Dominance.

By the mid 1960s IBM so dominated the computer industry that business insiders often spoke of "IBM and the Seven Dwarfs," which referred to IBM and the other major computer manufacturers. Its supremacy had been established in the early 1950s when it surpassed computer pioneer Remington Rand (later merged into Sperry Rand). IBM continued to eat up the market share, as the industry went through several generations. The first computers were giant machines using vacuum tubes. Vacuum tubes gave way to transistors in the second generation of computers, but it was the third generation that really gave IBM the edge.

The 360 Series.

IBM's 360 line of computers debuted in 1965 after a $5 billion investment. This new series used integrated circuits instead of transistors and revolutionized the industry for the next several years. The new circuits made miniaturization possible and allowed for a...