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The LEO Computer

August 5, 2003

A public radio commentary

I have a tale to tell you with a moral for today's computer business. It's the true story and cautionary tale of the world's first office computer. And its source is the most unlikely entity: A British tea shop.

The British firm J. Lyons and Company sold tea. Or at least they did at first. Founded in 1887 they found a niche in feeding the crowds at exhibitions and trade fairs. By the 1940s the company led the field, but also made and sold all sorts of cakes, confectionery, coffee and tea, and ran a chain of teashops and restaurants, one of which seated 4,500 people.

The company ran on a culture of self-sufficiency doing everything in-house - from manufacturing new bread ovens to operating tea plantations. They also printed the packaging for every product, and even laundered their waitress's uniforms.

Keeping track of this huge amount of activity took a whole fleet of clerks and accountants. To head them they hired, in 1923, a star Cambridge math graduate. This man, John Simmons, set up a think tank that guided Lyons every logistical move.

By the 1940s, Simmons and his staff were dreaming of a machine that could track their accounts. They knew of ENIAC, the computer developed at the University of Pennsylvania to crunch numbers for the military.

So, just after the second world war, Simmons convinced the Lyons Board of Directors that they should use that newfangled thing called the computer. Now there were of course, no computers to buy off the shelves at the time, it was 1947. So, they formed an alliance with Cambridge University to build their own. Called the LEO - the Lyons Electronic Office - it succeeded in keeping track of all the buns, teas, and crumpets made by the Lyons Tea Company. Based on this success they chose to expand even further. They formed LEO Computers Limited to sell ... computers! Here Lyons tried to duplicate their success in the manner they did with tea. They tried to control everything: building the computers, writing the programs, making input tape readers and output printers, and they even invented their own programming language. The LEO Computer Company died a quick death as it was acquired by a company that was soon acquired by another. In the midst of all this IBM came on strong, taking over the world with its computers.

The computer world has now gone the way of specialization, so what is the caution here? I've been keeping an eye on Microsoft. A company for whom the Windows operating systems is as central as tea was to the J. Lyons Company. I've noted that Microsoft has now moved into making XBoxes for gaming, started Microsoft TV, operates the MSN web site, runs a cultural magazine called Slate, and even makes watches - all of which lose money. Does this sound familiar? Perhaps they should study the J. Lyons and Company tea shop-computer story.

Copyright 2003 William S. Hammack Enterprises