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Rethinking Research

Almaden’s dramatic progress in magnetic recording is all the more remarkable when you consider its institutional history. In the early 1980s, IBM’s research division had a reputation for performing brilliant work that had little relevance to the company’s business. And even when the labs did produce findings that had commercial implications, the handoff to product groups was often fumbled, allowing other companies to capitalize on IBM’s research breakthroughs before IBM did. By 1981 IBM had fallen so out of touch with the market that Big Blue had to cobble together its first PCs out of components-including disk drives-made by other companies.

The Almaden building itself is a throwback to the great research labs of the past, surrounded by hundreds of millions of dollars worth of empty real estate, where the only sound is the wind sweeping over the Santa Teresa foothills. Conceived in the late 1970s when IBM had money to burn, Almaden was to be a showcase institution for pure research on a par with AT&T’s Bell Labs, Xerox’s Palo Alto Research Center, and IBM’s own research facility in Yorktown Heights, N.Y. By the time the building was completed in 1985, though, the climate for corporate R&D had changed. New CEO John Akers-a man who liked to use words like “cost containment” and “streamlining” when describing IBM’s mission-toyed with the idea of dismantling the research division altogether and dispersing its employees into various product groups.

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