

and

severed their

McHugh

ties

with South Florida). However,

when

decided not to move, the actions conflicted

with their message and undermined the employees' belief in the

move. The psychological contract between executive management and the employees was broken. Employee morale and

trust

declined dramatically.

Was IBM

right to consolidate into Raleigh rather than stay dis-

persed? Five years

later,

with the Internet, video teleconferencing,

and telecommuting rampant, the decision might be 1994, the

PC Company

order to survive

different. In

had to get their costs under control

—and survive they have. No one

will

in

be able to

quantify the effect of losing employees to competitors or other

IBM

organizations, but one has only to look at

the original

were

ThinkPad team have landed

lost. Ironically,

to

where members of

know

that vital skills

the reason used to justify the consolidation

joining development with manufacturing

Raleigh has a very small part of the role because manufacturing

Fujisawa, and Guadalajara.

is

now

PC

—no

longer

exists.

Company's manufacturing

primarily done in Greenock,

Chapter 26 The Employees: ThinkPad's Backbone

It

is

only with the heart that one can see rightly;

what

is

essential

is

invisible to the eye.

—Antoine de Saint-Exupery, The

Little Prince

Most

business chronologies are written from key players' perspec-

tives,

but such perspectives do not always

tell

the

ThinkPad

anced against its

a

story, the

the whole story.

To

key player perspectives can be bal-

snapshot of the team's feelings at various times in

During the

history.

tell

early

ThinkPad

years,

team members were

surveyed to gauge their feelings and reactions to varying manage-

ment

styles

and decisions. These surveys were the

basis for several

case studies required for the master's degree in technology at the

University of Miami.

A small

—Debi Steve DelGrosso, Mosher— questioned the ThinkPad

team of IBM employees

John Bilanych, and Nora

Dell,

team on three separate occasions. The surveys were triggered significant points in the team's history:

March

at

1994, after six

370

1993-1995:

months of Joe Formichelli

more than

1995, slightly

third

as general

manager; November 1994,

announcement of the Raleigh move; and November

after the

Raleigh.

The Brand Emerges

The

was

first

six

months

after the team's arrival in

two surveys were delivered

in person,

and the

via e-mail (online).

During the emergence of the ThinkPad brand,

IBM was under-

going significant infrastructure changes. In September 1993, Louis V. Gerstner announced a set of operating principles (published in Think Magazine) as the

The

roadmap

following eight principles defined

IBM revolution. how IBM and, in turn, for the

Mobile Computing were to be managed:

•

•

The marketplace is we do. At our core, we are riding

•

commitment

the driving force behind everything

a

technology company with an over-

to quality.

Our primary measures

of success are customer satisfac-

tion and shareholder value. •

We operate minimum

as

an entrepreneurial organization with a

of bureaucracy and a never-ending focus on

productivity. •

•

•

We never lose sight of our strategic vision. We think and act with a sense of urgency. Outstanding, dedicated people ticularly

•

make

it all

happen, par-

together as a team.

We are sensitive to the needs of all employees and to the

In

when they work

communities in which we operate.

December

1993, Gerstner took the principles one

and asked for "a band of committed professionals

more

step

—change agents"

The Employees: ThinkPad's Backbone

who,

in their

itability

own

way, were determined to return

and growth.

mental in

IBM

annual growth through 1999 and sales. 2

In

fact, in

securities analysts,

instru-

responding to a computer market that was

expected to experience greater than a thirty-five percent

wide

to prof-

The Mobile Computing team was

1

this effort,

371

compound

generate $69.6 billion in

world-

March 24, 1994, address to the ThinkPad success strategy by stat-

Gerstner's

he cited the

ing that "we have to duplicate that success across our product line."

The

survey coordinators

greatly influenced

ings

wanted to map these

felt

the

strongly that the employees' feel-

brand team's effectiveness. They

feelings against those held

management team. Employees were asked

by the ThinkPad

to indicate

whether

plans were in place to address each of Gerstner's initiatives; the scale

was from zero percent (no plans

in place) to

percent (plans fully meet the principle). dential

The

one hundred

surveys were confi-

and yet provided space for write-in comments.

The

survey

outcomes were presented to the management team under Formichelli, resulted

although,

disappointingly,

no concrete actions

from the recommendations.

Gerstner's everything

we

first principle,

do,

The marketplace

is

the driving force behind

was exemplified by the mobile organization. The

mobile team verified

how

customers made their choices through

Voice of the Customer programs. These programs led to the team's realization that the

mobile computing environment was market-

driven, not technology-driven. 3 It drove a reduction in

cycle time

from

a typical eighteen

months

development

to six-to-nine months,

depending on the system's complexity.

1.

"A Road Map

2.

Holly Hubbard, "Global Growth for Mobile Computing," Computer

Reseller 3.

for the Revolution," ThinkTwice

News (January

(December

1993): 14.

14, 1994): 44.

"Mobile Computing Guide," ComputerLand Qune 28, 1993): 107.

372

1993-1995:

The employee agreement with

The Brand Emerges

surveys indicated continual progress and positive this

statement as a foundation to the ThinkPad

team's approach to their business. Survey results exceeded eighty

percent on

all

ments such

as

three surveys and were supported by write-in

"Our industry and customer advisory

com-

councils pro-

vide great information for our future products" and

"We now

know what our customers want." In 1994, Bruce Claflin, then president of the PC Company Americas, commented, "I still

—

spend thirty percent of my time linked to customers source of intelligence.

I

am

—the greatest

concerned that the mobile team

may

be getting too arrogant in attitude and too cautious in execution."

Because of

market segment, "don't miss" tech-

a multi-faceted

nologies were fundamental to the ThinkPad's product plans.

Various core technologies, often defined as "allowing people to stay connected to databases tions,"

tional

and networks via wireless worksta-

were the genesis of the

decisions. 4

virtual office

and drove many func-

Such technologies were often documented

in the

Headlights programs established early in ThinkPad's history.

When

asked about the principle,

At our

company with an overriding commitment

core, to

we

are a technology

quality,

the

team

expressed concern about quality problems that occurred in

ThinkPad's early years.

One employee

expressed belief that the

temporary/contractor population of the Raleigh manufacturing plant was the basis of the

ThinkPad

quality problems and parts

shortages. Asking not to be identified, he wrote in that "the tem-

porary personnel in the Raleigh manufacturing plant are sent

home if they do not have the right parts for a particular product run. One of them admitted to me that they sometimes substituted

4.

David Wilev, "Star Tech," Journal of Business Strategy (July/August 1993):

52-54.

The Employees: ThinkPad's Backbone

373

other parts just so the line would keep running." This information

proved invaluable to Kanode and key manufacturing management

when they revamped Positive responses

the Raleigh

facility.

from the spring 1994 survey on

declined to thirty percent in the

fall

this principle

of that same year. But, by

fall

1995, employees asserted that the quality problems had been fixed.

This 1995 quality resurgence might be attributable to the team's geographic proximity to the Raleigh manufacturing team and ability to

work

closely with the manufacturing engineers earlier in the

development

Tied to

its

cycle.

Voice of the Customer programs and

its

Headlights

technology updates, the Mobile team believed that [Our] primary measures of success are customer satisfaction and shareholder value.

Customer

satisfaction

was tracked on

a

monthly

basis

worldwide focus; however, only 65 percent of the participants felt that the

team had plans

fall

and received 1994 survey

in place to achieve this

down from 77.3 percent earlier in the year. Employees commented that they were no longer aware of what was happening with the brand from an overall perspective. With Claflin's objective,

departure, information flow was short-changed, and individuals

had to seek information that previously flowed openly. This com-

November 1995

due,

Employees experienced

daily

munications degradation slowed slightly by in part, to the Raleigh consolidation.

communications with the key ThinkPad executives who had

moved

to Raleigh

and were

now

seated right

down

the hall.

The brand team was established as a new cross-functional organization that would knock down the barriers between marketing, development, and manufacturing. Operating as an entrepreneurial organization with a

minimum

of bureaucracy and a never-ending focus

on productivity was a critical objective for the mobile team. Claflin

achieved the

first

part of the objective

by getting the

different

374

1993-1995:

factions to

The Brand Emerges

work together and

to operate as an entrepreneurial

Where one would

organization.

expect Formichelli's process-

oriented approach to result in a consistent focus on productivity, the

outcome was

precisely the opposite.

Formichelli, the monthly that

Employees

under

measurement meetings contained data

was usually two months old and that the

format was unwieldy.

felt that,

The agenda was

rigid presentation

never followed and few

decisions were made. Although discussions centered ling expenses better than the competition

on control-

(Compaq) and on

addressing supply and process deficiencies, a "goat rodeo" often occurred.

Too many employees attended

these meetings and often

confused the issues by asking questions on irrelevant topics. But, because these meetings were the only source of information after Formichelli's arrival, one had

Throughout the tive

survey's

was consistently rated

Patty

McHugh,

no choice but

eighteen-month timeframe, as

this objec-

needing the most focus. In 1994,

the planning manager, stated that "Mobile

ping in terms of execution.

becoming

to attend.

less valuable.

With

The measurement

is slip-

meetings are

four to five times the

number of

products and volume opportunity, fewer people are available to do the jobs, and they are spending too

much

time reporting on their

One employee wrote on the survey form, "We went from controlling our own areas of responsibility under Claflin to progress."

constantly reporting and justifying costs under Formichelli. All this detailed reporting started to

Despite never

its

six-year existence, even today, the

loses sight

mobile segment. in funding a

slow us down."

of

its

The

strategic vision

—to

vision started with

ThinkPad team

be number one in the

Cannavino and

his belief

mobile organization that was challenged to deliver a

technologically advanced notebook computer. Claflin, in his role

The Employees: ThinkPad's Backbone

as the first

vision

by

General Manager

stating that the goal

375

—Mobile Computing, added was to be number one

in the

to the

mobile

market. Formichelli built on the vision's foundation by stressing the importance of delivering the products

when

the customers

wanted. Each progression was detailed in team meetings and written communications.

Throughout

monthly meetings personally and from the

criticism

entire team.

voice his or her thoughts.

his tenure, Claflin attended the

set the

tone by inviting ideas and

Every person was encouraged to

With his

departure, the formalized

com-

munications suffered, but the team already had the vision and

when

inspired each other to remain true to the objectives even

communications

faltered.

Achieving the ThinkPad vision required thinking and acting with a sense of urgency.

McHugh commented,

the team works with too

cramps.

brain

urgency

a

problem

is

for this team."

icated people

make

it

It

causes

Throughout 1994 felt

operated with this sense of urgency in efforts to be

When

think that

simply panic, but

and 1995, eighty percent of survey respondents

the market.

I

of a sense of urgency.

Sometimes, the urgency

never be

will

much

"Sometimes

that the

team

number one

in

coupled with the premise that outstanding, dedhappen, particularly

when

they

work together as a

team, the achievements of this fledging group are easier to understand.

Anyone walking

the halls of the Boca Raton site

would have

found individuals working well into the night, conducting conference

calls

with Yamato or taking time, over pizza, to talk about the

next iteration of ThinkPad. Although a small group, the results of their efforts

were tremendous and continually recognized

press and with industry awards.

in the

376

Patty

1993-1995:

McHugh, Gary

Buer,

Gene

The Brand Emerges

Yajfe,

Leo Suarez, Ron Sperano, and Jim

Keitchens.

Pete Leichlitei; Bruce Claflin,

and Mark Hofert

(right).

Jim

Bartlett, Scott

Bower

(left side

of table),

The Employees: ThinkPad's Backbone

The to the

We

survey results on Gerstner's final principle,

needs of all employees

were definitely

and

move

to Raleigh

to the needs of either the

anything,

more negative

are sensitive

communities in which we operate,

to the

reflective of the general

time. Certainly, the

any

377

manager

in charge at the

was not perceived

as sensitive

Boca employees or the community.

feelings arose

other. Despite the picnics,

from

this single action

If

than

employee roundtables, or one-on-

one meetings with key executives, most respondents could not get past their feelings

on the Raleigh move, documented

as "strictly

profit-driven" and "questionable with regards to employee sensi-

Write-in comments also reflected that financial rewards

tivity."

were not commensurate with the turnaround

on IBM's

mented

overall image.

in 1993, did

Even the

in

One

ThinkPad had

variable pay program, imple-

not offset the belief that there should have

been greater return for the greater

team

effect

doing business

risks

taken by the ThinkPad

differently.

other data point on the general population's attitude was

undertaken

as part

On January

13, 1995, a

of the University of Miami's student research.

brainstorming session was held with a vol-

To facilitate discussion ice, the March and November 1994 survey results Ideas and comments were encouraged, with no

untary subset of mobile survey respondents.

and to break the were presented.

judgments placed on individual observations. insights confirmed the state of the •

Supply was

•

The team

still

The

following

union entering 1995:

the biggest customer satisfaction problem.

often acted with panic, which

some equated

to a sense of urgency. •

The move

to Raleigh reduced productivity as individuals

discussed housing appraisals and timing of their personal

moves. •

A better heir apparent to

Formichelli than Jim Bartlett

or Per Larsen was needed in order to lessen the feelings

of uncertainty over ThinkPad's future.

378

1993-1995:

•

The

rest of the

especially pay,

when

move

The Brand Emerges

PC Company was it

came

pulling

down Mobile,

to sharing the wealth (variable

incentives, awards,

and the

like).

Despite these concerns and fluctuating responses to Gerstner's eight principles, 1995 proved to be a stellar year for the team, deliv-

ThinkPad 70 1C

ering innovative products such as the receiving

move with minimal valid today:

still

(Butterfly),

numerous industry awards, and completing the Raleigh

One

schedule impact.

Employees were proud

ThinkPad team. Each

felt

truism emerged that to be

members of

is

the

had contributed to IBM's

that he or she

turnaround in the second half of the 1990s.

The

Authors' Insights

Employees, the backbone of an organization, can positively or negatively affect business attainment.

the

Throughout the

ThinkPad team was challenged on

all

fronts.

early 1990s,

IBM was not per-

ceived as a player in the mobile segment, driving the absolute necessity of a recognized market success.

around the world without

The team was

a centralized vision

of the future.

the brand team was finally established and a strong place,

manager put

The

in

individual employees had to dynamically react to

product directions and technologies while adapting to

stantly

When

the challenges of time, distance, and different cultures

remained. fluid

dispersed

changing management structure.

general, brand, and marketing

unsung heroes of

The

con-

press interviewed the

managers but seldom

this business

a

cited the true

turnaround. Their numbers were

few, but their contribution long lasting.

"

1996 and Beyond: The Brand Reigns

The

5 th

Wave

*For further thoughts

downlead- Leviticus chapter

By Rich Tennant

on that subject, I'm going -to thrash the menu to Job

2, verse 6, file

X

It reads...

Chapter 27 Steve Ward: Operations Master

When you contemplate giving battle, and

strengths

to

it is

a general rule

to collect all your

leave none unemployed.

—Napoleon

The ThinkPad team had

contributed to IBM's turnaround in the

1990s despite a series of product introductions, organizational changes,

human

(GMs). Within

its

resource challenges, brief history, the

and general managers

team delivered

a family

of

advanced mobile products and established the worldwide, recognizable

ThinkPad brand. While expanding

to include

non-U.S.

organizations, development was migrated to Yamato, Japan, and

the U.S. effort was consolidated in Raleigh,

North Carolina. The

consolidation, as well as personnel downsizings, cost the

many

of

its

period, the Claflin,

original

members. Also, during

team

this relatively short

team had three general managers: Jim Watabe, Bruce

and Joe Formichelli. But, change

history as any other element.

is

as

much

a part of this

382

1996 and Beyond:

With

The Brand Reigns

the team's arrival in Raleigh, the fourth general manager

Ward,

in ThinkPad's brief history, Steve

Ward became

IBM ThinkPad

the

on the

arrived

scene.

general manager in January

1996 and brought a new perspective to the mobile team. Whereas

Watabe was an innovative

technologist, Claflin was a marketing

Ward was

leader and Formichelli was a manufacturing expert,

master its

at

running

evolution, the

ment

a balanced, profitable business.

ThinkPad business needed

this

a

point in

kind of manage-

talent.

Steve

Ward was born

most of his

in Pittsburgh, Pennsylvania, but spent

early years in California. His father

Ward

the Air Force, so

probably had

had

Moving as

a tighter relationship

with

a contract

lived near almost every Air

the western U.S. at one time or another.

Ward

this

At

Force base in

often as he did,

with his family than one

might normally have. Until high school, he did not have any close friends, but

Ward

he did get to know

"When

recalled,

I

lots

was

of people across the West.

my

seventh grade,

in

father

decided to buy a gas station, and the family stayed in one place for a

number of years.

a

gas station

I

grew up working

manager by the time

I

in a gas station

was

and became

fifteen years old. I put

myself through college and went to Cal Poly in San Luis Obispo.

While attending Peterbilt

school,

Motors

I

managed

a bicycle

shop and worked for

until I graduated in 1978.

"After college,

I

joined the

IBM

just spent five years learning that

disk division in Tucson.

it

didn't

micron

level

tolerances,

instructed not to over-spec products. costs.

You have

engineers spent didn't

make

and

You need

I

They were

had

a lick

their time trying to

of sense.

On

make

just

a balanced

to have a balanced view of quality. all

had

make any engineering

sense to do what Peterbilt Motors wanted to do. talking about

I

been

view of

Those truck

the perfect truck.

the other side of the spectrum,

It I

Steve Ward: Operations Master

figured that the one place difference was computers. "I traveled frequently

Boulder. During

where high tolerances had So

I

between the

I

to

make

a

IBM.

joined

labs in

my first year at IBM,

dred nights in hotels.

383

I

worked on disk

Tucson, San Jose, and

must have spent one hun-

drives. I

worked on

flexible

moved into developing and managing test facilities for drives. I moved quickly inside IBM. I eventually ran a three-

media. disk shift

I

manufacturing and engineering operation in one of

its

disk

drive plants. "I left the plant to assistants.

This was

to see

how

Office,

young

become one of John

a great career milestone

the entire

IBM Company

Aker's administrative

and gave

me

ran. In the

a

chance

Chairman's

executives were given staff assignments as adminis-

trative assistants reporting to a chief of staff known as the Executive Assistant.

Three things happen when you work

the Chairman's Office. First, lot.

For example,

I

you learn

a lot.

an assistant in

Second, you work a

must have reviewed one hundred 'open door

situations' [an open door

is

a

human

resources practice in which

employees can appeal management actions to in

as

a

higher authority]

which employees requested the Chairman's attention to

cific

Third, each of the Chairman's administrative

matter.

assistants

a spe-

had some technical

responsibility.

My responsibility was

the worldwide manufacturing and development process. "I

was the

first

administrative assistant in the Chairman's Office

with a hardware manufacturing and development background. Primarily, assistants

the exception of

were pulled from the marketing ranks, with

some software

developers. As a matter of fact,

then Executive Assistant Bob LaBant, breakfast with I

have to

tell

who

has since

me my first morning on the job. He

you

that we've never

left

told

had an engineer do

IBM, had

me,

'Steve,

this before.

There's a lot of fear about whether an engineer will be able to

handle a position

like this.'

My reaction was, 'How hard could this

384

1996 and Beyond:

The Brand Reigns

be?'

When

staff

were manufacturing and development engineers.

the Chairman's Office, about half the people on

I left

I felt

some

personal pride in being part of this transition."

From

Ward worked

the Chairman's Office,

Kuehler was

proponent of

a big

ucts. In 1986,

IBM

Ward worked on

the

for Jack Kuehler.

getting into portable prod-

IBM

Convertible, a laptop

portable with features similar to the competition. According to

Ward,

"I got the job

people

getting

starting with

working

experience.

IBM. This was

Not

I

three

in

of

years

in total conflict with the accepted

minimum

requiring a

only did

a second-level

Kuehler because he believed

management within

into

management mentality became

for

make

into

it

of five years of

management, but

manager with fewer than

five years

I

IBM also

of man-

ufacturing experience.

"Kuehler told me, If you do well back

as

member

my

assistant.'

of the

fairly well. After

A

brief time

IBM management working

in this job, later,

I

to

come

Kuehler became

committee.

for Kuehler,

you get

It all

went back

a

worked out

to the storage

systems division and managed not only our tape products but also

our entry into optical storage." In 1990, ness.

of

did an audit of IBM's personal computer busi-

This assignment led to

all

IBM

managed

Ward the

Ward plants,

his participation in the restructuring

working with Joe Formichelli. From

internal software development,

eventually

became the CIO

IBM PC Company

reviews with Paul

there,

working for IBM's CIO.

(Chief Information Officer) for

and often traveled to Boca Raton for

Mugge, then

lab director.

This relationship

enhanced Ward's chances of taking over the portable business

some

he

at

future date.

Ward's love for mobile computing germinated from experience in

the 1980s; he knew that he wanted

IBM's business. Ward reported,

"I

his first

to run this part of

was actually involved with

Steve Ward: Operations Master

mobile computing

earlier

my brief experience with

than most people the

IBM

385

realize.

Convertible,

I

In addition to

became involved

L40SX laptop in 1990. This Leo Suarez, who was a critical resource

with the development of the PS/2

me

project introduced

to

on the L40SX development team.

"Our chairman, John Akers, asked for an audit of this portable in what we called a Manufacturing Readiness Review (MRR). Alex

who two months

Wilson, a Scotsman

Raleigh manufacturing in a

heavy-handed guy

IBM

around first

became head of the

conducted the

who was

audit.

to enforce the audit results.

manager,

I

He

brought

carrying a Toshiba portable

That was me.

audit of the portable business, five years before

as general tial

facility,

later

I

So, in the

took

it

over

tracked the development of one of our ini-

laptops.

"The

audit results were predictable.

L40SX would

although, technically, the product

would

be.

would be

We

it

was

a nice product.

as successful as the

its

didn't think that the lots

of

risks,

We didn't believe that

development plan

said

it

were, however, impressed with Suarez; he was

clearly the star of the group.

didn't have

We

be very successful. There were

The

audit indicated that

act together in portables.

IBM

Changes needed

still

to be

made." After his participation for Joe Formichelli

ufacturing plants.

on the portable

audit,

on the worldwide restructuring of IBM's man-

Working

for Formichelli,

with the decision to do business with Toshiba.

Steve Ward.

Ward went to work

Ward was

involved

386

The Brand

1996 and Beyond:

"We matrix

Reigns

decided to do a joint venture with Toshiba to make active

TFT displays,"

said

Ward.

had excellent technology

beneficial partnership. Toshiba

ing the glass, and

IBM

around the

circuitry

turned out to be a mutually

"It

had excellent technology

glass.

in

mak-

in packaging the

Thus, for any given display

size,

IBM

has been one of the first to make the larger display. Why? Because we used less space around the display panel, which, in turn, means that we could allocate more of the total real estate to actual display glass.

This packaging capability enabled us to use the

We

inch display in our 1992 portable. else

could figure out

how

to

do

the exception of the 13.3-

inch panel that

we decided not

been the leader

in introducing larger displays."

Ward

In October 1995,

Stephenson, the head of replaced Rick

IBM

Thoman, who

Ward had brought

a stack

to aggressively develop,

sat

10.4-

did this long before anyone

With

it.

first

down with

new

his

we have

boss,

Bob

Personal Systems. Stephenson had left to

become president of Xerox.

of things three feet

tall

to the

meeting

and was quite surprised when Stephenson stated that he wanted to discuss

Ward's career.

responded, "I've got

a

He

sat

there

ton of things that

for

a

second and then

we need

to discuss so that

we can make some important business decisions. I need to get some things done. As for the career discussions, we can cut this real short. I want the mobile job. Whenever it's time, whenever that job I

comes open,

was using

a

that's the

job

I

want.

I

love mobile computing.

Toshiba portable long before we were in the business

of making portables. I've had virtually every notebook

produced, and

I

can't

imagine working without

Mobile computing has become

my

lifestyle."

taken aback but agreed to seriously consider job

when

With

it

became

a

we have

notebook.

Stephenson was

Ward

for the mobile

available.

the support of his former manager, Joe Formichelli, and

the sanction of Bob Stephenson, Steve

Ward realized his dream on

387

Steve Ward: Operations Master

when he became general manager of IBM Mobile Computing. Ward reflected, "The difference between the past two

January

mobile

1996,

8,

GMs

running

a

[Claflin

me was my

and Formichelli] and

number of different

areas within

marketing experience of Bruce Claflin.

IBM.

I

experience

didn't have the

anywhere

didn't have

I

near the manufacturing experience of Joe Formichelli. But,

I

did

have more development experience than either of them, and

I

had

a lot of experience in

production control.

My job was

mobile computing business to the next step beyond Formichelli's actions

by refining and building

to take the

Claflin's

and

a solid profitable

business. "I

was charged with getting the business elements in mobile

computing operating together

like a well-oiled

the team had support throughout

IBM

machine. Although

because ThinkPad was

darling brand, mobile needed to refine

its

In the past, they did whatever was needed to get the job done;

was

now

time to get the job done right.

to set their objectives

and then to

ancing accountability with the

our business objectives.

I

I

deliver. I

its

operational processes. it

expected the managers

was

empowerment

fanatical

about bal-

necessary to achieve

brought operational discipline to the

mobile computing team." Shortly after Ward's arrival,

expanded

its

on February

20,

ThinkPad 760 family with the 760L and 760LD,

models offering premium performance and design prices.

1

IBM

1996,

at

mid-range

His director of worldwide brand management for mobile

computing, Per Larsen, stated that "The ThinkPad 760

series

extended to reach the broader, mid-priced market. These

was

new

models made ThinkPad notebooks more affordable for mainstream and

fleet buyers."

In addition to Larsen and his marketing

nate to have several other veteran

1.

IBM news

skills,

Ward was

ThinkPad members on

release (February 20, 1996).

fortu-

his team.

388

The Brand Reigns

1996 and Beyond:

Many

of the employees had adapted to the Raleigh area and were

From

pursuing advanced degrees

at the

surrounding universities.

management

Ward

quickly learned to rely on Jim

perspective,

Bartlett's industry

knowledge and Leo Suarez's technical

In addition, he had Kevin Clark,

a

expertise.

who handled brand management

through various industry and customer councils. Clark reflected on Ward's

arrival:

"Steve came on board just as

we were realizing significant market ment team that had been together for

We

strides. a

had

a

develop-

now in sync Ward understood the

while and was

with marketing and product planning.

portable product line, and he forced us onto a quality track. His

manufacturing background encouraged the simplification of our product

lines.

By knowing what we were going

putting the right processes in place,

and business plan objectives. In

to

make and

we achieved both

the quality

my opinion, Ward

more than those

presided over the Claflin or Formichelli eras any

two

personalities could have

worked minor miracles

to

done what he

grow the brand

could not have

set

out to do.

He

into a mature business

that our customers both understand and respect."

Leo

Suarez, a team

member who

bridged

agers' regimes (with a brief interlude in

quarters), offered this perspective:

all

IBM

"Three

three general

man-

Latin America headdifferent eras

were

necessary for very different reasons. Bruce [Claflin] was brought in

we needed marketing

because

establish role.

He

shame

and take

a

was one of the best marketeers

to lose

him

couldn't deliver.

—

it

I've seen in IBiM. It

was

a

so soon after his arrival. But, he gave us the

Then, the market took

ThinkPad

became the

We had to

brand to market; Claflin was excellent in that

right marketing focus.

out

leadership and guidance.

availability

ultimate, classical

off,

was always

and we six

just

months

manufacturing problem.

389

Steve Ward: Operations Master

Leo Suarez.

"Joe [Formichelli] arrived

on the scene

to drive availability

and to perfect our manufacturing processes. His

ThinkPads by the

to build

many

that

days of the

we had

PC

efforts

millions. Unfortunately,

inventory

all

enabled us

we

built so

over the place, just like the early

Company. The mobile team now had major

ness problems. Steve [Ward] was assigned to

busi-

manage mobile com-

puting as a business with discipline and auditable processes.

was put

in place to

make

up

a dollar, to

make

a profit.

We

He

had

a

world-class portable line in ThinkPad, the best brand in the industry,

and

a strong

marketing team.

deliver high volumes. But,

it

We had even figured out how to

was time to learn how to make money

Ward was excellent at doing just that; he was the right GM for the time. Where we had thought that Formichelli was tough, we found Ward even harder and do

it

in a repeatable, organized

manner.

390

1996 and Beyond:

on the team.

He came

took names.

It

in

and almost

Bartlett,

Reigns

killed us.

He

kicked butt and

was the best thing that could have happened

because he got us running as

What

The Brand

management

did his direct

another veteran of

"Ward was an

a solid business for

impressive

to us

IBM."

reports think of

Ward?

three eras, expressed his thoughts:

all

IBM

executive.

I

enjoyed working for

He

was the perfect blend of Bruce Claflin and Joe Formichelli. He came from a development background and was

him.

astonishingly savvy in marketing and customer satisfaction issues.

He

understood the marketing stuff with an intensity you would

not believe for

development guy.

a

He

understood technology,

manufacturing, and the entire business process.

when

things

the

people surrounding him,

responsibility for those processes,

He

drove us to

who

actually

would not have

fixed

fix

had

them on

own.

their

"His expertise helped us address, and even prevent, quality problems.

He

drove us to the top of the heap in terms of quality in

portable computing. During Ward's regime, the Gartner

made tremendous

claims about

IBM

being the only guys

Ward had

the quality of portables right.

the ability to

Group

who

manage

got all

the functions reporting to him, including manufacturing, develop-

ment, marketing,

made

it

look

sales, quality,

easy.

He

and customer

brought

it

all

satisfaction,

and he

together and created a

smoothly running business."

One

of the things

Ward would

wide announcement process. familiar with the

He

bring together was the world-

When Ward

came on board, he was

team he inherited from Claflin and Formichelli.

quickly realized that Per Larsen was one of his strongest assets

and

a

means

worldwide

to the

basis.

end of

effectively

According to

managing ThinkPad on

Ward, "Prior

a

to Larsen joining the

ThinkPad group, the product was developed and launched publicly,

with each geography managing

its

own

execution.

So,

391

Steve Ward: Operations Master

although the U.S. planning team worked with Yamato develop-

ment

to create a product, the various field organizations

what had

figure out tion.

What

to be

done

to

had to

manage the post-launch opera-

resulted was an international effort that looked disor-

ganized and was extremely

costly.

ThinkPad ads

communicate the same thing

didn't even

in

as those

one country presented in

another geography. Products introduced quickly in one geography

would be

significantly delayed or,

worse

never announced in

yet,

another."

In their tive

initial

meeting, Larsen presented his vision of an effec-

worldwide business

as a strongly linked process.

fied flowchart highlights the

development and delivery linkage.

Product

Marketing

Offering

Communications

Strategy

From

this initial

simple concept,

create a worldwide brand led to products.

The

This simpli-

Go

Ward worked

management

process in

products resulted in a

to

Market

with Larsen to

which strategy

common

set of

mes-

sages worldwide. Both the product and the message were then

implemented worldwide

at the

Under Formichelli (Ward's part of his ThinkPad tenure

same time.

predecessor), Larsen spent the early

getting the strategy piece right.

A

formal market assessment process resulted and ensured that the

team know the customer requirements before product tions

were

finalized.

the product

on the

Marketing and development interlocked on

roadmap and

scene, he

specifica-

associated schedule.

worked with Larsen

When Ward arrived

to create a

worldwide mar-

keting communications process. This process addressed the

392

1996 and Beyond:

homologation

The Brand

AC

issues (different

Reigns

adapters for the plugs in the

various countries, and so on) early in the cycle and identified prob-

The approach

lems specific to the various geographies.

the team to be proactive, instead of reactive, in

deployment;

enabled

worldwide

its

prevented unnecessary development costs and

it

schedule delays.

The brand

messages were the same, simply deliv-

ered in local country languages. Finally, the actual "go to market" process guaranteed solid execution from the brand team into the field.

During

this period,

Larsen selected Rick McGee, an

IBM

eran with a strong operations background, to head the steps. After

and the

results

bite-size pieces.

make

who

were

significant.

me

By

a process

a process

to set

work.

up

this

work on

a

it

was pretty straightforward

I

scale. I

was not the guy

simply

knew how

jumped

at the

to

chance

would help an important part of

spent a lot of time working with each geography to get

happen.

I

in place. I realized that they

didn't

want

a

had the job of making

to be perceived as arriving

and then hoping that

it

from head-

would work

out.

established individual geography marketing managers.

We

planned

how

brought together the teams in the to

and break them into

a strategy guy. I

worldwide

knew

quarters, giving a lecture, I

was not

operations

succeed.

smooth process it

I

issues

little steps, it

"My

recalled,

kind of process for the ThinkPad team. By setting up

this process properly, I

"I

tough

to take

taking

McGee

figured out what products to build.

make

IBM

two

almost two years of effort, the process worked properly

experience taught

to

last

vet-

make

field and, together,

the 'go to market' process work.

got buy-in because

we made them an

This deployment was not always

on the

It

was

a joint effort.

We

integral part of the process." easy. First,

McGee

focused

largest countries because the top eight countries accounted

for eighty-five percent of the

ThinkPad

business.

As the team

393

Steve Ward: Operations Master

developed and refined the management system, they spent siderable

amount of time

con-

in these countries learning the local

IBM

market and creating relationships with the country teams.

a

The approach was

and

to listen

regional and

learn, as well as to

include the regional and country personnel on the extended

worldwide team. They recruited the right people on the

local

teams to execute the ThinkPad marketing plan around the world.

Then, he had

McGee

to

do the same thing

in the developing countries.

"We worked on

developing our ThinkPad

continued,

Customer

business in China by going to Shenzen to hold a

Advisory Council.

We

room with

got a bunch of customers in a

our in-country marketing managers so that we could learn what customers were expecting. process that would

work

wanted

to

I

realized that

we had

I

joint

a

major problem.

We

weren't

stopped the meeting and had our folks conduct

one-on-one interviews with the customers.

which made understanding

We

used interpreters,

a little difficult at times. But,

we

finally

to understand that we wanted their input and that

weren't there to lecture to them.

we

a

of the attendees had said a single word.

learning a thing.

got them

implement

for that geography.

"After about two hours,

Not one

We

couldn't get

uled times, but

them

we

When

to stop talking.

we

they finally understood,

We went beyond

our sched-

learned what was important for this geography.

"After the customer sessions,

we

sat

down with

the local mar-

keting team and put together a process tailored for China, slightly different

from what we do elsewhere. For example, when we build

a 'China' product,

it

really covers three areas:

Countries], Taiwan, and

PRC

[Pacific

Hong Kong. About eighty-five

the customers wanted Chinese language systems,

percent wanted U.S. systems, particularly in

customers conduct business in English.

Rim

percent of

and

fifteen

Hong Kong, where

394

The Brand

1996 and Beyond:

Reigns

"The management system and marketing

They were

together were not rocket science. that

needed to be executed on

a consistent

Repeatable, predictable, yet with plenty of

and to keep

ative juices to flow

it

processes

we put

basic fundamentals

and constant

room

basis.

to allow the cre-

fun and exciting," concluded

McGee. This new worldwide announcement process would come into

Under Ward's watch, the first recognized successor to the ThinkPad 700 series was introduced in May 1996 as the ThinkPad 560. It was a new paradigm in

play several times during Ward's regime.

portable computing. Before

its

introduction, small and lightweight

portables were called sabnotebooks.

just

a smaller dis-

slower processor, and smaller hard disk.

play, smaller screen,

were

These systems had

^-everything. But,

IBM

They

market research showed

that,

although users liked the idea of a very lightweight portable, they really

wanted

full-size

IBM

form

a thin

factor.

They

also

wanted

a traditional

keyboard. Finally, they wanted a large display that

they could easily read, coupled with the fastest processors and

adequate hard

disks.

accessories, such as

What they could live without was all the other

CD-ROMs

or diskette drives; these could be

added when needed.

IBM elers

responded to sore-armed, luggage-strapped business trav-

everywhere when

vative

it

announced the ThinkPad 560, an inno-

notebook so slim and

briefcase. It

packed

light that

a 12.1 -inch

TFT

it

into nearly any

fit

display, full-size keyboard,

and powerful Pentium processor in an ultra-thin 1.2-inch,

pound package. Before sporting a 12.1 -inch Also, for convenient

this

TFT

announcement, the

lightest

4.1

notebook

panel weighed nearly seven pounds.

computing on the road, the 560 featured an

integrated infrared link for wireless

file

transfer, printing,

and

communications with other infrared-enabled desktop PCs and electronic organizers.

Ward was quoted

as saying,

"The ThinkPad

395

Steve Ward: Operations Master

560 changed the way people think of ThinkPads, and notebooks in general.

The new design was

extremely innovative, but the per-

formance and price were equally impressive. For the

notebook users did not have to compromise

member

Jerry Michalski, a

any of these areas." 2

in

ThinkPad

"The machine

560:

I

—not the ThinkPad had, but the remember using—was the 560. was quite an extraordinary

remember using I

time,

of the Industry Advisory Council,

described his reaction to the

one

first

first

first

I

first

It

machine.

was

It

was

a while that

engineered,

"Once

it

me

change for

a big

because

had used

I

a

760 for

Although the 760 was beautifully

just overkill.

was way too much machine.

again,

on the product

front, the

team had

hit a solid

combination of product features, price points, and functionality.

There were no hidden did what

killer flaws in the

you wanted them

the black-and-red color

ing scheme of being a

to

do and did

scheme

little bit

still

a plane,

scheme and design July

it solidly.

worked.

The

On

branding,

general brand-

funky and having good broadcast

and print ads also worked in IBM's

ThinkPad on

machines; the machines

you can almost

favor.

When

feel the envy.

IBM

identity has played well for

you open

a

The branding over time."

1996 brought some organizational changes to the

ThinkPad team. Ward announced

that Koichi

Higuchi had been

appointed vice president of quality and alliances and would lead an

extended cross-functional task force made up of development, manufacturing, procurement, customer relations, service, and the

HelpCenter.

The

mobile product ice.

Ward

task force

quality,

stated,

would work on improving

customer

satisfaction,

overall

and customer serv-

"Koichi Higuchi's leadership in building the

ThinkPad brand and

his past responsibility for

ThinkPad product

development make him the perfect choice for

this critical assign-

ment."

2.

IBM news

release

(May

21, 1996).

396

1996 and Beyond:

The Brand

Reigns

Succeeding Higuchi-san was Adalio Sanchez, named vice presi-

who would

dent of development,

director of portable

Ikeda-san,

Between Rick McGee's

provide business direction to

systems development, Japan.

efforts at

worldwide branding and the

newly established task force under Higuchi-san, the ThinkPad

team had put

in place

some much needed updates

to

their

processes and organization.

On

October

ThinkPad 365

1996,

15,

IBM

added additional systems to

its

extended the 760 product line and enhanced the

line. It

Following the announcement, Gerry Purdy met with

series.

Steve Ward, Per Larsen, and Jim Bartlett at the

ThinkPad

fall

Industry Advisory Council at the Aspen Institute. Purdy questioned

them about

Ward. Ward

ThinkPad organization and

the

reflected

along the

new brand

tried very

hard to inject

—

try

this

"We

on

"My group was organized IBM is now focused on. We

this time:

structure that classic

brand management into the indus-

was something that had been lacking

also

added

a

focus under

its

in the past.

group called the Integrated Project Management

Team, which included Per Larsen, head of Worldwide Marketing. Initially,

the group

managed our four manufacturing

However, based on the work of Larsen and to close the Raleigh,

North Carolina,

his team,

facility

locations.

we decided

and manufacture

in

Mexico, Scotland, and Japan. "Like the job, learned that

it

this decision

was harder than you might

was tougher on the inside than

outside. I learned that the

it

ThinkPad brand,

brand, was heavily related to

how we

appeared from the

the strength of the

served our customers, the

high quality of service, and the assurances of

a

ownership and long-life products. Keeping that loyalty

that

and

satisfaction requires

no compromises

are made.

think. I

low

total cost

level of

of

customer

tough management to make sure

The manufacturing

decision was

— 397

Steve Ward: Operations Master

"no compromise" approach in determining our cus-

tied to this

tomers' wants and needs.

"As

we made

most important part of the

these decisions, the

process was to evaluate what promise of value

our customers. With ThinkPad,

we

we were

giving to

always delivered a product

that gave our customers a competitive advantage while providing

them with

mobile solution that enabled them to manage

a

mission-critical, network-centric tasks.

We

continued to evaluate

our users' needs and document the attributes of the product again, largely

done by Larsen's group. Then, we developed these

products in Yamato, Japan. Another

critical

component of

this

process was our research teams in Yorktown, Almaden, and Tokyo,

who

continually pushed us to go farther in

what we provided

to

the customer."

jumped

Bartlett

"Some of

in at this point

the best days for

want

to create the

room

in

and offered

ThinkPad

environment they

your house, for example, you

wherever you are on the road. to the personal

are

to

still

like. If

really

this projection:

come. People

you have

want

to duplicate that

If you take that picture

computing space, what we have

a favorite

to

and drive

do

is

re-create

home environment and make transparency thing. The user shouldn't have

the user's whole desktop or

mobile.

It's

really a

it

it

to

think about any differences between the desktop environment and the mobile environment. "In mobile computing, early 1900s.

We

we

are

where the automobile was

in the

had machines, but the roads were bumpy; the

infrastructure wasn't quite there yet.

those days, you couldn't drive

it

Even

on the

if

you had

roads.

a Ferrari in

You had

to wait for

the infrastructure to develop. "So, two things are happening:

We have to move the platforms

forward but also make sure that the infrastructure

is

put in place.

398

1996 and Beyond:

The

Reigns

exciting picture I see, certainly within the next ten years,

some

pretty high-speed roads and

The Authors'

some

is

pretty neat cars."

Insights

Throughout ThinkPad

history, the

insight to change general cited

The Brand

managers

IBM

executive team had the

as business

by Professor Kosnik, profound leadership

needs dictated. As is critical

to build-

ing an enduring brand, and ThinkPad was fortunate enough to experience this throughout

pointment

its

history.

Despite the team's disap-

in the perceived early departure of Claflin

and the spo-

radic focus of Formichelli during his tenure, Steve Ward's arrival

was accepted well

known

the group.

as a necessary

change. His operational expertise was

before his arrival and instilled confidence throughout

He

leveraged the

skills

of his organization while per-

fecting long-neglected processes. His direct style drove long days

and nights, but the team was committed to achieving operational efficiencies.

1996 and,

As

it is

a result,

operational efficiency was the hallmark of

hoped, beyond.

399

Steve Ward: Operations Master

1996 Product Line Additions System

560

760E/ED/FL

365X/XD

Form

Ultra

Notebook

Notebook

Processor

Pentium

Pentium

Pentium

133/120/

100/120/

120/133MHz

100MHz

133/150MHz

Memory

8/72MB

8-16-32/104

8/40

Storage

810MB 1.08/2. 1GB

810MB 1.35/2. 1GB

810MB

I/II/III

1.08/1. 3 5/2. 1GB

PCMCIA

II/III

PCMCIA

TFT DSTN 11.3" TFT

12.1"

XGA TFT SVGA TFT 11.3" SVGA DSTN

10.4"

11.3"

Windows 95

Windows 95

Windows 95

PC DOS

PC DOS

PC DOS

12.1

"TFT SVGA

11.3"

OS/2 Weight

II/III

12.1"

Display

Operating system

PCMCIA

Dual Scan

7.0

7.0

WARP

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SW

4.1

6.4/7.4

5.9/6.4

Infrared

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Integrated

PCI bus

ISA or PCI

CD-ROM

Ext FDD TrackPoint

Mwave DSP

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(lb.)

Other

III

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III

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Infrared

III

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Announced

10/15/96

10/15/96

5/21/96

Awards ThinkPad 560

ThinkPad 760

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Computer

First Place

Life

-

Portable

Chapter 28 ThinkPad After ThinkPad

The

history of design at

IBM is the history of innovation and hard work.

Innovation distinguishes the leader from the follower, never satisfied with

what has been, but with what will be. spirit, sensitive to

right,

It is the driving force

of the creative

change and the changeless. It focuses not only on what

but also on what

is

exceptional. Surprise, not predictability,

is

is its

hallmark.

—Paul Rand, 1990

A highlight of Ward's first year was the ThinkPad the original ThinkPad,

won

all

560, which, like

major portable industry awards.

Analysts renamed this class of products ultraportable

weight portables with tials. Statistics

all

—those

light-

bays removed and focused on the essen-

indicated approximately fifteen percent of portable

users sacrificed the built-in accessories in order to gain the advan-

tage of lower weight, forcing the ultraportable to be recognized as a

niche product category.

IBM

To

achieve a profitable participation,

needed to increase the appeal of these portables to

a larger

402

group of

users.

With

products in mind, the

each

new product

this goal

and the pursuit of award-winning

concept.

member

Group's Worldwide Market ThinkPad market research

DesRoches,

Reigns

IBM ThinkPad team thoroughly researched

Erica DesRoches, a

them

The Brand

1996 and Beyond:

IBM

of the

Personal Systems

managed

Intelligence organization,

the late

in

"I defined the research

According to

1990s.

requirements and translated

into research questions and research designs.

I

then reported

the findings of these primary market research projects, along with specific

recommendations on the product(s) under evaluation. So,

although

we were not

ThinkPad team, we were

part of the line

part of the matrixed structure.

Our group was as strongly commitif we reported to Ward."

ted to the success of the product line as

This market research helped to create the ThinkPad small and

medium

business segments.

80 for the

3

Each of these models

sold

more than one

million units, the result of strong product manage-

ment efforts. In

1995, David Nichols, an executive recruit, was hired

as the

product manager for

ThinkPad. In

this

his role as

product

manager, Nichols worked with the market research organization, well as the

Yamato development team.

slowed by his adaptation to the less culture

IBM

But, his efforts were not

environment.

shock than Jim Bartlett three years

fessional hires

as

He

earlier

experienced

because pro-

had become more commonplace. Nichols spent

less

time fighting the bureaucratic culture and, thus, could be more effective faster.

IBM had established programs to assimilate the pro-

fessional hires into the organization with a

little less

pain.

Nichols reflected on his move to IBM: "In July 1995, ing for a wireless data communication company.

time for a career

move and

called

I

1

was work-

decided that it was

Gerry Purdy, who had numerous

contacts in the mobile industry. I asked

him what kind of

career

move he thought a young mobile computing marketing guy like me might want to consider.

I

remember, that was on

a

Wednesday, and

ThinkPad After ThinkPad

by Friday

was talking to Jim

I

IBM

because of

products,

its

Bartlett, the executive director

IBM ThinkPad

Brand Marketing for the great

403

ThinkPad

Group.

I

was attracted to

brand. Although

had great

it

needed to expand beyond the large enterprise market

it

and move into other segments, perfectly with

my prior experience at Sony and this

fit

wireless data

communications company.

"My first

and small-to-medium

like retail

businesses. It

interview with Bartlett was over the phone.

It

was an

in-depth and probing interview, one of the most challenging had. Bartlett asked

me

not only

how

I

looked

at

me how you

asked

and link ket.

it

call, I

ever

a given market.

ThinkPad

take an established brand like

to a different type of product designed for a

Following the

I

markets but also

what type of opportunities allow expansion within

He

of

new mar-

was invited to Raleigh to meet the

rest of

the team.

Tim

interviewed with

"I

Peters (now at Dell

Computer

Bob Sachsenmeier, Jay Johnson, John Madigan, and The ThinkPad organization was now using the team

Corporation),

Kevin Clark.

approach to adding outside personnel; no longer did receiving

manager interview

a candidate.

interviews,

me.

I

knew

I

right

away

encountered people

doing.

They

I

was to be part

as well.

Based on the

Because

me

of the team, the team got to vote on

just the

that exceptional people surrounded

who thought hard

about what they were

asked hard questions and challenged those responses

they didn't understand or didn't accept. "I

have to admit that the bureaucracy

process turned deal with

the

first

it,

me

off a

little bit. I

coming from

offer

I

a small

got from Bartlett.

company. I

call

I

I

this

was prepared to

actually turned

declined his offer because

his credit, Bartlett didn't just pass

phone

encountered during

wasn't sure that

convinced that the culture would affect

To

I

down I

was

my ability to succeed at IBM.

on

this.

By the next

day, I

had

a

from Joe Formichelli, then the general manager of the

404

The Brand

1996 and Beyond:

ThinkPad brand.

then received

I

president of Marketing.

IBMers

me

told

IBM culture "My

I

a

phone

Reigns

call

from Per Larsen,

vice

was very impressed that both long-time

were to ensure that the

that their jobs

didn't get in the

wife accompanied

traditional

way of the Mobile Computing team.

me on

the second trip to Raleigh

move from California to North Carolina. This was an opportunity to work with a brand moving from number three and aggressively pursuing number because accepting the job would require a

one.

IBM

wanted to dominate the portable computer market and

new and

to bring out

lenging environment,

IBM

"I joined

enlightening.

some very signals. I

there was

I

old

new

exciting I

With such

products.

accepted IBM's revised

on October

The

1995.

2,

first

was immediately thrown into what

IBM ways

a chal-

offer.

I

year was quite

would consider

of doing things, which set off my warning

had come here to do product marketing, but

no product marketing position open.

I

at the time,

was put

in charge

of service and support and the customer satisfaction programs.

"This assignment provided some great understanding of

IBM

looked

tomers.

I

at things. I

saw how

IBM

took care of

largest cus-

got to measure their satisfaction and then put plans in

place to improve

it.

It

me a chance to learn the ThinkPad prodacclimated to the IBM culture. It certainly

gave

uct line while getting

proved to be different from any other culture

counted on

after I got

"In January 1997,

I

had experienced.

and Larsen's commitments to move

Bartlett's

Product Marketing

manager

its

how

1

some

became

for the small

a

initial

experience under

and medium business market,

out who would buy told to develop a

it.

se,

into

my belt.

product manager. As the segment

charge of focusing ThinkPad on the needs of this

not put in charge, per

me

I

I

was

segment.

I

in

was

of a ThinkPad product and told to find

Rather,

I

was

in charge of a

ThinkPad product

to

customer

set

and

meet the customer needs.

ThinkPad After ThinkPad

405

"Working with the Market Research organization, analyze the users in

my

attributes they valued

began to

segment and to determine the product

most

into requirements for the

small and

I

highly. I then drove those attributes

ThinkPad products

medium business market segment.

I

to be offered to the

decided on the

final

product definitions and the launch campaign for the 380.

"Our research showed didn't have an

MIS

and medium business owners

that small

department to configure their machines. Instead,

they themselves had to manage their portable computer resources, or they would use a part-time consultant. This told us that an integrated portable with

all

the features built in

ment. Therefore,

we

built in the

drive with the distinctive look

"Our research

also

As

a result,

hard

and floppy

of a ThinkPad.

feel

this class

we worked hard

we brought out

attractive to this seg-

CD-ROM,

disk,

demonstrated that

price sensitive. Therefore, unit.

and

would be

to

of buyer was very

minimize cost in the

a fully configured

ThinkPad 380

portable well under three thousand dollars. This just had not been

done before. In

fact, it

was

a challenge

IBM built only high-end

that

ferent.

We provided great value instead of the very highest perform-

that the 380

"We

was to broadly communicate

was an affordable portable.

May

1997. It was an instant

orders were backlogged for months.

We had thought that if

launched the ThinkPad 380 in

Our

we could well.

many people believed The 380 was dif-

expensive portables.

ance. So, our go-to-market strategy

hit.

because

sell a

Order

couple hundred thousand in a year, we'd be doing

rates

came

in well

above that so we had to make some

production adjustments. In just eighteen months, the

ThinkPad 380 had

sold

the most successful single

more than one

IBM reported that

million units,

making

model of a portable computer produced

it

in

the market to date."

At the time of the announcement, Ward commented that "the

ThinkPad 380

series all-in-one design represents the

next step in

406

1996 and Beyond:

The Brand

Reigns

mobile computing because the power and features

notebook computers match those of are

no longer desktop

alternatives,

a desktop.

now

available in

Mobile computers

but truly desktop replacements."

Press and market analysts were also gung-ho about this offering.

Mike McGuire,

senior industry analyst at Dataquest,

"Notebook computers able prices have

offering leading-edge technology at afford-

been the sweet spot of the overall mobile

ket for the past two years.

contender in

USA

this

said,

The ThinkPad 380

PC mar-

represents a solid

market segment."

Today echoed the forecasted success in an article

Record Punctuates

Rebound," published

Its

ThinkPad 380 announced. Two days puter and software beat the world's

before the

just

IBM's Big Blue com-

after

human

"IBM

chess champion, IBM's

stock surpassed the decade-old record high of $175 7/8 (August 21, 1987), hitting

$177

1/8.

According to the

article,

by Lorrie

Grant, "Analysts say another reason for optimism was IBM's

launch of an all-in-one ThinkPad notebook that integrates a hard drive, floppy drive,

and

The ThinkPad team strategies.

CD-ROM." also tried

some innovative introduction

To encourage customers

to experience the

380 and to find out where to buy ThinkPads,

ThinkPad 380

Web

site,

series

World Wide

May

13, 1997, for six

prizes,

to

how

to participate in the

Think" sweepstakes. Beginning

weeks, a ThinkPad 380, as well as related

was awarded according to the terms of the sweepstakes.

But, the

team did not stop

announced enhancements enhancements included

there.

to the

One month

later,

ThinkPad 760 and 560

13. 3 -inch active

Pentium processors. The systems were

IBM

created the

Web site on the Internet. At the

customers also found out

ThinkPad 380 "A Better Place

IBM

ThinkPad

the brand series.

The

matrix displays and faster also available

through the

System Care program. This program enabled customers to

407

ThinkPad After ThinkPad

experience the total benefits of ownership by refocusing assets on their

core businesses rather than on managing their PCs.

According to Ward, "Backed by the

combining technology, financing, and gle,

IBM

System Care Program,

service

and support

in a sin-

comprehensive program, these ThinkPads not only led the

cutting-edge technology but were also the easiest to

mobile PCs in the market. Our customers could business and let us

"A Better Place

to

manage

Think.

their

manage

now focus on their

mobile infrastructure."

"

Ward's team was on

a roll.

Not

only had they improved their

operational performance, but they also announced innovative,

award-winning products. They went for their third homerun: the

ThinkPad

1997, with a series

The ThinkPad 770 announced on September 8, 14.1-inch screen. It was billed as the first in a new

770.

of "extreme performance" mobile computing solutions that

integrated powerful processors and multimedia capabilities with

408

The Brand Reigns

1996 and Beyond:

maximum-size

advanced communications, Windows NT,

displays,

and massive data storage.

The ThinkPad 770

also featured several

enhancements to the TrackPoint pointing

stick device,

part of the brand's recognized personality.

New Press-to-Select or

an integral

Release-to-Select features allowed tapping of the TrackPoint itself to speed application launches

and reduce keystrokes.

A new

grammable button located under the mouse buttons enabled scrolling

of

Web

and large documents.

sites

together, these features enabled

ThinkPad

770,

IBM

is

Ward

When

to assert that

once again asserting

its

profast

coupled

"With the

leadership role in

notebook computing."

Ward was

leading a championship team on

becoming the most recognized brand

in

its

way

work anywhere

to

vision of "providing the

product choices that

sale.

significant

history.

progress

most powerful and convenient

in an interconnected world." It delivered

fit

customer requirements and budgets.

expanded and demonstrated port after the

journey to

mobile computing

During 1997, the ThinkPad team made toward

its

its

commitment

to service

It

and sup-

Quality processes that ensured continual

improvement of ThinkPad's

reliability

and serviceability were

established. Stocking spare parts to service older

machines took

precedence over revenue targets driving the ultimate goal of Total

Customer

Satisfaction.

Ward knew

that these successes should be documented.

made one more became

decision before the end of 1997 that eventually

On Tuesday, November 12, Comdex trade show, IBM celebrated its

tied to the legacy of the brand.

1997, during the annual fifth

He

anniversary of the

first

ThinkPad announcement

at Piero's

restaurant in Las Vegas.

Gerry Purdy had arranged to meet Debi Dell

at this celebration.

Dell arrived early in hopes of spending time with her old friends

from the ThinkPad team. As she entered, she noticed an

attractive,

409

ThinkPad After ThinkPad

silver-haired

who he

gentleman and wondered

was. Finding two

members of the former Boca Raton ThinkPad team, they gathered around one of the many tables laden with food. Halfway into her of wine, she noticed the distinguished-looking gentle-

first glass

man

walking toward her; she also

some nervousness on

felt

the

The gentleman walked over and introSteve Ward. Recognizing the name of the current

part of her tablemates.

duced himself as

general manager for

hand

in greeting.

IBM

Ward immediately

irony of her working at lost

Mobile Computing, Dell extended her

IBM

to write a

(the

with the surname Dell was seldom

on IBMers or customers) and

you want

name

recognized her

about

said, "So, let's talk

why

book about ThinkPad."

Dell related her role on the original

ThinkPad team and how the

experience had been the source of several papers during her recently

completed masters of technology

at the University

of Miami. She

described the benefits of telling this successful story about the creation of the

ThinkPad brand and

its

award-winning portable

PC

products. She was enthusiastic about the interest of professors and

industry headhunters in

Ward

this brand's

How

is

by the

They and

"What

very precise:

do you make

real players

make people read

will

this story interesting

study?" Dell responded that told

journey began.

then asked a probing question, the type so typical of

someone who story?

how

it

would be

and not from

discussed Ward's view

on the

just a

a

just a case

personal story, a story

technology perspective.

critical

elements of the story

his pride in his team.

After wishing her luck with the project,

away

to host the anniversary event,

his guests.

He

its first five

to

and not

this

many

Ward was

where he gave

then called

a spirited talk to

acknowledged IBM's success with ThinkPad during

years in existence.

of the things that

He related that IBM had stayed

made ThinkPad unique and

true

successful:

TrackPoint, innovative industrial design, and the black color.

410

1996 and Beyond:

The Brand

Reigns

He highlighted the move from twelfth in the industry to second in volume and first in revenue in only five years. He thanked the team for

making

it

happen and then thanked the

analysts

and press for

their support.

The

anniversary was not the

ThinkPad's

last

thing to be celebrated in

from Nichols' perspective. Nichols was

history, at least

come from the outside, survived and then produced a ThinkPad that became an

very fortunate to have

the culture

shock,

instant hit.

He

joined the team during a very productive and rewarding

period, culminating in the anniversary celebration.

And

his luck

continued. After his experience with the 380, he became the seg-

ment manager

performance segment. Whereas the

the

for

"extreme performance" segment was focused on the high-end, est technologies, the

performance segment was

the mobile team. Research to have a thin

machines.

and

They

could hold a

showed

a

new market

that performance users

light portable with the attributes of

also

wanted

a portable that

CD-ROM or other accessories,

lat-

for

wanted

high-end

included a bay that

such as a second bat-

tery or floppy drive.

Different form factors were tested with customers through

worldwide focus groups. Over and It

was thin

like the

one form factor stood

over,

ThinkPad 560 but included

a

out.

bay that was only

twelve millimeters thick, instead of the typical seventeen-millimeter

bay

such

common

to

most

machine would be

a

"Based on the research of

went

to

focus

less

than

five

responses indicated that

a real winner.

Tim

Nichols reflected that

Peters and Erica DesRoches,

work and developed such

only slightly

The

portables.

a portable.

pounds.

We

The

we

unit weighed

followed up the concept

groups by showing prototypes to major accounts and

medium businesses. They loved it. The

only exposure was that this

product might draw users away from the ThinkPad 380 and 560 because

it

was much thinner and

lighter.

Also, this

machine

1

ThinkPad After ThinkPad

provided the capability to have a that software

CD-ROM

41

anytime, anywhere

might have to be loaded."

DesRoches augmented Nichols's thought: "In the case of the ultraportable,

we

didn't stop with the

ThinkPad

Comprehensive research, both U.S. and product's definition and the design of

low-on, the ThinkPad 600. acceptance.

honed the

performance-based

its

efforts

predicted

fol-

market

its

We clearly demonstrated its superior performance rel-

other concepts under evaluation. This product was

to

ative

Our

560's design.

international,

reviewed from several perspectives: from early qualitative discussions of its pros

do

and cons, to quantitative estimates of how

it

would

in the target marketplace, given the other competitive options,

to in-depth discussions of

In June 1998,

IBM

its

industrial design."

introduced the ThinkPad 600, one of the

fastest selling portable

computers in IBM's

users in both large and

medium

try awards for

its

Performance

history.

accounts desired

it.

It

sleek design, high performance, and

won

indus-

low weight.

The minor design challenges, such as the audio placement, did not slow down this rocket in the market. In fact, according to IAC member Jerry Michalski, "The 600 was just awesome, the only machine

I

use.

Hard

to believe, but the difference

and 600 was definitely noticeable.

much If

One

between the 560

just has to

wonder how

longer these innovative designs can continue."

David

Hill,

manager of the Personal Systems Group design

center, has his way, these creative designs will continue indefinitely

Hill

commented on

design idea for the [is]

a

this

dimension of the brand: "The original

ThinkPad came from Richard Sapper.

noted industrial designer with a long

list

He

was

of accomplishments,

one of the most important designers of the twentieth century product design. since 1980,

and

He

in

has been IBM's corporate design consultant

his ideas affected

many

aspects of the

ThinkPad.

412

David

1996 and Beyond:

Hill,

manager of the

"I felt that the design it

was dramatic.

It

had

PSG design

The Brand Reigns

center.

of the original ThinkPad was special because a mysterious quality. Yet, the fact that the

design was very simple added a timeless quality to

it.

Take the pyra-

mids in Egypt, which are an incredibly simple, yet powerful and timeless shape.

Or

take the

Washington Monument with

simple shape. Take the Vietnam

War

its

very

Memorials, an incredibly

simple shape but a powerful design because

of. that simplicity."

In addition to Richard Sapper and the ThinkPad team, Hill also

worked with the

industrial design

team

in Yamato, Japan,

by Kazuhiko Yamazaki. An extended team,

it

headed

was important that

3

ThinkPad After ThinkPad

they

all

41

needed to

"The ThinkPad design was an evo-

be. Hill continued,

lution, not a revolution. Consider the Porsche 911. If

Porsche 911 today, and you looked

at a

ThinkPad

operate under the same perception of what

teen years ago, you would clearly see

you would

still

know

it

was

a

at a

how

Porsche 911.

you looked

Porsche 911 from

different the car

The

is,

fif-

but

car evolved with-

out destroying the basic underlying design elements. In

fact,

the

door handles and the overall contour of the two Porsche 911s remained almost

911 changes occurred out of

identical. All the

purposeful evolution to

make

on

better and, yet, hold

it

to the

design heritage.

"When you have a how you advance it. advanced

its

product,

wonderful design, you have to be careful Just as the Porsche design team slowly

we

did the same with ThinkPad.

don't have an industrial design that

every year without impact. But,

you

treat

it

very carefully.

We

is

special,

When you

you can change

it

when you have a special design, knew that the initial ThinkPad

design was something special.

"Lots of companies tried to create some sort of a design theme for their notebooks.

We saw some things that were interesting and

some

things that, frankly, looked a

boom

box.

The ThinkPad

transferable.

By

little bit

more

cheap

design was so simple, so strong, and so

transferable, I

small ones, thick ones, and

mean

little

that

we could make

ones, and they

all

because their simplicity allowed migration across size

we

like a

carefully experimented with the

big ones,

looked alike lines.

Thus,

ThinkPad design during

phase in IBM's portable history. Consider the ThinkPad 600. first

time you see

it,

you know

it's

a

ThinkPad. But, you get

at

you

this

somehow it's a little bit different. It has just a bit of a when you open it up. The ThinkPad 600 design screams

feeling that

surprise

this

The

artistically.

That was very

intentional.

414

The Brand Reigns

1996 and Beyond:

"We

discovered in testing the

petition that thinness

seemed

ThinkPad 600

against the

com-

to trip people's emotions.

The

ThinkPad 600 design was reworked illusion of

added thinness because

We

of advanced technology. so the

computer appears

ThinkPad 600, It

a

it

to emphasize

it's

such

a

strong communicator

chamfered the bottom of the

to float above the table. 1

size

of

a

"Interestingly,

design, the

560 that has although

it

a

is

When you see

a

'How

did they

make

CD-ROM in it?'

proved to be an award-winning

ThinkPad 600 does have some

most noticeable

chassis,

appears to be almost as thin as a ThinkPad 560.

has that element of magic or mystery, like

box the

and create the

that the audio speakers

glaring mistakes.

sit

The

right underneath the

hands. Typing on the 600 can interfere with the sound coming out

of the speakers. Because good design

and function, the ThinkPad design function are inseparable. So,

we

will

is

the melding of both form

fell a little

short.

Form and

have to modify the ThinkPad

600 to provide better sound and yet retain

its

sleek and special

appearance."

While the market research and planning communities were working on the features and functions of

their

soon-to-be-

announced products, Adalio Sanchez worked the product from another perspective. Sanchez from Joe Formichelli asking line.

After ending

my

me

recalled, "In 1996, I got a call

to help out with the

I

ThinkPad

assignment with Mii-san in 1994,

the director of manufacturing for the that

line

PC business.

became

I

Formichelli

had the expertise necessary to help with the new

felt

ultra-

portable 560, the high-end 760E, and the 365 series. For a time, I

worked on the ThinkPad problems while

five job as director

still

my nine-to-

PC Manufacturing. Eventually, the mobile my attention full-time. What started as a

of

assignment required

three-month special assignment turned into president of

doing

ThinkPad

development in the

a

promotion

to vice

of 1996.

stayed

fall

with the team through the 380 and 600."

1.

Nathaniel Wice, "Thin," Time Digital (November

2,

1998): 25.

I

5

ThinkPad After ThinkPad

Ward

continued

as general

41

manager during the ThinkPad 770

and ThinkPad 380 development

cycles. But, Bartlett's earlier

words

proved prophetic. As was the case with Claflin and Formichelli, when his mission

March

He was promoted on

1998, and Adalio Sanchez assumed ThinkPad's key man-

5,

agement

was accomplished, Ward moved on.

role

and saw the ThinkPad 600 to announcement.

comment emphasized his love for the mobile effort: "I looked at this job as the gem in IBM. I was honored to have this job. Whenever I got a chance to speak in front of large audiences, I always stopped and said, 'My name is Steve Before his departure, Ward's

Ward, and was

I

am privileged to represent the IBM ThinkPad brand.' It

a great deal.

Everyone

really

You got

a ton of support

from everyone in IBM.

wanted to help, to be part of a winning team."

Ward was not the

final

the only one to

move

on.

Two

ThinkPad 380 and the ThinkPad 600,

successes in a row,

led to the

IBM Group

promoting Nichols to manager of Mobile and Consumer Options in Options by IBM (OBI). his experience

beyond

He was encouraged by Per Larsen to expand

experience and joining the ranks of intelligent, bright,

his

ThinkPad

IBM, "IBM people

are smart,

portables. Nichols

and aggressive.

smartest person in the company.

I

It

summarized

was refreshing not being the

don't

mean

that I

was the smartest

person in the other companies, but it was refreshing to say something

and know that ing,

and

it

it

was going to be challenged.

improved

my critical

skills. It

person, helped

me

IBM

a contribution to the

and made

to grow.

Somehow,

I

It

helped

improved

my think-

me become

a better

survived the bureaucracy of

mobile business."

416

Adalio Sanchez.

1996 and Beyond:

The Brand

Reigns

ThinkPad After ThinkPad

The Authors' Sometimes, when

a

Insights product comes to market,

no follow-on

der" with

success.

product brand

is

ucts that are as

good

its

to develop

was

fact,

one-hit

won-

a

the test of an enduring

its

preferential position in

no one knew whether the ThinkPad 700C

wonder or whether

IBM

ing portable brand. Throughout

demonstrated an

won-

than the original. Thus, the brand

reach and continues to hold

a one-hit

a "one-hit

and bring to market successive prod-

as or better

the market. In 1992,

it is

Seldom does such

der result in an enduring brand. In

increases

417

its

could build a truly endur-

IBM

abbreviated history,

ability to create lasting equity in the

ThinkPad

The team developed successive ThinkPad products reached new markets and added value to the overall brand. brand.

Like Claflin and Formichelli, Ward's era was will tell

whether

it

was too

the contrary, history has

brief;

only time

team

short. Despite feelings of the

shown

to

that the departures of Claflin and

Formichelli were well timed and that the

not negatively affected. Perhaps

that

it

ThinkPad journey was

was inevitable that

mobile general managers every two years;

after

IBM

rotate

the market

all,

changes significantly in the same brief time frame. But, then again, hindsight

is

20/20 vision, and anything can be

justified

when

it is

associated with success.

We will

never

know what ThinkPad might have

same general manager stayed successes, failures,

But,

we do know

in place

achieved

long enough to

live

that

Ward

pany has one primary

ThinkPad grow from

IBM.

the

with the

and constantly changing competitive landscape. achieved what Professor Kosnik

the importance of running a successful business. After

for

if

objective: to

make

a profit.

a start-up enterprise into a

all,

Ward

a

calls

com-

helped

major business

418

1996 and Beyond:

The Brand Reigns

The Brand Expands System

380

560E

770

600

Form

Notebook

Ultra

Notebook

Ultra

Processor

Pentium

Pentium

Pentium

Pentium

w/MMX

w/MMX

w/MMX

266/233MHz

150MHz

166/150MHz

Mobile

Module

200/233MHz

Memory Storage

16/80MB

16/80MB

32/256MB

32/256xMB

1.08/

2.1GB

5.1/

3.2/

2.1GB

II/III

10.2GB

4.0GB

I/II/III

PCMCIA

PCMCIA Display

Operating system

12.1"

12.1"

14.1"

13.3"

Dual

Active

Active

scan or

TFT SVGA

matrix

matrix

TFT

11.3"

13.3"

Dual

Active

Scan

matrix

Windows 95 Windows 3.11 Windows XT

Windows 95

DOS

DOS

7.0

OS/2 Warp

Win

3.11

Windows 7.0

OS/2 Warp

Windows Windows Windows

DOS

7.0

DOS

OS/2

W arp

95 3.11

XT

7.0

r

V4

V4 Weight

XT

Windows 95 Windows 3.11 Windows XT

7.0

4.6

4.6

4.1

Integrated

Infrared

Second

Swappable

CD

PCI bus

hard drive

CD-ROM and

ZYport

Ext

Opt

diskette

enabled

System

internal

drive

Enh Port

Care

(lb.)

Other

FDD

Iomega Zip

Enhanced

replicator

drive

TrackPoint

Preloaded

Opt 20/8

UltraBay

NetFinity

CDROM

Built-in

3D sound

modem

Enhanced TrackPoint

Announced

5/13/97

6/10/97

9/8/97

4/29/98

ThinkPad After ThinkPad

419

Awards

TP380

TP560

PC Computing

A-List

Computer Shopper

Top 100

Home PC

Reviewer's Choice

Fall

Comdex

Home

TP770

Office

Computing

PC Magazine Fall

Comdex

Fall

Comdex

1997

MVP Award

1997 Editor's Pick Award Editor's

Choice

Technical Excellence Award

1997

MVP Award-State of

the Art Notebooks

TP600

PC Today PC Magazine

Top Pick Editor's

Choice Award

Chapter 29 The IBM ThinkPad

iSeries

Only a fool thinks that price and value are the same

thing.

—Antonio Machado

The winning ThinkPad team

responsible for the

most valuable

brand in mobile computing knew that they had to have a game plan to stay ahead of the competition

ket demographics.

segment, but

and to address the changing mar-

ThinkPads were

selling well in the enterprise

now individuals wanted the systems as well.

to get back to basics

ThinkPad name and Individuals are

and design

a line

satisfying the

much more

buyers. For example, they

own image and to the people

was time

of portables deserving of the

needs of individual buyers.

in tune with style than corporate

buy Sony Sports Discmans not only

the sound but also for the look. Similarly, individuals

chase portables with their

It

own money want them

personality. Individuals

who

they look.

pur-

to reflect their

want to make

a

statement

around them. As multimedia and sound permeate

the portable market, individuals want systems that sound as as

for

The sound

good

needs to be accompanied by bright

422

1996 and Beyond:

The Brand

Reigns

game

displays to handle the action graphics of today's

Most

software.

importantly, individuals want to use this latest and greatest

technology right out of the box, connecting to the Internet in a straightforward manner.

No

hassle,

no bother.

Five groups of buyers are interested in portables designed for individuals. First

is

the college student,

Although dorm rooms are is

filled

who is

always on the move.

with desktop computers, there

a rapid switch to portables. Analysts predict that

almost

all

col-

lege students will have portables instead of desktops within a

few years. Portables can be used in the dorm, in the classroom (where appropriate), or the library and then easily taken

home

for

breaks.

Second on the

list is

the family that

computer. Portables provide more

moved from room

The

third

group

puters for the

whether used

is

first

to

buying

second or third

a

because they can be

room, family member to family member.

recent college graduates buying personal

They know

time.

in their first

small business owners puters to client

is

flexibility

the benefits of a portable,

apartment or small cubicle. Fourth are

who

also

sites. Finally,

over the next twenty years

com-

—

they are expected to travel

need the

flexibility

of taking com-

grow

fastest

As knowledge workers

retire,

the group expected to

retirees.

more

and, yet,

want

to stay in touch

with their children and grandkids, probably via the Internet.

Whether in a small condo, camper, or recreational vehicle or just visiting new locales, this group will not want to be burdened with cumbersome desktops. Thus, portable manufacturers are pursuing products that appeal to the interests of the individual instead of the enterprise. It should prove to be a smart

to millions of units a year.

move

as this

market grows

The IBM ThinkPad

5 th

The

423

iSeries

Wave

By Rich Tennant

"THE LCP PISPLAY WAS GOOD, PL4SM4 PISPLAYS WERE A LITTLE BETTER, BUT WE TW/NK THE J./QUIP LAVA PISPLAY THAT JERRYS VEVELOPEO IS GQM/4

ROCK THE WESTC04ST."

Early in 1997,

develop

a

IBM

decided to pursue this market and to

ThinkPad portable product

line

designed for individuals

and small business owners. Jim Bartlett brought forward the concept because he

felt

that

IBM

lored to the individual buyer.

needed to offer

Under

a

initial

ThinkPad

Bartlett's direction,

tai-

John

Biebelhausen conducted some early market research on what a portable for individual buyers should be. Brian Dalgetty from the

Aptiva

PC

group was then asked to lead the

was to head up the

this

Consumer and

new IBM

the

effort; in essence,

he

business with direction from both

ThinkPad groups.

Dalgetty studied robotics at M.I.T and graduated with a master's

degree in 1984.

He

lived

all

over the world, from

Australia to Belgium. This experience led

him

Hong Kong

to

to seek a position at

424

1996 and Beyond:

The Brand

Reigns

He

an international high tech company, and he joined IBM. developed

serial

dot matrix printers, with responsibility for the elec-

tromagnetic heads that did the actual printing.

member

first

He

was

a charter

of IBM's PS/1 consumer team in Lexington, Kentucky.

In 1993, he was promoted to head product development for

Ambra North America. Ambra was IBM's attempt organization like Dell

to set

up

a direct

Computer Corporation. Although Ambra

worked from product and

logistics perspectives, it just did

not

fit

IBM's enterprise computing model. Following Ambra's demise, Dalgetty was asked to head the Product Marketing team on the Aptiva S Series. Shortly

IBM's development

after,

Jim Firestone asked him

to

manage

effort for a portable designed specifically for

individuals.

Said Dalgetty, "At the time they asked portable,

I

me

to

do

a

consumer

had several mentors inside IBM: Jim Firestone [now

at

Ward [now IBM CIO] They convinced me that I should take this job and create a new portable line different from the enterprise portables developed during the past five years. They

Xerox] and Steve

told

.

me, 'Don't just use an existing ThinkPad and put

keting program around

it.'

Rather, they told

on meeting the needs of the

me

that

I

a fancy

mar-

should focus

individual and small business buyer."

Erica DesRoches described this approach, which included her

market research: "Because

my

group was responsible for the entire

PC product line, we did significant research in seven countries across the world

on

this

new product line.

We found that individual buyers

wanted the advanced technology desired by business purchasers, but they also needed the products to be easily accessible and quite afford-

We knew that the product had to look sharp and include only active matrix TFT displays, competitive differences for IBM. These

able.

individual buyers, part of the fast-growing

segment of the portables

market, purchased these products with their nitely

wanted value

for their dollars."

own money and

defi-

The IBM ThinkPad

Dalgetty added, us

"We went

some very interesting

off and did a lot of research. It told

things. First, users hated the existing low-

cost portables with the passive matrix

going to use

42 5

iSeries

DSTN displays. If they were

a portable for personal productivity applications

and

the Internet, users wanted a bright display with great response to

motion graphics. That insight told us that active matrix

our portables needed

all

TFT panels. These users also turned out to be expe-

rienced users of technology. If they bought a portable, they wanted it

to be a true desktop replacement.

"They wanted an IBM-quality keyboard. to have the portables.

same look and

They also wanted

ers positioned

their

feel as the a great

So, our portables

keyboard on our business

sound system, with the speak-

on the front of the

They

portable.

did not want

hands to cover the speakers while typing and playing

"Speaking of CDs,

a

standard

CD

a

Users wanted to be able to play

With

ing on the computer.

a

music

in the left

It

LCD

CD without turn-

these objectives in mind, the iSeries

new could be embedded

team got together with Altec Lansing and designed speaker system.

CD.

player was desired in the

front of the portable, with industry standard buttons and an display.

had

was thin and

and right sides of the

vertical, so

it

a totally

display."

Dalgetty continued, "Users wanted their personal portable to

be more stylish than

a

We

business ThinkPad.

refreshed the

design and included red, green, blue, and yellow bars just above the keyboard to identify customizable 'shortcut' keys.

responded to four function keys that could be to launch any

Web

site

or application.

We

sound adjustment wheel and drop-down

would be positioned

"One

mon

legs so that the

from

keyboard

for easy typing.

on the desktop.

tasks right

programmed

included easy-to-use

ease-of-use innovation was the Access

that resided

easily

These cor-

a

It

ThinkPad software

allowed users to do the most com-

drill-down menu.

They

did not have to go

426

1996 and Beyond:

inside the machine. It

The Brand Reigns

was right there whenever needed. Our

research and our usability lab told us that users wanted to do their typical tasks easily.

Other areas of

IBM

will

probably use

this

approach in their products."

The team

investigated adding a touch pad just below the left

and right mouse button. But, in

typical fashion,

up with something even

They provided an

better.

Bar button that allowed the user to

moving the cursor to scroll

down

all

the

way over

scroll a

Yamato Labs came Internet Scroll

Web

page without

to the right side of the display

the page via the slider bar. Pressing the scroll bar

and moving the TrackPoint caused the whole page to move without the user having to

A lot of time

move back and

forth to the slider bar.

was spent on developing the product positioning,

customer value proposition, and associated branding. The team

wanted

to position future

IBM

"consumer mobile" products

personal productivity and business use.

They

for

desired to leverage

and extend the ThinkPad brand to the individual segment, while providing enough separation from existing ThinkPad offerings to

They contracted with Communications Development Corporation (CDC) to conduct naming research in the U.S., Europe, and Japan. The product needed a name that was more personal and conveyed the preserve the current equity with corporate customers.

attributes of affordability, convenience, freedom, fulfillment,

and

achievement.

"More than

three hundred

wide range from

names were

X Pad and X Series for

evaluated, covering a

the generation Xers, to

TrekPad and Aptiva Note Personal Series" recalled Dalgetty. of these options appealed to a younger audience but

out in the cold. day, I

left retirees

When the iSeries popped up in a team meeting one

remember

saying, 'Hey, that's

ThinkPad to represent

The

"Many

individuals.'

it.

Let's leverage the

/*

Everyone got excited about

in it.

research confirmed this as the best choice and indicated that

— The IBM ThinkPad

the letter

had

i

also

Many

Internet.

become

a

42 7

iSeries

contemporary descriptor for the

of the marketing messages were built around a

personal enablement theme using featuring the tag line

'i

and in-store materials

can'

can do anything!'"

'i

Dalgetty managed the development of the iSeries with a very small staff but also with help from the entire

ThinkPad team

in

Raleigh, the Personal Systems design team, and development via

Yamato Labs

The worldwide resources of ThinkPad develop a new focus on individual buyers. One

in Japan.

were leveraged to

of the resources that not only was leveraged but was also a

critical

aspect of this effort was the industrial design organization.

David

Hill,

Group, was

Personal Systems

in charge of the design for the iSeries notebooks.

talked about this project in detail:

design for the

trial

IBM

head of design for the

He

"When we worked on the indus-

new ThinkPad

iSeries, the challenge

was to

come up with a more attractive and personal design than the ThinkPad 380. The 380 was an all-in-one design meaning that it

—

CD-ROM, and floppy all in the same unit

included a hard drive,

but

it

was kind of clunky.

It

was on the wrong end of the spectrum

of the ThinkPad design language, where being thin was the focus of the appearance.

"The ThinkPad 380

did not have the advanced design signals of

the 600.

Our concept was

exploit

even more in the iSeries so that

it

for the first time, feels better

gance to "It

looks really thin.

when you

still

had to be

open

a

a

it.

It

see the iSeries

easier to pick

it

up, and

it

has a completely different ele-

ThinkPad, but with

ThinkPad

a

more personal

iSeries for the first time,

design.

you see the

and yellow bars above the keyboard. That way of communicating more personal affiliation user than the more corporate feel associated with the

red, green, blue,

use of color was a

with the

carry

It's

when you

chamfer and

it.

When you little

it

to take the idea of the

428

1996 and Beyond:

ThinkPad

The Brand

Reigns

600. It was very intentional and did an excellent job

delivering a feeling of a

more personal product.

"Remember that the original idea of ThinkPad was simplicity that, when opened, revealed a surprise. What we did with the ThinkPad iSeries was to make the surprise bigger. Instead of the same old thing, we made it so that when people opened it, their eyebrows

raised.

appearance terms of

a

how

We

gave the

more personal

style in

sculptured the palm rest more.

—

a little bit

the palm rest and the buttons were treated for the

scrolling feature

"We wanted come from

We

fun character

and the TrackPoint buttons.

to create a different sensation for

how sound would

We made it more like a TV, so the speakers screen rather than sitting on the palm rest. We

this product.

were adjacent to the

liked the idea of rapid access keys, similar to

on the Aptiva desktop PC. of space limitations, but

what we had introduced

We couldn't create dedicated keys because

we had

this

concept of using the function

keys to create a sense of personality so that you could launch applications

from them. Users could assign them

liked, for

AOL. So, we came up that would act as memory joggers.

example, making the blue one launch

with the idea of four colored bars

Then we had

"We

to be whatever they

to decide

decided to

what color

make

to

make them.

the color bars associated with the colors

used in the ThinkPad logo today: red, green, and blue.

them

as stripes just

fourth color.

It is

put

We used yellow as our connector for the AC adapter in

above the function keys.

the color of the

ThinkPad notebooks. Thus, we picked up

we were

We

already using in

the four primary colors

ThinkPad and put them

in

sequence

inside to provide a personalized touch in a comfortable and

friendly way.

The

use of color created this element of fun.

remember which keys

are which, based

on

their color.

You can

The IBM ThinkPad

"We

We

also

429

iSeries

took the design one step further into the screen

helped the usability engineering folks develop a

called Access ThinkPad.

design.

We

We

feature

were responsible for the interface

incorporated simplification of the technology in a

compelling, interesting, engaging way.

runs with the letters that

developed a top ten

ThinkPad

new

itself.

list

tell

We

you the

wanted to do.

another good use of design

We

different categories.

that describes those

that everybody

used animation that

how-to-do things

We

thought

this

for

was

—to help create an enjoyable experi-

ence for the user."

IBM

introduced the ThinkPad iSeries on Tuesday, October 13,

1998. Reviews were very favorable.

The iSeries group was challenged who clearly

immediately with making enough of them for people

wanted first

a stylish, affordable

to introduce a

dollars.

ThinkPad. With the

iSeries,

IBM was the

TFT color portable for less than fifteen thousand

More and more

individuals could

now buy

a portable that

provides the flexibility and functionality of a desktop system.

com-

Erica DesRoches summarized the efforts of the mobile

puting team, aesthetic

first

under Ward and currently under Sanchez: "The

and ergonomic appeal of notebook industrial designs was

elevated to a primary focus of our research.

Computing design team worked on ThinkPad while tures.

retaining

its

The

extended Mobile

the natural evolution of the

unique character and design signa-

This evolution was well executed from the

stantial resource

start,

with sub-

investment helping the brand stand on

own.

its

IBM's continued commitment to high-quality standards made purchasers seek out team's

commitment

new models of ThinkPad. The ThinkPad

to keeping in touch with

customer wants and

new many

needs and preferences was pivotal to the design of each

ThinkPad, whether before us,

we

are

it

was the 560, 600, or

proud to be

a part of this

iSeries.

Like so

continuing saga."

430

The Brand Reigns

1996 and Beyond:

The Authors' The

iSeries

Insights

ThinkPads shook up the competitive landscape

portables designed for individual buyers, a space previously

by Compaq and as the

its

Presario line of integrated portables. But, just

requirements of individual buyers

of the portable manufacturers

Throughout the

Discman

IBM

is

is

a

who

The

iSeries,

distinction

consumer product,

not known

a

consumer

as a

had to correctly position the

it

has continued to perfect

its

focused on the individual, not

important.

is

so will the reactions

differ,

decide to pursue this space.

IBM

past decade,

branding strategies. With the the "consumer."

for

owned

A

Sony Walkman or

product designed for the masses. electronics

iSeries in a

around the individual, not the consumer.

company. Thus, they

more amenable It

value space

had to focus on personal

productivity, not entertainment.

According to Jim Forbes of Windows

Magazine, "the iSeries showed a

new side of IBM

was not generally acknowledged.

It

showed

time computer buyers or individual buyers.

or side of IBM that

their awareness of firstIt

showed

their willing-

ness to address one of their weaknesses during the last few years

—paying attention

to price."

The team also knew that the

iSeries

had to be

a

complete package

appealing to the targeted market. Just branding and positioning

would not be enough; role as the technology

that

it

industrial design

and product

had learned how to

deliver a

would play

attributes.

IBM

as

important a

demonstrated

new product to a new market seg-

The group built a system that was attractive to the target group while retaining the equity of being a ThinkPad. They incorporated all the ThinkPad attributes into the iSeries. They used innovative ment.

technology to create an integrated portable, made sure that world-class product, put top talent in charge of the effort, successful

business.

And

the

a

world

class

was

a

built a

—leveraging the —was further with

naming scheme

ThinkPad brand and then migrating masterful. Its mastery linked

it

and

it

iSeries

two of Professor Kosnik's key

product and a trustworthy brand.

qualities:

Chapter 30 The Journey Continues

If everything seems under

control,

you 're not going fast enough.

—Mario Andretti

As with most legends

some way or

another.

in history, the story usually continues in

Sometimes the legend languishes, and few

enhancements are made to the a

wrong turn and

story.

Oftentimes, the players take

things go awry. Preferably, the players remain

true to their plan, and the legend remains intact and

maybe even

grows. Such was the case of the ThinkPad brand in the

last

year of

the 1990s.

The ThinkPad team wanted inal personality.

to

remain true to the brand's orig-

However, things were rapidly changing

in the

mobile market, and they realized that something truly innovative

was needed to stymie the competition. Faster processors, larger displays,

and enhanced TrackPoints would not be enough to cap-

ture the interest of the ever-expanding

The team

looked outside

was found

in the

number of portable

itself for inspiration,

most unlikely

place.

users.

and the inspiration

432

1996 and Beyond:

The Brand Reigns

Ask any purchaser of portable computers about the

latest

machines on the market, and he or she could probably give you the speeds and feeds. Ask any kid about a transformer, and he or she

knows

that

an amazing

it's

when you

action figure,

Although

toy.

twist

and turn

its

it's

amazing.

On

April 20, 1999,

portable and, like

its

IBM

The ThinkPad 570

transformer.

diskette drive,

modem

and

.

its

transforms into

that's

unexpected and

announced

toy counterpart,

replacement portable with

it

parts,

—something

something completely different

an ordinary-looking

it,

its

amazing new

too, could be called a

looks just like any other desktop built-in

CD-ROM

DVD),

(or

But, with the push of a button

on the

front of the notebook, the top piece detaches, and the unit trans-

forms into a

How

did

four-pound ultraportable phenomenon.

svelte,

IBM

conceive this amazing marvel? You might think

that IBM's innovation industry's

most

ThinkPad

its

course after creating one of the

successful notebooks with the

consumer

creating a

had run

iSeries.

line of

ThinkPad 600 and

award-winning notebooks with the

However, by applying proven

this challenge, a better solution

creative talent to

was designed than anyone believed

possible.

The

concept of

this ultraportable

grew out of the ThinkPad's

The subnotebook journey ThinkPad 500 and 510. The ThinkPad 5 10C was

experience with the subnotebook.

began with the limited in

board and full-size

its

acceptance, to

display. Users, especially outside Japan,

keyboard (that

ter of one

some degree, because of its small key-

is,

a

still

19mm pitch or distance

key to the center of a key to the right or

preferred a

from the cen-

left)

while desir-

ing full-function, lighter machines. In 1995, the team announced the

ThinkPad

because of

its

701,

known

as Butterfly

throughout the industry

innovative keyboard, which fanned out

system opened. Although the 701 addressed the requirement,

its

when

full-size

limited processor and display prevented

the

keyboard its

being

The Journey Continues

a

long-term alternative for individuals

43 3

who need power

while on

the road. Users not only wanted the fastest processor but also preferred a display that to read.

is

easy on the eyes and makes text comfortable

Subnotebooks had forced users to compromise on these

attributes, causing a general resistance to portables described as

subnotebooks.

So, the subnotebook portable category was found lacking

by the

mobile industry. Yet, users knew that they wanted a "smaller" notebook, one that was thinner and lighter but with a standard

keyboard and large

display.

As these requirements gained wide-

new category, a new term machine: ultraportable. The term, sometimes

spread popularity, the industry coined a for this class of

attributed to

Gerry Purdy, described

a full-function

notebook that

incorporated an ultra amount of portability. Building on

its

subnotebook experiences, IBM's

deliver an ultraportable

April 1996, the

inch

SVGA

attempt to

was the ThinkPad 560. Introduced in

ThinkPad 560 became an

(800x600

first

instant hit with

pixel resolution) display.

A

incorporated.

To keep

12.1-

standard key-

board similar to the one used on the ThinkPad 700

travel of the keys

its

series

was

the 560 as thin as possible, the vertical

was reduced

slightly, a

change that was almost

imperceptible to the user. This portable remained a competitive portable offering for almost three years because

keyboard and

display,

of, in part, its solid

something that most other ultraportables

failed to provide.

This

is

not to say that competition within the ultraportable cat-

egory did not

exist.

In 1997 and 1998, Fujitsu Personal

Corporation announced and enhanced

its

LifeBook 600

ultraportable similar to the 560, the LifeBook 600 a

"slice"

that

sat

underneath

the

portable

Computer series.

mated with

component.

Unfortunately, getting the portable on and off the slice was plex.

Often, the pieces did not

fit

An

com-

together properly. But,

it

434

1996 and Beyond:

The Brand

Reigns

provided something that the ThinkPad 560 did not:

It

enabled

the additional media components to be collected in one place.

The ThinkPad

ports in one thin accessory.

provided external floppy disk and that

were connected

560,

CD-ROM

drive,

and

all

the

on the other hand,

drives as accessories

via cables.

As the market indicated the

CD-ROM

contained the floppy drive, the

slice

all

The

its

acceptance of the concept of a

ThinkPad team was designing the ThinkPad 560

slice,

follow-on.

Gerry Purdy was asked to work with Ron Sperano, then the

ultra-

portable segment manager, on this project. In 1997, Sperano invited

Purdy

to a

meeting

in Building

205

at the

IBM

facility in

North Carolina.

Raleigh,

"Ron, have you seen the Fujitsu LifeBook 600?" inquired Purdy. "Yes," responded Sperano.

"We've evaluated the unit

PFV

of our competitive positioning and

as part

[Price Function Value]

The keyboard and display are nothing like what we have in the ThinkPad 560. And we don't think that it has nearly the ease of use of the 560. The portable does not connect very well to the ranking.

slice,

making

access to the

media devices and ports

more of

a

What

the office alternative?

is

difficult.

Even

concern, what do users take with them on the road?

There must be

a

docking solution

a slice similar to

what Fujitsu has

as well."

Purdy mused, "The idea of done makes

you have

sense; users

would take

it

to provide docking as well.

on

the road. But,

What

if

I

agree that

the slice were con-

nected to a port replicator that would always stay in the office?

Think of it

as the 'three-piece suit' scenario for the ultraportable.

By incorporating

three pieces into the system, the customer has a

portable that connects to the media to the port replicator."

portable, a slice,

As they

slice,

talked,

which, in turn, connects

Purdy proceeded

to

draw

a

and a port replicator on the white marker board

in Sperano's office.

The Journey Continues

435

Ron Sperano.

"It's a

great concept," said Sperano. "If

low-on to the 560 in

We

knew

address

its

that

this direction,

we wanted

deficiencies.

I

we could have

think

it's

is

different

take the fol-

a real winner.

to take the best of the

This concept

have been thinking, but

we could

560 and yet

from what others

a direction to consider."

436

The Brand Reigns

1996 and Beyond:

Both Sperano and Purdy knew that industrial design engineering to

The

would take some

it

make

the design

work

careful

properly.

portable had to mate easily with the slice and include hot dock-

ing (the capability to detach the portable from the slice without

having to reboot the system).

mate with the port

to easily

The

portable and slice then needed

replicator.

entire system should resemble the

ThinkPad

integrated all-in-one portable (later

This desire helped to with

its

named

solidify using the

also felt that the

380's follow-on, an

the ThinkPad 390).

mating design of the 380

bus connector on the bottom versus connectors on the

back, like the

ThinkPad 600.

Maintaining

It

IBM ThinkPad

cator across the

a

could drive a

common

port repli-

line.

family look and feel had been a hallmark of the

ThinkPad brand. As Purdy

They

their discussion continued,

also agreed that the

keyboard and display used

Sperano and

ThinkPad 560 follow-on should use the in the

ThinkPad 600. The design would

include the latest processor and largest storage available in the

market while keeping the TrackPoint and other industrial design favorites.

Sperano did not get the chance to see the design through to

He

completion.

soon accepted

which allowed him Bill

to pursue his

Tsang became

Ultraportable and

the

demanding

a less

Ph.D.

in

worldwide

Companion

staff position,

technology in education.

segment

manager

and tested

this,

it

To

he worked with the engineers in Yamato, Japan,

with target users in the U.S. and Europe.

Tsang and the ticated

for

Products, with responsibility for

taking the product from concept stage through announcement.

accomplish

its

IBM market research team

did extensive, sophis-

market research on two continents to determine the feature

The Journey Continues

set that ultimately

437

went into the 570. This research showed

differ-

ent skews in the feature preference for small and light notebooks

between North American and Japanese

users.

The

challenge of the

570 was balancing and coming up with models that could appeal to both geographies.

"We

now the ThinkPad Tsang. "We showed them

enjoyed testing mock-ups of what

570 with focus groups worldwide," said the portable sitting

on the

is

When participants looked at it, it

table.

appeared to be a full-sized desktop replacement portable very attractive one at that.

how

it

worked.

We

told

computer that weighed floppy, keyboard,

modem. And sounded

it

We

them 6.5

did not that

IBM

like a great portable

pounds and included

a portable

CD-ROM,

a

standard ports, and built-in

ThinkPad. They commented that but that

a

them anything about

what they saw was

13. 3 -inch display,

was an

tell

—and

it

seemed big

in

it

comparison

to other portables in the market.

"At that point,

we

lifted off the

Ultraportable with one simple

motion. Reactions varied in degrees of amazement.

showed them how

we demonstrated how little

in

release button

the pieces

on the

then

snapped back into place, and

easily

it

We

worked

together.

By pushing

the

popped

off

right side, the Ultraportable

one easy motion. Reactions by the focus groups were consistent

worldwide

—smiles and acceptance."

The ThinkPad 570 originally

UltraBase

conceived. slice

ROM, DVD,

In addition to

has two bays.

and so on,

device in the other.

UltraBase

was, indeed, designed in three pieces as

as well.

A

in

It

supports

the all

Ultraportable,

the

the typical media:

CD-

one and floppy drive or other smaller

second battery can also be charged in the

438

1996 and Beyond:

Completing the three pieces

The Brand

Reigns

Mini-Dock

in the overall design, a

accepts either the Ultraportable alone or the underlying

bus connection a

is

on the bottom, so the unit simply off when disengaged.

drop-down and then pops

has

all

the standard ports replicated

portable,

PC

a

Mini-Dock

is

Card

slot,

and,

The

attaches with

The Mini-Dock

on the back of optionally,

slice.

a standard

The

ethernet.

integral to the entire solution. Users can attach

all

cables to the

Mini-Dock and then detach

or the

depending on their needs. According to Sam Dusi,

a

key

slice,

member

of the ThinkPad marketing team, "Managing the

secondary devices so

critical

to the mobile user

consideration in our design efforts. flexibility

either the Ultraportable

We

knew

major

a

that users

on the road and when they returned

were concerned, however, that such an

was

wanted

to the office.

alternative

form

We

factor

might not get the executive support and funding necessary to survive. its

We needed to view this product differently and offer proof of

potential.

"We size

discussed this potential in terms of usage scenarios and the

of the opportunity associated with the users. If the user just

needs the Ultraportable

on

a short trip

at a

meeting, at

where multimedia

isn't

home

for the evening, or

needed, the Ultraportable

can be taken off the UltraBase. In this configuration, the user has a lightweight (3.9

pounds

for 12.1" display, four

display) portable that's easy to carry

same keyboard and display

as the

user needs multimedia, such as a

pounds

for 13.3"

around and yet provides the

ThinkPad

600. However,

if

the

CD-ROM to play music, a DVD

to play a movie, a floppy drive, or other media, the Ultraportable

and UltraBase can be taken off the Mini-Dock. a full-function desktop

configured with a

The

user then has

replacement that weighs 6.9 pounds when

CD-ROM and floppy."

The Journey Continues

Sam

Dusi.

439

1

440

1996 and Beyond:

The Brand

Reigns

ThinkPad" 570

#

c

the

new thinkpad

5 P o. = £ * £

570. (dramatization)

§

|

I ! I *

9

price

(P)

pentium

T/7f

/5M ThinkPad

Knowing riors,

e-hi Mtneji took

]]

510.

that the

ThinkPad 570 was

to be used

the mechanical housing and design were

by road war-

deemed very

The Journey Continues

They decided

important by the product team.

UltraCarbon housing based on developed by

IBM

a

Researchers. UltraCarbon

A

is

an

use

to

carbon fiber-reinforced

most durable composite material today.

441

plastic

the lightest and

available in the marketplace

derivative of carbon fiber composites used in sporting

goods equipment, the UltraCarbon housing

results in a thinner-

walled, higher-strength unit that enables efficient heat dissipation

and room for high-performance internal components such

as the

IBM hard drives, and long-life batterexterior, the IBM ThinkPad 570 has a

latest Intel processors, large ies.

Beneath

its

rugged

full-size, full-stroke rest;

keyboard; an ergonomically designed palm

and IBM's TrackPoint pointing device, with the Internet

Scroll Bar button

and magnifying functions to help users breeze

through spreadsheets and

were

definitely

"We knew although

its

pated," said

Web

pages. Ease of use and durability

key components of this product. that

we had

a

winner with the ThinkPad 570,

gestation period was a

Leo

little

we Management

longer than

Suarez, director of Product

Mobile Computing group and Dusi's manager. maintain market leadership in better to take longer and get

it

this space, so

right.

the 570, the

most

"We wanted

we knew

that

Users quickly saw

improvement over the 560, which was,

antici-

for the

it

to

was

a distinct

until the introduction of

successful ultraportable

on the market. The 570

extended the ultraportable franchise, potentially eating into some sales

of our integrated all-in-one ThinkPad 390 and the ThinkPad

The ThinkPad 570 will also bring new customers to IBM, those who were thinking of buying a sexy looking ultraportable 600.

but wanted one that delivered a total solution." Adalio Sanchez, general manager,

IBM

Mobile Computing,

expounded on Suarez's thought: "As notebooks become the

sole

computers for business, users are torn between full-function

models and ultraportables.

Now

they can enjoy the best of both

442

1996 and Beyond:

The Brand

Reigns

worlds without sacrificing performance or functionality. this

happen, ThinkPad must operate on

all

To make

cylinders right now.

We have to focus on producing ThinkPads worldwide so that they are ready

when and where customers want

have to make sure that our product

to

buy them. And we

line covers the

requirements of

the varied segments of portable users."

To round out

its

family of mobile offerings, the

ThinkPad team

introduced the Ultralite ThinkPad 240 in June portable was designed for people

who

1999. This

have a desktop computer

but want a small, lightweight portable to use when out of the office. It filled the

most important notebook form

The board pitch),

feature, users usually

factors have

is

without

met with

ThinkPad 240 has

found in Japan, where minigreat success.

and

a key-

although slightly smaller than the 570 (with an

18mm

Ultralite

that,

whom system weight was the

niche for users for

large

enough

that even

a 10.4-inch display

most Western users can touchtype

Like the ThinkPad 570, the usability and

difficulty.

ergonomics of this smaller, nonstandard-size keyboard were extenand tested with

sively studied

machines in

its

users, resulting in

one of the best

Steve Wildstrom, in his June 28, 1999,

class.

"Technology and You" column

in Business

Week described the entry

of the ThinkPad 240: "I have been searching for a long time for a really small laptop for the road. But, everything I

Windows

CE

Sony

Compromise

ThinkPad 240,

at,

from

to mini-notebooks like the Toshiba Libretto to

ultralites like the

mises.

looked

is

VAIO

505,

demands too many compro-

a fact of life in a laptop this small,

IBM has made

choices

I

can

live with."

but in the

U

1

The Journey Continues

IBM ThinkPad 9 240

Draft version. For information only

443

and subject to errors.

Final version at http://w3.pc.ibm.com/pcinstitute/psref/ after

announce

IBM a ThinkPad8 Intel 9

Mobile Celeron'- 300MHz' / 66MHz system bus No upgrade / processor on Ball Grid Array (H-PBGA) 128KB / onboard (full speed) / synchronous pipelined burst / ECC / write-back External 3.5' 1.44MB / connects to left side with FDD port / includes case and cable

Processor Processor features L2 cache Diskette drive

CD-ROM DVD-ROM

Option: External CD-ROM / 20X-8X5 speed / connect via PC Card slot Option: External ThinkPad Proven DVD drive / connect via PC Card slot

Type-model

2609-21 Celeron

Processor Disk - size / ms Preload (see side)

6.4GB

Available date

June

Display Display

/

300MHz 13ms read

14ms

/

write

/

Ultra

DMA/33

or

PIO Mode 4

/

S.M.A.R.T. 29

1

and type 10.4" TFT color (264.16mm) / Active Matrix SVGA / 800x600 / 1 5ms refresh (typical) / 50 to 1 1 nits techology 16.7 million simultaneous colors / 250 to 1 contrast (typical)

size

-

Graphics

-

controller

Graphics

•

features

NeoMaalc™ MaglcMedia128XD

2MB

/

SGRAM

Simultaneous

64MB

(embedded)

"

(NM2160C)

color

/

/

128-bit accelerator

/

space conversion

LCD and CRT / 180 degree

/

tilt

multiple-monitor support

DDC2B M / ext SVGA

/

non-parity

/

66MHz

/

3.3 volt

/

64-bit

2 sockets for JEDEC 144-pin SO DIMMs / one socket used by std memory socket accessed by removing three screws and keyboard Disk controller

/

disk

EIDE / PCI 2.1 / supports one internal disk disk (IBM or dealer service required) Keyboard palm

Keyboard

TrackPoinr" sensitivity /

Dimensions Weight2 (w/

Case

/

rest

95%

/

/

customer can not remove

main typing keys / 18mm key pilch Release-to-Select / dragging / click pace

/

/

-

Me'

hrs 3.5 hrs on

Charge time

3.0 hrs off

•

IBM

None None

• • • • •

• 1

None None (software support for MPEG-1 56K 37 / V.90 / integrated in system /

Video (TV) out

MPEG

decoder

Data/fax

II

modem

in Windows 98) mini-PCI Type lllb

/

Registration

IntelliSync 97 (infrared) IBM Global Network Dialer Netscape Communicator

1 Type or Type / CardBus 32-bit / PCMCIA 2.1 / no Zoomed Video support • PC Card Std slots USB / serial / parallel One USB / one 9 pin; 16550A / one (IEEE P1284-A, EPP, ECP, bidirectional) • • APM-aware BIOS / Ultraslim AC adapter, barrel, 3-prong, 56 watts Other features I

98

Puma

•

Intel

Port replicator

ThinkPad Configuration Program ThinkPad Utilities ThinkPad on the Net Access ThinkPad IBM Update Connector RingCentral Fax Ergonomics

• •

.9

Texas Instruments* T11211 PCMCIA

Docking station

•

• •

/

440DX AGPset / Intel 82371EB PIIX4E (EIDE. PCI to ISA bridge, USB) controller / NS PC97338 (FDC, IR, I/O) PCI 2.1 / 32-bit / 33MHz (EIDE, graphics, PCMCIA, USB, audio, modem) ISA (diskette, serial, parallel, infrared)

Architecture

Online User's Guide

•

plastic

Li-Ion (3 cell) / intelligent /

Mirs± Windows'

•

• •

type 10

65.536 colors

-

•

full-size

Press-to-Select

spare caps

-

1

with

WINDOWS 98 PRELOAD' 6

x 1.05- (86 cubic inches) 2.9 lbs (1.31 kg)

PC/ABS

material

Battery Battery

1024x768

/

...2 x 8.0

batt/disk)

to

192MB33

/

SDRAM

Lotus* SmartSuite Millennium20 PC Doctor ConfigSafe Norton Antivirus (OEM Version) Universal Management Agent Software Selections CD Lotus SmartSuite Millennium CD-ROM Recovery CD-ROM (Windows 98) Recovery CD-ROM (Windows 95) 7

Lucent 1646

not voice-capable

SoundBlaster Pro™ compatible / ESS 1946 / PCI / full duplex One internal speaker (.5 watt???) Internal microphone / Fn+PgUp and PgDn volume control with mute Microphone jack (stereo) / headphone jack (stereo) / line-in jack Infrared port on left side / IrDA 1.1 compatible / up to 4Mbps

Audio Speaker Audio features Audio in/out jacks

16-bit

Infrared ports

setup password

password

Security

Power-on password

Supp oper systems

Windows 95, Windows 98, Windows NT 4.0 , 3 (door-to-door depot ly««r i_ c?rrY.- ir2 °' ThinkPad EasyServ ,

Color depth

LCD

Resolution

TFT 16M 16M 64K

External Monitor

60H7 16M

16M 64K

70H7

64K

7SH7 16M 16M 64K

ASH 7 16M 16M 64K

1280x1024 Virtual All -

screen

disk

'

On-site 18 M-F, 8-5, next bus day (72 cities)

Service options''

1024x768*

/

'»

Limited warranty"

640x480 800x600

/

/

/

security keyhole

repair service) serv up to 5 yrs from purchase date

OPTIONS 32MB SO DIMM 3.3v NP SDRAM 64MB SO DIMM 3.3v NP SDRAM 128MB SO DIMM 3 3v NP SDRAM High-capacity 6-cell Li-Ion Battery Ultraslim 56 watt AC Adapter (3-prong)

20X-8X Portable Stereo CD-ROM Drive 20X-8X Portable CD-ROM Drive V.90 PC Card Modem with XJACK 2 ' 10/100 Ethernet CardBus PC Card 10/100 EtherJet plus 56K modem Turbo 16/4 Token-Ring PC Card

mode

models:

C:driveisFAT16of2GB D: drive is FAT32 of remaining space

DC Auto Adapter Smart Card Security Kit ThinkPad Proven™ solutions' 2 (visit www. ibm com/pc/us/thinkpad/proven)

FEATURES 76H0294 Wired for Management 1 1a compliant DMI 2.0 compliant 01K1150 PC 98 compliant 02K6580 ACPI ready (APM enabled)??? 02K6545 Wake on LAN™ support 2,,,?7 1969011 Setup Guide, User's Reference, Windows 1969010 OS manual, and Quick Reference Card 10L7393 System Status Indicators 08L3147 Reset switch on bottom 28L3261 Plug and Play 1.0a 28L3670 Standby, suspend, redifsafe, and hibernation modes 02K3381 10L7333 ENERGY STAR compliant 20L0241

International

Warranty Service' 4

IBM SystemXtra™36 24 hour/ 7 day telephone50 board, lax, electronic, and ,

bulletin

Internet

(www.ibm.com/pc/us) support

Ail

The

trademarks are the properly

of their respective

owners

IBM ThinkPad 240.

The

Authors' Insights

As the 1990s draw to are intact.

With new

a close, the

mainstays of the ThinkPad brand

additions to

its

family of products, the team

444

1996 and Beyond:

did not

compromise the design and ease of use fundamental

brand's personality. detail

The Brand Reigns

and quality

how few

Despite

They remained

as

they had since the brand's inception in 1992.

as

of the original team members were

ThinkPad organization and how matrixed

the

to the

concerned with attention to

still

part of

the organization

was within the chameleon-like IBM, the brand personality survived.

Members

of the original team had consistently conveyed the

vision and brand blueprint throughout time, driving innovation as a

fundamental element of the plan.

This innovation was captured

ThinkPad

the

in

ThinkPad 570 and

240. Yet, the team realized that their challenge, in addi-

tion to remaining true to the brand,

was to address more markets

and segments than development funds might

needed to

allocate

money not only

for

its

allow.

The team

traditional product fam-

The

but also for emerging categories of adjunct tools.

ily

ThinkPad brand had

to be extended

beyond the category of note-

books and ultraportables.

The ThinkPad name was expanded CrossPad to IBM's product and

A.T

and an

line.

with the addition of the

This joint venture between

Cross allows users to record notes using active

IBM

a standard

pad

pen, broadening input capabilities beyond the

TrackPoint so integral to the ThinkPad brand. But, the pen was not the only tool required for the mobile

line.

ThinkPad licensed the Palm Pilot from Palm Computing and named it the IBM WorkPad. The WorkPad, part In

of

a

1998,

category of electronic tools, enabled pervasive computing.

Pervasive computing,

an

initiative

from the

Chairman Lou Gerstner, combines the computing with data communications. business

model

value chain. together.

that

is

To extend

beyond

It

office

IBM

to pursue a

—

extends the

just selling a device

this value chain, all parts

IBM

of personal

benefits

allows

of

it

of IBM must work

The Journey Continues

According to

Tom

recent addition to

something creates

445

ThinkPad brand manager and the ThinkPad team, "The value of having Grimes,

a

as recognizable as the

ThinkPad brand

is

the value

it

by allowing one-to-one relationships with our customers

and with other parts of IBM. ThinkPad enables us to take the best

IBM

has to offer and extend

partners

who

its

capabilities

through

a

network of

We

recognize the value inherent to the brand.

address the changing needs of our customers while delivering

can

IBM and ThinkPad. IBM as a place to work.

the promise of

It

me

It is this ability that

choose

was

this ability that

ThinkPad's desirability in the minds of our customers. ability that will

on

made

ensures

It is this

continue ThinkPad's status as the most recogniza-

ble brand in mobile

computing

history."

— 446

1996 and Beyond:

The Brand

Reigns

System

570

240

WorkPad z50

Form

Ultraportable

Ultralite

Companion

Processor

300/333/

300MHz

NECVR

366MHz

Mobile Celeon

4121

Mobile Pentium

Memory

131MHz

II

64/1 92MB

64/1 92MB

16/48MB

20MB Storage

6.4GB

4.0/6.4GB

ROM

i/ii/m

PCMCIA Display

12.1/13.3"

TFT Operating system

Windows 98 Windows NT

10.4" TFT SVGA

8.2" VGA DSTN

Windows 98

Windows

H/PC

.

CE

Professional

Edition

V3.0 Weight

4.0/6.9

2.9

2.6

UltraBase

56K modem

Infrared

(lb.)

Other

Infrared

Enh

Card Bus

Announced

6/99

4/20/99

Kps Card

33.6

PC

TrackPoint

5/99

These products demonstrate IBM's commitment ever changing needs of

its

customers.

modem

to address the

The Journey Continues

PC Magazine,

IBM goes and

April 20, 1999:

the thin-and-slice route with the

the result

447

is

a

—

4-pound ThinkPad 510

success.

"Latest ThinkPad: Nice,

Any Way You

Slice It,"

PC

Week,

May

3,

1999:

The

near-flawless execution that

ThinkPad notebooks can

IBM

be found in the

brought

to

previous-generation

ThinkPad 510.

The

Authors' Final Insights

Success has a thousand fathers, while defeat

is

an orphan. Ultimately, we

will be judged not by our rhetoric or our rationales, but by our results.

—President John

F.

Kennedy,

after the

Well, you have completed our book, ThinkPad:

A

Bay of Pigs

Different Shade

of Blue, about a high tech success that has changed the landscape

of the portable market. for

you

as writing

material and

we

more

it

We

hope

was for Gerry and me.

individuals

ever thought possible.

We

who wanted also

—the more successful

was right story, the

more

that reading

tributions to the

ThinkPad

We

was

as enjoyable

had more source

to be interviewed than

found that President Kennedy

a certain aspect

individuals claimed that they

Early on, some individuals

it

who had

of the ThinkPad

were responsible.

built careers

on

story and were afraid that

their con-

some

aspect

of this book might affect their credibility threatened us with lawsuits.

Despite such intimidation,

we continued

present the real story behind the

to

work hard and

ThinkPad brand.

We

to

attempted

The

450

to introduce

Gerry or

I

you

to the

Authors' Final Insights

main

characters, those with

had personal contact. Regretfully,

introduce you to each and every person

ThinkPad product

who

Many wonderful

line.

it

whom

either

was not possible

to

has ever touched the

and talented people con-

tributed to this narrative, either during the writing process or as

ThinkPad development and marketing.

part of the actual

could never do

of them

all

though you know

you now

justice. But, hopefully,

We

feel as

few of our favorite characters.

a

This book represents the best of what we personally experienced,

we remembered, we

we discovered. As with any story, but we diligently scrubbed the fifty-

learned, or

other versions probably

exist,

plus interviews to find those dates and meetings that could be verified or validated.

We

encouraged our contributors to

As you would

sides of every incident.

individuals

those

who

who came

discussing

it

we

us both

did not find as

many

forward and admitted their mistakes. For

such as Bruce Claflin, our admiration only increased.

did,

Gerry and

expect,

tell

I

also learned a lot

from writing

this

book and from

with such knowledgeable individuals as Dr. Dave

Bradley and Professor

Tom Kosnik. While Dr. Dave kept us straight

on the technologies, Professor Kosnik's Seven Qualities of Enduring Brands provided

a

framework

in

which

to highlight ThinkPad's

strong points. At the beginning of this journey, the team did not

know that it was developing a brand; develop a new line of portables. However,

even

a

it

had been asked only to

in the early 1990s, just as

renewed focus was put on portable computing,

tremendous change.

IBM

A revised approach to branding became part of

IBM's transformation and fundamental to ThinkPad's qualities

underwent

success.

The

of an enduring brand began to surface within the

ThinkPad's infrastructure. To refresh your memory, those seven qualities cited

by Professor Kosnik include

A growing market Innovative technologies

The

•

World-class products

•

Profound leadership

• • •

A trustworthy brand A balanced business A global learning network

Allow

me

qualities

and

moved

451

Authors' Final Insights

to briefly recap

how

the team

how ThinkPad

addressed these

members considered each one

as

they

forward.

A Growing Market The

personal computer industry has been marked over time by

what paleontologist Steven Gould

What

that

until, all

means

is

that things

called punctuated evolution.

go along pretty much

as

expected

of a sudden, a significant occurrence changes the entire

landscape. This change might force us to think about things differently.

Such was the case

for personal computing.

Before the early 1980s, businesses were content to use mainframes and

"dumb

terminals" for their data processing require-

IBM changed the business computing paradigm by announcing the IBM Personal Computer. ments. Then, on August 12, 1981,

At the time, no one was certain what the

"killer

app" would be, but

almost everyone knew that the way they were doing business was

going to change nential

in a big way.

market growth, and

try that continues to evolve

But, something users started to rely at

home. They

also

The

personal computer started expo-

it is still

growing.

on an almost

It started

an indus-

daily basis.

happened along the way. Personal computer

on

their systems not only in the office but also

found that they needed them on the road.

PC

manufacturers started to address both this portability requirement

and the emerging segment of the personal computer market.

Compaq Computer Corporation

entered the

PC

scene and

The

452

showed everyone how

Authors' Final Insights

to

do portability

the way, sometimes getting lost in

its

right.

own

IBM stumbled along and not

difficulties

hit-

ting the "sweet spot" of the portable market. But, Big Blue did not

them almost ten

give up. It took

way

years to find their

in

portables, but they did.

IBM became

a player in portables

utives such as Jim a portable

because of the vision of exec-

Cannavino and Bob Corrigan. In the early 1990s,

team was funded and asked to pursue

this

exploding mar-

They were given the latitude to operate as a self-contained unit similar to how Don Estridge had been allowed to run the original PC team. The team analyzed the market, its competitors, and the

ket.

available technologies. It developed a five-year

journey to become number one in It

roadmap

for

its

dynamic market space.

this

learned the importance of having a roadmap and religiously

updating

An

it

to reflect changing trends and technologies.

unexpected factor along the way that helped the

portable team was the downturn in the economy. started to look for

ways to be more

efficient

when

space and personal computing equipment.

inward and found that

nology to make

its

it

could save

IBM

Many businesses came

it

IBM

Even

money by using

to office

looked

portable tech-

employees mobile, to eliminate

office space,

and to allow employees to work from home. This changing demographic,

now known

as telecommuting,

expanded the baseline for

the

term portable computing

the portable market.

Somewhere along

this

path,

migrated to mobile computing. It took

more than

just portable

IBM

new

digital assistants,

face

and included at

and smart phones.

could not ignore the different segments of the market

now termed mobile computing. However, focused on

a

PCs. Manufacturers started to look

handheld devices, personal

Even

on

its

the

ThinkPad team stayed

core technology and brand strengths.

their foray into these uncharted waters.

They

limited

The

ThinkPad has kept pace with that

had "legs" and

is

453

Authors' Final Insights

this

fast-growing market, one

expected to grow for at least the next

decade. According to Jim Cannavino, "This market will continue to grow. In fact, even guys like

A portable

use only a notebook PC. I

me who

were mainframe bigots

computer

is

the only system

have, and there's a whole segment of the market that operates

the same way. Today, the only difference

We

with more sophisticated servers.

is

that

we back them up

can stay linked to the

Internet and corporate data while we're on the road."

Cannavino's statement supports the need for

ThinkPad team

the future, as Professor Kosnik cites, the team

IBM

has taken the

Pervasive

first

Computing

more than

just

and the

emerging markets. To be successful

to pursue

growing market segments

IBM

as pen, voice,

steps with

its

initiatives. But,

in

must address such

and data communications. CrossPad, WorkPad, and perhaps the future brings

changing form factors and innovative uses.

Perhaps, by building on

its

service heritage,

IBM

and ThinkPad

can establish a reputation as the premier services and technology provider in the mobile computing market.

Innovative Technologies The ThinkPad product line incorporated changes in

its

significant technological

short history, changes that laid the foundation for an

enduring brand. Throughout the

story,

we

highlighted

some of

those key features and functions that helped to create the

ThinkPad brand. By the time you read

this

book, the team will

have incorporated newer, more innovative technologies than those

ThinkPad 600, the the ThinkPad 570. found

in the

These technologies

will

iSeries, the latest 770,

and even

be decided on the basis of the brand's

standard requirements processes.

The

Headlights program has

survived from the team's inception and includes both short- and

The

454

Authors' Final Insights

long-term views of the technology landscape.

The

industry and

customer councils continue to be held semi-annually and bring the

and end user inputs into the requirements

analysts, consultants,

The team

equation.

listens to the

forums and user groups and

market research on

a

Voice of the Customer through

at trade

worldwide

shows.

basis to

make

It

conducts extensive

sure that

new products

meet customer requirements.

Customer requirements have driven portable computers

to be

the incubation field for advanced computer technology. In the

beginning, portable manufacturers wanted to build machines

whose

were equivalent to the desktop.

features and functions

Screens had to be equal to or better than those attached to the desktop, thus, active matrix color

TFT

displays.

PCMCIA

slots

and

cards were developed to handle options and peripheral capabilities.

keyboards were

Full-size

a

fundamental requirement, driving

mechanical designs and, in the case of Butterfly, some

The

creativity.

technology curve has turned from viewing portables

as desk-

top alternatives to viewing them as desktop replacements. In

one point

team to

in

ThinkPad's

refer to

affecting

its

its

history, executives

product

desktop

line as a

fact, at

would not allow the

desktop replacement for fear of

line.

As the portable segment matured, the trend toward greater and greater mobility drove

Companies such hard

files

IBM

life,

power management

Mouse

capability

technological innovation.

reduced system weight while increasing

and memory. Battery

necessitated flights.

as

additional

basic to the useful portable,

to allow for trans-continental

had to be usable

in confined spaces,

resulting in such innovations as TrackPoint, the Trackball, and the

TrackPad.

and

The

mechanical design and packaging had to be durable

resistant to the ravages of the road warrior environment.

Interestingly,

mobile technologies are migrating onto the desk-

top. Large, flat-panel

TFT displays are replacing monitors. Power

The

management

455

Authors' Final Insights

an accepted feature on the desktop. TrackPoints

is

have been added to desktop keyboards.

possible to conceive of

It is

the desktop of the twenty-first century as a portable configured to

work primarily

in the office.

Adalio Sanchez, ThinkPad's general manager since 1998, offered this perspective:

"We

are reaching an interesting

inflection point,

which Gerstner describes

tion technology

becomes much more than

top that forces issue of

you

March

as 'one

a

where informa-

computer on

to type in order to interact with

The Journal of Business and Design describes

as crossing into true ubiquity, finding its

this

it.

a desk-

A

recent

technology

way into everything from

automobiles to machine tools and household appliances effect,

disappearing into the fabric of our day-to-day

today's notion of "computers"

is

—in As

lives.

replaced by these pervasive "com-

puting devices," there's a

new premium on

design as an aspect of

competitive advantage.'

ThinkPad must

stay in step with the

1

changing landscape, the innovation that Industry Advisory Council

member

is

always on the horizon."

on

Leslie Fiering built

Sanchez's thoughts: "ThinkPad must absolutely stay on the cutting edge of technology, always be ahead of the crowd, strive to be

number one. To me, innovation will become more and more critical. With the proliferation of devices that people carry around with them, ThinkPad must be leading edge in not only portables but also extensions to the portable, such as WorkPad.

They

will

need to seamlessly link these products together."

The

personal computer industry has changed dramatically in

relatively short history;

even more

ment propelled forward

at

ThinkPad family embodied

1.

The Journal of Business

so, the portable

its

computer seg-

rocket speed. During this time, the a family

& Design

(vol. 4,

of technologies that,

no.

2):

22

when

The

456

Authors' Final Insights

taken together, provided customers with real benefits and value.

The brand

has a track record of continuous innovation over time,

a record that should continue into the twenty-first century.

World-Class Products The ThinkPad brand lence.

IBM

world

class,

has established a high

benchmark

for excel-

did not just build a slightly better portable;

it

built a

multi-generation portable family. Industry analysts

and consultants have consistently rated the ThinkPad brand one of the best, bestowing numerable awards for quality, innovation, and industrial design.

Customers have developed

ThinkPad brand equivalent

to that of Harley

a

loyalty to the

Davidson

riders or

Starbucks coffee drinkers. ThinkPad has "crossed the chasm" from technological innovation, to useful product, to desired brand.

Profound Leadership Throughout our personalities

story,

Ward, and Sanchez.

management

ThinkPad

described various leadership styles and

of ThinkPad's key management team: Watabe,

Claflin, Forrnichelli, sity for

we

We illustrated the neces-

to change as the business changes.

story started with a technologist (Watabe),

marketing genius

(Claflin),

grew under the decisions

facturing expert (Forrnichelli),

The

moved to a of a manu-

improved the business with an

operations master (Ward), and has

come

full circle to a

savvy technologist (Sanchez). Each brought his

own

market-

perspective

and experiences to the mission; each succeeded because he listened to his team.

We

also

explored the vision of Jim Cannavino and

Bob

Corrigan in funding and supporting the renewed portable effort within

IBM. Coupled with

the arrival of Lou Gerstner and a sound

business strategy, a turnaround was almost inevitable.

The

We

457

Authors' Final Insights

talked about the effect of

some of

were not general managers but who ship in their areas of expertise

—

still

its

team members who

offered profound leader-

for example, Bartlett's

market

management, Larsen's worldwide knowledge, and Higuchi-san and Ikeda-san's technological

expertise.

Tom

of such leaders as Richard Sapper,

when

it

came

to industrial design.

expertise of such individuals as

We explored the creativity Hardy, and David Hill

We learned about the planning

McHugh, Bower, and

Fletcher.

More important than these leaders was the environment they created. The people rallied around the mission and took pride in their contribution to the brand. The team succeeded as a team, and, in those rare instances when there were problems, suffered as a team. story,

Future leaders were groomed throughout the ThinkPad

including Adalio Sanchez,

Leo

Rod Adkins. The

Suarez, and

depth, breadth, and diversity of leadership talent across multiple

generations of the product line was remarkable. tinues with the addition of individuals such as

Dalgetty, and

Tom

Grimes, to name

just a

The

trend con-

Kevin Clark, Brian few of the current

ThinkPad team. Finally, ests

of the utmost importance, despite their divergent inter-

or individual career goals, the team respected the capabilities

and strengths of each

player.

They

learned to accept the cultural

differences and challenges associated with being a worldwide

team. Each function was recognized for the part of the journey for

which

it

was responsible.

Jim Cannavino

said

it

best:

"The

strength of

ThinkPad was

in

the team approach. Centralizing everything under one general

manager enabled

a clear vision, a clear

path toward achieving

IBM

number one

in the

the team,

would be the beginning of the end.

it

mobile space. Should

ever decentralize It

change that ThinkPad's competitors would welcome."

would be

a

The

458

Authors' Final Insights

A Trustworthy Brand An

enduring brand must be

trust that

what they

IBM

trustworthy brand. Customers must

are buying

must endure over time; a series

a

it

what they

is

cannot be

of good decisions and

a "flash in the pan."

commitment

built a recognizable brand,

The brand

will get.

one

Through

to a brand personality,

which customers place

in

their trust.

As Professor Kosnik takes

more than

the five Ps of marketing

price, placement,

brand

stated, "building a

and promotion

—to

did the fundamentals extremely well.

is

difficult." It

—product, production,

create a brand.

The team

ThinkPad

developed innova-

tive

products with cache.

They eventually produced enough

to sat-

isfy

the demand, improving their processes along the way.

They

moved from

the perception of high-end pricing to a tiered pricing

structure that today even includes the consumer.

placed not only in dealers but also in nels.

The brand

retail

ThinkPad

is

now

and direct mail chan-

has been promoted from day one, despite IBM's

financial challenges of the early 1990s.

But, investment in the five Ps cannot build a brand unless cus-

tomers trust the brand. Trust service,

is

based on product usage, customer

and technical support experiences.

We

expect that service

and support will continue to grow in importance forward.

IBM

will

have to be more creative in

front of competitors such as Dell

answer

will

no longer

just

be

as

ThinkPad goes

this area to stay in

Computer Corporation. The computer with cache but

a portable

will require a total solution that addresses the entire

requirements.

By

linking the

IBM services Computing initiative, IBM expertise

of

ThinkPad

effort with the

scope of

growing

Global Services and the Pervasive can build both

its

primary brand

image, IBM, as well as the sub-brand images of ThinkPad and

IBM

Global Services. Rob Enderle, of the Giga Information

Group and an LAC member, supports

this thought:

"IBM must

The

focus

on what

it is

459

Authors' Final Insights

they do best

—making ThinkPad part of an

overall corporate solution or business solution as

opposed to

a

standalone product. As a standalone product, they are at risk by the emerging companies like Dell, Micron, and Gateway. As part

of an overall solution, few companies can touch the kind of breadth that

IBM

can provide."

How will IBM know what services should be offered? the continuous

Through

two-way communication between product devel-

opment and the people who use continue to build

portables, the

ThinkPad team will

successful brand. According to Chris Barr,

its

"Few organizations have mastered the art of customer-company dialogues as well as the

ThinkPad team. They continue

to dia-

logue with the most visionary analysts, consultants, and customers year after year, keeping a finger on the pulse of the portable com-

puting user." As a result,

IBM

created a position in the minds of

the user (and the prospective customer) that

people can

trust,

Bower,

is

the

to propel

its

brand forward? According to

to focus

on the brand. They must not

lose sight of the original personality that customers have

same.

They must be

It

has to be

on the value

brand

marketing director for ThinkPad,

first

"ThinkPad must continue

expect.

a

admire, and enjoy.

What must IBM do Scott

ThinkPad

come

to

careful not to allow the systems to look the

more than

They have to focus technology. And they have

just technology.

to the customer, not just

to stay in touch with their customers."

Sam

Dusi, currently a

member

of the ThinkPad team, contin-

ued, "Staying in touch with our customers

Mobile products are an emotional in

sale

is

absolutely critical.

—ThinkPad brings that out

our customers, the team, and our partners. Surely in

where people a Cross, a

identify with the type of

Mont

pen they

use,

a

world

whether

it is

Blanc, or a Bic, surely a notebook cannot be

The

460

viewed

as a

Authors' Final Insights

commodity. The ThinkPad team must continue

to differentiate

products

its

—to personalize

its

products

—well

into the future."

A Balanced Business "One of the you get

so,

Business

great things about this industry

is

that every decade or

a chance to redefine the playing field," Gerstner told

Week

in

an exclusive interview in 1995. "We're in that

phase of redefinition right now, and winners and losers are going to

emerge from

the

it." 2

During the redefinition of the portable

management team

approach to

The

its

also realized that

it

needed

a

effort,

balanced

total business.

team, through each general manager and each personnel

change, worked hard to run ThinkPad as

a successful business,

even during IBM's most challenging times. Under the watchful eyes of individuals such as

monitored

its

Rod Adkins and

financial performance,

its

Steve Ward, the group

customer performance,

internal processes, and organizational learning

During

vation. that,

a

by

recent history,

estimates,

is

IBM

and product inno-

built a portable business

in excess of five billion dollars a year. It

is

very profitable unit within IBM, approaching eight percent of

IBM's it

all

its

its

total revenue. In fact, if ThinkPad

were

a

separate company,

would be one of the Fortune 500 companies. Bruce Claflin recently reflected on ThinkPad's past business

performance: "Clearly, ThinkPad has been

One

of the things that used to trouble

really

promoted the brand, despite

results.

In 1992,

in notebooks

2.

IBM sold

and

lost

"The View from IBM,"

a real success for

me was how IBM

its

has never

success. Just look at the

about two hundred

fifty

two hundred million

Business

IBM.

Week (October

million dollars

dollars

30, 1995): 142.

doing

it.

The

So, here

it is

seven years

a very profitable

business for

later,

IBM.

I'd

nothing to

argue that

it

360 and 370 mainframes.

much

I

think that

It

IBM

a five billion dollar

might be the most successful

surpassed anything

didn't

other businesses were doing.

want

to

did.

To

promote ThinkPad too

how

badly the

And now that the company is back on it isn't

ThinkPad can

necessary.

own."

According to Jerry Michalski of Sociate and

LAC, "There are

new

Compaq

pointed out just

it

track and looking to the future, its

going to be

in this industry. Ever. It surpassed the

in the beginning because

stand on

likely

is

In seven short years,

essentially

computer ever introduced

be honest,

and ThinkPad

five billion dollars a year.

ThinkPad went from

461

Authors' Final Insights

still

IBM

directions.

numerous opportunities

member

of the

push ThinkPad in

to

could change their revenue model and take

Net

advantage of the

a

for

Web

support.

It's

something

I

keep

bringing up at the councils. Integrating that type of capability

would increase leadership beyond the ThinkPad control panel, driving a

new way to manage your machine and

figuration.

IBM

to change

its

con-

has not taken mobility seriously enough; they

think that they are in the notebook business, not in the mobility

some funda-

business. Being in the mobility business will cause

mental business changes.

It will link

ebusiness strategy while propelling

Kevin Clark balanced

make to

sure that

worry about

to hold

on

we

this

ThinkPad

to a different level."

input with caution:

don't change too

a step function

them with the new corporate

many things

too

"We fast.

change and adjust for

to the iconic value of the

it.

have to

You have

We

need

ThinkPad brand. We're

reaching into a broader segment of the population, even reaching

people

who buy through

retail outlets.

We want to offer them rel-

evant, legitimate products without taking the edge off the quality

of the ThinkPad brand.

We

want

to extend the brand into

arenas such as pen, voice, and pervasive computing.

We

new

want

to

The

462

link

ThinkPad with

Authors' Final Insights

IBM

Global Services to seamlessly extend our

services heritage to our mobile customers."

Leo insight

Suarez, Director of Product Marketing, provided the last

on what ThinkPad must do going forward:

must realize

that

we

"First of

actually in the business of delivering solutions for people

were

that they

a PC away from the office.

who

are

Railroads thought

in the railroad business instead of the transportation

business. If they

might own an

we

notebook business. Rather, we're

are not in the

mobile or need to use

all,

had realized what business they were

airline today.

really in, they

We must never forget that we're not in

the computer business. Rather, we're in the business of helping

people be productive

when not

in their personal office.

Thus, you

will see

IBM's mobile computing group develop exciting new prod-

ucts to

fit

family of

this

PC

paradigm.

We

recently branded the

companion products

people be more productive

when

WorkPad

for a

that have the mission of helping

they are mobile.

We will network

these products to provide the total solution needed by our mobile

customers, to match their

life

and work

styles.

ThinkPad

will

be

at

the core of IBM's pervasive computing initiative."

A Global Learning Network Whether

it is

raising a child or building a brand,

or team can do

work of

its

it

alone. ThinkPad's success

no one

individual

was due to the hard

design, development, planning, and marketing teams.

This hard work was reviewed by

a

network of influencers, both

industry and customer. Plans were altered based on this input.

A

network of option and software providers then supported the prodgrowing network of channels

ucts.

ThinkPads were sold through

who

provided ThinkPads to millions of customers.

resentatives explained the

a

ThinkPad

IBM

sales rep-

benefits to their customers as

an integrated part of their information system. In the future, the

IBM

Global Services network

a total, pervasive solution

will

support the ThinkPad, offering

approach to the mobile segment.

The

Of

463

Authors' Final Insights

course, the network has not stayed stagnant.

employees have strengthened other

moved

teams.

ThinkPad

They have

also

to other companies, peppering the portable industry with

their expertise.

or her former

much

story

IBM

Each of these

individuals has kept in touch with his

ThinkPad teammates.

easier as this extended

It certainly

made

writing this

network closed around our

effort.

The

current

ThinkPad team has made

it

easy to communicate

with them or to discover information on their products. Simply by "surfing the at

Web," you can

find additional information

on ThinkPad

www.pc.ibm.coin/us/diinkpad or simply www.diinkpad.com.

Web

The

provides another potential network for this enduring brand.

Customers can communicate direcdy with the team that is designing future ThinkPads, right or

on what needs

How did

the

with

in

believe has been

done

to be improved.

ThinkPad team and

affect a cultural

brand

commenting on what they

network do

its

it?

How did

it

change that resulted in the most recognizable

The ThinkPad journey began by a cross-functional team. The

mobile computing history?

a vision that

was executed

team was contained within

a flattened,

The

its

organization extended

empowered

capabilities

through

organization. its

network of

industry analysts and consultants, suppliers, and customers, each

representing a different stakeholder perspective. These perspectives influenced the

The product

line

technology and innovation of the product

was well timed and focused on

quality.

became the hallmark of its global presence. 3 Even the the

way were handled with

flexibility

line.

Quality

errors along

and provided the

basis for

lessons learned along the way.

3. Peter L. Brill and Richard Worth, The Four Levers of Corporate Change (American Management Association, 1997).

The

464

Gerry and

power of

a

I

Authors' Final Insights

also learned a lot along the way.

can-do

attitude.

We

about their successes and even discuss their learned that

it is

possible,

Internet, to write a

We

learned the

learned that people love to talk failures.

We

also

through the power of ThinkPad and the

book on separate

coasts.

The authors at work on ThinkPad 600 and ThinkPad 560, accompanied by Dells "laptop" dog, Chrissie.

However, councils,

met

we

just like the value

of face-to-face industry advisory

learned the value of working in the same vicinity.

We

in person three times during the writing of this book, with

specific objectives for

each meeting.

We

learned that, even in the

world of mobile computing, face-to-face encounters enhance communication. This as

they

move

is

an important lesson for businesses to consider

into the widespread world of telecommuting.

Each element of building an enduring brand and ensuring

its

continued success has been interlaced throughout the ThinkPad history. I

We hope that you found it an interesting story.

realized during this past year that

ThinkPad

is

Gerry and

truly the legacy of

The

465

Authors' Final Insights

name but in its philosophy. In the prophetic words of Thomas J. Watson Senior in 1915, "all the problems of the world could be solved easily if men were only willing to IBM's founder, not

think..."

We

just in its

believe that the

tools that enable individuals

—Debt

Dell

IBM ThinkPad

brand provides the

and businesses to do

just that.

A

Appendix

Where Are They Now? Jim

Bartlett

In September 1997, Bartlett was promoted to vice president of

—Consumer Division,

Marketing

Aptiva brand. In 1999, Bartlett

developing and marketing the

left

IBM to become

corporate vice

president and chief marketing officer for StorageTek.

Bower

Scott

After twenty-three years at

IBM, Bower

left to

become

dent of Sales and Marketing for Samsung. During

Samsung,

his

son graduated from high school, which allowed

Bower even more

career

flexibility.

He

and general manager of Commercial

Dr.

vice presi-

his tenure at

is

currently vice president

Sales,

Micron Computers.

Dave Bradley

Dr. Bradley

is still

working on technology development

personal computer business within staff manager

IBM. He

and vice president of the

is

for the

a senior technical

IBM Technology Academy.

Jim Cannavino Cannavino

CEO

retired

from

IBM

in the spring of 1995.

He

1997.

also

pany

was the

of Perot Systems from September 1995 through September is

currently chairman and

growing enterprise security company is

He

CEO

of CyberSafe,

in Seattle,

a fast

Washington.

He

chairman of Softworks, an enterprise software tools com-

in

Washington, D.C.

Appendix

-1-68

A

Bruce Claflin Claflin left

IBM

and joined the executive team

Corporation. In

1998, he

DEC Computer

became the president and chief

3Com Corporation. He is still in contact with

operating officer for

many

at

of his friends and former employees from IBM.

Kevin Clark Clark

is

IBM

the brand steward for the

ThinkPad. Resident

in

Raleigh, he maintains the programs that entrench and expand the

brand.

Debi Dell Dell

now

is

Services.

sulting

She

the is

National Principal

—Mobile

and Wireless

driving the development and marketing of a con-

and services practice for

IBM

Global Services. She

still

resides in southern Florida.

Erica

DesRoches

DesRoches continues

to conduct

ThinkPad team. She Worldwide

is

the

market research on behalf of the

manager of Market Research and

Intelligence for the

IBM

Personal Systems Group.

Chris Farrell Farrell

is

the brand

manager responsible

of software products.

for

IBM's eNetwork

suite

He still has the Duke basketball poster on his

office wall.

Maurice Fletcher Fletcher in

is

PORT, Inc., based contributed many of the mar-

currently chief operating officer of

Norwalk, Connecticut. Fletcher

keting examples found in the

ThinkPad

history.

Where Are They Now?

Joe Formichelli Formichelli left IBM

to

become

the

CEO and president of Hayes

Microcomputer, based in Atlanta. Formichelli vice president

469

is

now

and general manager for Toshiba America

executive in Irvine,

California.

Tom Hardy Hardy

left

IBM

tions to the

in 1992 after

making

ThinkPad brand. He

is

significant design contribu-

now

a design strategist

and

resides in Stamford, Connecticut.

Koichi Higuchi Higuchi-san

is

director of Personal Systems National

and Solution Development.

He

is

Language

based in Yamato, Japan.

According to Higuchi-san, the personal computer business in Asia Pacific

is

growing, and he will need to learn Chinese quickly.

David Hill Hill still

is

manager of Design

for the Personal Systems

enjoys working on innovative designs for the

Group.

ThinkPad

He

line of

products.

Toshiyuki Ikeda Ikeda-san tive

is still

working on the ThinkPad team, leading innova-

product engineering

efforts.

Bob Kanode Kanode

left

ThinkPad

in

September 1995 to become president of

the U.S. subsidiary of Varta Batteries.

470

Appendix

A

John Karidis Dr. Karidis

is

a

Systems Group.

Distinguished Engineer for the

He

and computer form

continues to

IBM

Personal

work on new product concepts

factors.

Sue King King

is

presently vice president of

Services at

Cadence Design Systems,

Worldwide Methodology

Inc., in

San Jose, California.

Per Larsen Larsen resigned from

Olicom,

IBM

in

1997 and

is

currently president for

Inc., in Dallas, Texas.

Bob Lawten Lawten

is

currently vice president of sales for Cognos.

Pete Leichliter Leichliter

division

is

manager

American Recruiters.

division for

American High Technology

for the

He

still

enjoys playing baseball

with his son, Timmy. Bill

Lowe IBM

Lowe

left

He

currently heading his

is

for

Xerox Corporation and then Hughes

deals in investments. to Phoenix,

Rick

He

is

Aircraft.

firm, the

Lowe Group, which

in the process of

moving from Chicago

where he hopes

own

to perfect his golf game.

McGee

After getting the

moted

ThinkPad process working well, McGee was pro-

to vice president.

He now has

responsibility for developing

similar "go to market" processes for other business units (such as

servers

and desktop personal computers).

1

Where Are They Now?

Patty

47

McHugh

McHugh

left

IBM

to

work

IBM

Florida. In 1998, she returned to

voice and pen products. She

Motorola

for

in

Boynton Beach,

as director

of planning for

an avid sailor and motorcyclist.

is still

Mark McNeilly McNeilly

is

currently

Market Requirements.

program director of Mobile Computing

He

was instrumental

in providing source

materials for this project.

Nobuo Mii Nobi Mii Ignite

He

left

Group,

also serves

IBM a

in 1995

and

is

now managing

partner of the

venture capital company in Palo Alto, California.

on the Board of

Segasoft, the software division of

Sega Electronics.

Paul Paul

Mugge

Mugge

is still

at

IBM

and

is

the offering executive for mar-

ket-based innovation.

Janice Roberts Roberts, a

member

of the original ThinkPad pen team,

is

now

director of business development for Citrix Systems, Inc. Citrix

is

developing application management and delivery for remote and wireless users in the

consumer market.

Adalio Sanchez Sanchez is

is

the current general

responsible for the

to the brand.

manager of Mobile Computing.

ThinkPad product

line

He

and future extensions

472

Ted

Appendix

A

Selker

Ted Selker

is

on

from IBM, working

leave

as a visiting professor in

the multimedia lab at Massachusetts Institute of Technology.

Ron Sperano PC Company architecture team, He is currently program director for

After an assignment on the

Sperano rejoined ThinkPad.

Mobile Market Development.

Leo Suarez Suarez rejoined the ThinkPad team after

America marketing operations.

He

is

a brief stint in

IBM Latin

currently the director of

Worldwide Product Marketing.

Bob

Sztybel

After

nearly

eleven

years

with IBM,

Sztybel

joined

Port

Corporation, Norwalk, Connecticut, where he developed and

launched

a line

of mobile accessories to complement

cessful line of carrying cases. In 1998,

PORT's

suc-

he became vice president,

Group Marketing and Product Brand Development, The Tele Adapt Group.

Rick

Thoman

Thoman

left

IBM

to

become president of Xerox Corporation.

Kathy Vieth Vieth worked in a consulting role to Bruce Claflin until the end of 1992. She

is

now

an independent consultant living in Colorado.

Where Are They Now?

473

Denny Wainright Wainright retired

after a stellar career at

IBM

and

still

resides in

Boca Raton.

Steve

Ward

Ward was promoted ThinkPad team.

He

is

after his role as general

now

manager of the

the chief information officer for

IBM.

Jan Winston Winston

IBM and is now an independent consultant. Patty McHugh on IBM's pen and voice products.

retired

He works with

from

Appendix B ThinkPad Timeline References •

All awards information

was obtained from IBM's

Firm, Broedeur Porter Novelli. Special thanks to

PR Kim

Zuleba and Monica D'Agostino for their help. •

All

IBM ThinkPad

product release information was

obtained from press releases.

476

Appendix B

Year 1981

Personnel

Products

Estridge heads

McHugh

on

PC

effort.

team Dr. Bradley patents BIOS. original

IBM

Personal

Computer

IBM PC XT

1982

1983

1984

Boca

IBM Portable PC IBM PC AT IBM PCjr

10,000

site hits

employees.

1985

Estridge re-assigned.

Lowe

Boca and Austin become one division (Entry Systems Division). returns.

1986

ESD Headquarters move New York. Sapper works

IBM PC

Convertible

to

on PCs. 1987

IBM

1988

Lowe

Research initiates "TrackPoint" idea.

1989

IBM. Donofrio Boca Mfg.

leaves

takes over.

moves

Personal Systems/2

to Raleigh.

Vieth assigned displays.

Cannavino

arrives.

PS/2 P70

Lawten

assigned laptop. Sapper

and Hardy develop new "differentiated" strategy.

1990

King assigned pen

IBM

tablet.

PS/2 P75

invests ten million

GO

Corp. Decision to centralize

dollars in

portable development in

Yamato. 1991

Lawten

leaves

IBM. PS/2 L40SX PS/55 Note (Japan)

Pen Project Office 1992

Brand concept deployed. Bartlett joins first

Mobile

IBM.

GM.

Claflin,

Formichelli

takes over displays.

N51SX N45SL CL57SX ThinkPad 700T ThinkPad 700C ThinkPad 300

ThinkPad Timeline

477

Differentiators

Key Competitive Actions

BIOS/Alt+Ctrl+Del

Osborne 1:CP/M System Epson HX-20

Hard

disk

(10MB)

Grid Compass

Morrow

Decision Kaypro

Kaypro

II

1

TRS-80 Model 100

NEC 8201A Compaq Portable Plus Corona Portable Infrared keyboard

DG1

(Data General)

Commodore SX 64

Toshiba T- 1 000, T- 11 00

Micro Channel OS/2

NEC Ultralight Sharp Wizard Toshiba 5100

Compaq SLT Compaq LTE, LTE 286 Poqet

PC

Atari

Portfolio

Harvard

MBA portable pilot

HP95LX ThinkPad name 10.4" display

TrackPoint II Double-speed

CD-ROM

Macintosh PowerBook

Duo

Appendix B

478

Year

Personnel

Products

1993

Louis V. Gerstner arrives. Claflin promoted. Formichelli succeeds Claflin. First IAC meets. Larsen appointed division director of Marketing. IBM and Canon jointly produce portable with built-in printer.

PS/Note ThinkPad ThinkPad ThinkPad ThinkPad ThinkPad ThinkPad ThinkPad ThinkPad

710T 720C 750C 750P 500

350/350C 360/360C 550BJ

(Japan)

1994

PC Company announces

site

consolidation in Raleigh.

1995

Nobuo Mii

leaves

IBM.

Cannavino retires. Jerome York quits. Raleigh

ThinkPad 730T ThinkPad 755C/Cs ThinkPad 5 lOCs

ThinkPad 70 1C ThinkPad 760CD ThinkPad CD/CV

consolidation. Clark joins

IBM

as

brand manager.

TP used

in "Trial of the Century," the O.J. Simpson double murder trial.

1996

Ward

succeeds Formichelli as

ThinkPad GM. ThinkPads used

Summer

at

Olympics.

ThinkPad 380 ThinkPad 560E

1997

1998

1999

ThinkPad 560

Sanchez succeeds Ward. appointed IBM CIO.

ThinkPad 600,

Ward

IBM WorkPad

ThinkPad book

ThinkPad 570 ThinkPad 240

WorkPad z50

iSeries

ThinkPad Timeline

479

Differentiators

Key Competitive Actions

IAC

Apple Newton

ThinkPad

@ COMDEX

Proven Convertible

form

factor

ISA bus

"Out of Box" with product map. Personalized nameplate

Apple Newton MessagePad 110 Apple PowerBook 500 series Apple PowerBook Duo 260 / 280c

Expandable keyboard

Apple Newton

12.1" display

MessagePad 120 Apple Newton MessagePad 130 (backlit) Apple Newton 2.0 O/S Iomega Zip drives

IACs go worldwide

Mwave DSP

Ultraportable

PalmPilot

Infrared

DEC HiNote Ultra II

PCI bus

OmniBook 800 Apple PowerBook 1400 Apple MessagePad 2000 and eMate 300

11.3"

Dual Scan display

12.3"

TFT display

Pentium

Windows

CE unveiled

NEC MobilePro HPC Compaq PC Companion Apple PowerBook

Integrated

design

TrackPoint

Low-cost

III

TFT

Integrated

MMX

(250MHz) REX PC Companion Palm Apple

III

iMAC

SonyVAIO UltraBase

PalmV

Appe n dix

C

PC Timeline 1992 The number

of Internet hosts breaks one million.

Creative Labs introduces SoundBlaster 16.

NEC introduces the first double-speed CD-ROM drive. Apple Computer Chairman John Sculley coins the term Personal Assistant, referring to

on an

via a stylus

Computer

handheld computers that typically operate

LCD

will enter the

He

of the year.

is

display. Sculley

consumer

announces that Apple

market by the end

electronics

widely quoted as predicting

a three trillion dol-

lar industry.

Intel

and Microsoft announce the Advanced Power Management

(APM) tem

specification for laptop computers,

down power

to shut

Intel introduces the

25/50MHz a

25MHz

sys-

to system resources not currently in use.

i486DX2 microprocessor, with clock speeds of

(external/internal).

For the most

486 that internally runs twice

each in quantities of 1,000. Speed

Microsoft ships

which allows the

Windows

3.1.

is

part, the

as fast.

The

DX2

price

is

is

just

$550

41MIPS.

More

than one million advance

orders are placed worldwide.

Apple

CEO

and Newton champion John Sculley

first

shows the

prototype to the press in Chicago, where he describes not only the device but also the platform strategy.

Apple Computer discontinues the PowerBook 100. Apple Computer introduces the Macintosh PowerBook

Duo

482

Appendix

C

systems, consisting of a 4.2 -pound portable computer and a

Macintosh

Duo Dock desktop

docking

station.

One

year after the introduction of Apple Computer's PowerBook,

sales

of $1 billion

threshold.

More

make

it

the

first

personal computer to break that

than 400,000 PowerBooks have been shipped.

Microsoft announces Microsoft

Windows

for

Workgroups

which integrates networking and workgroup functionality into

Windows

3.1,

directly

3.1.

Intel introduces the

486SL

processor, designed for notebook

20MHz

com-

and

25MHz (19MIPS), 33MHz (25MIPS). The processors can address 64MB of phys-

ical

memory, and 64 terabytes of

puters. Speeds include

(15.4MIPS),

virtual

memory. They use

1

.4

million transistors, employing 0.8 micron technology.

Microsoft announces Microsoft Access Database.

1993 Mosaic takes the Internet by storm. The

WWW

341,634 percent annual growth rate of service

growth

is

proliferates at a

traffic.

Gopher's

Newton

Personal

997 percent.

Apple Computer shows off Digital Assistants at the

test versions

of

its

Winter Consumer Electronics Show.

Total sales of Apple Macintosh

PowerBook Duo systems reach

100,000. Intel introduces the

Pentium processor.

with a 64-bit data bus, giving

it

It

uses

an address space of 4GB.

Prices are

60MHz

(100MIPS) and

$878 (60MHz) and $964 (66MHz).

Microsoft introduces the

MS-DOS

It

incor-

BiCMOS tech66MHz (112MIPS).

porates 3.1 million transistors, using 0.8 micron nology. Speeds are

3 2 -bit registers,

6.0 Upgrade.

PC Timeline

483

Amstrad begins shipping the Amstrad Pen Pad PDA600 Personal

(PDA)

Digital Assistant

shipped.

in England. It

The Pen Pad weighs

and features

less

is

the

than a pound,

240x320 resolution 3x4 inch

a

PDA

first is

to be

inch thick,

1

screen. It uses a

20MHz Zilog Z8S180 microprocessor and can run for forty hours on three AA batteries. It includes 128KB RAM, with a PCMCIA expansion slot for

memory

expansion to

Windows

Microsoft formally launches

2MB.

NT

3.1.

Windows

NT

delivers a powerful, reliable, and open platform for client/server

solutions.

Apple Computer introduces the Newton MessagePad 100 personal digital assistant at

Macworld Expo

640KB RAM, 3MB of ROM

Hall. It features

storing applications

and the operating system (Newton Intelligence),

20MHz

32-bit

ARM 610 microprocessor, LCD

dpi) 2.8x4-inch

socket, data transfer of

screen,

one

Symphony

in Boston's

a low-voltage

240x336 resolution

PCMCIA

Type

9600 bps and runs on four

II

(85

expansion

AAA batteries.

Fifty thousand units sell in the first ten weeks, but only eighty

thousand are sold during the product's Microsoft Office

4.0.

Microsoft releases

MS-DOS

Microsoft releases

Word

Microsoft ships Sales of

life.

6.2.

6.0 for

Windows

for

Windows.

Workgroups

Apple Computer's PowerBook

3.11.

series hit the

one million

mark.

The MessagePad wins Forbes Product

of the Year award.

1994 Java

is

introduced by Sun.

Intel ships the

micron

Pentium processor. The chip uses

BiCMOS

technology.

Intel's

new

0.6

484

Appendix

U.S. Robotics ships the Courier price:

$329

internal,

Gateway 2000

$349

C

v. 3

4 28.8K bps modems. List

external.

PC

Inc. sells the first

powered by

Intel's

75MHz

Pentium.

two million Pentium chips have been

Intel confirms that nearly

shipped with a defective floating-point unit.

1995 120MHz Pentium

Intel introduces the

Iomega begins shipping Intel releases the

Zip

its

processor.

drives.

mobile version of the

90MHz

Pentium pro-

cessor.

P6 processor (Pentium

Intel introduces the

Intel

announces the immediate

Pentium processor. micron

BiCMOS

It

availability

of the

133MHz

uses 3.2 million transistors, employing 0.35

technology. Speed

Iomega introduces the Jaz Microsoft releases

Pro).

is

218.9MIPS.

drive.

Windows

NT v3.51.

Microsoft introduces Microsoft Office 95.

Microsoft releases Microsoft Internet Explorer

1.0.

A number of Internet-related companies go public, with Netscape leading the pack with the third largest ever NASDAQ IPO share value (August

Windows

95

9). is

launched.

system replacing

and

MS-DOS

It is a fully

Windows

as the

3.11,

integrated

Windows

for

3 2 -bit

operating

Workgroups

3.11,

mainstream desktop operating system. More

than one million copies

sell at retail

stores in the first four days.

Windows 95. This new Windows 95, greatly facilitates

Microsoft announces Microsoft Project for version, designed exclusively for

project communication throughout an organization and includes

PC Timeline

improved workgroup

functionality, full

gration with Microsoft Office for Intel releases the

485

ODBC support,

and

inte-

120MHz Pentium

pro-

Windows

mobile version of the

95.

cessor.

Intel

releases

120MHz Pentium

the mobile version of the

processor.

100MHz CX6x86 microprocessor (formerly code-named Ml). The chip is manufactured by IBM and priced at Cyrix announces the

$450 each

in quantities of 1,000.

U.S. Robotics begins shipping enhanced Sportster

v. 3

4 modems

capable of transmitting data at up to 33.6K bps. Intel

announces the Pentium Pro microprocessor,

150MHz, 180MHz, and 200MHz, available initially $1,682. The processor uses 5.5 million transistors.

at speeds

of

$974

to

for

Advanced Micro Devices begins shipping samples of its

Am5x86

The

price

Microsoft announces the release of the

final

tities

Pentium-class processor.

is

133MHz

$93 each in quan-

of 1,000.

Internet Explorer 2.0 for

Windows

version of Microsoft

95. Internet Explorer 2.0

is

widely available for downloading at no charge to licensed users of

Windows

95 via the Internet. Internet Explorer 2.0 offers

support for

Web

full

standards and for current Internet security stan-

dards, including secure transaction technology (STT). Bill

Gates outlines Microsoft's wide-ranging commitment to sup-

porting and enhancing the Internet by integrating the

PC

plat-

form with the public network. Gates notes that businesses adopt the Internet for internal business use

communication with employees,

suppliers,

Intranet applications will likely

emerge

general consumer market.

—the

intranet

will

—

for

and customers and that

faster

than those for the

NBC and Microsoft join forces.

486

Appendix

C

1996 Microsoft ships the thirty millionth copy of Windows 95.

133MHz Pentium

Intel releases the

The

puters.

on

3.3 volts

volts.

The

processor for notebook com-

processor uses 0.35 micron technology and operates

of power externally;

price

is

its

internal core requires only 2.9

$371 in quantities of 1,000.

AMD5K86

Advanced Micro Devices begins shipping the processor. Prices are $75 each for the

AMD5K86-P90,

and $99 each for the

in quantities of 1,000.

Microsoft releases Microsoft Internet Explorer Microsoft

SQL

2.0.

Server, a client/server database

tem, version 6.5

is

micro-

133MHz AMD5K86-P75

released to manufacturing.

management

Key new

sys-

features

include built-in support for Internet applications, improved sup-

port for distributed tecture called

management

tools,

and

a

new

locking archi-

Dynamic Locking.

Netscape Communications releases Netscape Navigator 2.02. Intel introduces the tially in

200MHz Pentium

small quantities.

The

price

is

processor, shipping

$599

NEC Electronics begins shipping its R4101 digital assistants. a

2KB

DMA

The

chip includes a

1KB

instruction cache, a controller,

an audio

it

ini-

in quantities of 1,000.

processor for personal

33MHz 4100 processor core,

data cache, a real-time clock, a

driver,

and interfaces for

serial port,

keyboard, infrared, and touch-screen interfaces. Intel begins shipping the

200MHz Pentium

Pro with

a

512KB

cache.

Microsoft releases

Windows

NT 4.0.

Microsoft releases Microsoft Internet Explorer Intel releases the

150MHz

3.0.

mobile Pentium processor, designed

for use in portable computers.

The

processor uses 0.35 micron

PC

technology and operates on

Timeline

3.3 volts

nal core requires only 3.1 volts.

The

487

of power externally; price

is

its

inter-

$341 in quantities of

1,000.

At the Microprocessor Forum, announces the supporting will

K6

MMX,

Advanced Micro

processor, optimized for 16- and

Devices

3 2 -bit

code,

and including 32KB cache memory. The chip

plug into a standard Pentium socket.

Windows CE operating system for handheld PCs. The code name of the project is Pegasus. CE stands for

Microsoft unveils the

Consumer Electronics. Microsoft unveils Microsoft Office 97 at Fall Comdex.

Compaq Computer ships the PC Companion, a handheld computer running Windows CE. The weight is less than 1 pound. The unit measures 7 inches wide by 3.5 inches deep. It runs teries, lasting

RAM)

NEC

to

up

to twenty hours. Prices range

on

AA bat-

from $499 (2MB

$699 (6MB RAM).

Computer Systems

ships the

MobilePro HPC,

a

handheld

computer running Windows CE. Hitachi

Home

Electronics ships the Hitachi

Handheld PC, run-

Windows CE.

ning

Casio Computer ships the Cassiopeia, a handheld computer run-

Windows CE.

ning

1997 Intel introduces

MMX instructions.

Microsoft announces the immediate availability of Office 97, the

new

version of the world's best-selling productivity suite, which

integrates the ease of intelligent applications with the

Web.

56K modems

appear in market.

power of the

488

The

C

Appendix

second-generation PalmPilot comes in two versions: the

PalmPilot Personal and the

1MB

512K

PalmPilot Professional. Both

PalmPilots have display backlighting and an Excel-compatible expense-tracking application, and they run under

Palm

PalmPilot Professional model also includes an e-mail

Apple Computer announces that Systems Group into

Pentium

II is

a subsidiary

it

will

OS 2.0. The

client.

spin off

its

Newton

company.

introduced at a low entry price.

Steve Jobs and Bill Gates lay out a broad product and technology

development agreement between Apple and Microsoft. The agree-

ment

includes the production of future versions of Microsoft

Office,

Internet Explorer and other Microsoft tools for the

Macintosh; the bundling of Internet Explorer with the

Mac OS; a Mac

broad patent cross-licensing agreement for leading-edge technologies;

and

a

$150 million investment

in

Apple by

Microsoft.

Rolodex® Electronics the

extreme.

REX™ PC Companion

Ultra-slim,

takes portability to

1.4-ounce device has Starfish's

this

TrueSync™ data synchronization, so mobile professionals can view their

PC

organizer data anytime, anywhere.

Microsoft's Internet Explorer 4.0

is

released to critical acclaim and

enormous customer demand. Internet Explorer

4.0 combines the

premier Internet browser, communication, and collaboration tools, innovative Active

Channel, "push" content, and true

Web

integration to offer users an unparalleled Internet client solution.

Apple Computer announces that Systems Group,

as it

will

it

had announced

The Justice Department

files a

in

motion

not spin off

its

Newton

May. in Federal District Court,

alleging that Microsoft has violated a 1994 consent decree dealing

with certain aspects of licensing the

computer manufacturers.

Windows

operating system to

Specifically, the Justice

Department

asks

PC Timeline

489

the court to stop Microsoft from tying the use of

its

Windows 95

operating system to the use of its Internet browser, a tool to navigate the Internet.

Palm Computing

enters an

OEM licensing deal with IBM to pro-

duce the WorkPad, which Palm clones. IBM's

WorkPad

tar-

is

geted toward IBM's enterprise customers.

1998 Netscape makes source code for Netscape Communicator 5.0 browser available for free download on the Internet.

333MHz Pentium

Intel releases the

II,

with a

66MHz bus.

Apple Computer ceases development of its Newton operating

sys-

tem and Newton OS-based products.

The Palm

III is

the

first

Palm device

to run

third-generation model comes standard with

Palm OS

2MB

3.0.

This

of storage, an

infrared transceiver for sharing contact information and applications,

and

removable

a rigid,

more rounded design Intel releases the

with

—

a

flip

cover.

The Palm

III also

has a

portent of future designs.

350MHz

and

400MHz Pentium

II

processors,

100MHz memory interface.

Microsoft Corp.,

3Com

Corp., and

announced that they have agreed

Palm Computing

Inc.

have

to amicably settle their dispute

over the naming of the category of palm-size devices currently referred to by Microsoft as

Microsoft releases

Red Hat Linux

5.2

Palm PCs.

Windows is

98.

released.

America Online buys Netscape Communications for $4.2 in stock.

Yahoo! brings Internet content to the PalmPilot.

billion

490

Appendix

C

1999 The Palm

IIIx shares

but the Palm

IIIx,

many

Palm

is

on, letters light

V

officially rolls

lighter than the

The Palm IIIx's

Palm

III

OS

3.1,

has

up and the background

is

out at Mobile Insights

IIIx,

the

Palm V also has

V comes with 2MB

tions as the

Palm

Palm

III,

4MB of RAM, a and reverse backlighting. When the back-

which runs Palm

better reflective screen, light

of the design features of the Palm

darker.

'99.

Thinner and

a glossy metal case.

memory and the same applicaand Palm IIIx units. The Palm V shares the of

reverse backlighting.

IBM announces its versions of Palm IIIx (8602-30X)

and

V (8602-

40U) using the WorkPad name.

References Microsoft

Museum: Timeline

http://www.microsoft.com/MSCorp/Museum/timelines/ microsoft/timeline. asp

Timeline of Computers http://hyperion.advanced.org/17072/html/normal-html/ timeline.html

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PC Magazine—Fifteen Years

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http://www.zdnet.com/pcmag/special/anniversary/

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http ://www. zdne t. com/pcmag

http://www.franklin.com

http://www.tcp.ca/1998/9802/9802smal/palmpilo/palmpilot.html

http://www.palm.com http://www.infoworld.com/cgi-bin/ displayS tory.pl?9902 2 .ehpalm2 .htm

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1998): 25.

London

3

1

1

Index

Bartlett, Jim, 49, 129-136,

Symbols 2. 5 -inch

467

birthday celebration at

disk drive, 176

Comdex,

208 Gerry Purdy and, 203

700C model, 163-185

Joe Formichelli and, 291 NBA, 248 battery, 245 Bauer, Bob, 25 Beitzel, George, 1 Bertram, Jack (Blackjack), 56 Big Blues: The Unmaking of IBM, 39 basketball,

Access ThinkPad, 429 accessories,

PORT and,

253

Acorn code name,

1

active matrix color

TFT panels,

167

Advanced Power Management (APM),

BIOS

481

(basic input/output system)

code, 17

MS-DOS

advertisement, 247

coupons, 249 flyers in initial

and, 16

Zenith Data Systems and, 50 blocks comparison with butterfly key-

advertising

shipping content, 250

campaign, 195

Maurice Fletcher, 248 media, catering to, 260 NBA basketball, 248 slogans, 196

Thank You from ThinkPad, 248 Ward and, 383-384 Alexis Park hotel, Comdex and, 202 Aker, John, Steve

Altec Lansing, speakers, 425

board, 314

BMC (Brand Management Council), 220 book writing, 409 boot sequence, MS-DOS and, 16 Bower, Scott, 85, 155,467 Bradley, Dave, 467 brand development, 189-199, 243-253 brand recognition, 245 brand trust, 458-459

Ambra North America, 424

Broward Community College, 32

Amstrad Pen Pad, 483

business balance, 460-462

answering machines, 33 appearance of product, 42

business plan review, 154

432

Butterfly, 307,

Aquarius, 9 Asia Pacific South, Bruce Claflin and,

146

AT computer,

CAC

33

AT&T, Hobbit RISC

architecture, 102

Atari, 11 availability,

217, 228-229

(Customer Advisory Council), 216

Canion, Rod, 20 Cannavino, Jim, 56, 96, 467 Bruce Claflin and, 139 Carberry, Robert, Dr., 41

B Tim, 199 barbecue at Debi Dell's, 302 Bajarin,

Bartelemeo, Jim, 25

Caribbean code name, 41 carrying case, case,

drop

PORT and,

test,

CD-ROM,

253

1 1

410 market research and, 425 Charlie Chaplin marketing campaign, 38

81

498

ThinkPad:

A Different Shade

chess champion, 406

3

of Blue

customers

Circus team, 33

feedback,

Claflin, Bruce, 131-133, 139-151,

House of Quality con-

cept, 95

468

Gerry Purdy and, 203

input, 122-123

Cyrix microprocessor, 485

Gerstner and, 232

pen product, 149 269-276 most memorable meeting, 154-159 Raleigh and, 359 claiming responsibility, 449 killing first

leaving,

D Dalgetty, Brian, 423

Datamaster, 9

System/23 Datamaster, 40

Clamshell, 43 clones, 59

Dell Computers, 45

code names, 12

Dell, Debi, 32,

college students, 422 color,

468

barbecue, 302

IAC

174-176

black, 80

meeting, 2

Raleigh

Joe Formichelli and, 289

demand

red pointer, 182

design

move

color, 80,

color display, 155

lunch box, 173

201-208

IBM

compatibility, 27

keynote address, Bob Corrigan, 207

communications, in-house, 33 Compaq, 22-24

IBM

employees, hiring away, 35

DesRoches, Erica, 402, 424, 468 development, 9 brand development, 189-199 Japan and, 99 digital writing capability, projections,

Dirty Dozen, The, 14

Broward Community College meeting, 33

Lte, 76

Portable

III,

Discovision, 9

75

recruiting from TI, 24

TI IBM

Deskpro personal computer, 27 desks, executives, 3

Alexis Park hotel, 202

rivalry,

compatibility,

MS

disk drive 2.5-inch, 176

25

Flight Simulator and,

27

Convertible, 43 display,

concur/non-concur commentary, 157 confidentiality agreements, journalists

and, 212

228

active matrix color

TFT panels,

167 color, 155

importance, 168

Convertible, 43

Cooley, Ross, 25 Corrigan, Bob,

size,

Comdex

keynote

169-171

super-twist neumatic (STN), 76

TFT, 167

address, 207

Toshiba and, 386

councils

Display Technology,

220

Internet connections, 222

coupons, advertising and, 249 cover, breaking hinge, 317 cursor keys, 177

customer

174-176

Porsche 911 comparison, 412

1992 ThinkPad introduction,

gifts,

234

forecasting,

color bars, 428

Comdex

1

and, 359

satisfaction,

257-258

Inc.,

167

displaying, 156 diversity of line, 2

1

docking station supply, 234 dot on log, 181 drop test, 111

93

7

5

1

Index

499

H Tom

ease of use, 109

Hardy,

EasyServ, 252

Harris, James, 20

EMI

Headlights, 136,246

(early

manufacturing involve-

Heathkits, 130

ment), 307

employee surveys, 371-375 employees, 369-377 entry systems, 40 environment, offices, 30 errors in judgment, 227-238 ESD (Entry Systems Division), Estridge,

(Aquarius), 9-10

Hegmann, Heinz, 105 Higuchi, Koichi, 154, 469 hinge breaking on cover, 3

1

Hobbit RISC architecture (AT&T), 102 hot docking, 436 35, 41

House of Quality

concept, 95

Don, 13-14

death

of,

41

offices, 31

event timeline, 476-478

IAC

(Industry Advisory Council),

211-222

executives desks, 31

member

environment changes, 30

personality profiles, 212

multi-computer households,

422

343-349 Firestone, Jim, 424 Fletcher, Maurice, 85, 126, 468 advertising and, 248 finances,

company growth, 30 TI rivalry, 25

IBM IBM IBM IBM

shipping content, 250

Formichelli, Joe, 166, 279-304, 469

Jim

Bartlett and, 291

Intellectual Property

Law

(IPL),

IBM PC AT, 33 IBM PC XT (Extended Technology), IBM Personal Computer press release,

414

floppy drives, 410 flyers in

5520 Administrative System, 40 Boca Raton, 7 DisplayWrite, 40

105

Flight Simulator, compatibility and, 27 floating computer,

215-216

IBM

office styles, 3

expandable keyboard, 311-316

families,

list,

1

specifications, 15

IBM IBM IDC

Personal Systems/2, 55

PS/2 L40SX, 78-80 (International Data Corporation),

244

Frito-Lay, handheld units, 98

In Touch, 147

Fujisawa, 121

industry growth, 119

Future Computing, 27

infrared communications, 263

innovative technologies, 453-456 Intel, qualification

charge and, 356

intellectual property, 105

Gantt

chart,

Joe Formichelli, 280 V, 231

Gerstner, Louis

operating principles, 370 gifts for

council members, 220

Internet connections during council

meetings, 222 Internet Explorer, 485 Internet scroll bar, 426

global learning network, 462-464

introduction strategies, 406

GO Corporation, 92

introduction to market, 106

growing market, 451-453

35

investment in Microsoft, 63 Isaacson, Portia, 27 iSeries,

421-429

1

1

1

ThinkPad:

500

A Different

J-K J.D. Powers, 264

Japan, pen development and, 99 Java, 483

judgment

errors,

227-238

Shade of Blue

market requirements, U.S., 165 market research, 402 CD-ROM, 425 keyboard, 425 product positioning, 426 marketing, 9 Charlie Chaplin campaign, 38

Kanode, Bob,

39,

469

sweepstakes, 406

Kaplan, Startup, 101

Martin, Todd (tennis pro), 248

Kapor, Mitch (Lotus), 92

McHugh,

keyboard, 123, 177,432

Patty, 14, 94,

471

Raleigh and, 358

expandable, 311-316

xMcLaughlin, Mac, 25

market research and, 425

media, catering to, 260 Micro Channel systems, 45-46, 55

PCjr, 78, 177

Kuehlerjack,

56, 384 Joe Formichelli and, 284

Microsoft, Mii,

IBM

Nobuo

investment

in,

63

(Nobi), 121,471

Mini-Dock, 438

MMX technology, 487 Laguna code name, 270

LAN (local

area network), Caribbean

monochrome

and, 42

Larsen, Per, 331-342

Joe Formichelli and, 331 246 Lautenbach, Ned Bruce Claflin and, 146

late debut,

lawsuits,

book and, 449

Bill,

1

display,

168

MS

Flight Simulator, compatibility and,

27

MS-DOS,

boot sequence and, 16

Paul, 96, 471

MultiSpeed (NEC), 51 Murto, Bill, 20

N

1

replacing Estridge, 41

Lte (Compaq), 76 luggables, 19-28

notebooks war, 77

name, using elsewhere, 150 nameplate, 249 names, 426 naming of ThinkPad, 104

naming

startup, 23

strategies, 103

NBA basketball,

lunch box design, 173

NEC,

M magnesium case, 1 1 Manhattan Project,

2

Mosaic, 482 mouse, 179-180

Mugge,

Lawten, Bob, 64 leadership, 456-457 Leontopolis (Egypt), 108 LifeBook, 433

Lowe,

Mobile Computing, finances, 344 models, new, 233

248

50-53

ProSpeed, 53 UltraLite, 52

Nectarine, 86, 126

Netscape Navigator, 486 networking wireless system, 147

13

manual, design, 108

manufacturing experience, Joe Formichelli, 280 xVlanufacturing Readiness

(MRR), 385 market, growing, 451-453

market introduction, 106

Review

new markets, missing, 37 Newton MessagePad, 483 Nichols, David, 402

notebooks, 75-88 luggables demise, 77

9

1

Index

501

O-P

product positioning, 426

OfficeVision, 60

prototype, customers and, 95

ProSpeed (NEC), 53

operations,

Ward,

Steve, 381-398

OS/2, 59-62

PS/1 Note, 308 PS/2 desktop, 270 PS/2 L40SX (IBM), 78-80

packaging, stolen goods and, 251

PSLOB

PalmPilot, 488

paper

planning and, 120

sizes,

Parade magazine, 243 parts,

punctuated evolution, 45 Purdy, Gerry, 25, 201-203

removable, 123

ThinkPad

PCjr keyboard, 78, 177 PCMCIA, 245 PCs' development timeline, 481-491 peer audit, 98 pen computing, 92 pen tablet, 91 pen-based computers, 84 PenPoint, 92, 102 Pentium, 296, 482

Q-R qualification chart, Intel,

radio

356

wave emissions, case and, 111

Raleigh,

NC,

353-367

red colored pointer,

Personal Assistants, 481 personal productivity, marketing and,

430

1

82

references, 490-491

removable parts, 123 requirements validation process, 95 research, 9

personality,

244

retail sales

IAC

personality profiles,

meeting, 212

PFV (Price

Function Value), 85 Barlett and, 130 Pie House restaurant, 20 Piero's restaurant, 408 PIM (personal information managePhillips,

unveiling, 205

ransom note, 231

ThinkPad Proven, 252

peripherals,

(Personal Systems Line of

Business), 153

Jim

retirees,

introduction, 9

422

reviewer guides, Sztybel, 261 Rizzo, Paul, 56

Rosen, Ben, 20

ment), 51 plant locations, 299

SAC

platforms, 245

Sanchez, Adalio, 34

pointing devices, 179-181 political battles,

(Scientific

Sarrat,

230

Advisory Council), 220

Fernand, 96

Sarubbi, Joe, 34

Porsche 911 design comparison, 412 PORT, accessories, 253 portable computers, 21, 26

service, EasyServ,

252

Sevin, L.J., 20

shortcut keys, 425

emerging technology, 58

Silicon Valley, 9

industry growth,

skunkworks team, 65

1 1

portable computing roadmap, 112 portable market, breaking

in,

206

ports, 123

PowerBook

small business owners, 422-423

software

IBM (Apple), 261, 481

presentations, 263 press releases,

IBM

5520 Administrative System,

40

IBM

Personal Computer,

15

pricing strategy, 192, 430 processors, Convertible, 43

DisplayWrite, 40 System/23 Datamaster, 40 Somers, facility, 1 54 Sparks, H.L. (Sparky), 16 speakers, 414, 425

NY

5

ThinkPad:

502

A Different Shade

U

specifications, 111

IBM Sportster start

Personal Computer,

modem

1

(U.S. Robotics), 485

UltraBase (Ultraportable), 438

UltraCarbon, 441

up

UltraLite (NEC), 52

Kaplan, 101

Ultralite

luggables, 23

Farm,

State

of Blue

RFP

(Request for Pricing),

ThinkPad, 442

ultraportables, 401, 433

upgradeability, 123

93

STN (super-twist neumatic)

76

,

user manual, 108

stolen ThinkPads, 251 strategic vision,

urgency 375 7

display,

374

stylus-based tablets, 92

Suarez, Leo, 14-15, 472

value line, 308-309

naming and, 190 Steve Ward, 388

Value Point, 271 variable pay, 302

subnotebooks, 433 sweepstakes, 406

vendor grades, 262

System/23 Datamaster, 40 Sztybel, Bob, 97, 259-260

Vieth, Kathy, 96, 472

Bruce Claflin and, 145

naming and, 190 Raleigh and, 357

372 Voice of the Customer program, 247 virtual office,

team building, 153-161 technologies, innovative, 453-456

voice recognition, 263

telecommuters, Raleigh and, 364 tennis pro,

Todd Martin, 248

Texas Instruments (TI), 19

Compaq's recruiting and, 24

IBM

rivalry,

TFT display,

25

167

Thank You from ThinkPad, 248 ThinkPad Proven, 252

W-Z Steve, 381-398, 424 Watabe, Hajime, 100 background, 124 replacement for, 164 Yamato team, 126

Ward,

timeline of events, 476-478

WTiitestone, 95

TIP (ThinkPad

Wildstrom, Steve, Business Week, 245

Information Package),

Windows, 61

259

Windows 95 launch, 484 Windows CE, 487

touchpad, 426 TrackPoint, 178-180

wireless networking system (In Touch),

improvements, 245

147

TrackWrite, 324 transition, Claflin leaving,

269-276

TRS-80, 130 TrueSync (Rolodex), 488 turning point meeting, 154-159

Yamato team, Watabe and, 126 Zenith, 235,238

Zenith Data Systems (ZDS), 50

Zip drives (Iomega), 484

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