´Prestige luster´ and ´snow-balling effects´: IBM´s development of computer time-sharing

In the middle 1960s IBM responded to pressure from its most prestigious customers to hasten the development and availability of computer time-sharing systems. When MIT and Bell Laboratories chose General Electric computers for their new time-sharing system, IBM management feared that the "prestige luster" of these customers would lead other customers to demand the same capabilities and that there would be a "snow-balling" effect as more customers rejected IBM computers. IBM worked on a time-sharing product and brought it to market by the end of the decade despite greater-than-expected costs. Meanwhile MIT, Bell Laboratories, and GE worked together on a new time-sharing system known as Multics. By examining IBM\´s role in and response to the development of time-sharing, the article illustrates the nontechnological criteria that even high-technology companies use to decide what products to develop and market.<>