back later for the results. The bureau provided customers with advanced information processing on-demand, thereby eliminating the cost of maintaining and staffing an EAM installation. Depending on the volume of data to be processed, using a service bureau tended to be more expensive per transaction than using one’s own installation. Users had a choice. If one had a low volume of transactions then the economics favored the service bureau, but if one had a high volume of transactions it was cheaper to have one’s own installation.
From top photograph Courtesy oF ibm, adp, daVid l. mills
In 1949 a small firm, Automatic Payrolls Inc., was founded in New Jersey and used a variant of the service bureau business model. The firm specialized in payroll processing. It developed its own procedures—at first using bookkeeping machines, and then punched-card machines that were programmed with plug-boards. It would send a van to its customers to collect time sheets or punched cards, process the data, and drop off the results to its customers later. This made excellent business sense not only for organizations that did not want to maintain a bookkeeping machine or an EAM installation, but also for firms that simply wanted to offload the non-core activity of managing the payroll. In 1958, the company changed its name to Automatic Data Processing Inc., or simply ADP, and in 1961 it acquired an IBM 1401 computer. ADP expanded into new locations and by the mid-1960s it was using the emerging capabilities of data communications to eliminate some of the physical collection and return of data.
introduced in 1937, the iBm 77 collator rented for $80 a month. it was capable of handling 240 cards a minute, and was 40. 5 inches long and 51 inches high.
top: henry taub (left) in aDP’s first computer room. Bottom: teletype.
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