Evolution of the reseller, Part III: Agents of their own success
In which special agent Anderson recounts how the UK's channel revolution developed. Fleur Doidge reports
The story of the channel and computers is far from all being about the US. One of the earliest commercial microcomputers was devised and created by a Frenchman of Vietnamese descent, Truong Trong Thi, known as André. His machine, the Micral, was launched in 1973 - two years before the Altair - and he went to the US to promote it in 1974.
HP's 9830 BASIC language computer appeared in 1972, but was not followed by IBM's 5100 until 1975 - a complete computer system programmable in BASIC or APL, with a small built-in CRT monitor, keyboard and tape drive. It was very expensive, costing up to $20,000 (£12,558 in today's money).
IBM eventually became the personal computer manufacturer to finally achieve a truly mainstream and long-lived reach. And as far back as 1976, a British executive with manufacturing expertise was helping shape the channel business of the future at IBM.
In fact, Graeme Anderson is still at IBM, although these days he rejoices in the title of channel business development sales manager for the Business Partner Organisation, IBM UK and Ireland. We asked him how he knew the channel was the one for him.
"I had been running factories and things. I joined IBM as a systems manager with special expertise in the manufacturing industry, in what would become the small systems division - the General Systems Division (GSD). And they had just announced the previous year the System 32 (pictured, top of page), as the first small commercial computer, with a massive 128KB of memory," Anderson says.
"It was quite exciting. In fact it was fantastic. The reason I am still working with the channel 40 years on is that I think the whole area is so exciting and dynamic. It has been a privilege to be involved."
He notes that IBM's EMASS, CMASS, and DMASS were helping System 32 replace accounting machines in businesses, as well as functions such as payroll that were traditionally outsourced, with minimal in-house IT expertise. "IT was a bit expensive in those days," says Anderson. And then it all had to be matched with the right software.
"I was working in the Midlands branch selling to manufacturing companies," he says. "Salesmen would provide the customer with at least three potential software companies they could work with, and the customer would make the decision."
The Agent programme
As the number of companies expanded, this became an increasingly complex call for one vendor to make, however large. There were also the issues of geography, and size of the company and its customers, to factor in. So in the late 1970s, IBM devised its Agent Programme, probably one of the very first B2B IT channel programmes in the industry. Potential partners signed up to this, although initially they offered only IBM hardware.
"Some of these developed into individual companies. Some came from the US. Some had four, five, six or seven people, and some had several hundred," Anderson says.
"There were companies such as the Bloxwich Lock and Stamping Company. That was the sort of small company that was supplying into the market. They made drive panels for cars and they bought their first computer really to manage their product systems. There were lots of similar supplier companies."
Before joining IBM, Anderson himself had worked at one of the many computer bureaux that existed at the time, so he understands how laborious data handling used to be before the advent of affordable PCs.
Software had to be loaded on to floppy disks for customers, mainly for simple data transfer tasks, and then one would have to travel to the IBM office, for example, to order some batch processing on other computers, which would have to be run by expert technicians. "And a very large box of paper would then appear the next day," Anderson says.
"So when IBM introduced the first Unix box, the 6150, and System 3, both had a channel route to market. It was about solutions and distribution and providing logistics for selling the hardware," he says. "They were the first ‘reseller' channels."
Anderson notes that despite the number of players in the early days, he was certainly aware of Sir Peter Rigby's SCC, which was founded in 1975. Although there were older UK resellers that are still around - such as Leemic, a copier company founded in 1972, based in Stockport and Falkirk - there are few who can claim to have achieved the ongoing success of SCC.
"I worked initially with mainframe computers and I was trained as an engineer, working for Honeywell," says Rigby. "I ended up as the youngest branch manager, in the late 1960s, and then I decided I wanted to do my own thing, and started out with the computer industry with my own small business."
Rigby formed a recruitment consultancy called Specialist Computing Recruitment (SCR) - still going today - to provide some working capital, as getting into the IT industry in those days was very expensive. Outsourcer Specialist Computer Services (SCS) opened in 1980, followed by reseller SCC in 1982. For a broad-based reseller there was early product from the likes of Apple and Commodore from which to choose, and customers tended to be "those who really liked technology", he notes.
"But the thing that really got things happening was when IBM, Microsoft and Intel got together and launched the IBM PC. To my mind, having sold large, complicated computers to big corporations, these things called PCs, that was the creation of an industry standard. The potential of that type of product was huge. And most people who came out of a real computing background did not see it that way," he says. "Although they were a pretty mixed bunch."
The IBM dealerships were perhaps the most noticeable players in the early days. Some people moved into the industry because they were IT people, Rigby explains. "Others were just people who saw a business opportunity and wanted to get in at the start of an explosion," he adds.
This was a genuine chance to do well in a new industry, with new products and a long-term future. Little local companies providing computers for businesses began to spring up around the UK. "So that is why I became one of the first UK resellers," says Rigby (pictured, right). "And at the same time, I had also bought a couple of computer bureaux organisations - today they would be called a service provider, they offered payroll and things sold as a service."
Change had really begun to gather pace towards the end of the 1970s. The year 1978 in particular saw the buzz increase when a Croatian migrant called Angelo Zgorelec started up Europe's first computer magazine, Personal Computer World, in February after admiring one of the new-fangled gadgets in the window of London's first computer store, The Computer Workshop.
Then 1979 saw the Midwich Computer Company founded by David and Ruth Watson in Rickinghall, Suffolk, to design and distribute microprocessors and systems, and Island Computers, an independent UK reseller which still operates from the Isle of Wight. By 1980, the first one million personal computers had been sold.
Our fourth and final instalment of the Evolution of the Reseller series will be on the continuation of the IT reseller evolution through the 1980s and 1990s.