ICL’s roots, creation and demise, chart the story of the twentieth century UK computer industry. Diverse firms came together, striving first for domestic scale (with Government support) and then global competitiveness (with international influence). This short, anecdotal account touches on some themes and references oral histories in the Archives of IT of a sample of many of the employees who were, or became, industry figures.
Part 1: Building a British industry
Tony Benn’s Ministry of Technology in Labour’s, Wilson Government created ICL in 1968 through the Industrial Expansion Act, to compete with IBM.
After World War II, fledgling UK computer manufacturers excelled in technology. Ferranti was developing machines based on world-leading university designs, including the ground-breaking Atlas.
Elliott Brothers / Automation had their 152 model and English Electric (EE) acquired the computer interests of the Marconi Company. LEO Computer established the first commercial computer application, the Lyons Electronic Office. Frank Land recalls a DIY approach, 'The management of Lyons had started the Lyons Electronic Office (LEO) by building their own computer and decided to recruit people in-house to join the LEO team.'
Bill Ellis (later of Software Sciences) recalls starting his career at The British Tabulating Machine Company (BTM), working on the Hollerith punch card driven device, and ending up at ICL through a series of mergers in which International Computers and Tabulators (ICT) was formed from BTM and Powers-Samas and then came together with the English Electric Leo Marconi company in 1968 to form ICL.
ICL inherited two mainframe products: the ICT 1900 series and, from EE, the System 4 range. The EE order books were full, while ICT (with twice as many employees) was struggling. The System 4 was IBM-compatible, while the 1900 was out of step, using 6 bit characters in a 24 bit world. The 1900 was almost phased out, but political pressure, under a Labour government saved it.
ICL initially thrived but depended on the UK public sector. Ninian Eadie as Sector Manager for Government, Defence and Universities, recalled 'The government was a big customer for ICL as they had a procurement policy of buying from the British company,' while as Regional Manager responsible for financial institutions throughout the United Kingdom, selling 1900s to insurance companies, banks and stockbrokers, 'The main competitor was IBM, as the big financial institutions felt they were safer with the larger company.'
Technical innovation was a strength and a working party recommended developing a new range of machines offering 'acceptable compatibility with the current ranges of both companies' to compete better in the market and help unify the organisation. The design drew on many sources, including the Manchester University MU5 and in 1974 the 2900 series was launched; two years late but the VME (virtual machine environment) operating system was a world leader. Ground-breaking hardware, such as CAFS (Content Addressable Filestore), DAP (Distributed Array Processor) and the Unix-based Advanced Graphic Workstations were inspirational, if not financial successes.
Customer satisfaction, though, was an issue. Sir Peter Gershon started his career at ICL and recalls that, 'Most of the customers were unhappy with these computers as they had many technical problems... the government had a policy that every computer over a certain size was bought from ICL. The people who Sir Peter was dealing with were often resentful as they did not like being told what to do and the computers were not always fit for purpose.' At one point the ICL MD, Dr Chris Wilson, asked Charles Hughes to lead a Government Relations Improvement Programme; GRIP for short.
Government policy and people
The 1970s and 80s were a period of economic and industrial turbulence and not everyone saw benefit in a domestic computer industry.
Recession in the computer market threatened development of the new range and Ted Heath’s Tory Government of 1970 was noninterventionist. Nevertheless, ICL got preferential procurement treatment and £40m in loan aid. Labour returned in 1974 and the National Enterprise Board took a 25% stake in ICL. The rest of the 1970s was a very good period for ICL, with 20% pa growth.
In 1981, though, ICL made a loss of £18.7 million, following fiercer competition from the IBM 4300, unfavourable exchange rates and costs for developing a new lower-end range. Margaret Thatcher was in power and opposed to supporting the industry. Kenneth (now Lord) Baker, recalls trying to persuade Mrs Thatcher of the importance of Information Technology. As a result, the Ministry of Information Technology was created and became 'responsible for the reconstruction of the British computer company, ICL.' This time, the Government gave loan guarantees to keep the company independent.
Part 2: A new era
With the loan guarantees came Sir Christopher Laidlaw as chairman and Robb Wilmot, ex-Texas Instruments, as MD. Wilmot, just 36, cancelled the in-house development of large-scale integrated circuit (LSI) technology and negotiated an agreement for Fujitsu’s LSI and packaging technologies. This made possible the Series 39, level 30 and 80 computers; a huge step in hardware technology. In 1982 Christopher Laidlaw was knighted for his efforts.
In 1984, Standard Telephones and Cables (STC) took over ICL but the merger was soon followed by a financial crisis at STC, leading to Arthur Walsh becoming chief executive of STC. Peter Bonfield, who had joined ICL at the same time as Robb Wilmot, was made Chairman and MD of ICL. Within a few years ICL was contributing 60% of the profits of the combined group.
Fujitsu’s involvement, though, increased, becoming sole shareholder by 1998. Sir Peter Bonfield recalls, 'It was challenging to convince the customers that they were not going broke'. Sir Peter travelled around to all the major customers for the first twelve months, explaining to them that it was all going to be alright, and that they were doing the link with Fujitsu who were very highly regarded. ICL operated in 85 countries around the world. He found the Fujitsu management excellent.
ICL could not compete with US competitors in the hardware business and moved increasingly to services. ICL Dataskil (and other services units) developed software products and delivered client projects. As Sales and Marketing Director for the customer service organisation, Charles Hughes was a champion for services and put in place an overall strategy which pulled everything together under a single banner and got the software and professional services businesses growing in excess of 30% per annum.
In the early 1990s this profitable area was 50% of turnover - ICL was number one in British computer services - and it had one of the highest returns on capital in the industry.
With things going so well, Fujitsu was expected to float ICL. Keith Todd stepped up to take the top job when Peter Bonfield went to BT and promised that ICL would be floated by the end of 2000.
That was not a good year though! In the aftermath of the Year 2000 (Y2K) boom the company was loss-making and hi-tech valuations had plummeted. Fujitsu shelved the plan, prompting Keith Todd to resign and within two years the ICL brand had disappeared.
Archives of IT (AIT)
This article appears courtesy of the Archives of IT (AIT), a charity (No: 1164198) committed to Capturing the Past and Inspiring the Future of the UK IT and communications industry.
It is an expanding digital database of interviews and media from leading people involved with UK IT to help understanding and encourage study amongst current and future stakeholders. To see the material we have gathered, visit www.archivesit.org.uk. Follow us @ArchivesIT