Cooperation with IBM in the 1980s

Cooperation with IBM in the 1980s

Intel's measures in the late 1970s as a reaction to increasing competition from other chip manufacturers paid off greatly and resulted in a remarkable technological lead against its competitors. The most significant consequence, which was a landmark in the company's development, was IBM's decision to rely on the Intel 8088 microprocessor for its PCs in 1980.

IBM (short for International Business Machines) has been the world's leading company in the big mainframe computers since the 1950s. Due to its dominance, it was often compared with a giant and referred to as "Big Blue." Surprisingly, it was not before 198 1 (the PC revolution had already been on for a few years) that IBM introduced its own Personal Computer.

Because of IBM's dominance and worldwide reputation, its PCs soon became industry standard and penetrated the office market: other established computer companies followed and introduced their own PCs - the so-called "clones" - which were compatible to IBM' s models. To maintain compatibility, all these manufacturers were forced to rely on Intel's microprocessors, which thus were bootstrapped to industry standard, too.

As well as for Intel, the CPU manufacturer, IBM's decision has been crucial for a company in the software field: Microsoft's (Redmont, Washington) MS-DOS was chosen as the IBM PC's operating system and became industry standard. It is essential to every IBM compatible PC. Microsoft, a small company in 1980, grew explosively, and is today's superior software giant.

At the beginning of the 1980s, IBM was concerned about Intel's ability to keep investing in R&D and therefore decided to support Intel by buying $250 million (=12%) of the company's stock. This endorsed Intel's position, and, in 1987, IBM sold the last of its shares in a strong Intel.

Martin Groeger
Last modified: Mon Jul 8 05:28:59 PDT