Anthony M. Townsend - Smart Cities - Big Data, Civic Hackers, and the Quest for a New Utopia

No longer a government employee, and protected by an array of carefully written patents, Hollerith proceeded to fleece his former employer. Instead of selling the machines outright to the Census Office, he leased them. In a particularly usurious move, he developed a rate structure based on the number of cards counted, thus ensuring that the explosion of data gathering would create an equally explosive flow of revenue for his company. With practice, census workers could process five hundred to seven hundred cards per day.17 At a rate of 65 cents per thousand cards tabulated, that entitled him to over $6,000 a year in fees per tabulator—more than the cost of the machine itself! To top things off, he required the government to use his Tabulating Machine Company as the sole supplier of punch cards.

Renting the machines to his customers rather than selling them outright was also part of a calculated effort to protect the machines from copycats. Hollerith’s experience as a patent consultant had taught him the urgency of capitalizing on his technological lead.19 Retaining ownership and handling all of the maintenance and repair of the machines helped Hollerith conceal how the machines worked and the details of their design. But after he jacked up rental rates in advance of the 1900 census, the new Census Bureau made the decision to build its own tabulating machines for the 1910 count. By then, however, Holleriths success was no longer in question.

The market for tabulating machines was expanding rapidly. In the quarter-century following its 1890 debut, Holleriths invention was put to use in censuses conducted by governments around the world, including Austria, Norway, Canada, and Russia.

But the tabulators future was in industry, not government. In 1893 Luigi Bodio, the director of Italy’s census, prognosticated that “the time will come when the railroads, the great factories, the mercantile houses, and all the branches of commercial and industrial life will be found using the Hollerith machines as a matter of not only economy but necessity.” Railroads, the industry at the epicenter of the control revolution, were eager customers. By 1910 Hollerith’s subsidiaries were supplying machines to tabulate accounting ledgers and freight manifests throughout North America and Europe.

In 1911, after a lengthy legal and lobbying battle that ended in a termination of his contract with the Census Bureau and probable infringement on his patents by the US government, Hollerith was ready to cash out. At the invitation of Charles R. Flint, the great mergers-and-acquisitions tycoon known as the “Father of Trusts,” Hollerith accepted an offer to merge his Tabulating Machine Company with two other firms. With a million-dollar windfall and a cushy salary, he eased into retirement.

The crisis of counting set in motion at the birth of the American republic over a century earlier and brought to a head by the explosive growth of industrial cities was now over. But its solution, Hollerith’s tabulating machine, had set the stage for a far greater transformation. For the company formed from that merger, the prosaically named Computing-Tabulating-Recording Company, would pursue an ever-expanding market for information processing throughout the next century. In 1924, under the leadership of Thomas J. Watson, it would take a new name—International Business Machines Corporation.

Big Blue

Fast-forward to 2011, a big year for the company that came to be known as “Big Blue.” It’s the one-hundredth anniversary of the merger that launched Hollerith’s punch- card enterprise on its way to global domination and built a big business processing the big data of government and business. Throughout the twentieth century, IBM’s pinstripe-suited engineers personified corporate America. But in 1993, after a long decline driven by growing competition in its mainframe and personal computer businesses, Big Blue hit rock bottom, posting an $8.1 billion operating loss. That year CEO Louis Gerstner Jr., a veteran of RJR Nabisco and American Express, embarked on a radical transformation plan. The new IBM would focus solely on services and integration of large-scale, complex information systems. In 1995 the company abandoned its famously strict employee dress code. A decade later, in 2004, it was ready to jettison the personal-computer division that had so recently defined it.

The new IBM wasn’t a staid purveyor of hardware; it was a general contractor for planetary-scale computing. Less than three years before the centennial, in 2008,company chairman Sam Palmisano had launched IBM’s Smarter Planet campaign in a speech to the Council on Foreign Relations. If Siemens and Cisco aim to be the electrician and the plumber for smart cities, IBM’s ambition is be their choreographer, superintendent, and oracle rolled into one.

While Smarter Planet is a snazzy spin on a new marketing push, IBM has a long history of building truly globe-spanning computer systems. The company boomed after the Second World War, as the consumer economy swelled and carried American firms along with it. Rising international trade, the settlement of the Sun Belt, and increasing leisure time drove a swift expansion in air travel. Much like the management crisis created by the spread of railroads a century before, airlines couldn’t keep up with the acceleration of commerce they were enabling. After a chance encounter on a long flight in 1953 between C. R. Smith, the president of American Airlines, and a young IBM salesman, IBM began planning a replacement for the company’s archaic paper-based ticketing system. By 1960, drawing directly on its work in the mid-1950s building the massive SAGE (Semi-Automatic Ground Environment) air-defense computer system for the United States Air Force, IBM installed the eponymous SABRE (Semi-Automatic Business Research Environment) for the commercial airline. For the first time, travel agents could call into a specially designed computer center where airline reps could instantly browse available seats. SABRE cut the processing time for reservations from an average of ninety minutes to just a few seconds. As an exhibit at IBM’s global headquarters celebrating the centennial proclaimed, “What once took hours could now be done in real-time.” A half-century later, after countless upgrades, the fully automated descendant of SABRE still processes over forty thousand bookings per second for dozens of airlines worldwide.

SABRE opened a new chapter in the control revolution. As IBM’s corporate historians boasted, “For the first time, computers were connected together through a network that allowed people around the world to enter data, process requests for information and conduct business.” It didn’t just let American coordinate its operations better; it revolutionized air travel and set the stage for economic globalization and the urban explosion that revolution would unlock. It presaged “the entire universe of electronic commerce that exploded in the mid-1990s.”

The legacy of SABRE is written all over Smarter Planet. Colin Harrison, one of the firm’s “Master Inventors,” helped launch IBM’s efforts to apply its technology to urban problems before retiring in early 2013. As bombastic as IBM’s historians may be, Harrison was typical of the company’s cadre of inventors, a brilliant yet humble practitioner. His bio lauded many achievements, including leading the development of the first commercially useful MRI system in 1978, but also his “many failed innovations,” including an intriguing one named “magnetic bubble memories.”25 For Harrison, the weaving of SABRE-like information systems into everything was an inevitable historical process. “Over the last two decades,” he explained in 2011 at a conference in New York, “the planet became wired for transactions. The global supply chains that existed for centuries suddenly became instrumented,” fitted out with sensors that could track the movement of people, goods, and money. Manufacturers could track operations and sales worldwide, in real time. Suddenly, suppliers could tap into their customers’ mainframes to update delivery schedules. Consumers increasingly got glimpses of this new commercial apparatus, like the package-tracking services provided by carriers such as UPS and FedEx. Streams of sensory data gave companies a holistic new vantage point, according to Harrison—“you could see patterns in what was going on in your particular ecosystem.” Frustratingly though, while “during that period this approach to managing was adopted by almost every industrialized domain of human activity,” he argued, local governments lacked the networks needed to plug their systems together.