From the Archives: The IBM 701 and Software-as-a-Service

Sixty years ago today, the IBM 701 was formally announced.  Its official name was the Defense Calculator, “specifically selected to appeal to the patriotism of the older Watson and to avoid the use of the unacceptable word, computer,” according to Emerson Pugh in Building IBM.  


The 701 was IBM’s first commercially available scientific computer and the first IBM computer in which programs were stored in an internal, addressable, electronic memory. A month earlier, at the IBM shareholders’ meeting on April 29, Thomas Watson Sr. said: “Our progress in electronics convinced us one year ago that we had in our company the ability to create for the Defense Department, and the defense industries, a computer of advanced design which could be of major service to our national defense effort. We began planning and building such a machine, which we believe will be the most advanced, most flexible high-speed computer in the world. It is built not for one special purpose but as a general purpose device, and two days after it was announced on a limited confidential basis we had orders for ten.”

A complete list of the 701 customers is here. The first production model of the 701 was installed at IBM’s headquarters in New York in March 1953, operating “as a Technical Computing Bureau for organizations having problems involving mathematical computations.” In other words, the Computing Bureau delivered hardware and software as a service to those organizations in need of rapid mathematical calculations who could not afford the $11,900 monthly rental or $96,000 in today’s dollars.

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