It started with a product announcement in May of 1955. IBM Corp. was introducing a product that offered unprecedented random-access storage — 5 million characters (not bytes, they were 7-bit, not 8-bit characters). This first disk drive heralded startling leaps in mass-storage technology and the end of sequential storage on punched cards and paper or Mylar tape, though magnetic tape would continue for archival or backup storage.
The disk drive was big, not quite ready for today's laptop. With its vacuum-tube control electronics, the RAMAC (for "random-access method of accounting and control") occupied the space of two refrigerators and weighed a ton. It stored those 5 million characters on 50 hefty aluminum disks coated on both sides with a magnetic iron oxide, a variation of the paint primer used for the Golden Gate Bridge.
The RAMAC marked the birth of an industry with a history as colorful as any in electronics, punctuated by such events as an unprecedented mass exodus from IBM, two major lawsuits that ended in a draw, a fatal strategic misstep stemming from company politics and even a country-club murder. Along the way came sensational boosts in storage capacity and access speeds along with amazing reductions in size.
Distance promotes progress
IBM's RAMAC disk drive was a momentous achievement. So one might assume that it consumed a great deal of corporate enthusiasm and top-management support. Well, it didn't. Instead, geography and the relatively primitive state of transportation were the factors that mainly contributed to its success.
San Jose, Calif., a relatively small town in the '50, was 12 hours away by plane from IBM headquarters on the East Coast, a tough trip for busy executives. The difficulty kept visits down, so the research team in San Jose — led by Reynold B. Johnson, who turned over responsibility to senior engineer Louis Stevens in late 1953 — ran what was essentially a bootleg project.
When management back East got wind of the project, it sent stern warnings that RAMAC be dropped because of budget difficulties. But the brass never quite caught up with the cowboys in San Jose.
In January 1953, Johnson had decided to concentrate on disks, which everybody considered a mechanical folly, perhaps a nightmare. They posed enormous problems. It was necessary, for example, to maintain a very small spacing, 800 microinches, between the recording head and the disk surface. That was clearly impossible because disk runout at 1,200 rpm, even in disks considered flat, could run as high as 20,000 microinches. (Today's heads fly at less than 3 microinches.)
In February 1954, the San Jose team successfully transferred data from cards to disks and back. In November, RAMAC product development won official corporate sanction. IBM made the public announcement the following May and, in September 1956, featured what became known as the IBM 350 as part of the IBM 305 system, which included a card reader and printer.
An old idea flowers
The RAMAC disk drive was the first commercial implementation of an idea that had been kicking around for quite some time. The disk drive, in fact, was a successor to the magnetic-drum drive, and both go back to the early '50s at Engineering Research Associates. That company, with Eckert-Mauchly, was merged into Remington Rand to become Remington Rand Univac.
In 1956, the Univac operation in St. Paul, Minn., was ready to bring a disk drive to market. But for political reasons, it didn't. Univac in Philadelphia wanted to stick with 18-inch drums. And Philadelphia had more clout. The city was the heart of computer activity because of the fact that it was there, at the University of Pennsylvania, that J. Presper Eckert and John Mauchly, senior people at Univac, had developed the pioneering ENIAC computer in 1946. The decision to stick with drums rather than switching to disks has been described as not the only bad decision by Univac, but one that ranks right up there with the worst.
In 1956, it was clear that the disk drive would take over the world for random-access storage if you wanted to store a lot. Five million characters was a lot and IBM had the only game in town. For a while.
At the end of 1956, Midwestern Instruments, a six-year-old Tulsa, Okla., company that made geophysical instrumentation, acquired Magnecord, a manufacturer of professional audiotape recorders. A year later, Midwestern bought Data Storage Devices, which made magnetic heads and drums. Armed with Magnecord's tape recorders (albeit audio recorders), its own tape recorders used for geophysical logging and Data Storage Devices' mag heads and drums, Midwestern built a digital magnetic-tape transport, the M-3000. That tape drive helped build a company. A different company.
Across the country, in Springfield, Vt., Chucking Grinder Co. started work in 1959 on disk drives to complement, or perhaps supersede, its industry-leading line of drum drives. By 1960, Chucking Grinder's Joseph Smith had developed a disk drive.
In 1961, Chucking Grinder moved to Walled Lake, Mich., and became Bryant Computer Products, a subsidiary of Ex-Cello Corp., a major producer of food-packaging machinery. Unlike IBM's disk drives, the Bryant drive had a horizontal shaft. Bryant drives featured eight or more 39-inch magnesium disks.
A short line cord
Unfortunately, the aluminum arm that positioned the heads was not well-balanced. When the arm moved, the entire disk drive vibrated and, sometimes, walked across the floor. Competitors joked that Bryant had solved the problem by using a very short line cord. When the drive started walking, it would pull the power cord and the drive would stop. In reality, counterbalancing the drive and bolting it down eliminated the problem.
In February 1959, the year Bryant started work on disk drives, a group of Minneapolis and St. Paul businessmen bought 98 percent of Telex Inc., which had been founded in 1936 as a partnership, Telex Products Co., to make portable hearing aids. The original company took advantage of Raytheon's peanut tubes to make hearing aids that didn't nail a user down to a location with a large horn or large amplifiers.
The businessmen were led by Arnold J. (Bud) Ryden, president of a venture-capital organization, Midwest Technical Development Corp., no relation to Tulsa's Midwestern Instruments. Well, not yet.
In February 1961, Midwestern Instruments borrowed $1.8 million from Midwest Technical Development, which now owned most of Telex. In April, Midwest president Ryden joined the board of Midwestern. Then Telex (98 percent owned by Ryden's group) bought Midwestern (whose major creditor was Ryden's group), changed the name of Midwestern Instruments to Telex, elected a new chairman of the board — Arnold Ryden — and, in 1963, moved its headquarters to Tulsa.
Telex moved Midwestern into its Data Systems Division, which started developing disk drives but never succeeded in putting one on the market. In 1962, in financial difficulty, Telex spun out the division to its shareholders. Soon, the Data Systems Division, in exchange for cash and stock, belonged to a young company led by Erwin Tomash, Data Products Co. Data Products and Bryant became the major suppliers of disk drives independent of IBM.
So Telex was out of the disk-drive business. For a while.
In early 1963, Telex Inc., a Minnesota corporation, became Telex Corp., a Delaware corporation (located in Tulsa) and, under pressure, Ryden resigned from the board. His major attempt to regain control failed dramatically.
In 1965, Roger Wheeler, who put needed cash into Telex for 17 percent of the outstanding stock, was elected chairman. He hired Stephen Jatras and appointed him executive vice president of Telex Corp. and president of the Midwestern Instruments subsidiary. In 1966, Jatras was appointed president of Telex and, in 1981, he was elected chairman upon Wheeler's sudden and dramatic departure.
Among Wheeler's interests was an investment in a jai alai gambling enterprise. It's been reported that people whose urgings are usually heeded strongly advised him to sell them his interest. Wheeler did not accept these recommendations. Possibly as a result, after a round of golf at his Tulsa country club on May 27, Wheeler was shot and killed.
Soon after Jatras took over the presidency of Telex, he decided that it would be easy to design an interface for a tape drive to plug into an IBM computer. Telex won a DuPont contract and delivered the first non-IBM tape drive that could plug directly into an IBM computer. Jatras pioneered the plug-to-plug business.
The Dirty Dozen
Meanwhile, events at IBM were only slightly less sensational. In December 1967, a dozen technical men who worked in Vic Witt's storage-products group in San Jose resigned and started Information Storage Systems (ISS) to manufacture storage products. Most were engineers. They became known as the "Dirty Dozen."
ISS had a major impact on the disk-drive business — entirely through Telex, which became its exclusive sales agent. Telex sold the ISS disk drives to end users, with a Telex interface to IBM electronics. The drives bore the Telex nameplate and they helped Telex grow rapidly to become a major supplier of disk drives, tape drives and printers, all compatible with IBM computers.
But IBM wasn't standing still. In 1961, having joined IBM right out of school 10 years earlier, Alan F. Shugart took over a project called the Advanced Disc File which, like its parent, the RAMAC 350, packed fifty 24-inch disks. But now, for the first time, self-acting slider bearings made it possible to have a head for each disk surface; it was no longer necessary to move heads up and down to reach different disks. This development did away with the need for an air supply. It also improved areal density and access time. A lot.
On Jan. 25, 1968, a month after the Dirty Dozen left IBM, Shugart was promoted to the position of product manager for direct-access storage devices at IBM. He reported to Vic Witt, as had the Dirty Dozen. But in the summer of 1969, Memorex hired Shugart to take over its young disk-drive operation as vice president of product development.
After Shugart joined Memorex, a large number of IBMers followed. A very large number. Some estimates had the number at 200. Recruiting was casual. Nursing a beer or two, Shugart would hang around the eatery where many IBM engineers would lunch. Casual old-buddy greetings would ensue and, pretty soon, the disk-drive staff at Memorex would grow while that at IBM would shrink. Shugart was assisted by a telephone.
By 1971, Shugart was responsible for all product development at Memorex. In January 1973, he left to found Shugart Associates. In December 1974, impatient with the absence of products ready for the market place, the venture capitalists who funded Shugart Associates fired Alan Shugart. Or maybe he quit.
The difference, Shugart said later, was about five microseconds. Shugart was replaced by Don Massaro, a cofounder and director of engineering. Under his leadership, the company brought out the first 5.25 inch floppy drive in 1976. A few years later, Xerox bought the company and closed it down within three years.
In 1979, after five years of consulting, fishing and owning a liquid-refreshment establishment, Alan Shugart, with Finis Conner, founded Shugart Technology to manufacture — yes — hard-disk drives. To avoid confusion on shipping docks, Shugart Technology changed its name to Seagate Technology — just before Xerox sent a letter telling Shugart Technology to change its name.
New rates from IBM
A series of pivotal developments began in December 1970. First, IBM, probably feeling the pinch of competition, cut its lease rates on disk drives. And in 1971, Itel Corp., a company involved, among others, in leasing ISS equipment being marketed by Telex, acquired ISS, and later sold it to Sperry Univac, which sold it to Control Data before Sperry, itself, was sold to Burroughs in 1986, the new operation taking the name Unisys.
In late 1971, IBM began offering one-, two- and three-year leases instead of its customary month-to-month leases and, in 1972, eliminated its extra-use charges. Where competitors had begun to pinch IBM a few years earlier, IBM now began to pinch competitors. Especially Telex.
On Jan. 21, 1972, Telex filed a suit against IBM, charging that IBM violated antitrust laws and engaged in practices aimed at eliminating Telex as a competitor. Telex filed a second, similar suit on March 15.
In September 1973, Telex was awarded $352 million, which was reduced to $259.5 million at a post-trial hearing. When IBM appealed, the award was eliminated and IBM was awarded $18.5 million stemming from a finding that Telex had engaged in trade-secret violations.
The situation at this point was probably disastrous for Telex, which was not in wonderful financial condition. Further legal action might have destroyed Telex. But it might also have sullied IBM's reputation and made the company look like a bully trying to destroy a small competitor.
Private talks doubtless ensued. Both lawsuits were withdrawn in 1975 and no money changed hands.
While these legal activities occupied a major portion of the activity at Telex, it was business as usual for the research activities of IBM. In 1973, IBM had another breakthrough, the first hermetically sealed disk drive, the 3340.
The new drive was originally intended to have 30 Mbytes fixed and 30-Mbyte removable storage. Project manager Ken Haughten named it after the 30-30 rifle in his closet. It became the Winchester drive and it was characterized by low-mass heads, lubricated disks and sealed assembly. After he retired from IBM, Haughton served as dean of engineering at the University of Santa Clara for several years before he joined Seagate's board of directors.
In time, thanks to a potential raid at Telex by financier Asher Edelman and thanks to heavy debt at Memorex, Telex and Memorex merged, forming Memorex Telex, which went into Chapter 11 for the last time in December 1996. Memorex Telex wasn't alone among the early participants to pass on.
Paradoxically, while the disk-drive business is growing and more drives are installed every year, the number of manufacturers is declining. Four companies — IBM, Seagate, Quantum and Western Digital — dominate the field today. Three of the four that dominated in 1969 — ISS, Data Products and Memorex — are gone.
According to Disk/Trend, an industry-research organization in Mountain View, Calif., more than 230 disk-drive manufacturers have dropped out of the business, leaving only 22 still making hard drives in 1997. Disk/Trend's Jim Porter estimates that the highest-capacity 3.5-inch disks (the size most popular in 1997) would store 130 Gbytes by the year 2000 at 2 cents per Mbyte.
Thanks to enormous strides in head design, disk-surface materials and recording technology, that's a far cry from RAMAC's 5 million characters at $150 per million — per month.
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