1960 to 1969: The Rise of Business Computers and Business Software - The Technical and Social History of Software Engineering - page 124

The need for computers as business tools was clearly shown by what happened
to Wall Street. Between 1965 and 1968, shares of stock traded on Wall Street in-
creased from about 5,000,000 to 12,000,000, which stressed back office clerical
work to the breaking point. Clerical staffing increased rapidly.
One of the reasons for the increase in stock sales was a reduction in the percent-
age of a stock's price that needed to be paid to acquire it. The rates were reduced
from 100% of the stock's value down to 70%, which naturally led to increased
sales volumes.
But in 1969 and 1970, stock trading declined abruptly, cutting into brokerage
revenues and causing layoffs and financial distress among brokerage houses.
About 100 Wall Street firms went out of business or merged, which was a shrink-
age of about 17%. For Wall Street companies, this was the worst crisis since the
Great Depression.
Many of the Wall Street companies that failed did so in part because they had
lost control of their back office financial records due to huge clerical workloads.
About 90% of the operating costs of Wall Street firms in this decade were tied up
in clerical work. Clearly, Wall Street was ready for a move into computerization,
which would occur in the 1970s.
Litigation Changes the Computer World Forever
The 1960s witnessed several major lawsuits that would change the nature of com-
puting and software in unanticipated ways. The first of these major lawsuits were
two patent violation cases filed by Sperry-Rand against Honeywell and a counter-
suit filed by Honeywell against Sperry-Rand. Both suits were filed on the same
day, May 26, 1967. Honeywell filed a few minutes before Sperry-Rand, which
later turned out to be important.
Honeywell charged Sperry-Rand with being a monopoly and asked that the
patent on the ENIAC, owned by Sperry-Rand, be invalidated. The impact of the
ENIAC patent was that Sperry-Rand was claiming ownership of the main features
of all digital computers and therefore charging license fees. This patent was a clear
bottleneck to the expansion of the computer industry.
This lawsuit and several predecessor lawsuits were the longest trials in Amer-
ican history and accumulated thousands of pages of data and information about
computer technology and the history of digital computing. In total, more than 150
witnesses were involved.