IBM Australia turns 70

When IBM started in Australia in 1932, it had 10 employees, £20,000 in the bank and sold scales and time recording equipment. Now, 70 years later, it employs about 10,000 people and has annual revenues of $3.3 billion.

Speaking at an Australian Information Industry Association (AIIA) luncheon in Sydney on Wednesday to celebrate IBM Australia's 70th birthday, CEO and managing director for Australia and New Zealand, Philip Bullock said the company's progress has been linked "inextricably" to the development of Australia.

Just as the outbreak of World War II brought the country to a standstill, it also halted the company's growth. IBM was unable to obtain inventory for 20 months. The dire situation was only relieved when then-general manager George Bennett found a way around Government restrictions, on both sides of the Pacific, by preparing specific information on who would use the systems the company sold, thereby putting Government fears about security to rest.

At the same time as Australia was growing and evolving through the 60s, 70s and 80s, IBM was growing up.

In the 1960s, IBM installed Australia's first commercial data communications link between Sydney and Melbourne; it stopped selling time records and launched the System/360. This all-purpose computer, a precursor of today's mainframes, had a common architecture and was the first system to feature interchangeable programs.

The 70s saw the introduction of systems for small offices, including the first portable PC, the 5100 computing system, and the System/32. This computer for the small office was the forerunner of the iSeries.

IBM's 4300 series was also introduced featuring new fabrication technologies such as x-ray lithography for etching silicon chips. This low-end mainframe included the first air-cooled system.

But just like other companies within Australia, the 1980s was a boom time for IBM Australia. It launched its personal computer globally and gross income exceeded $1 billion.

"The 80s was a tremendous growth period. Two industries led the use of IT, banking and finance."

In comparison, the 1990s was a difficult time for the company. "This is when we originally started to drift away from our customers."

The company was close to splitting and also had to deal with Y2K ramifications.

Bullock believes the present scepticism of the IT industry stems from this period, which saw the Y2K fiasco and the dotcom era. Bullock distanced the IT industry from the dotcom disaster during his speech, saying the "dotcoms were not the IT industry; it was an industry that involved IT a bit more heavily than any other industry".

Today, Bullock said, there are five key challenges facing the Australian technology industry.

These include managing complexity, delivering security, privacy and business continuity, maximising return on investment and skilling Australia.

"We as an industry need to address these problems. What we have now are systems that are enormously complex; we can't afford for them to go down."

Another issue is IT's role in the debate about the ethical nature of technological developments within the life sciences area.

He said the industry needed to be "open and engage in debate".

Bullock said IBM sees the next areas of technology impact in the IT industry as autonomic computing, grid computing and utility computing.

He said autonomic computing was vital as "we were nearing a stage where human intervention could not react quickly enough to solve IT problems".

Grid computing, which presently resides in the domain of the higher education sector, will move out into the commercial area, Bullock believes.

Another trend Bullock said IBM is betting its future on is utility computing. In this model, computing resources flow like electricity on demand from virtual utilities around the globe -- dynamically provisioned and scaled, self-healing, secure, always on, efficiently metered and priced on a pay-as-you-go basis while being highly available and easy to manage.

Using the latest clusters, grids, blades, fabrics, and other cool-sounding technologies, enterprises will supposedly be able to plug in, turn on, outsource, and save big bucks on IT equipment and staff.

"Are we going to reach a stage where I will be able to use a business process for X amount -- I won't have to commit to it and will be able to give six months notice [to terminate]? This is enticing but hard to deliver."

Bullock said while utility computing is still in its infancy, it is a trend "we will see".

"We are currently offering Linux on demand. There will be a progression [to utility] and IBM will play a large part in it."

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