.Big Blue is looking for a slice of Apple's
market share...
...Bits and Bytes mean nothing try this one...
...Now they're going to sell $1,000 computers
to millions of customers...
...I have seen the future said one analyst
and it computes.
Nobody was ever fired for buying IBM.
Now companies could put PCs with the name they
trusted on desks from Wisconsin to Wall Street.
What IBM said was it's okay corporate America for
you to now start buying and using PCs.
And if it's okay for corporate America, it's got
to be okay for everybody.
For all the hype, the IBM PC wasn't much better
than what came before.
So while the IBM name could create
immense demand,
it took a killer application to sustain it.
The killer app for the IBM PC was yet
another spreadsheet.
Based on Visicalc, but called Lotus 1-2-3,
its creators were the first of many
to get rich on IBM's success.
Within a year Lotus was worth $150 million bucks.
Wham! Bam! Thank you IBM!
IBM had forecast sales of half a million computers
by 1984.
In those 3 years, they sold 2 million.
Euphoric I guess is the right word.
Everybody was believed that they were
not going to...
At that point two million or three million,
you know,
they were now thinking in terms of a hundred
million and
they were probably off the scale
in the other direction.
What did all this mean to Bill Gates,
whose operating system, DOS,
was at the heart of every IBM PC sold?
Initially, not much, because of the deal with IBM.
But it did give him a vital bridgehead to
other players in the PC marketplace,
which meant trouble in the long run for Big Blue.
The key to our...the structure of our deal was that
IBM had no control over...
over our licensing to other people.
In a lesson on the computer industry in
mainframes was that er, over time,
people built compatible machines or clones,
whatever term you want to use,
and so really, the primary upside on the deal
we had with IBM,
because they had a fixed fee er, we got about
$80,000
we got some other money for some special work
we did er,
but no royalty from them.
And that's the DOS and Basic as well.
And so we were hoping a lot of other people
would come along and do compatible machines.
There were other PCs that were sorta like the
IBM PC, kinda like it.
But IBM now had fifty per cent market share and
was defining what a PC meant.
What the public wanted was IBM PCs.
So to be successful other manufacturers would
have to build computers exactly like the IBM.
They wanted to copy the IBM PC, to clone it.
How could they do that legally?
Well, welcome to the world of reverse engineering.
This is what reverse engineering can get you
if you do it right.
It's the modest Aspen, Colorado ski shack of
Rod Canion,
one of the founders of Compaq, the company set
up to compete head-on with the IBM PC.
Back in 1982, Rod and three fellow engineers
from Texas Instruments
sketched out a computer design on a place mat
at the House of Pies restaurant in Houston, Texas.
They decided to manufacture and market
a portable version of the IBM PC
using the curious technique of
reverse engineering.
Reverse engineering is figuring out after something
has already been created
how it ticks, what makes it work,
usually for the purpose of creating something
that works the same way or at least does
something like the thing you're trying to
reverse engineer.
Here's how you clone a PC.
IBM had made it easy to copy.
The microprocessor was available off the shelf
from Intel
and the other parts came from many sources.
Only one part was IBM's alone, a vital chip that
connected the hardware with the software.
Called the ROM-BIOS, this was IBM's own design,
protected by copyright
and Big Blue's army of lawyers.
Compaq had to somehow copy the chip
without breaking the law.
- First you have to decide how the ROM works,
- so what we had to do was have an engineer sit
down with that code
- and through trial