L. R. SHEELEY
Thank you, Ronnie, you have established the theme of our
meeting, Frontiers of Progress. We are truly on the verge of a
revolution. ...the information handling revolution. The frontier. ..this
expanding frontier... is unfolding before us. It is this frontier that
we will be talking about for the next four days.
Exploring with you the boundaries of the frontier and the many methods and
plans available to us to push back these boundaries.
The past years can be described as years of change. No
one knows that better than you. The future, however, is not static. Change
is inevitable in a dynamic industry such as ours. Changes to meet the
expanding frontiers. Changes to meet the challenge of competition and
changes to meet our volume objectives. As a matter of fact, you should be
proud that your organization is capable and willing to make changes. It
proves that our department and its management is dynamic. ..flexible.
Flexibility is essential in this fast moving business. ..the keynote
of success. The ability to move fast and turn around in a hurry.
This is flexibility.
You will see and hear much in these next few days.
..much that will contribute to your ability to represent the General
Electric Company and the Computer Department. You will see examples of our
flexibility. ..our ability to turn on a dime.
We are sure some of these examples will surprise you.
Some may even amaze you. But all are for your
benefit. All will contribute in one way or another to the achievement of
our and your objectives.
We have mentioned the flexibility inherent in a small
business. ..the Computer Department. We have not mentioned stability.
..the stability of the General Electric Company. This is a definite
advantage that none of our competitors enjoy. The flexibility of a small
company with the stability and resources of a very large company.
You are going to hear much more on this subject from
Paul Chamberlain, our Department's sales consultant.
RESOURCES FOR EXPANSION
P. L. CHAMBERLAIN
This introduction reminds me of a three day
on communications that I attended about three years ago. Bill Merrihue of
marketing services opened the meeting by telling us of a friend of his who
had a very large, very virile, tom cat. He said that this tom cat spent
every night tom catting around the neighborhood and causing quite a
disturbance. The friend decided that this could not continue, so he took
the tom cat to have him altered. Some two or three weeks later Bill met
his friend and said, 'I assume that your cat now spends his evenings at
home quietly by the fireside?' In which his friend replied, 'Like hell he
does, he's out with the other cats every night serving as a consultant.' At
which point Merrihue introduced his consultants. So now you know just what
a consultant is.
Seriously though, I have functional responsibility for
advice and counsel in the areas of product and market development, sales
and distribution channels, sales incentive compensation plans, guidance to
sales managers in the technical aspects of their positions.
When I came here in January, Bob Sheeley placed no.1
priority on the study of our government sales setup, both at headquarters
and in the field. After checking into what we had in place I made eight
recommendations which were as follows:
1. Transfer responsibility for the general sales
activities with all government agencies to the field sales organization.
2. Transfer present Washington D. C.
personnel to the field sales organization.
3. Transfer Huntsville representative to the field sales
organization and consider Atlanta as the base of operations.
4. Set up separate quotas for government business for
each region and each district manager and salesman who has assigned
5. Set up manpower to cover government
customers in all regions. This responsibility may be at least' in part
assigned to present personnel, on either a part or full time basis.
6. Realign the headquarters sales unit
1 senior sales engineer air force
1 senior sales engineer army and NASA
1 senior sales engineer navy and AEC
1 sales engineer special computers and systems and
7. Establish an application engineering group in the
headquarters sales unit. The original group to consist of:
1 senior application engineer, two
8. Appoint an acting sales manager.
These recommendations were approved and some of them
have already been implemented. The others are in the process of
Another activity on which I have spent a great deal of
time in the last three months has been the planning for this sales
I have already done considerable
collecting of information on current incentive compensation plans, both
inside and outside the company. This in turn has lead to plans for a rather complete
market study and survey about which you well hear more from the next
speaker. I have recently concluded visits to a number of sales offices in the central and eastern
region. I had a very frank exchange of information and ideas at all
locations and I think that you will find some things taking place as a
result of this trip. Other field trips are planned for the near future.
In talking to many of you in Phoenix over the last
several months and also on this field trip, it was quite apparent many of
you are new to General Electric or to the Computer Department, or both.
I feel that many of you do not fully realize the strength of the General
Electric Company, and I hope that during this four day meeting you can
align your thinking in terms of General Electric versus other computer
manufacturers rather than the Computer Dept. versus other computer
This slide is one indication of what I am talking about.
This is a tabulation of the fifty largest manufacturers in the United
States. It shows General Electric in the number four position surpassed
in size only by General Motors, Standard Oil of New New Jersey, and Ford.
In going through this list I find the next computer manufacturer, RCA, is
in twenty-fourth position, while IBM is in twenty-seventh place.
Sperry-Rand is thirty six. There are no other computer manufacturers in
the first fifty and I have not gone further in the descending list to
locate the others. So that we all may have an up-to-date picture of
General Electric's size and resources, I am going to talk from some slides
that were used by Mr. Cordiner at the April 26th share holders meeting
Since the end of World War two your company has moved
from a centralized company to a decentralized modern organization of 113
different business units, each with its own seasoned management team and
meanwhile we have developed a sound structure, patterned to fit our five
major market areas, consumers, industry, electric utilities, government,
and international market in the decade since 1950 we have grown from 129
manufacturing facilities in ninety-eight cities in the United States and
Canada to a hundred and sixty eight manufacturing facilities in a hundred
and thirty four cities plus an expanding network of manufacturing and
sales facilities around the world. Sales doubled in the same ten years
growing from two billion dollars in 1950 to over four billion dollars
annually in recent years. The physical plant has been almost completely
rebuilt meanwhile at an investment of approximately one billion, four
hundred million dollars since 1950. Today our company has the capacity
in place to produce at the rate of six billions dollars worth of products
efficiently and profitably. But greater than our change from
centralization. ..greater than our modernization...greater than our
growth in capacity. ..is our basic change from a manufacturer of tradition
electrical equipment to one of the most diversified product
manufacturing businesses in the world. It is as though we had built a
completely new General Electric side by side with the old one. The new one
working in the new fields of space, atomic energy, of jet engines, gas
turbines, electronic equipment, chemical and metallurgical products,
missiles and of course, computers. Your company has advanced through this
period of radical
change not only financially strong but well able to
finance profitable new ventures and with foundations for constant growth
in the most exciting new areas of economic development.
Today your company is not simply growing within already
established industries. It stands at the advanced outposts of the most
complicated technologies of our time. There are very few companies in the
world that could even attempt to solve some of the fantastic technical
problems posed by space exploration or development of nuclear energy,
for example. But General Electric can solve such technical challenges
and develop new businesses from them.
I have mentioned the company's exciting new business
developments. They are expensive ventures, in some of the most advanced
technologies of our time. But these are the coming sources of economic
growth, new employment and greater profits. They include such advanced
technical businesses as atomic energy, fuel cells and other power sources,
gas turbines and jet engines for commercial use, computers and information handling systems; automation of industrial, commercial, and government
operations; modern electronic components such as transistors, diodes and
micro circuits; exploring the business potentials of thermoplastic
recording; desalting of sea water, and space vehicles for scientific
military and commercial purposes.
In addition to the domestic market the international
markets are increasingly attractive because they are in many cases growing
even faster than the United States markets. In 1960, the company's foreign sales including exports, Canadian General Electric, and foreign
affiliates amounted to six hundred million dollars.
By the middle of the 1960's, this will be a billion dollar business and that is only the
beginning in a world that is electrifying as fast as it can. Today we have
plants in twenty-one countries, truly 'the sun never sets on General
We have a number of basic strengths
which will enable the company to rise above the
present sales rate. There is, first of all, the
strength of our superb body of employees, perhaps the most creative team
in history. We have a quarter of a million skilled
and productive employees, including 37 thousand college graduates of
whom 26 thousand are scientists and engineers. These employees are
organized into 113 business departments and the research oriented
functional services. Each under the experienced leadership of seasoned
managers. Some of the departments are a quarter of a half the size of the
entire General Electric Company twenty years ago. We have at our disposal
108 million square feet of completely modern manufacturing and laboratory facilities, most of it built or equipped since World War Two.
In 1961, 160 million dollars more will be invested to
modernize and expand these facilities. Your company has an established
market position in every segment of the economy here and abroad including
consumer, industrial, commercial and government markets. Thus, it has the
channels to establish new ventures quickly and
General Electric has ample financial resources to
develop profitable new markets and product lines and handle any other
financial needs that may emerge. The company has, as a consequence of this
diversity, a unique capability to produce completely engineered systems, not merely individual components and
products, for industry, electric
utilities, national defense, commercial and residential installations
and for municipal services. Such engineered systems enable us to sell many
of the company's products at one time to the advantage of the customer as
well as General Electric. As I mentioned earlier, these slides and much of
the accompanying script were lifted directly from Ralph Cordiner's talk at
the share holder's meeting. I have taken your time to go
over this because properly applied, these customer resources and
contacts can be a great source of strength to you in
the sale of computers. You have already seen the influence that can be
exerted at the proper time by our financial people
in the field of banking. In the next few days you
will hear from the man who heads up the defense field operation, who
will talk to you about the help that they can give
in contacts with the government. You will hear from one of our better
known Regional Vice Presidents who will discuss their function. And you will hear from the man who directs our
management school at Crotonville, from Harold Strickland, our Divisional
Vice President and a member of the office of the
president. I believe that these people and the other speakers will; give you a whole new dimension of the company and how it compares with
In closing, I would like to tell you one
of the few computer stories that I have run into. It has to do with an old
line army colonel of the 306 and bayonet school. It
seems that his staff had been trying to get him to consider a computer for
several years, but had not gotten very far. Finally, during a recent
computer meeting in Washington the staff persuaded the colonel to attend
and they eventually got him over to a GE 225 that was on display. And
after a good deal of discussion they finally persuaded the colonel to ask
the computer a question. The question he asked was 'where is my father?'
The answer came back.. .'Your father is in Alaska.' The colonel snorted
and said that he knew these machines weren't any good. 'My father is
dead.' Wayne Wright who was in charge of the display was quite perplexed,
but finally suggested that the question be rephrased to 'where is the
colonel's mother's husband.' This time the computer came back with. ..'
the colonel's mother's husband is dead, but tell the so and so that his
father is still in Alaska. '
PLANNING THE EXPANSION
O. K. LINDLEY
As many of you know, since leaving the Eastern Region I
have been assigned the job of manager...Sales Analysis and Planning which
is a sales subsection function reporting to the manager of sales. So much for titling, and what it is worth. ..what does it really mean. Very simply, it means planning, organizing,
integrating and measuring... good old Crotonville
poim. " even though I express this as simply it is basic to every
detail of this function. As we all all know, the
sales organization is a major contributing activity in the achievement
of the department's objectives for volume, market position... that is percent of available... and profitability. The sales
objective is to sell the maximum quantity of the product or
service through the most efficient sales and distribution channels within
the planned selling expense. And since sales volume does not always vary
in direct proportion to selling expense, the sales
sub-function must determine the relationship of selling expense for various levels of sales volume to be considered by the
manager of marketing in establishing volume and permitted
selling costs objectives.
Now, let's first talk about sales
planning. One part of sales planning involves the
formulation of sales objectives, specific plans and
policies by product, market and customer required to
carry out the overall marketing plans of this
Another part involves plans and programs designed to
stimulate the selling organization and to keep
enthusiasm high. To do this function, it is necessary to formulate sales
volumes objectives in appropriate detail, that is,
by product, market, trading area, customer, channel of distribution and
individual salesmen, if so desired. It also includes the
formulating of market participation objectives, percent
of availability in appropriate detail, and determining the proper sales
approach by product, by market and by customer We
must also determine the optimum sales effort
manpower, that is manpower and expense, required to
meet these various sales objectives we must
recommend or changes in sales channels within and
outside the department. We must formulate plans and
timing for seasonal campaigns, special sales
activities, special local promotions, timely well planned sales meetings, both at headquarters
and in the field and introduction of new product lines
and models and product specialists meetings, as well
as possible incentive compensation plans.
Another important function involves the
development of merchandising plans with the help of advertising and sales
promotion, as well as integrating the plans of the
marketing sub-functions with the sales plans and
programs for the department.
I believe I have defined and described the sales planning
function, now let us talk for a moment in the sales
analysis area. Here in this function we analyze the
available business and sales results by markets, industries
and customers, including location. In order to do this we must evaluate
product acceptance and position on the growth curve,
and at the same time, constantly be appraising new
uses and applications, analyzing competitive practices, determining
customer buying habits and trends, appraising selling practices and trends, surveying customers on results
of sales campaigns and promotional programs.
The data resulting from this sales analysis work
is necessary for the development of the sales and
marketing plans, including the assignment of manpower,
location of field sales personnel as well as recommendations for product
planning, advertising and sales promotion, sales and distribution
channels, market development activities and sales methods.
This sales analysis work, you will see, requires
the necessary assistance from marketing research and
integration with product planning studies. So much
for what this job function will contribute in
your overall, everyday work assignment.
Now, let's take a closer look at what has actually
been accomplished, and is underway to your benefit.
For the first time in our department history, and as
of January 1st this year, each of the respective three regions had their
commercial orders received budget as well as their commercial and
administrative expense operating budgets, and since that time, for
measurement purposes, the regional budgets have been
broken down for each of the districts, both as it
pertains to orders received and their C and A
operating budgets. As of May 1st the Regional O/R
Budget has been increased by seven million dollars.
..1.5 million to Western. ..1.5 million to
Central. ..and four million to Eastern. This increase represents the government and military
portion of our business for 1961.
I had to laugh the other day when reviewing the monthly
sales report of one of the unit managers who had
been traveling the districts recently. He made the
statement to the effect that the district people were
unhappy with their budget of orders received and
unhappy with their operating expense budget. This is a healthy situation and indicates we have done a good job. The report went on to say, however,
that they expected to exceed both. By far the majority of
the time and effort has been devoted to field
personnel work consisting of organization, budgets,
placement. When it comes to the placement of people, a few of us back here
at headquarters feel as though we have been playing with God, but at the
current date there is every indication that the respective regional
managers and district managers are now beginning to take over from a
recruiting, hiring and placement of people within the various district
areas. Since we are talking personnel we should understand that personnel
budgeting is fundamentally based on marketing strategy. Therefore, this
budgeting will be done as a part of this function, reviewed with the
regional managers, and implemented by all contributing groups.
I am sure you will be interested to know that we have
started and assigned eight men, representing about a two man year
effort, to make a very detailed study as it pertains to both sales
analysis and sales planning in our planned prime market area which are.
..banking, electric utility (but not gas utility or telephone) aircraft
and missile and federal government (USAF, USN, and non-military)
electrical-electronics, petroleum, chemical, steel and
automotive insurance service, research and consulting organizations and
computer service bureaus.
The main areas of investigation in each of these markets
will be: definitions of industry studies, participants in industry factual
description of present information handling needs, present computer
applications, anticipated future customer needs, industry
as a market for computers, identify important potential customers for
This study of prime markets areas is, as you can see, quite detailed and since the study will
be developed to the finest point geographically speaking, we expect the
final results to become the basis for better marketing strategy. Better
marketing strategy which will accomplish. ..consideration of incentive
compensation better placement of personnel, opening of strategic new
offices, positive approach for direction of your pre-sales planning and
efforts enabling you to properly assign sales responsibility by type of
customer by geographic location. Aid in better selection of type of
customer you will concentrate on with what product offering.
Another example of thoughts and efforts in your overall
behalf, you should have received at your regional and district locations
by this time, a complete complement of framed pictures for you respective
offices. Another small item of annoyance I hope will have been licked
shortly, and that is your time clock card reporting.
Of course, intermixed in all of this is the individual
requests from you respective people in the field, particularly the
Regional Managers and the District Managers, wherein you come to either
Bob Sheeley or myself for information requiring effort on our part to
better enable you to perform your sales functions in the field.
You should all realize that we people back here in
headquarters are at all times thinking, working and performing with your
uppermost interests in mind, enabling you to do more direct selling, which
is your prime responsibility. At the same time, you must realize that
whether it be timeclock routines or framed photographs, and because of the
fact that many other functions and people are involved it all takes time.
If I can, in this small allotted time, impress you to the
point that you will leave here and return to respective locations with the
factual impression that we are planning and producing for
you behalf, then my turn here on this podium has
Yes, we admit that there are any number of things
pertaining to personnel, market analysis, advertising, sales promotion,
product planning, as well as many other areas which need to be looked into
and bettered from your standpoint.
We wish to assure you that given enough time and enough
pills for blood pressure, metrecal for overweight condition, milk of
magnesia for ulcers, these jobs will be done.
RESOURCES FOR DEVELOPMENT
L. W. GOOSTREE
How a New Product Is Born
The General Electric Company is in the business of
manufacturing and selling some 200,000 different products every working
day of the year. The products range from toasters to turbines; lamp bulbs
to jet engines; man-made diamonds to plastic table tops.
With this gamut of products you may wonder how the
company can ever come up with new products. The answer is simple in
addition to manufacturing and selling products. The General Electric
Company is also in the business of invention.
General Electric has long been a leader in this industry
of invention. According to government patent records it is the most
inventive company in the United States and probably in the
world. It has more than 30,000 patents to its credit. That is an
average of about one patent per day for every single day of the 83 years
General Electric has been in business.
Today it is almost impossible to glance around you and
not see a product in which the General Electric Company has had some
influence and yet it continually comes out with new significant and
sometimes startling products. Let's consider why this is so.
Consider, for example, that General
Electric spends more money in a year on research and development than it
earns in profits. Consider also that of its some 1/4 million employees, more than
37,000 hold college degrees, and that more than 26,000
of those degrees are in engineering and the physical sciences. And then
consider that more than 1,000 of those degrees are doctorates.
It all adds up to this: in every area of technology
and science related to the company's activities. ..whether in nuclear
physics or chemistry electronics or metallurgy...General Electric is able
to call upon a huge reservoir of technical skills and -experience that is
unsurpassed in industry.
Where are these skills? Many of them are in engineering
groups among the more than 113 product departments across the country.
Many more can be found in the forty major laboratories throughout the
company that are devoted to research and development in many different
technologies. In addition, thousands of specialists throughout the
company are showing that savings can be effected, costs lowered, and the
conduct of business improved through the application of research methods
to engineering manufacturing , marketing, financial activities, and the
company's relations with its employees and its public.
All of these activities contribute to new products and
new areas of activities for the General Electric Company.
The research laboratory at Schenectady is devoted to
pure research where scientists are encouraged to explore any area of
interest. From this laboratory have come such significant developments as
methods for using Tungsten for light bulbs; the X-Ray tube; Alnico
Magnets; man-made diamonds and thermoplastic tape. The General Engineering
laboratory at Schenectady is credited with much pf the company's early
work in computers, talking movies, electro-cardiograph equipment and
thousands of specialized instruments ranging from A as in amplistats to
Z as in zymometers.
Man-made diamonds is an excellent example of how a
product is born. Announced as a research development in February 1955, the
making of diamonds was the result of more than four years of intensive
Examining various materials subjected to combined high
temperature and pressure during this research, special techniques and
equipment were developed to maintain for the first time temperatures above
5,000 degrees Fahrenheit at pressures in excess of 1,500,000 pounds per
Following announcement of diamonds, more research went
into the product and little was heard of the results. However, 33 months
after the original announcement, the metallurgical products department
announced it was in pilot production. During this time General Electric
had invested $2.5 million in research and facilities. Today the
metallurgical products department is in full production of diamonds for
Recently I read where the man-made diamonds were being
introduced to the consumer market as needles for Hi-Fi sets.
Man-made diamonds is just one example of how research
and development has paid off for General Electric. Between the original
development and the pilot production, however, much effort was expended
in product planning, marketing research, and applied engineering before
the laboratory development became a practical and marketable product.
A good example of a basic research development which
has not yet reached the marketable phase is thermoplastic recording many
of you are familiar with it. There are hopes that this development will
someday be used in the products you are selling. .. computers.
Thermoplastic recording was announced to the press in January of 1960. TPR,
as. it is called, is described as a technique combining 'the processing
speed and much of the versatility of magnetic recording and the storage
capacity of photography while offering some advantages over both of these
Initially, the research laboratory, the chemical
development operation and the electronics laboratory are working on the
special tapes used in the process. The General Engineering Laboratory is
investigating applications which could contribute heavily to world
technology. And, our own Computer Department Advanced Development
Laboratory, as you will hear, is studying applications
for computers. The Industrial Electronics Division has been assigned
responsibility for developing recording and play-back equipment for
commercial application of the new technique.
To date, thermoplastic recording is only an infant, and
its commercial applications will come about in the future only after
considerable development work. The effort will include more basic
research, many hours of applied research, much frustration by product
planners, arguments among practical engineers, and slowly but surely,
products incorporating the development will reach the marketing phase,
where you will become involved.
We realize, of course, that General Electric does not
have a monopoly on research and development. Competition is also
becoming more able and
more aggressive, and we cannot expect success
to come automatically. The paths into the future will be marked by accelerating technological obsolescence, as
heightened competition between companies and countries places a premium on
the ability to develop new products and processes.
However, using previous experience as a guide, the
company expects that at least one-third of the products General Electric
will be making in the 1970's are now either totally unknown or are simply.
ideas in the minds of the men working in the company's forty major
laboratories many of these ideas will apply to future products of the
For example, in 1963, 72 per cent of the orders received
for business and scientific systems will be' for products not now
available. One year later, in 1964, the percentage will have risen to
eighty-four per cent.
Meanwhile, we will not be forgetting our current
product line. We are accelerating innovation and emphasizing better
customer values. The computer industry presents a challenging
opportunity for General Electric to intensify its traditional innovative
efforts, enhance its productive performance and step up even further its
Over the next four days, you are going to hear about the various steps the
Computer Department is taking to assure creative innovation, productive performance and
competitive vigor. We are proud of the team we have developed, and are continuing to
develop a team that is experienced not only in the evolution of new
products and new businesses, but also in taking a pioneering approach to
every function of the computer business.
We intend to intensify our efforts against major
competitors. ..in every phase of the department's activities General
Electric is not new to the struggle against major competitors. We have
never had the market to ourselves but have always fought hard against some mighty tough odds to become
leaders in such areas as the vacuum cleaner market; the major appliance
market; and the communication market, to mention a few. We are going to
put up the same fight in the computer market.
Whether we can accelerate or even maintain our
present rates of growth will rest largely in getting your wholehearted
support and cooperation. Success will depend upon how the market-place
evaluates our products and your services. The entire department is with
you every step of the way.
The products we now have are proven. We have made
competition sit up and take notice and in some cases, have made them
realize that the top is a slippery place.
With the many new plans and products you will hear about
during this meeting, we have every confidence that you will help General
Electric rise to its responsibilities and opportunities in the computer
CROWDING THE FRONTIERS
Dr. C. F. Spitzer
The charter of the Computer Laboratory states that is is
this Laboratory's function to supply to the Department new technology and
to recommend areas for advanced development.
As seen in Figure 1, the Computer Laboratory reports to
the Manager of Engineering and its personnel currently represent about
16. 5 percent of the Department's engineering staff.
The names of the laboratory's support
technical units and their managers are shown on this organization
chart. Eighteen personnel represent the technical and administrative support functions. In
addition, five employees reporting to other department sections are
assigned to the laboratory as local representatives of General Accounting,
Materials, and the Patent Operation. The technical staff consists of
about fifty. The present distribution of professional training is shown
in Figure 2, together with our tentative long-range goal. Operating
experience will teach us, whether these goals will require later
modification. The currently planned expansion of the Computer Laboratory
is shown in Figure 3, At the end of 1961 the total staff should be about
100, and continued growth at about thirty per year would bring us near 300
by about 1970. Figure 4 shows a forecast of budget and overhead rate. With
staff increase must, of course, come an increase in physical facilities.
Currently we are housed in a 20,000 square feet rented building in
mountain view, California (Figure 5). A second rented facility less than
100 feet away, was occupied on May 1, bringing our total space to about
20,000 square feet.
Approximately one year from now, our permanent
facility in the Sunnyvale International Science Center should be ready for
occupancy. Its 36,000 square feet on 5.6 acres of land are designed to
accommodate at least 150 personnel, and will therefore be adequate until
mid 1963. Space is provided for a computer, and for its service personnel
(Figure 6), Total cost for the fully equipped facility will be about $1.5
It is essential, to frame laboratory projects against
the background of product plans, applications experience, product
engineering readiness, and manufacturing capability, in order to maintain
realistic coupling with the non-laboratory world. On the other hand, it
is the laboratory's further obligation to broaden the scope and vision of our market-place
oriented organizations. These functions could present impossible tasks
to our relatively small laboratory, and are made possible only through
very close coordination of our own work, with that of other company
laboratories. This coordination is particularly intimate with the
computer system and oriented components of the research laboratory, the
General Engineering Laboratory and the Syracuse Electronics Laboratory.
Information is freely exchanged, and fairly frequent visits ensure
friendly relations based On mutual respect, giving us the confidence that
comes from knowing that the research and development strength of the
entire company stands behind us. Figure 7 shows, in terms of visitors to
the laboratory, the intimacy of our liaison with Phoenix personnel and
with the rest of the company. The trend toward more frequent contacts in(is?) unmistakable, and hopefully it is a sign that, before very long, we will
have taken our place among the outstanding company laboratories. We feel
pleased and honored that this attention has become as regular pattern, and
we sincerely hope and expect that it will continue.
The division of our effort is such that about 70 percent of the work is aimed at the satisfaction of
recognizable short... or long-range product engineering needs. The remaining thirty percent are of an exploratory,
or research nature. In both categories, we draw heavily on the ingenuity,
Imagination and advice of personnel in Product Engineering,
Manufacturing, and Marketing, and of others, outside the Computer Department. We do not by any means
that only ideas developed by laboratory personnel are worthy of further
It is a widely-recognized observation, that the output
of laboratories requires, in general, a considerable Product Engineering
effort before becoming a manufacturable product. Indeed, the words:
'another worthless idea, if we had not taken it over' are product
engineering by-words known to almost anyone who ever worked in a
laboratory. I have, after these many years, arrived at the conclusion that
this comment is in reality a significant compliment, on one hand,
laboratory projects not ultimately taken over by Product Engineering
would, in fact, be worthless to the company. On the Other hand, a
laboratory should not carry its developments so far that they require no
further Product Engineering. The Computer Laboratory is no exception to this rule, and
we attempt to keep the Product Engineering subsections carefully informed
of our progress. Every three months we formally present the laboratory's
developments to Phoenix personnel, and we receive a return visit of the
Product Engineering subsection managers during the interval. Many other
contacts outside these formal presentations supplement the information
It is, of course, the function of the Computer
Laboratory to serve first, foremost, and above all, the needs of the
Computer Department and of the process computer section. However, as
frequently pointed out by our Division General Manager, essentially all
the Division's work relates to the processing of information. It is to be
expected, therefore, that the results of the laboratory's efforts should
be made promptly available to the other departments of the division. For
example, we have scheduled a conference of the division's Managers of
Engineering for next month, to share our latest understanding with them
and to learn, in turn, about their own advanced developments and
development needs. Conversely, we have much to learn from the computer
users in the company: for example, a seminar held last month at our
laboratory, of. the company foremost computer experts, has helped us
greatly in forming new concepts for future systems. Copies of our monthly
status reports go to key mangers, within the division and in the
centralized company laboratories.
Since the computer field encompasses aspects of all
physical sciences, and their related technologies, it follows that the
laboratory's work covers a wide range of scientific activities, in its
four technical units.
The advanced circuits unit actually concerns itself
equally thoroughly with materials development, device fabrication, and
circuits research typical projects relate to the study of
electroluminescent phosphors and photoconductors for display devices and
logic elements; thin magnetic films as very fast memory devices; cryogenic
materials for potentially very small and inexpensive computer elements;
tunnel diodes in novel circuit configurations; and research and
development on transistor logic circuits operating significantly faster
than any currently marketed computer.
The problem of evaluating the systems aspects of new
components is assigned to the special projects unit. Their work is
concerned with the logic potential, of such new elements as tunnel
diodes, cryotrons, lumistors, etc. Components technologies of the future
will take the form of integrated electronics, and relatively large
circuits will be fabricated in a single sequence of processes. The
problem of yield will then be of foremost importance. A small effort is,
therefore, devoted to the problem of improved yield through logic design.
Optical information processing techniques will be of the greatest
importance in future computers, and one such system is currently under
evaluation. It may have a significant impact on future computer design
The earliest pay-off from any of the computer
laboratory's work may be expected from the computer organization unit.
This group has already contributed significantly to the department's
present product lines, by proposing superior organization concepts. It is
highly probable that a far more competitive machine can be designed by
more efficient utilization of all the equipment
composing a computer system, than can be done by designing for higher
speeds of operation of its components. Two of our projects are therefore
devoted to studies related to improved organization. Another effort of a
far more theoretical nature concerns the theory of machines. We hope that
this work will culminate in a comprehensive
understanding of the behavior of all sequential machines regardless of
their codes, programs, or specific organizations.
The peripheral equipment unit's work
thus far this year, relates primarily to the general problems in
optical character recognition.
Concurrent with participation in the American Standards Associations
work on a successor to the E 13 B Font, this unit has designed
and built equipment to read and recognize characters of the new ASA
numeral letter font, both by magnetic and by optical means. Other work is
concerned with basic problems in optical pattern recognition, and with the
use of thermoplastic tape and slides, as high-density storage media.
Even though we have, as an advanced
development laboratory, been in existence for only about one year, we have accomplished some noteworthy results,
summarized in the following list:
Transferred Projects Sorter Feeder
Transferred and integrated into Product
Proposed machine organization incorporated in the
design of the planned product line.
Fabrication know-how communicated to manufacturing
engineering, and used in checkout of printed circuit boards.
In process of transfer to Product Engineering. With
both magnetic and optical reading heads.
Maturing Projects Cryotrons:
Significant improvement in fabrication
technique, circuit design, and logic design.
Electro-optical information search
machine under construction.
Participation in American Standards
Association work in defining 'a font tolerant of print defects.
Significant Progress List Structures
Better understanding of improved use of
A small number of redundant elements may
improve the potential yield of high-density mass-fabricated electronic Microsystems.
Thin Magnetic Films
Equipment almost completed, for
deposition and evaluation of memory films.
This listing is not intended to be complete. On the
other hand, some of the projects transferred to product engineering are
not to be considered anywhere near ready for manufacturing, let alone
sale, and considerable Product Engineering effort will be needed to
develop them into products.
As projects are transferred, time and personnel become
available for new work. Future projects being evaluated for their
promise include a new method of character identification, novel high speed
memories, and studies of asynchronous logic, to name but a few. Most
probably, we will give our particular attention to the problem of
non-erasable mass memories, with the initial aim of more than 20,000 bits
per dollar of shop cost. Other potential future areas relate to studies in
the mathematical identification of industrial systems, man-machine
relations, process control computer reliability, and redundancy studies.
In summary, let me state emphatically that, as a
departmental laboratory, our aim is not the advancement of knowledge for
its own sake; but rather, to select our projects carefully and in such
manner, that we will at all times serve the foreseeable department needs
by receiving our direction from the Product Engineering subsections, while
trying to meet unforeseeable needs by making our best possible guesses as to where the
'frontiers of progress' may be in future years. In this manner we shall
attempt to carry out our responsibility to you today, tomorrow, and in the
increasingly successful years to come.
PLANNING THE BREAKTHROUGH
R. F. BARNES
Gentlemen.. You and I are part of an exciting team.
...Marketing Research and Product Planning. ..A team that is bringing
you one complete new computer system each year for three years. ..A team
that is producing unique peripherals. ..document handlers, card readers.
..optical character recognition. ..All to make it easier for you to beat
Clair Lasher's orders budget. To show better how you and we fit together
to make your future selling more effective, I've arbitrarily broken this
presentation into two parts. ...Marketing Research and Product Planning. I
say arbitrarily, because both these functions must be and are closely tied together.
Both are aimed at answering two questions. What will we
make? Who will we sell to? Let's answer the second question first: 'Who
will we sell to: Who's selling to them now? And how big is the
market? To bring you aboard our Marketing Research efforts, here's Chet Rice.
PLANNING THE BREAKTHROUGH
C. T. RICE
McGraw Hill in this year's Annual Economic Report of the
Electronics Industry started out by saying, 'Electronics markets will be
untouched by any business downturn this year.'
'Not to be outdone by McGraw Hill, Marketing Research
is pleased to say that the same applies to the computer market. In fact,
we are predicting a pronounced jump this year in computer shipments.
The first slide shows our last year's
forecast and our present forecast of the total electronic computer
market growth. This shows a 15-20% per year growth rate, which is a rapid
growth rate even when compared to other markets in the fast growing
One interesting feature is the dip in the chart which we
detected in 1960. This is primarily due to IBM's transition from tube
machines to transistorized machines, 2 years after G. E. Originally, IBM
planned on shipping out a sizable quantity of 7070's during 1960.
Remember, now, that this machine was announced in late '58 and they
started taking orders all during '59 for shipment starting in early '60.
Unfortunately for IBM, they ran into some serious technical problems with
their first production machines and they had trouble getting the first
installations working. At the same time, IBM was phasing out of
production of their various tube machines such as the 650, 305, 704, 705,
709, etc. Thus, their factory output was seriously down in 1960.
Interestingly enough, because IBM has such a stranglehold on many
of its customers, the total market actually dipped and those customers
waiting for 7070's were not picked up by the rest of the industry.
Note also how our forecast goes up in 1961. This is due
to expected large shipment of 7070' s, 7080' s, 7090' sand 1400 series.
..all transistorized computers well into production.
Now that you have a good picture of the growth rate of
the overall computer market. The next slide shows how it splits up into
the top 15 user industries. This analysis was done on a little different
basis than actual computer hardware shipments as shown on the previous
chart in that this one shows cumulative orders received for computer
hardware since the computer industry began in the early '50' s thru the
end of 1960. Because, by the end of 1960, some orders had been received
for computer systems to be shipped in 1961 and 1962. It gives us a little
peek into the future, but, primarily, gives us a snapshot picture as of
the end of 1960 and does not show the dynamics of each of the individual
market. It is true that some markets are developing faster than others,
but a similar analysis done two years ago by Jay Greene showed remarkable
similarity. Note the rankings of the electric and electronic markets and
the banking market.. .Both popular with the Computer Department. ..But
also, note that if we had grouped the non-military Federal Government, the
U. S. Navy, Air Force and Army into one big Federal Gov't market, it would
total over 20 % which makes it the largest customer industry
classification .for computer systems. ..and incidentally the pioneer of early computer purchases.
Let's now look at what the Computer Department has
done in the marketplace. This slide shows how the Computer Department's
cumulative orders received have split among user industries. Those 304
computers sold to NCR were not shown since they were subsequently sold to
a variety of markets and, therefore, do not show the emphasis of our own
sales organization's efforts. I don't believe that it's a surprise to
anyone that we have strongly concentrated in the bank market.
Electrical-electronic is next because many of our
internal General Electric orders fall in that category. Incidentally, don't
get the idea that opportunity is anywhere near exhausted in the bank
market because a recent marketing research study showed that we have
concentrated heavily in the top 180 banks and for these we emphasized the
GE 210 for demand deposit accounting. There is lots of opportunity for expanding into medium-sized banks with
our 225 and there are many other possible applications that demand deposit
accounting. For example, many of our customers are talking of automating
a bank's payroll.
Now let's turn more specifically to Marketing Research
and how we do our work. Let me assure 'you at the outset, that the
proverbial crystal ball as a Marketing Research tool became obsolete with
the introduction of the computer. Off the record, you might get me to
admit that we drag the darn thing out occasionally and dust it off, sometimes, when
management asks us a question which the computer can't answer. But our
program in Marketing Research is to automate our task of gathering facts
and statistics on the ever-changing business environment, so that we can
assimilate on a systematic and continuing basis a huge amount of information
with a minimum number of personnel. By utilizing a computer, we can constantly store information and then
manipulate this up-to-date information when needed. With the possibility
of stepping on Rem Rand's toes, we call this' Real-Time' Marketing Research. Through automation, we hope to
be able to assist management in making sounder business
decisions and formulate better strategies by replacing hunches or
preconceived opinions with facts.
The slide shows the way information flows in Marketing
Research. Most of our input comes from newspapers or magazines plus
letters and reports, some of which come from you salesmen in the field. We
figure we scan over 10,000 pages per month. Out of the initial
screening comes a series of clippings which contain information pertinent
to the computer market. These clippings vary in size and importance, for example, from the price of the new Philco Model 2400 satellite computer to
a whole article from Fortune Magazine on Sperry Rand Corp. These clippings
then take one or more of three paths. One is directly into one of our 14
file cabinets. Another path is the Marketing Research Newsletter which is
shown on the next slide.
I am sure that most everyone here is familiar with this
publication. What we do is publish the first few paragraphs of each of the
week's top news stories in the computer and automation fields. We add to
this, a keyword headline, which we later index using punched cards. This
index we publish and distribute semi-annually. For those
of you who don't already get the newsletter, all you have to do is give me
your name and address and I'll add your name to the list. I'm happy to add
that it's still free! For those of you who already do get the
newsletter, I would like to remind you that we accept contributions,
particularly clippings from your respective local papers. I especially
want to thank Gene Agerton from Philadelphia who is a recent contributor
as well as Jim Kessler from the Dallas office. Incidentally, we get
contributions from other sources too. ...G. W. Alexander up in the
Minneapolis ASD office is a faithful contributor and we even got one the
other day from J. B. Lanbert in Rio de Janeiro telling about Machines Bull
opening its first office in Brazil.
An example of the third and automated path is shown on
the next slide. This shows how information flows into our installation
report. Information from anyone of three sources is formatted and
keypunched, providing a punched card which represents a new computer
installation. The three sources are (1) magazine clippings or (2) a
'yellow card', and more about that in a moment, or (3) a salesman
proposition report, which itself is being automated by Marketing
Administration. This one card by itself doesn't mean very much but when
this is placed into a deck of cards, each of which contains similar
information on many other installations, we have a powerful Marketing
Research tool. We have recently put this data through a sorter and had
printed up an installation report a copy of which was sent to the manager
of each field sales office. This is a handy document and we want you to
become familiar with it and use it. For instance, the other day, Ralph Zani
wrote me from Boston, stating that he was recently assigned the state of
Rhode Island as his sales territory and wanted to know all the computer
installations in that state. Although,
we don't have everyone listed, we probably do have 75% which is a good
sample. In his case, it was easy for him to look up, because we have the
data sorted out by state and city. Similarly, Bill Beagle asked for a list
of all the computers in the New York City area for N. Y. office.
Besides these general requests, we sometimes get
detailed requests like a recent one from Jim Kessler. He asked for street
addresses for two computer users in Waco, Texas whom we had listed in the
installation report. When our information proved correct, Kessler reported
that even the local Waco Chamber of Commerce didn't know those
To keep this report up-to-date and more useful to you,
we have provided 'yellow cards' on which to send in new installation
information. Tom Horton in Los Angeles has already sent in three 'yellow
cards', and I want to thank him a lot for his cooperation. These 'yellow
cards' were used to verify some questionable data we had from another
source and it was then fed right into the system.
As you can see Marketing Research is a two-way street.
By feeding our systematic collection system factual bits and pieces of
information, we will be able to feed back summarized information which
will help to make your sales task easier.
PLANNING THE BREAKTHROUGH
R. F. BARNES
Thanks, Chet. Now that you fellows are current with
Marketing Research, let's look together at the second part of my talk.
..Product Planning. Four important phases for you to be acquainted with
What we do. ..
How we do it. ..
Who does it, and a look at future results.
To describe what we do, let's look at
what good Product Planning isn't.
Customer needs. Here your regular sales contacts are
important to point out where a future product change will be valuable.
As a Product Planning team member, you can improve our inputs by
bringing these to the attention of Product Planning, as well as arranging
depth discussions with selected customers, and consultants, as required.
Product spec's. Here's where customer needs, sales
tactics, engineering capabilities, and manufacturing requirements are
hammered out by the product planner into function specifications.
Product appraisal. Performance,
features, attractiveness and cost are compared
from the sales and customer viewpoint, Competitive analysis are made on
current and forecasted offerings.
Timing. For the team, product
planning records the scheduling of the major key dates,
bringing to the attention of microscopic people how they fit into the
microscopic picture. From these schedules, announcement, order taking,
and shipment dates of your new products are made available to you.
Product line control. Your sales needs for an
variety of ratings as a standard line are matched against the costs to
produce and the probable results.
Pricing. Value to your customer
competitive levels now and forecasted, costs, sales volume, profit
goals, selling tactics are all considered in
arriving at those prices which stand the best chance of
helping you meet your goals. So much for the work elements of product
Planning. Since it's a creative, evolutionary, and a team process, a brief
moment on how it all fits into your field selling efforts. Starting at the
left, ideas for products. ... hardware and software...may come from any
place. Three major sources are:
One.... Engineering, including the lab,
ideas on how to do a present job
better...faster, cheaper, more flexible, more saleable.
Two....Joint analyses of competitive
offerings...techniques, features acceptance.
Three.. Sales and customer requirements over and beyond
current products. Here you fit in importantly.
Promising ideas are then synthesized by the product
planner into functional specifications to which engineering, applications,
and manufacturing address themselves. The time cycle from specification to
a deliverable product includes the type of invention, design,
manufacturing required.. .plus, the priority of this new product in
relation to others going through the same process. In the computer system
business, headquarters sales tactics determine when,
during the engineering manufacturing cycle, the product will be announced
and orders taken. On a planned basis, orders are filled and customers use the
product to satisfy their needs. As manufacturers introduce more and more new products, hopefully to
obsolete all but their own products, the product planning management of this team process becomes as
competitive as the product itself. The pressures to shorten the process
time cycle become as insistent as the pressures for increased product
performance. As a member of this new product team, you can markedly
improve the output...in time and product....of this process by insuring that your inputs and
feedbacks get to product planning for evaluation with engineering,
manufacturing, applications, and other sales people. Headquarters backup
to keep you in the Product Planning and research flow of information
includes Chet Rice, Dick Fay and Ray Washburn, trainees Bob Lyons, Don
Graf (225), Pete Scola (new computers), and Al Case (optical character
recognition and the new document handler) Case Krygsman and Howard Carter
(3100, 3101, data communications) Ross Reynolds, Don Falk (Site,) Rod Mead
(1000 CPM Reader, ) Archie Watson (TPR), and May Doyle (proof encoder).
Part four of my brief talk involves a quick look at our
new product objectives. In supporting your present and future sales
efforts, new product goals are aimed at increasing volume, broadening
line, and creating new growth businesses. In business data processing; we
currently have the 304, 210, and 225 computer systems aimed at pieces of
the IBM overall line. As a result of close analysis of selected customers,
competitive comparisons and in conjunction with Arnold Spielberg's
group, and those with Art Critchlow, we have in active planning and
implementation a broader market basket. As Lacy Goostree stated, this will mean in the business processing area
alone, seventy two per cent of your 1963 orders will be for products not
now available. In 1964, eighty four per cent of your orders will be for
new products. These new lines (and it will be more than one line) have not
yet progressed to the announcement stage. I can say that we are aiming at
a line smaller than the 225. ..and one larger. The timing of their
availability depends heavily on your current success with the 210 and
225. ..Getting the orders and resultant income so we can afford the major
expenditures in new hardware and new software. On peripherals, our objectives are to design, manufacture and sell
our own products to (1) better match peripheral performance to system
needs, and (2) obtain greater profits and controlled source of supply by
in plant manufacture. The General Electric document handler, full field
proof encoder, 1000 card per minute reader, and OCR are examples of one or
both of these objectives. Peripherals, as you are well aware, are the
important interface between the customer and the information system.
Working closely with Ken Manning's group, our plans are to make these
electromechanical marvels more and more of General Electric design and
manufacture. With the peripheral content increasing to well over fifty per
cent of the total system cost, and the tailoring of systems to selected
applications by unique peripherals, our new business systems will hinge on
General Electric peripherals. In the next three days you will hear much of
our new team approach to the product plans. ..that we are currently
talking about. You have an important part to play in this team process
of planning products to beat orders budgets. The perfect product has been
defined, from conflicting viewpoints as:
From Sales...A low price, immediately available from
stock, with obvious unique sales features every customer wants and no
From Finance...High net income and low investment, preferably none.
From Engineering....A patentable contribution to the
From Manufacturing. ..1000 a week output, never change
the rate, one model only, requiring fancy machinery to produce uneven, but
The challenge of Product Planning is to weld these
diverse views into one timely department plan which will satisfy you and
your customer. ..and will build confidence that General Electric's plans
for future products will enhance your personal stature in your customer's
APPLYING THE RESOURCES.
R. R. JOHNSON
A few weeks ago, the Computer Department received a
letter from a high school student in Pittsburgh. 'Dear sirs,' it began,
'I am a data processing student and I would appreciate any free material
and samples you might have on this subject...'
Now, while this letter is amusing enough on the surface,
let's pause and consider it for a moment. For, in this relatively innocent
request, we can put a finger on two vital issues in this complex
business of selling data processing.
First, from our engineering point of view, it stands to
reason that we can not furnish free samples, that even the simplest of our
products represents dollars in development plus dollars in hardware. On
the other hand, your customer, like our youngster from Pittsburgh, often
would appear to be looking for the most for the least with everything
but green stamps thrown in at bargain prices.
Moreover, I believe we have a new brand of customer.
For, is it not true that many of your customers today feel their
organizations have hovered on the brink of a recession. ..have had time
to hear talk from dissatisfied computer users. ..and have become cautious
when automation is offered as a pill or panecea for their business ills?
How then may we bridge this lack of free samples when
our end product is probably the most expensive time and money saving
device the ingenuity of man ever invented? Both the equipment we have to
sell and your sales techniques depend upon a common factor. This factor is
information. So, I am here today to give you a review and preview of
Computer Department products from the engineering point of view and to
discuss briefly the philosophy of the Engineering Section at work. A
philosophy which we believe is producing and will produce an increasingly attractive family of data processing equipments capable of
broad applications, long life, and efficient service.
There is a Chinese proverb to the effect that it is wise
to make haste slowly and I am certain that you learned at your grandfather's knee that haste
makes waste. Yet for all the wisdom which may exist in old saws, the Computer Department Engineering
Section scarcely has had time to cease running since Bank of America
almost six years ago selected the General Electric Company to automate a
major portion of its banking procedure.
How fast that running has been may be simply illustrated
by a few figures from Engineering personnel rosters past and present.
For example, in January of 1957, there were 101 individuals assigned to
Computer Engineering. By January of 1959, this had grown to 240. Current
figures for the Engineering Section set the figure at 452.
Although Computer Department Engineering and
Erma had to 'grow up' together, we were very fortunate in achieving two
major and enviable objectives. These were a big, solid-state computer
and a satisfied customer.
So much at the moment for ERMA. From her, we went on to
the GE 210 system which will be discussed presently. Meanwhile, back in
Engineering, another computer system was under development. This was the
NCR-304 electronic data processing system and the subsequent 304-B. With
the NCR 304, the Computer Department Engineering Section entered actively
into a design automation program, and it should be noted historically that
a considerable portion of the 304 was designed with the aid of another
Today, we are using a 304-B to run design automation
programs on current and future computer models. We are confident of the
value of using a computer to aid in the design of a better computer.
We have learned that proper design automation techniques will: 1. reduce
computer design cycle time; 2. reduce engineering design manpower; 3.
provide better documentation for the designed computer; 4. assure greater
reliability built into the computer; 5. determine optimal computer design;
and 6. most of all, perhaps, remove much of the' coolie labor' from the
backs, or more precisely, the minds of the design engineers.
This year has seen us double the size of
our design automation team which means that as the year
passes, more and more of the routine and drudgery of computer design will
be handled by computers.
As our sales representatives, it is extremely important
to you that we use computers to design better computers. Design automation
is one of the strongest tools in the industry today with the key
competitive advantage that it is possible to explore any number of design
possibilities before freezing the design. It is also our intention in the
future to extend the benefits of simulation to customer requests where
they enter the area of performance ability in new equipments. But this
must depend upon you educating our customers to the idea of our working
out their problems in an elegant pseudo language such as COBOL, ALGOL,
TABSOL or fringe(?) to be processed by our general compiler program, GECOM.
Before leaving the subject of design automation techniques, one thing more remains to be said. Design
automation and simulation depend upon computer programs. As I am certain Dr. Sassenfeld would
be the first to agree, computer programming is not inexpensive. Still, weighed against the tremendous
expense of a new product line, design automation is money well spent and
perhaps the best 'life insurance' we have as we move to the future.
Now let's consider our current frontiers, the products
we have and how we in Engineering can help you in this day of the 'harder
First the General Electric Company intends to assume a major role in the computer industry. In the Computer Dept., it is spending
large sums of n1oney on engineering and applications efforts to assure our
ability to provide you with more than adequate equipment for your
customer's needs. It is our fullest intention both in hardware and
software to increase our position in the field as dynamic contributors,
and to continue to furnish you with highstandard, high-fashion,
So, what are we in Computer Engineering
doing about this big obligation.
Byron Burch will tell you how GE 210
grew out of Erma and will delineate its
present capabilities. Originally working with checking accounts, it has broadened its activities to process
mortgage loans, and eventually will be applied to all bank accounting
functions. As you noticed on your copy of the General Electric 1960 annual
report, the GE 210 is a show horse as well as a work horse. It's a truly
spectacular set of prestige equipments. The bank without GE 210 is not a handsome as the institution that has
one. And while this certainly is not the chief bit
of business we sell when we sell a computer, it's not an item to be over-looked.
To illustrate what I mean, I was reading the other
evening a account of the history of the British military uniform. Now it's
a long jump from a nineteenth century soldier suit to a twentieth century
electronic data processor, but I couldn't help noting that when the
British Army of Queen Victoria's day was faced with a dull, unpatriotic
period of peace on earth and the recruiting fell off, it increased what
was called the seductive value of the uniform to attract young men into
service. So let's not ignore the possibility that we may build a more
seductive computer, and I am suggesting most strongly that neither
engineering nor you can over-look the appearance factor and the value of a
strong General Electric product image.
Grant the GE 210 is the banking computer, it also is something considerably more. And, taking
advantage of the know-how gained through it and ERMA we are now preparing
to move strongly into the 7070. ...1401 span of the general purpose
It will be the pleasure of Mr. O'Rourke and Mr.
Levinthal to present to you the major virtues and capabilities of the GE
225 and I am certain that I can add little to their remarks. But I would like to
call your attention to its extreme flexibility as a computer. For here, at
last, we have a truly modular machine, a computer developed in the
building block philosophy which adjusts simply and quickly to any size
The GE 225 can cover a range of
applications from conventional punched card approaches to a highly
sophisticated management information system, demonstrating equally high performance in general
data processing or engineering and scientific calculations. Moreover,
its ability to incorporate a variety of peripheral devices by means of its
special common connecting device, the 'controller selector function' mark
it as a big step toward tomorrow's computers which must emphasize compatibility
among all computer department product lines and equipments.
Before we leave the 225, a word of caution. We like the
225 and we're glad you like it, too. But please, gentlemen, think twice
before you offer a customer a new option you've just thought of.
The 225 does just about everything now short of bird
banding and counting goldfish, and I suspect if one of you ran into an
individual who needed a computer with a bird bander and automatic fish
counter built in, you would sell him a 225 with the bander and counter as
Actually, in the field of special applications for
computers, we're better set up to serve your individual needs than we
were. At the beginning of 1961, we established a new Engineering
Subsection, Special Computer Systems under Mr. William Bridge and this is the function in engineering
which has been assigned the very important job of customizing our
computer devices and systems to serve particular and unusual assignments.
The formation of another new subsection in engineering
also has occurred since last we met. This is Peripheral Equipment
Engineering under Mr. Ken Manning. And on Wednesday, Mr. Manning, himself,
will talk to you about the big new look in General Electric Computers.... the addition of a
strong and substantial line of major peripheral equipments.
Naturally, this change will not take
place over night. Obviously, there is a long and difficult road ahead. But
in less than a year, we have made tremendous strides. From a handful of
individuals, we have built a full-fledged, exceptionally competent
Engineering Subsection. Moreover, the subsection, as Mr. Manning will tell
you, has gone to work. Some of its products are in the development stage
and others are close to the point of release to manufacturing. Among
these are: sorters, a proof encoder, card readers, a large random access
memory, a flexible disk memory, a low speed printer, and an optical
character reader. Other products are in the planning stage both in the
peripheral engineering function, and as Dr. Spitzer has revealed, at the
Therefore, one of the important facts of this sales
meeting, gentlemen, is that the Computer Department in general and
computer engineering in particular have moved into the peripheral field
with the means and intentions of building some of the finest computer
peripheral equipment that have yet headed to market.
Still in the area of engineering's reorganization, I
am most happy to announce to you today the creation of a third new
engineering subsection. This is small automation systems and devices
engineering. The small automation systems and devices engineering
subsection will emphasize and implement our interest in low cost,
self-standing, automatic devices for industry. These will be data
processing units and systems aimed at those individuals and industries who
don't like the ultra sophistication of highly priced, highly involved
on-line data processors.
The GE 3100 and GE 3101 are data collecting systems
designed to serve the management and business functions of any industrial
enterprise. These devices handle such areas of activity as shop
production, inventory control, shipping and receiving, stock and
warehousing, cost accounting, and any other important functions which
the individual industry feels may require monitoring.
Perhaps, I should point out here that we are not
interested in assuming the functions of industrial computers, but we are
most interested, indeed, in exploring and developing those supplemental
services of a strictly business nature. The 3100 and 3101
systems are spring boards into an enormous area of computer
applications. They will permit us to do business wherever our kind of
business is done.
Regardless of the merits of these several products, as far as Engineering is concerned, they are
not good enough. The best machine in the world is not good enough nor
shall it ever be unless it achieves the quality of those perpetual motion
devices man dreamed of in the seventeenth century. And oddly enough, as we
enter the age of the computer, it is precisely a perpetual motion machine
that we require most. ..That is to say, data processing systems capable of
one-hundred percent up time.
So, within the Engineering section, a constant program
of product improvement goes on. Reliability is the rule of the day with
sophistication and diversification of product application running neck
in neck for second place.
Other factors also enter into our constant search for
means of upgrading our equipment. Standardization of equipment
philosophies and components bearing across product lines will make the job
of product service easier. Conformity of appearance design to present
machines with a pleasing and uniform General Electric aspect, improved human
engineering so that operator controls and displays are in the best possible locations, simplification of
installation requirements, increased modulability, each of these is of major and immediate concern to
Engineering as we seek to provide you with the best computers available in
And here, I would like to remark upon the growth of
Engineering's Industrial Design unite which has more than trebled in the
last year. For, from these individuals has come and will come our most
apparent product improvements. Last year, for example, Mr. Henry Bluhm
received the 1960 Wescon Award for outstanding computer appearance
design. Much more work of the same caliber is in progress. I have
mentioned the outstanding good looks of our 210. You are well aware of the
neat, handsome and efficient aspects of the 225. On Wednesday, Ken Manning
will give you a preview of the exceptional appearance of our new line of
Looking now to future frontiers, what are some of the
things we must achieve in Engineering. One is compatibility among our
products. As I have mentioned when speaking of the 225, we already are
involved with this concept. In the future, it must concern us in every
aspect of our design. Assuming the obligation of our own peripherals, it
would be dangerous to limit their design to this particular system or
that. If we are to achieve the growth which we must to survive in the
battle of computers which lies ahead, it is important that compatibility among our equipments and devices become a prime goal of the immediate
Of equal importance is this business of a product image,
and it is of major concern of all of us that we develop a General Electric computer image.
Our Industrial Design people are immediately involved as
they should be. But this creation of a firm product image must go much
deeper than the 'finishing touches'. You can not improve the appearance of
a cow by painting it purple. It is absolutely essential to all of us who
are concerned with building and marketing computers that we think in the
terms of a General Electric computer so that the final product will be
indelibly and unmistakably stamped with the GE brand. Sales and service
are as much a part of this brand, this all essential product image, as is
its appearance design.
Finally, gentlemen, the state of the art in electronic
data processing is always fluid and dynamic. There are no indications
anywhere that we can settle down to this type of device or that, that we
can say this is our market and that is not. Therefore it is the intention
of the Engineering Section of the Computer Department to continue to
explore, initiate, innovate and develop engineering programs in support of
new and expanding product fields.
An indication of this intent has been given to you in
the promise we hold for the 3100 and 3101. There are several other
projects on the drawing boards. Big, exciting computers, small, extremely
fast and efficient systems, but gentlemen, the time for their unveiling
has not arrived. When it does, it is our belief that we will make a major
step forward in the computer business. As devastating as it may appear to
established sales routines, it is the business of your Engineering Section
to obsolete our existing products technologically as fast as we are able.
For, this is the only way in which we can achieve those important
contributions to computer technology which
will put us in the forefront of a field where General Electric belongs.
Thank you, gentlemen, for your attention.
THE END RESULTS
I am here today to tell you a frontier story about a gun that made history. You have undoubtedly heard the story of how
the colt 44 opened up the west and made it safe for the early settlers.
Well, this is the story of a Rifle that opened another frontier. This
rifle is known as the GE 100 computer system.
In the early days, this frontier belonged to a certain
tribe of Indians. These Indians were firmly established and roamed their hunting grounds at leisure. They were not
bothered by an occasional settler, just as long as the settler did not
encroach on their superior hunting and fishing areas.
Life was difficult for the white man on the frontier in those days.
However, one pioneer family was not deterred from stringing-out on their
own and establishing themselves. This family was George and Bofa Bank.
From this union came the GE 100, delivered right on schedule, in June of
1958. This was just the beginning. With George and Bofa as a
rallying point, the settlement began to grow and prosper.
The Indian bad men became concerned about this invasion of their
exclusive hunting grounds. They went on the warpath. This led to the
establishment of the banking outpost as a haven for those bankers who were
unwilling to knuckle under to the Indian bad men.
To defend this outpost against the raging IBM tribe, a
highly-select group of men was formed. Their names are legend now: Hogg,
McGoldrick, Bellamak, Hayes, Lindley and Prince, on the right!
They were the original Arizona Rangers!!
Those early days were tough and fraught with danger. (I ought to know; I lost most of my hair.)
But we did not yield. Then, as now, there were some who doubted if we
could make a go if it. On every side, there was much wailing and wringing
of hands about tape problems, about late delivery, about pricing, and so
on, ad infinitum. But we overcame every problem and today all of us
point with pride to what we have accomplished.
Yes sir, those were the days! But those damn Indian bad men never let
up. From 'it will never work' tactics, they suddenly switched to 'our
70701401' millimeter howitzer will do it better!
To meet this challenge, the GE 210 was developed: a newer, lighter,
rapid-fire weapon that literally ripped holes in the opposition.
As of today, the banking outpost is firmly established. The original
Arizona Rangers have gone out on the offensive and are carrying the flight to
the enemy's camp-grounds. The original Rangers have been relieved here
in the fort by a new group of young, vigorous replacements. The original few inhabitants of the
outpost... (we call them 'customers') ...have grown in number and they do
many things other than banking now. With both the GE 100's GE 210's in
service, our firepower is increasing daily. But we haven't stopped the
Indian bad men. ...As you all know, we have developed another weapon for
the arsenal: the GE 225 like the 210, it is light and rapidfire. The two
of them together give you the weapon you need: a double-barreled
shot-gun, loaded with both 210 and 225 shot. You can shoot with either barrel, depending on the situation. (in
some instances we've fired both at once!) But more about this weapon later. While we have won some important
battles against the Indian bad men, we have not yet won the war. We still
have to defend the outposts we have established. In fact, as we penetrate
deeper into various markets, we ourselves become more vulnerable to
attack. To help you in the field sales outposts, we here at the fort are
organized to provide special assistance in each of the market areas we are
planning to go after.. ..These market areas are: banking and finance....Ranger Lieutenant Hal Wells; utility data processing. ..Ranger
Lieutenant Jim Richmann; engineering and scientific---Ranger Lieutenant
Gene Scott; manufacturing and production control. ..Ranger Lieutenant Len
Kilfoyle; insurance. ..Ranger Lieutenant Art Dodd; information storage
and retrieval. .. Ranger Lieutennant Jim McPherson; consultants. .. Ranger
Lieutenant Len Kilfoyle; hardware and software. ..Ranger Lieutenant Jim
Pompa and, most of all, First Sergeant Lois Littlefield, ram-rodding the
You know, she's recently been designated the official "Den
Mother" of the headquarters unit, Arizona Rangers! Several of the
present-day Arizona Rangers are specifically charged with helping you to
defend and expand the banking frontier. Here is Ranger Hal Wells to
tell you about it.