The IBM Centennial - IBM Denmark Milestones 1970-2011 (part 2)

(This picture was published in Gyldendal's Encyclopedia in 1971 under the heading: 'Modern Electronic Data Processing'. It was taken a few months after I started in IBM and was deeply engaged with the 360/40 simulating The Maersk Company's container traffic using GPSS. It was a proof-of-concept, that led the Maersk Company to invest heavily in management systems for containers, and was as such the first milestone that I remember.)

From 1970 to 2011: Until the first oil crisis business was booming – the big Data centers really took off, both in the financial sector and in the public sector, where the major part of the cities now joined forces in Kommunedata matching the equally powerful Datacentralen, owned by the State Government.

The first major project IBM had with the Aalborg Kommunedata Center was the so-called 'Project Database' where we spent a year to map all transactions, work flows, and archives in the city of Aalborg and jointly developed a complete catalog of municipal applications as an idea. This was in fact used for Kommunedata's first on-line success, the SIP-system with info on Tax, Income and Personal Data. It was a predecessor for what later became known as Enterprise Architecture and used as teaching material at university level.

After the success of the 'pay-as-you go'-tax and the Central Personal Registration System, the next major application area became the Social Security System (Sygesikring/Dagpenge), probably the most ambitious system of it's kind. Kommunedata worked hard to solve all the inconsistencies in the legislation and by something close to a miracle - and a very firm controlling hand - the system was launched in 1973. Behind the scene it was a mess

– integration consisting of tapes being carried from one sub-system to another, but it worked.

In IBM DK we formed a 'think tank' giving advice to new uses of Government DP and among other initiatives we launched the 'Government Game' – you could say an early version of 'SimCity' which really opened the eyes of many politicians and top managers during the many seminars we arranged. An other new thing was the creation (in APL!) of what we called 'SiSyFos-model' (In Danish this was short for Taxes, Income and Social Benefits seen from a Family perspective). This was the first time all these diverse legislative initiatives, all depending on actual income, family size etc. were brought together. With astonishing results showing the problem areas where marginal taxation exceeded 100%!. This was later taken over by Datacentralen and the Ministry of Finance as a general law-model and has been refined ever since.

At the same time my IBM colleagues in the Health Sector developed the first on line Medical Record System, 'The Red System' – because the proposal was wrapped in red paper. It was based on DB/2 (Well, IMS) and ran on 3270 screens (4 colours!). It was developed by 3 counties and in 76 it became part of Kommunedata's new County/Medical Center in Skejby, Aarhus.

Other milestones of IBM Denmark impact in the 70'ies were undoubtedly the massive investments made by the Danish Banking sector. It was the dawn of the banking terminal era based on the IBM 3600-terminals and major main frame solutions. And in the beginning of the 80'ies an extraordinary thing happened in Denmark as the banks agreed to implement a common debit card system, the DanCard, and created a joint center, the PBS, to handle this and soon all major credit cards business as well. This greatly influenced the way the Danish population became accustomed to 'EDP'.

As the 3rd generation computers - the IBM 360 announced in 1964 - were replaced by the 303X-series, the competitive marketplace changed once again for IBM, and in parallel with the 'high end' 303x customer segment new initiatives for the SMB-market were on their way, so the early 80'ies saw the beginning of the era of SMB and Business Partner way of marketing. Also the personal computer entered the market place and IBM's PC was born. In a garage in Boca Raton, Florida based on standard components and external SW - but the brand name immediately made it a success.

In Denmark we saw the opportunity to go for the educational market – Schools and Universities – and mainly because we focused much more on SW, applications, 'Teachware', plus solutions for handicapped children - and how this new technology could be used by teachers, IBM soon became the absolute leading brand in the Danish Schools – from general schools, to High Schools to Teacher's Seminars.

(The poster illustrated our new style of communication with the young generation - we couldn't use Chaplin, we dis-liked the Pink Panter so this was one our favourites)

In the late 80'ies as the industry turned to distributed data processing, competition turned to Unix and mini computers, and the early 90'ies witnessed the problems of IBM doing the traditional stuff. Lou Gerstner 'Taught the Elephant to dance', but in the process a number of IBM'ers were laid off, something never seen before. Because IBM Denmark always had a reputation for running a tight ship, the impact here was in fact minimal, although felt hard enough by those exposed to it. And the major reorganisation for the first time really put an emphasis on services – from consulting to hosting services to programming. And IBM Denmark struggled for this.

In the early 90'ies we looked for new business and one of the milestones during this period was the first projects for TeleMedicine. The first project was implemented with the Viborg County where pictures of tumors scanned by an electronic microscope and via 2 ISDN-lines were transmitted to a specialist hospital where the experts could judge on the nature of the sample shown in the picture. The next pioneering project was sending Magnetic Scanning pictures from Queen Ingrid's Hospital in Nuuk, Greenland, to the National University Hospital, where the pictures of unborn babies could be studied to decide whether the pregnant ladies should be transported to Denmark or give birth locally under advice from the specialists. Also video conferencing systems were pioneered, partly with Danske Bank.

So even at this harsh time there was a focus on new business opportunities. - And then we entered the Internet age – first called 'Multimedia'. Some of the early projects included a plan with Datacentralen to install 1000 information booths in Denmark with access to all public information, but it soon became clear that this idea was overtaken by the rapid development of 'the Net', and 'eBusiness' emerged.

So IBM Denmark played a leading role in this – We helped the City of Copenhagen launch their first major web-site with on line access to a huge database with practical information, we launched a joint county-company website in North Zealand with the first websites of prominent companies like DSV and Coloplast, and we participated in 1999 with the first secure payment systems using internet payment for eBusiness solutions in cooperation with PBS and the Egmont on line book shop.

The new IBM led to acquisition of a number of companies: From the Lotus SW company to Price Waterhouse's consulting group, to CMA hosting services to Maersk Data and through Maersk the Acure Health Services company originally part of LEC, the Danish Agricultural Data Center.

Among the major milestones for the first 10 years of the new millennium was undoubtedly the health portal, Sundhed.Dk, for the first time integrating a remarkable number of back-end systems from medical records to medicine prescriptions, communication systems across the health sector and between patients and doctors, doctors and specialist. This major websphere portal received several international prices and is still one of the top international solutions in the World.

Maybe less visible but equally important was the consulting effort towards the central Governments IT Task Force developing the Danish ICT Public strategy. IBM has contributed to this rather consistently since the very first reports in the 90'ies and until today using IBM methodology to map the relevant domains and activities across the public sector (FORM, STORM).

In the local Government area the most exciting development was happening in the municipalities, partly as a result of the major reorganisation that took place in 2007 but prepared during the period from 2003-2006. During these years IBM consulting developed and tested Enterprise Architecture solutions that helped different authorities to merge their operations. If one city should be mentioned, it must be the City of Odense, where joint efforts between the City IT staff, the business partner and IBM resulted in a quite spectacular solution covering both intranet, citizen services and linkage to a number of back end solutions.

The largest public sector solution in Denmark was undoubtedly the deMARS-project for the Defense. A huge multi-year SAP project designed and implemented by IBM. The system was delivered in 2005, and IBM is now also responsible for operations.

Of course a number of important sales and implementations took place in the industrial sector as well as in the major banks – Nordea, Danske Bank – rapidly becoming the largest IT installations in the Nordics. Maersk Company, Carlsberg, NovoNordisk and many more were equally in the forefront of ICT development, but if one real new activity should be mentioned, it must be the Edison project, were IBM teamed up with DONG energy, BetterPlace electrical Cars, the Technical University of Denmark to produce a pilot project in Bornholm, were windmills would create up to 80% of the anticipated power consumed, using the batteries of the electric cars as a storage and a buffer in periods with more wind than needed. This is part of the 'family' of projects that IBM launched under the heading 'A Smarter Planet'. Around the World these kind of projects will be fundamental for the success of the company during the next hundred years.

The nature of the ICT market has changed over the 100 years of IBM operations in Denmark – the competition has changed from decade to decade. And the company has changed. But what has remained intact is probably the fighting spirit and the teamwork among the members of the company – including the 'new comers', the 'light blue employees', those that did not choose IBM as their first choice but was bought into the family. The milestones I have highlighted of course reflect my personal experience but nevertheless I think covered the major successes and also some of the small, but innovative steps that moved IBM forward.

(See part 1 of the centennial blog)

IBM Centennial – From 1911 to 1970

(Picture: Dansk Folkeforsikring installs the first "real" computer - the IBM 1410 in 1962)

On June 16. IBM will celebrate it's 100 years anniversary, the Centennial. On that date in 1916 the Computing, Tabulating & Recording Company was incorporated as a merger between 3 companies.The Computing was actually represented by computing scales, and recording was the Time Recording used as a basis for wages in industry. The Tabulating part was a result of Hermann Hollerith’s invention of the punched card machinery, first used in 1890 for the US Census.

As Hermann's business idea was to rent the machinery to customers and not sell it, he soon realized the need for a much larger marketing muscle and willing investors, which is why he gave up his company to enter the merger. This company was renamed to International Business Machines, but that happened as late as 1924. So in 13 years IBM can celebrate yet another centennial.

As I have been granted the privilege of access to my former company's archives in my attempt to write the history of IBM Denmark, I have dug into the archives to see what kind of impact the CTR-company, the Hollerith equipment and later the Danish IBM company has had on the Danish society. (See my slides from HINC3, History of IT in the Nordic Countries, Stockholm 2010)

As it turned out, this year is also the centennial for the first Hollerith equipment that was used in Denmark: The Danish Statistical Department received 2 sorting machines, 1 tabulator and 6 punch card machines in june 1916, ordered through the German affiliate of CTR, DeHoMag – Deutsche Hollerith Machinen Gesellschaft A/G. The were returned only after one year, and the impact was not impressive – with no service personnel and no instructions, the machines jammed frequently, which proved a challenge for the first entrepreneur selling 'IBM' equipment in Denmark, Max Bodenhoff, who was granted the role as an agent for Hollerith Equipment in 1920.

Max B. tried several times to persuade IBM to set up a service bureau, but only succeeded in 1933. During the recession of the thirties and especially during the German Occupation 1940-45 this proved to be one of the reasons why IBM solutions had a stronghold in Denmark in the Forties, and helped by a donation from the US Army of 2 lorries filled with punched card equipment from the US Army, the Data Center and the City of Copenhagen immediately after the war was updated with 'heavy' machinery. The team with Max B. had spent the war to develop an arsenal of different applications and solutions, so it was a solid base, upon which a new affiliate could be created in 1950. Viggo Troels-Smith became the first CEO, a position he held until 1952, when he was named Executive Assistant to the European IBM Vice President, and then again from 1960 until his death in 1980.

The punch card era in DK contributed to a number of solutions for the public sector: Danish Railroads, census and statistics, but most important salary systems, citizen registration and taxation systems. Also the insurance business was among the key industries at this time.

The cities of Copenhagen and Frederiksberg pioneered the use and applications in the municipal sector, and the 2 top salesmen in the IBM hierarchy, Renner Andresen and Willy Olsen, became the founding fathers for some of the most important Data Centers in the public sector. Already in 1953 the association of municipalities and the association of cities in the County of Copenhagen, created the first center serving several communities, but soon the idea was taken up by other parts of the public sector: Renner A. became the first CEO of Jydske Kommuners EDB-central in 1955. JKE eventually merged in 1971 with other municipal centers to create Kommunedata, now KMD. Willy Olsen formed Government Data Center, I/S Datacentralen of 1959, most likely based on a request the year before to IBM to enter into highly confidential planning discussions on a new taxation system – 'pay as you go' – instead of the traditional, declaration based system. Willy O. was in charge of IBM's team, and undoubtedly he spotted the business potential, yet it took almost 10 years before the work materialized in a very advanced citizen registration system and a new taxation system. Also one of the World's first Vehicle Registration System – based on the IBM 2321 Datacell with Teletype terminals – was installed in the late 1960's.

The 60'es marked the first decade with 'real' computers – from the IBM 701 to 1401 and then the 1410, that was claimed by old timers to be the first 'real' computer as it had multiplication and division as part of the instruction set, something the 1401 and other contemporary machines had to simulate. This gave rise to new, advanced solutions: Dansk Folkeforsikring installed the first 1410 in 1962, Handelsbanken entered the computing age at the same time. In 1963 Scandinavian Airlines Systems launched their first IBM based booking system, SASCO I, and in October 1965 a 'super computer' IBM 7090 was installed at the Danish Technical University after lengthy negotiations as a gift to the scientific World. It was part of Scandinavian/Dutch University network and named NEUCC – Northern European University Computing Centre. It was soon upgraded to an IBM 7094, which in fact was my first personal meeting with IBM Computing. (See Picture from NEUCC)

In 1966 Gentofte hospital installed an IBM 1800 process control computer and marked the first milestone of eHealth in Denmark. Landbrugets EDB-central, LEC, the data center for the Danish Agricultural Sector, was started in 1962 and got it's first 'real' computers also in the late 60'ies. At that time IBM launched a new series of systems, the IBM/360 with a new operating system – OS/360 – that would change the momentum of computing yet once more.

Looking back at the period from 1911 until 1970 the impact of the IBM organisation was due to a combination of strong marketing and sales skills, a clear fokus on internal training as well as education for customers, a dedication of systems engineers that helped customers define and develop new applications – and of course the steady development of equipment and partly SW. Not always leading edge, but with a firm reputation for quality.

I will discuss the major milestones of IBM Denmark in my next blog covering the period from 1970 and until today.