Cassidy: IBM’s big influence on Silicon Valley

You might have missed the news that venerable tech giant IBM is celebrating its 100th anniversary.

After all, on the surface Big Blue’s wingding hardly seems like a Silicon Valley party. The company, founded in 1911 as the Computing-Tabulating-Recording Co., is based in New York. And we’ve got our own venerable tech giants — Hewlett-Packard, Intel, Cisco Systems, Oracle, Adobe Systems, Apple, Google and on and on.

But it’s hard to overstate the impact that IBM has had on Silicon Valley since the day it opened its first San Jose factory in 1943 — only four years after Bill Hewlett and David Packard flipped a coin in Palo Alto to decide who’d get top billing in their new company.

“Without IBM,” says IBM fellow Josephine Cheng, who runs the Almaden Research Center in San Jose, “we might not even have Silicon Valley.”

OK, so it’s not hard for her to overstate IBM’s impact. But you can’t blame Cheng and her colleagues for being excited, given the company’s place in the valley. No question IBM provided a competitive push and some of the technological know-how that propelled the area’s companies forward. And while it was at it, IBM also helped build a solid middle- and upper-middle class by creating thousands of valley jobs for workers ranging from loading dock laborers to Nobel-caliber scientists.

So, let the party begin.

“IBM has always had a presence in Silicon Valley,” says valley journalist and historian Michael S. Malone. “It has been the constant challenge to every generation of technology in valley history. So much of Silicon Valley history was done in reflection of or in competition with IBM.”

No question we trip over IBM’s past every day. There’s the historic display at 99 Notre Dame Ave. in San Jose commemorating IBM’s groundbreaking 1950s work on the RAMAC disk drive. And there are the colorful geometric tiles decorating the new Lowe’s on Cottle Road. The tiles were a feature of IBM’s modernistic campus that rose on the site in the late 1950s. Oh, and the historic pavilion outside Lowe’s — an homage to IBM’s work on storage sitting across the parking lot from a row of storage sheds. And, of course, there’s RAMAC Park right across the street.

Not as obvious is IBM’s influence on the companies that built the valley. Malone starts with the chip industry, pointing out that IBM was designing and producing bushels of its own chips for its own computers as the valley’s namesake industry was launching in the late 1950s and ’60s. He moves on to minicomputers and argues that IBM’s early work spurred HP to develop competing products. And then there is Intel, which in the early 1980s was locked in a death struggle with Motorola. The Santa Clara chipmaker hit the jackpot when IBM chose Intel’s 8088 as the microprocessor for the company’s first personal computer.

“IBM went with the 8088,” Malone says, “and when they did, that made Intel.”

IBM’s PC push also stoked Apple’s competitive fire during a time when its attention was split between marketing the Lisa and launching the Macintosh as a replacement for the Apple II.

“It went at the PC market with everything it had,” Malone says of IBM. “Apple is losing market share by the hour and Apple does its Hail Mary with the Macintosh, and Apple carves out enough market share to survive for another 25 years.”

And then there is Oracle, which CEO Larry Ellison has said was partly inspired by research papers published by the Almaden lab that first described a relational database, the principle behind today’s computer searches.

IBM is often overlooked in the valley. It’s seen as an East Coast outfit, despite the fact that for years it’s been among the valley’s largest private employers. (Today those employees work primarily at the Almaden center and IBM’s Silicon Valley Lab, a software development operation.) IBM is seen as stodgy — a suit-and-tie company in shorts-and-sandals Silicon Valley.

But in fact, IBM brought an innovative fury to the valley long before the founders of Facebook and Google were even born. In 1952, the company sent senior engineer Rey Johnson west to open a lab in San Jose. Years before Steve Jobs launched nimble and independent skunk works to kick-start innovation at Apple and decades before Google launched its “20 percent time,” hours set aside for engineers to think big thoughts, IBM was experimenting with open-ended invention.

“I was given only two guidelines,” Johnson, who died in 1998, once told an IBM newsletter, “keep the number of people in the lab to about 50 and experiment in technology that no one else in IBM was working on.”

Holed up at 99 Notre Dame (now a county court annex), Johnson and his team seized on the problem of storage and came up with the magnetic hard disk drive. The RAMAC was huge, with data stored on 50 metal disks, each two-feet in diameter. It held 5 megabytes, about one iTunes song. But the storage concept is the same one used today.

Howard Bell remembers the RAMAC well. He says he was working on the IBM loading dock when one of the early models was shipped off to a customer in the late 1950s. And he is one who needs no convincing that IBM shaped the valley in ways big and small.

“When I came out here you either worked at Lockheed or IBM,” says Bell, 75, who started with IBM in 1958 and eventually managed the utility plant at Almaden. His father had already worked at IBM for 13 years when Bell started at the company. Eventually, his son, two daughters and his daughter-in-law also went to work for IBM in San Jose. Collectively, the Bells put in 127 years at the 100-year-old company.

“IBM wasn’t a place to work,” says Bell of Gilroy. “It was a way of life at one point.”

And a way, for decade after decade, of helping mold Silicon Valley into the world’s innovation center.

Contact Mike Cassidy at mcassidy@mercurynews.com or 408-920-5536. Follow him at Twitter.com/mikecassidy.