The impetus for the 701's development was the outbreak of the Korean War in June 1950. At the onset of hostilities, IBM Chairman Thomas J. Watson, Sr., asked the U.S. Government what the company could do to help. Build a large scientific computer, he was told. One that could be used for aircraft design, nuclear development and munitions manufacture.
The company had already constructed one-of-a-kind large machines, such as the Automatic Sequence Controlled Calculator -- Mark I, for short -- developed in cooperation with Harvard University in 1944, and the Selective Sequence Electronic Calculator (SSEC) in 1948.
But to produce a number of clones of a single large-scale machine for multiple customers with varying needs represented a bold new challenge for IBM. In late 1950, Jim Birkenstock, the company's director of product planning and market analysis, set out to visit defense and aircraft firms to determine their requirements and the potential for a machine that would be useful in building aircraft, designing jet engines and performing other technical applications requiring many repetitive operations.
After IBM secured just 18 orders, Tom Watson, Jr., knew "that we were in the electronics business and that we'd better move pretty fast."
And move fast they did. In fact, design and construction of the Defense Calculator were undertaken almost concurrently. Actual design started on February 1, 1951 and was completed a year later. Assembly operations began in Poughkeepsie, N.Y., in March 1951. Actual assembly of the first production machine began on June 1, 1952, and it was shipped out six months later for installation in IBM's World Headquarters, at 590 Madison Avenue in New York City. Installation of the first 701 -- in the same space previously occupied by the SSEC -- was announced by the IBM on March 27, 1953. The 701 was some twenty-five times faster than the SSEC and occupied less than one-quarter of the space.