Oct 24, 2021
Gene Amdahl grew up in South Dakota and as with many during the early days of computing went into the Navy during World War II. He got his degree from South Dakota State in 1948 and went on to the University of Wisconsin-Madison for his PhD, where he got the bug for computers in 1952, joining the ranks of IBM that year.
At IBM he worked on the iconic 704 and then the 7030 but found it too bureaucratic. And yet he came back to become the Chief Architect of the IBM S/360 project. They pushed the boundaries of what was possible with transistorized computing and along the way, Amdahl gave us Amdahl’s Law, which is an important aspect of parallel computing - how much latency tasks take when split across different CPUs. Think of it like the law of diminishing returns applied to processing. Contrast this with Fred Brook’s Brook’s Law - which says that adding incremental engineers don’t make projects happen faster by the same increment, or that it can cause a project to take even more time.
As with Seymour Cray, Amdahl had ideas for supercomputers and left IBM again in 1970 when they didn’t want to pursue them - ironically just a few years after Thomas Watson Jr admitted that just 34 people at CDC had kicked IBM out of their leadership position in the market.
First he needed to be able to build a computer, then move into supercomputers. Fully transistorized computing had somewhat cleared the playing field. So he developed the Amdahl 470V/6 - more reliable, more pluggable, and so cheaper than the IBM S/370. He also used virtual machine technology so customers could simulate a 370 and so run existing workloads cheaper. The first went to NASA and the second to the University of Michigan. During the rise of transistorized computing they just kept selling more and more machines.
The company grew fast, taking nearly a quart of the market share. As we saw in the CDC episode, the IBM antitrust case was again giving a boon to other companies. Amdahl was able to leverage the fact that IBM software was getting unbundled with the hardware as a big growth hack. As with Cray at the time, Amdahl wanted to keep to one CPU per workload and developed chips and electronics with Fujitsu to enable doing so.
By the end of the 70s they had grown to 6,000 employees on the back of a billion dollars in sales. And having built a bureaucratic organization like the one he just left, he left his namesake company much as Seymour Cray had left CDC after helping build it (and would later leave Cray to start yet another Cray). That would be Trilogy systems, which failed shortly after an IPO. I guess we can’t always bet on the name. Then Andor International. Then Commercial Data Servers, now a part of Xbridge systems.
Meanwhile the 1980s weren’t kind to the company with his name on the masthead. The rise of Unix and first minicomputers then standard servers meant people were building all kinds of new devices. Amdahl started selling servers, given the new smaller and pluggable form factors. They sold storage. They sold software to make software, like IDEs. The rapid proliferation of networking and open standards let them sell networking products.
Fujitsu ended up growing faster and when Gene Amdahl was gone, in the face of mounting competition with IBM, Amdahl tried to merge with Storage Technology Corporation, or StorageTek as it might be considered today. CDC had pushed some of its technology to StorageTek during their demise and StorageTek in the face of this new competition ended up filing Chapter 11 and getting picked up by Sun for just over $4 billion.
But Amdahl was hemorrhaging money as we moved into the 90s. They sold off half the shares to Fujitsu, laid off over a third of their now 10,000 plus workforce, and by the year 2000 had been lapped by IBM on the high end market. They sold off their software division, and Fujitsu acquired the rest of the shares. Many of the customers then moved to the then-new IBM Z series servers that were coming out with 64 bit G3 and G4 chips. As opposed to the 31-bit chips Amdahl, now Fujitsu under the GlobalServer mainframe brand, sells.
Amdahl came out of the blue, or Big Blue. On the back of Gene Amdahl’s name and a good strategy to attack that S/360 market, they took 8% of the mainframe market from IBM at one point. But they sold to big customers and eventually disappeared as the market shifted to smaller machines and a more standardized lineup of chips. They were able to last for awhile on the revenues they’d put together but ultimately without someone at the top with a vision for the future of the industry, they just couldn’t make it as a standalone company.
The High Performance Computing server revenues steadily continue to rise at Fujitsu though - hitting $1.3 billion in 2020. In fact, in a sign of the times, the 20 million Euro PRIMEHPC FX700 that’s going to the Minho Advanced Computing Centre in Portugal is a petascale computer built on an ARM plus x86 architecture. My how the times have changed. But as components get smaller, more precise, faster, and more mass producible we see the same types of issues with companies being too large to pivot quickly from the PC to the post-PC era. Although at this point, it’s doubtful they’ll have a generations worth of runway from a patron like Fujitsu to be able to continue in business. Or maybe a patron who sees the benefits downmarket from the new technology that emerges from projects like this and takes on what amounts to nation-building to pivot a company like that. Only time will tell.