[ECKERT, J. Presper and John MAUCHLY.] "Outline of plans for development of electronic computers" [sic]. Typescript and carbon typescript. Headings underlined in red. N.p, 3/13/46 (date in ms. on final sheet). 8 sheets.
THE FOUNDING DOCUMENT IN THE ELECTRONIC COMPUTER INDUSTRY. From this small beginning the entire electronic computer industry followed. IBM would not venture into electronic computing until several years later. The BINAC produced by Eckert and Mauchly would be the first operational electronic computer produced in America, and the first electronic computer that was sold in the world. This would be followed by the UNIVAC I.
When Eckert and Mauchly developed their business plan there was no such thing as "venture capital" and the concept of electronic computing was hardly convincing to banks. They were forced to use their imaginations to get their company off the ground.
Five weeks after the unveiling of the ENIAC on February 14, 1946, Eckert and Mauchly resigned from the University of Pennsylvania's Moore School over a disagreement about patent rights. The University of Pennsylvania did not have a formalized patent policy in the 1940s, but its general policy barred faculty members from obtaining private patents based on university research. Since the ENIAC was not strictly a university project, however, having been funded by the United States Army, Dean Harold Pender of the Moore School, in a letter written in 1944, granted Eckert and Mauchly special permission to file independently for the ENIAC patent. This permission was repeated, with certain restrictions, in a letter written to Eckert on March 15, 1945 by the president of the University of Pennsylvania, George McClelland.(See the first lot in the beginning of the description of this archive.) After World War II the University's lenient attitude toward the patent issue changed: the military was now requiring that all academic institutions seeking research contracts have uniform patent policies (i.e., no special dispensations), and the university was becoming increasingly unhappy with Eckert and Mauchly's desire to profit from the work they had done while at the university. On March 22, 1946 Dean Pender asked Eckert and Mauchly to sign an agreement giving the university the patent rights to all work done on the stored-program EDVAC then under development and on any future machines as a condition of remaining at the Moore School. Unwilling to agree to this demand, Eckert and Mauchly left the Moore School's employ on March 31, 1946.
Eckert and Mauchly were convinced that a postwar market existed for the new digital electronic computing technology, believing that the future of computing, in Eckert's words, would be "more furthered by manufacturers who make [computers] quickly and cheaply as possible so that a lot of people can get their hands on them than it would be to perfect them somewhere in more detail for a long while in universities" (McCartney , ENIAC (1999), 137-38). They accordingly decided to found their own computer manufacturing company, and drew up the above eight-page business plan outlining the company's objectives and financial requirements (as the date on the last page of this document indicates, Eckert and Mauchly were working on this plan even before their departure from the Moore School).
THIS WAS THE BUSINESS PLAN FOR THE FIRST ELECTRONIC COMPUTER COMPANY IN THE WORLD. In considering this business plan more than fifty years later, we should not underestimate what a revolutionary undertaking it was. Eckert and Mauchly's next task was to find an institution willing to contract for one of their machines. After interviewing with several agencies, they found a customer in the National Bureau of Standards, which wanted one of the new machines for the United States Census Bureau. After drawing up the necessary partnership papers and choosing a name for their business, Eckert and Mauchly leased a converted dance studio in Philadelphia and launched their Electronic Control Company (ECC) in October 1946. Mauchly was president of the new firm, and Eckert was vice president.
The first three pages of Eckert and Mauchly's business plan describe their new company's objective, which was "to design and develop a multi-purpose rapid computing machine of moderate cost" (p. 1) for use in both scientific and business environments. Reflecting their financial naiveté, the two men conjectured that they would be able to market such a machine for less than $30,000 and possibly for as little as $5,000. Page four lists five company names then under consideration (Electronic Control Company is second on the list); this is followed by the company's "Statement of Purpose," and by a list, continuing over the next three pages, of "the extent and variety of devices and equipment which are now foreseen as subjects of possible development or improvement by the engineering and research work of the proposed company" (p. 4).
The partners' vision here was both far-reaching and prophetic: going beyond the computer's obvious scientific and commercial uses (stated in items 1-4 of the list), Eckert and Mauchly imagined the application of electronic computing and control devices in navigation, hydraulics, automatic artillery fire control, various industries (including textiles, printing, petroleum and rubber), and the manufacture of musical instruments. On page 3 Eckert and Mauchly made the following assertion with regard to patents: "It should be pointed out that the development here proposed is based on prior development work done for Army Ordnance using government funds. Some of the devices which are to be used are at present still under security classification. No patents as yet issued, but the work of filing patents is now in progress. The inventors, who will head the proposed company, are required to give the government a royalty-free license (non-exclusive) and have agreed to license educational institutions to build and use such devices for non commercial purposes. The inventors now hold the commercial rights under all patents which will issue."
The final page, titled "Tentative basis for estimate of funds required," presented the partnership's estimated operating expenses for a three-year period; these projections were absurdly low, as Eckert and Mauchly would soon discover. OOC 1116.