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a self-fulfilling prophecy on the part of IBM executives and marketers, who initially saw
commercial use of computers as a threat to their traditional core business of selling calcu-
lating machines for office environments.
Unlike Remington Rand's marketing approach with the UNIVAC, IBM did not sell the
701, but instead leased the machine at a rate of $15,000 per month. (Not until 1956, as a
result of a consent decree negotiated with federal authorities concerned about antitrust is-
sues, would IBM begin to sell its machines as well as lease them. Nevertheless, leasing was
always to remain the firm's preferred business model.)
IBM announced another machine, Model 702, in September of 1953 - and delivered the
first of these three years later. IBM positioned the 702 both technically and applications-
wise as a direct competitor to the UNIVAC. Like the latter, it used magnetic tape, and the
binary coding of decimal digits. But it also adopted the 701's basic model for electronic cir-
cuits. Like the UNIVAC, the IBM 702 used the Williams Tube (officially the Williams-Kil-
burn Tube, named after inventors Freddie Williams and Tom Kilburn): a cathode ray tube
developed in 1946 to store binary data, and the first random-access digital storage device.
IBM wound up building only fourteen of Model 702, even though there was great de-
mand from a range of customers. This decision on the part of IBM seems to have been
derived from the fact that it had new and better machines on the drawing-board. A decision
was made at the board-level that customers (not to mention IBM's profit picture) would be
better-served by holding off significant adoptions till the results of IBM's intensive, ongo-
ing R&D could be brought to the street.
The fruits of these R&D efforts were revealed in 1954 with release of the IBM 704,
the first commercially-produced computer to incorporate floating point arithmetic. (Note:
The programming language LISP was first developed for the 704, as was Max Mathews'
MUSIC, the first computer music program.)
Not at all compatible with its predecessor machines, the 704 served up a quantum
change in terms of architecture as well as implementations and software. Changes included
core memory (replacing Williams Tubes), the addition of three index registers, and an ex-
panded 36-bit word instruction set. The 704 instruction set was to live long as the basis for
the entire 700/7000 series of computers. From both a technical and performance point of
view, the 704 outdid even a souped-up version of the UNIVAC that would be released in
1956. Several further improvements were made with IBM 709, released in 1958, for which
IBM developed the FORTRAN programming language.
IBM's 700 Series and Remington Rand's UNIVAC shared the top echelon of the main-
frame marketplace with another contender, the 1101 ("13" in binary notation) developed by
Engineering Research Associates (ERA) and subsequently marketed by Remington Rand
after that firm's acquisition of ERA in 1952.
Founded by Howard Engstrom and William Norris, ERA had emerged from a group
of cryptographic mathematicians involved with code-breaking for the U.S. Navy during
