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With IBM clearly on top in the early '60s, Watson took one of the biggest gambles in corporate history. He proposed spending more than '5 billion -- about three times IBM's revenues at the time to develop a new line of computers that would make the company's existing machines obsolete. The goal was to replace specialized units with a family of compatible computers that could fill every data-processing need. Customers could start with small computers and move up as their demands increased, taking their old software along with them. This flexibility inspired the name System/360, after the 360 degrees in a circle.

Ultimately, System/360, which revolutionized the industry, proved to be wildly successful as well. IBM's base of installed computers jumped from 11,000 in early 1964 to 35,000 in 1970, and its revenues more than doubled, to '7.5 billion. At the same time, IBM's market value soared from about '14 billion to more than ' 36 billion.