Whatever Happened to the Seven Dwarfs
Dwarf Two: Sperry-Rand

by John C. Dvorak

IBM and the Seven Dwarfs

It was a coinage of the mid-1960’s as IBM dominated the computer business. IBM and the Seven Dwarfs was how the business was described. By 1965 IBM had a 65.3-percent market share of the industry. The seven dwarfs shared the rest. They were: Burroughs, Sperry Rand (formerly Remington Rand), Control Data, Honeywell, General Electric, RCA and NCR. The following is the story of the biggest Dwarf: Sperry-Rand (12.1-percent market share in 1965)

There are three players in this tale. Sperry Gyroscope, E. Remington & Son, Rand Cardex, and the Eckert-Mauchly Computer Company. Through a series of mergers and acquisitions the Sperry-Rand company emerged to become a big dwarf.

The computer piece of the puzzle began in 1940 when pioneers John Atanasoff and Clifford Berry showed John Mauchly an idea for a vacuum tube computer. (Much later this meeting led to a patent controversy won by Atanasoff). In 1946, with J.P. Eckert, Mauchly introduced the 15,000 square foot ENIAC (Electronic Numerical Integrator and Computer) at University of Pennsylvania Moore School. It performed 5000 adds per second. The twosome went on to form the Eckert-Mauchly Computer Company to develop the BINAC machine for the Census Bureau. One observer is convinced that the original request for proposal and bidding process contract bid was rigged to favor Raytheon and EMCC lost money on this deal and just about everything else they did. A contract with Northrop to build a guidance computer in 1947 saved them from complete disaster. As an aside, the famous Grace hopper was a lead programmer for the BINAC.

After this minor success the company focused on UNIVAC (Universal Automatic Computer) — Mauchly and Eckert’s dream machine. The company immediately lost Ike Auerbach who believed they could build lots of BINACs and makes lots of money. He ran off to Burroughs. This loss was the beginning of missed opportunities. All evidence indicates that both Eckert and Mauchly, while brilliant computer designers, were clueless as how to run a business. The company quickly ran into cash flow problems. Despite plenty of contracts for the new Univac computer the company was nearly bankrupt. EMCC had to be sold to Remington Rand. Eckert and Mauchly, who were always pre-occupied about their patents sold them, possibly some of the most important patents in the history of computing, for a mere $70,000. On top of that each got an 8-year employment contract for $18,000 a year.

Remington-Rand formed out of the original E. Remington & Son, the firearms maker founded in 1816. It slowly evolved into a products company making sewing machines and farm equipment. Christopher Sholes talked the company into making a QWERTY typewriter and in 1886 this venture was spun off into the Remington Typewriter Company which later merged with Rand Kardex and a slew of smaller firms to form Remington-Rand in 1927. It was a leading office equipment maker in 1950 when it bought out EMCC.

The next year, in 1951, the Univac-I was finally delivered. It was the first business computer on the market. It became synonymous with computing. To the general public UNIVAC meant “computer.” Magazines heralded the “electronic brain!” It did 100,000 additions per-second and had a clock speed of 2.25 Mhz. UNIVAC became a household name when on election day in 1952, with only 7-percent of the vote tabulated, a UNIVAC computer predicted the landslide victory of Dwight D. Eisenhower. CBS network executives were skeptical and refused to let the broadcast crew announce the computer prediction. After it turned out that the computer had made an accurate prediction the network made a public apology on the air for not believing the computer. The Univac, at that moment, became legendary. Curiously this particular machine was the fifth Univac built and scheduled to be delivered to the University of California Lawrence Livermore Labs but was delayed. Some programmers at the company programmed it to analyze election results as a lark.

It was a fantastic triumph and a missed opportunity. Four years later it was an IBM 701 making the same predications and getting all the glory. It was ridiculous since the 701 was known to be clearly inferior.

The mid 1950’s became a period of bickering as Eckert and William Norris feuded over marketing issues. Norris wanted better marketing while Eckert only wanted to push the technology to its limits. Earlier, in 1946, Norris was part of a group of computer designers calling themselves Engineering Research Associates out of the facilities of Northwestern Aeronautical Corporation. They developed a digital computer in 1950 called the Atlas I. There was some belief that Eckert and Mauchly and EMCC may have used Atlas I patents and ideas for UNIVAC which came a year later. The issue was moot after Remington Rand bought ERA in 1952.

Norris came with the deal but finally quit in 1957 to form Control Data. Another important employee lost to mediocre management. An irony here is that, at Control Data, Norris latched on to Seymour Cray who, like Eckert, pushed the technology to its limits.

It was 1955 when Sperry Corporation merged with Remington Rand to form Sperry-Rand. Neither one of these partners knew much about business sales as both were to deep into government work. It was no surprise that despite superior technology at Sperry-Rand, IBM blew by them effortlessly.

The Sperry Corporation itself had a long history. Elmer Sperry (1860-1930), a graduate of the famed Erasmus J® Hall High school in Brooklyn was an inventor with over 360 patents to his name. He formed the Sperry Gyroscope Company after inventing the Gyroscopic compass. The company thrived even after his death and continued to introduce innovations into the marketplace including specialized oil drilling equipment and gyroscopic stabilizers for large boats. Becoming one of those companies that generates a lot of income from government contracts the company was sold to North American Aviation after World War II and then spun off part as the Sperry Corporation which bought the computer company so it could sell computers to the government.

Sperry also had an interesting missed opportunity once it lost engineer Carl Norden, inventor of the Norden bombsight. Norden had worked at Sperry Gyroscope before starting his own company. Sperry had invented the first bombsight, but is seldom credited with the invention.

The Sperry-Rand Corporation and its UNIVAC mainframe peaked in the mid-1960’s with its remarkable Univac 1100 series — one of the great mainframes. Just for perspective you should note that 131K of core memory (RAM) for this thing sold for $823,000. A new Ford Mustang was about $3000.

Eventually Sperry merged with Burroughs in 1986 to become Unisys having long since discarded the UNIVAC name and slowly turning into a “services” company.

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Other Dwarfs: Burroughs, Sperry Rand (formerly Remington Rand), Control Data, Honeywell, General Electric, RCA, NCR