An Interview with Watts Humphrey, Part 11: Skiing with Tom Watson and Why RCA Failed
This interview was provided courtesy of the Computer History Museum.
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Skiing with Tom Watson
The Endicott Lab
Humphrey: I agreed to take the
lab in Endicott. He said I would no longer be a division vice president,
because, you know, "We've abolished those jobs. You could stay here and in
that job. I don't know what you'll do," but et cetera.
And so he was quite direct on what I ought to do. So I agreed to take the
Endicott job. And so I got a few stories about what happened there when I ran
it. It was up in
So I decided that we
had to re-organize the place. We had an awful lot of work to do. I had all the
intermediate systems, the printers, the OCR/MCR stuff. It was a very important
lab and we had several billion dollars worth of products. The mid-range
computers were an extremely big market. It was billions and billions of dollars
in hardware. So that's what we did, and it was about 2,000 engineers, and we
were working with a big manufacturing plant there in Endicott. And so I put
together a committee of the line managers, the people developing the products. And
I said, "What I want you to do is to go through the list of all the
departments in the lab and tell me which ones you need to do your job." And
so they did. And they went down this list. And there were a whole mess of them
that they indicated that they didn't know -- "Why have we got those? What
are they doing? We don't need them." And so I started down the list of
them to have each of those other departments to justify why are
you here? What is your job? What makes your work essential to IBM?
And we eliminated. I
mean, we kept the technology stuff. No one said they needed the tech stuff, but
I said they did. So Sy
And it was amazing we
were able to do that. And we did, basically, requiring that people justify why
they're there and how they're supporting the products we're developing. That
was why we were there. So it was really a hell of a good reorganization and it
worked very well. Also, there were a bunch of battles with Bob Evans. Bob had a
habit of going out to various labs and looking at what ad tech was doing, and
if somebody had a wild idea, they'd bring it to him. And somebody had an idea
for a disk printer, a little printer where you have little flexible plastic
disks. And you'd hammer the disk onto the paper. And he showed us it would be
real cheap, easy to make, et cetera. And so Bob essentially directed us to
develop a disk printer. And we disagreed with it. The printer guys didn't want
to do it. The printer guys were really difficult on that. The manager was a guy
that I had a lot of battles with, who worked for me. And the basic problem was
that he had expected to be the Lab Director, instead of me. And he'd been with
the company a lot longer and that sort of thing. And so we did not start off
well. And we never did work well.
As a matter of fact,
he turned out to be a real problem later. So we had a big battle with the disk
printer. They were never able to get it to work, and they tried all kinds of
stuff. It was an enormous expense and big failure. A little bit later, as I
said, I had this battle with the printer manager. And I ended up pulling him
out, and I wanted to reassign him to run the OCR/MICR stuff, but he wouldn’t
have any part of it, and we got into a big flap with that.
And so, I had a bunch
of problems with people, and a lot of them were old timers that had a lot of
background that we had some real trouble with. It was a tough environment to
work in because anybody could go open door if they disagreed and any of that sort of thing. You couldn’t move people without all kinds of
justification. It was a very difficult way to do things. But in any event, we
also had the OCR/MICR Group, optical recognition, which was in
Booch: Yes.
Why RCA Failed
Humphrey: Well, Pat Beebe was
my boss then. Actually, he was my boss’ boss. All of a sudden, I was his boss,
and boy, that didn’t sit well with him at all.
Booch: I can imagine.
Humphrey: Well, that was the
case with several people -- that basically here was a guy from lower down that
came in. Of course, I’d been running programming. So, I had been in all these
big jobs. So, I rocketed past all these people who felt that
they had earned their keep and I hadn’t and so. I had all kinds of
problems with them. So, Pat ended actually resigning from IBM. He quit and I
had arguments with him when I worked for him because he [had ideas that] turned
out not to make a whole lot of sense and basically said you couldn’t make a
general purpose programming system, operating system. He said they all had to
be special purpose. He was a special systems guy. So, he was just plain wrong
on some of this stuff. Again, one of these people that had a
conviction and essentially made up facts to support convictions instead of
testing convictions against fact.
Booch: And, he had grown up primarily
from a hardware perspective, isn’t that correct, where there was the legacy of
building specialized machines.
Humphrey: Well, he actually was
the guy who ran the SABRE System development. And so, he had that background --
the special systems stuff and how complicated they were and all that sort of
thing. He came from that community; a hardware guy, but also through the SABRE
stuff. So, he had a pretty good extensive background and he was no dummy. He
knew how complex these big systems were. So, that was an issue. He had been in
charge of the early development of that.
So in any event, Pat
quit. Do you remember Orville Wright was my marketing manager when I ran TSS?
Booch: Yes.
Humphrey: Orville Wright also
quit and they both went to work for RCA. There’s an amazing RCA story here
because Pat, when he quit, said, “I’m going to RCA and we’re going to clean
your clock,” and was really aggressive on that. He had taken the job as the VP
of development. Orville Wright was head of their computer operations. So, he
took it over at RCA. He had a big job. What was interesting was RCA had come up
with, as I said, the Spectra 70, which they had gotten going, but they were
replacing the Spectra 70 with a new line. What they had done, which I learned
later, they made some just god-awful mistakes in a marketing and policy basis
because they established a series of long-term leases to sell their machines,
and they were actually pricing them with fairly long lives.
So, they were able to
compete pretty aggressively with IBM, and they were getting business. They were
doing reasonably well. And so, when IBM came out with a 370, they had a problem
because they were developing a new replacement system also with higher
performance technology, and that’s why Pat was brought in -- Pat Beebe and
Orville Wright -- to go in and fix that and bring this new system out. But the
new system was delayed, and it was pretty seriously delayed. And so, what they
decided to do -- Pat and Orville -- they decided that instead of coming up with
a new machine, they would fake it. So, they would say, “Okay. Here’s a new
machine.” They would take the old Spectra 70 machines, bring them back and
repaint them and do a little bit of clean up to them and ship them back out as
a new model at a much lower price. It was kind of fakery.
And so they did that,
and what they didn’t realize was that all of their long-term leases had granted
an out. You had to pay a termination charge to get out of the lease unless you
were buying another GE machine, like getting another Spectra machine. So, it
turned out that all of their customers could now take the machines they had,
essentially trade them in, and get one of these newer models at a much lower
price without paying a nickel. So, the new RCA operation, all of a sudden, they
were running their factories like crazy, retouching all these machines and
cutting the hell out of their revenue.
And so these guys
went down to the RCA board meeting one day to decide what to do about this, and
overnight, they wiped out the RCA computer division. The board just said, “No. It’s
gone.” Oh, and it became a money pit. They were into the hole for like $100
million in no time. And so, that was sort of the dead end for those guys. Orville
came out well. I don’t remember what Pat did. I heard of him running some
smaller company somewhere.
But in any event, we
also had another big flap. Learson now had taken over
for Tom Watson. Tom Watson had retired. I was still at Endicott. When Learson took over -- this was about 1970-1971 -- they had
to cut people. And so Learson basically came up with
this thing that you have a requirement to cut out so many people. They levied a
number on each lab. I got a number. I forgot what it was -- 70 or 80 people I
had to get rid of -- but I had to follow standard IBM ground rules. I could
only fire people for cause. It was ludicrous. I mean I had to go around and
figure out some way to fire good people that were doing good work. I totally
objected. I had big battles with my immediate management, and so I got in real
hot water over that again.
My boss at that time
was still Bob Evans. He reported to a guy named Spike Beitzel
who was the group executive, and I really got into a terrible flap over that
thing because it was unfair. We were being dishonest with these people. If we
were going to fire them, let’s come up with the layoff number and they were
unwilling to do that. So, we had to somehow make it up. Learson
was driving that. While I thought he was an extraordinary and marvelous man, he
sure had this hard edge to him on this. This was a toughie. But, that was a
real problem. So, I got in a real battle over that, and then had another
re-organization -- IBM kept re-organizing -- and decided they were going to put
a whole bunch of things together, restructure it. One of the big debates we had
at the time -- and this will come up a little bit later -- we had a big meeting
with Bob Evans and all of his lab directors. He’d had these lab director
meetings periodically, and we had them in everybody’s labs. I remember we had
them in
At this one meeting,
Bob wanted to talk about how should we structure the
division in terms of the way we lay out the logic for the organization. The
option basically that he was proposing and pretty much everybody else wanted
was we will organize around computer systems. We have a large systems group and
so each of the systems would be the center and they would each have their own
programming group and that sort of thing. So essentially, we would fragment the
whole programming community. That was sort of what had been done before, but it
hadn’t been broken up. And so they wanted to really now essentially break it up
so everybody had their own programmers. All of the hardware system managers
were now the system managers, and they would have their own hardware and
software. The file people would get the file software. So that’s what they were
going to do. I objected. I said that makes no sense at all. I said that what
you really need to do is to have an operating system focus instead. So, focus
on what the users are doing and do it that way. Well, the whole hardware
community would have none of that. So, they basically decided to re-organize
that way. The whole programming community was essentially splintered and that
happened, as I said, right about the time of the re-organization when I went to
Endicott in January 1970. They later asked me to go down to corporate staff and
take a job as director of policy development. This was about in 1972.
Booch: If I may ask, around that time
when you were still the director of programming, what was your span of control,
because you told me these stories of all these groups you’re working with.
Humphrey: Oh, okay. I ran
programming from 1966 to 1970 and had a whole lot of people under me. I had
Fritz Trapnell, who was the director over the OS 360
-- later became Don Gavis and Fritz, by the way --
went over to
Booch: Got it.
Humphrey: So, Fritz reported to
me. Jim Frame had the intermediate systems, DOS and that sort of stuff. We had
Dick Bevier and all the labs reported to him. The lab managers were different
than the system managers, by the way. There was a
But, the big
operating systems, the large and intermediate and the small, they reported
directly to me, and Dick Bevier had the labs. I also had my own very small
staff. So, I had about five people. I didn’t have a big crowd. Dick Bevier had
quite a list of lab directors, although the European people were all kind of
pulled together in one group under By Havens. But other than that, they were
pretty much all under Dick.
Booch: Okay. That helps.
Humphrey: So now, from 1970 to
1972, while I was running the Endicott lab, I was no longer the programming
director.
Booch: Right.
Humphrey: You remember now the
programmers were all reporting to their local laboratory management chain. When
I went to the Endicott lab, all the programmers were doing that as well. They
had like the
While I was in the
IBM was being
aggressively attacked at the very low end. It wasn’t PCs yet, but small
computers - DEC and others. And so the hardware guys had concluded they really
needed to make a small system that was not 360 compatible. They were going to
break the line and go off on their own -- the System 38 I think they ended up
with. I was irate. I thought this was crazy. So, I wrote a blazing letter to
Spike Beitzel about compatibility and what we would
do, and I got Dick Case, who had worked for me as the 360 system architect, to
bless it. He went over it and commented on it. I didn’t anticipate the
Internet, but I basically said that compatibility, interchangeability -- that
there were various levels of it and you really had to have the ability to move
data and programs back and forth -- that people were going to do this stuff
dynamically and we had to be able to interchange between all these systems, and
that going off with a completely different system was a terrible mistake.
I never kept copies
of any of it. I’m not a pack rat, so I don’t have much of that stuff. But in
any event, it created no affect at all.