7 April 1964: IBM bets the company on System/360
On April 7, 1964 IBM announced System/360, a family of compatible computers that could run the same software from small models to large ones. Development reportedly cost around $5 billion, more than IBM's annual revenue, and insiders called it a bet-the-company project. It worked spectacularly. Customers locked in, IBM dominated mainframes for decades, and descendants of the 360 architecture still run banks and airlines today.
The lesson: The best moats are often built by making it painful for customers to ever switch away.
What it meant for investors
$1,000 in IBM at the start of 1990 → $12,083 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. That is 12.1 times the money, but $7,345 less than a plain index fund made over the same years.
What IBM teaches: Buybacks cannot substitute for growth; IBM spent tens of billions shrinking its share count while revenue declined, and the stock went nowhere for years.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $24.00 | $12,083 | $19,429 |
| 1995 | $18.00 | $16,111 | $14,783 |
| 2000 | $110 | $2,636 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought IBM? Every starting year and the full story →
More IBM history
- 11 May 1997: Deep Blue beats Kasparov
- 12 August 1981: IBM launches the personal computer
- 28 October 2018: IBM bets $34 billion on Red Hat
- 7 December 2004: IBM sells its PC business to Lenovo
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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