GE's Appliance Park Still an IT Innovator

The trucks rolled up to the brand-new, ultramodern factory in Louisville, Ky., one day in January 1954. Now, 47 years later, no one seems to remember the exact date. There wasn't any hoopla: No reporters or speeches or ribbon-cuttings.

But it was the very first installation of an electronic computer at a U.S. business, and it launched the era of business data processing.

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Who's On First? LEO

History books routinely describe the delivery of the Univac I to General Electric Co.'s Appliance Park in 1954 as the first installation of an electronic computer at a business.

But that "first" is only true in the U.S.

Three years earlier, a venerable British catering company—famous for its teas and cakes but with no electronics experience—had built its own computer and run the first routine office program.

The firm, J. Lyons and Co. in West London, had an intense interest in improved office-management techniques and wanted to see if the experimental computers being designed for mathematical work could be applied to the problems of business data processing.

The result was LEO, for Lyons Electronic Office, the first computer to run a payroll and the first to manage inventories, not to mention the first to calculate the most cost-effective blending time for fine, flavorful cups of tea.

The whole story of this user-driven innovation—the ultimate homegrown system—is told in the book, LEO: The Incredible Story of the World's First Business Computer (McGraw-Hill, 1998). It was written by several Lyons employees who actually worked on the project.

Even in the U.S., there were companies ahead of GE in line to get Univac computers, but the computers were never installed.

In 1948, A.C. Nielsen Co. and Prudential Insurance Co. agreed to buy Univacs from the Eckert-Mauchly Computer Corp., at the ludicrously low price of $150,000 each.

But when Remington Rand Inc. bought Eckert-Mauchly in 1950, it recognized the price was too low and eventually succeeded in canceling those contracts.

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Until then, computers had been used at places like the U.S. Census Bureau and military sites; this one was going to run payroll and manufacturing applications at General Electric Co.'s major appliance division in Louisville.

It took several trucks to transport the machine because the Universal Automatic Computer, or Univac, weighed 30 tons and came in many pieces. The Univac I processor was the size of a 25- by 50-ft. room—technicians actually walked inside to work on it—and had more than 5,000 vacuum tubes. GE got the eighth one off the assembly line of Remington Rand Inc., a predecessor of today's Unisys Corp.

For GE, the installation was directed by Roddy F. Osborn, a visionary who had the guts to buy a $1.2 million machine that had no programming tools and no track record in business. Today, we'd call Osborn the first corporate computer manager and champion of the original bleeding-edge IT project.

Jumping ahead to 2001, GE Appliances is a $6 billion, global business unit that carries on that tradition of technological innovation, from business-to-business e-commerce to an aggressive move toward a truly paperless office.

A Place in History

The company has been connected to customers electronically for more than 14 years with its DirectConnect application, said Gregory Levinsky, the current CIO at GE Appliances. Plus, GE has an Internet ordering system called CustomerNet that serves more than 8,000 appliance dealers.

The business unit is working on Web-enabled appliances, such as refrigerators that can read bar codes and microwave ovens that can scan frozen entrees and automatically set the right cooking times. And in November, Levinsky's team took one of the more dramatic steps toward GE's goal of being an all-digital business: It eliminated 1,500 personal printers.

It wasn't easy to pry those printers out of end users' hands. "We had people hide them in desks when we came by and collected," Levinsky said. So the IT department just removed all of the printer drivers from the desktop PCs, which are "locked down" so that only the IT staff can install software. The first week was tough, he said, but you figure out how to "think digital" and cope without printouts.

Levinsky said he's aware of the historic significance of having the first U.S. business computer at Appliance Park, the manufacturing campus in Louisville, and proud of GE's long tradition of innovation and technology investment.

Appliance Park was built in the early 1950s to feature the latest automated equipment and processes for making washing machines, dishwashers, refrigerators, ovens and the like. So GE also wanted the most modern accounting system for its showcase manufacturing facility.

GE contacted Chicago-based Arthur Andersen & Co.'s administrative services division in 1952 to do a feasibility study, and by June 1953, the accounting firm recommended that GE proceed with installation of the Univac I "with its new 600-lines-per-minute printer." (Univac's previous printer, an electric typewriter, was limited to tapping out 10 characters per second - definitely unsuitable for business.)

Why didn't the study recommend the prototype computer from IBM, the leader in the punch card tabulation market?

"That answer is very simple. IBM did not have equipment that was available at the time that GE wanted to start. IBM was a latecomer in the [electronic computer] field," said Joseph S. Glickauf, the project leader at Arthur Andersen. "So there was no real problem making the decision at that particular point, if you wanted a true electronic computer," the 89-year-old Glickauf said in a telephone interview from his home in Venice, Fla.

For business users, the big attraction of the Univac design was the machine's "ability to scan through a reel of tape, find the correct record or set of records, perform some process in it and return the results again to tape," wrote historian Paul E. Ceruzzi in his book, A History of Modern Computing (MIT Press, 1998). The magnetic tapes replaced the labor-intensive process of having people shuttle punched cards from machine to machine to accomplish each of those tasks.

But programming the machine turned out to a tremendous leap into the great unknown. There were no coding tools or manuals.

Programs had to be written directly in machine language—ones and zeroes—plus a letter code for operations (A for add, S for subtract, for example) and an address identifying where in the memory device the operation should be performed. This required three instructions just to multiply one number by another, recalled Burton Grad, who wrote the first manufacturing control programs for GE's Univac.

It made for slow programs that were painful to modify.

Grad, in a telephone interview from his home office in Westport, Conn., said he spent three months in Louisville writing the material-control, factory-scheduling and inventory programs—and then the next three months in New York debugging what he'd written.

Near the end of 1955, the manufacturing programs turned out to be the first really productive applications to run on GE's Univac.

The payroll application took much longer. The programming team from GE, Arthur Andersen and Remington Rand succeeded in writing a payroll application that worked in October 1954, but performance was far from satisfactory. By one account, it wasn't until late 1956 that the payroll program was actually able to handle the workload.

"When we first started off, we thought this was a machine that could run a payroll the size of GE's at that time—10,000 employees—in two hours," Glickauf said. "As it turned out, at the end of 40 hours [the first time it was programmed], it still hadn't completed a payroll."

Recovery From Disaster

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THE UNIVAC I was installed at GE's Appliance Park in January 1954, with help from Arthur Andersen & Co.

(Photo from the Hagley Museum and Library).

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Given the high expectations, this was an embarrassing disaster. The mortified Glickauf went to GE, hat in hand, saying, "We have to redo it. This program that we have made, it just isn't any good, period. Our firm will redo it and we won't charge you."

As Glickauf recalled, the GE executive smiled a little bit and said, "You have to appreciate that GE has problems like this all the time. We recognize that there are difficulties with innovation and development, so we wouldn't expect you to do this for nothing. We'll arrange to have you do it on a cost-plus basis. The main thing is that we don't want to lose the experience that you already have, knowing where the problems are."

The programming team worked day and night for seven months to rewrite the application—figuring out ways to simplify the program and slash the runtime—"and the second run-through didn't take anywhere near as long as that first one," Glickauf said.

Eventually, the Univac saved GE millions of dollars by tracking and scheduling materials for the assembly line, reducing excess inventory and sharply reducing the need for payroll clerks.

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Then and Now

GE Appliance Park, 1954
Remington Rand's Univac I mainframe
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5,400 vacuum tubes
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2.25 MHz
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2,000 instructions per second
382% uptime
GE Appliance Park, 2001
Two mainframes: Bull DPS 9000/84T, Amdahl GS565E
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7TB of data stored
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More than 400 servers
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17M e-mail messages per year
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Payroll managed in Lakeland, Fla.
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Major e-commerce applications
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99.7% uptime for critical apps

Sources: GE Appliances, Louisville, Ky.; A History of Modern Computing, by Paul E. Ceruzzi (MIT Press, 1998); Smithsonian/Unisys Corp. UNIVAC oral history project, May 1990

But why did the payroll project take so long? "The first reason is that nobody had ever done it before," Glickauf said. "So we got off on many wrong premises.

"One of the basic things that we didn't recognize was that we couldn't just drop input into the computer and let it run, because it would recognize an error and then stop. Then all the work had to be done to make the correction [and rerun the program]," Glickauf said.

Another reason was the complexity of GE's payroll, which included union wages, piecework, salaried employees and different pay scales—"a whole range of things that had never been done before except on punch cards," Grad said. "They ended up getting beaten up pretty badly for how long it took."

Indeed, several contemporaries said GE dismissed Osborn because of the problems. "Somebody had to be the goat for the fact that the first run-through had such an overrun, and unfortunately he was it," Glickauf said. "He was certainly a very enthusiastic visionary. He didn't leave of his own will, that's for sure. They brought in somebody else who was his complete opposite, a very strict, unfriendly supervisor."

At last report, 10 years ago, Osborn ran a cash-flow management consultancy in Florida, but he couldn't be located for this story.

But the legacy of Osborn and Glickauf is that they recognized that the same computers revolutionizing science and engineering could be applied to business data processing—at a time when many business executives saw no corporate future for what the media called "giant brains."

Writing in the Harvard Business Review in 1954, Osborn said businesses were sleeping through the computer revolution like Rip Van Winkle, but "GE's installation of a Univac may be Rip Van Business's first blink."

For more on this subject, head to our History of Computing online resources page.

Meet the Father of Computer Consulting

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When Joseph Glickauf returned from the messy laboratory of ENIAC inventors J. Presper Eckert and John Mauchly, he felt he'd seen the future. His notes from the Philadelphia visit had the following passage:

"The demonstration we were given was impressive, if brief. But it took no genius to see that we had before us a device that would outrun, outpower and outmode every device that preceded it. I left Philadelphia with a mission. It was to convince everyone I encountered . . . that this day, I had indeed seen a vision of what would soon become a revolutionary reality."

In the late 1940s, the accounting firm Arthur Andersen & Co. had heard whispers about the development of electronic computers and sent Glickauf on an extended exploratory mission to see if these so-called giant brains could be applied to business accounting.

After the Philadelphia visit, Glickauf became one of the early computer evangelists. "The first thing I did was to convince the partners in my firm to put up the money to get started, so we could study and learn about it and become, you might say, consultants in the field," he said in a recent interview.

But what good is an evangelist without a demo? So Glickauf built a small-scale model—soon dubbed the "Glickiac"—to demonstrate the speed of electronic computing. "That little Glickiac only added 10,000 units per minute, but compare that to an adding machine," he said.

Basically, the Glickiac was an electronic counting machine—in binary, of course—with flashing lights. For the demo, Glickauf would have the audience count along with the machine and then turn up the speed, faster and faster. "The neon lights were flashing and you couldn't even see them—and pretty soon, it was far beyond the speed that anyone could possibly count. But it was a very vivid demonstration and drove the idea home that we were talking about something that was beyond anything we'd ever seen before," Glickauf said.

At a January 1951 meeting, the Glickiac demo was powerful enough to persuade Arthur Andersen partners to devote whatever resources were required to get into the computer consulting field before anyone else did.

In 1952, Arthur Andersen got its first engagement: a feasibility study for installing an electronic computer at General Electric's Appliance Park in Louisville, Ky.—at the bargain price of $64,000.

Eventually, Glickauf became head of Arthur Andersen's administrative services division and held that position for 12 years during a period of dramatic growth fueled by business adoption of information systems.

So, does that make Glickauf the father of computer consulting? "I would say so," he said. "I don't like to take any credit, but I had to be."

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