One of the world's leading computer makers in  the 1950s was an Italian typewriter manufacturer.Olivetti was founded in northern Italy as  a maker of fine mechanical typewriters.But the company's visionary leader Adriano  Olivetti fervently believed that  its future laid in electronics.He recruited a brilliant Chinese-Italian  from the United States to produce a  world-leading computer and they delivered.For a brief time, Olivetti was capable  of challenging IBM itself. Until tragedy  struck. In this video, we are going to  look at an Italian computer pioneer.## BeginningsMario Tchou (馬里奧·朱, Zhu) was born in  1924 in Rome, one of three children.His parents were Republic of China  diplomats to Vatican City. Italy  in the 1920s is experiencing the rise of  fascism. But Mario and his siblings lived  life in somewhat of a bubble, away from  the chaos and speaking Chinese at home.Mario proved to be a promising student  gifted with an analytical mind and a  proficiency in mathematics. Yet at the  same time, he had a talent for music  and a passion for philosophy. People who knew  him remarked on his cultured and elegant air.Over six feet tall, wicked  smart and quite handsome,  Mario had many girlfriends and easily  struck friendships with his classmates.  Those friendships would play a big  role in his future in computers.In the 1930s, Japan invaded the Republic of China  - starting the Second Sino-Japanese War. Italy's  military alliance with Japan - signed in 1940  with the Tripartite Act - made them Japan's ally.As a result, the Republic of China  closed its missions in Rome. Mario's  father Yin considered returning to  China but decided to take up a new  position so that his children might  continue their education in Italy.## MarioIn 1942, Mario entered the engineering  institute at the La Sapienza University.However, his father insists that Mario  goes to the United States rather than  Europe for his secondary education. So  Mario wins a scholarship to Washington DC.He spends the majority of World War II  in the United States, graduating with a  Bachelors in electrical engineering from  Catholic University of America in 1947.In 1949, he earns a masters from the Polytechnic  Institute of Brooklyn - now part of NYU.  Times were hard in America back then for a Han  Chinese. Mario studied during the day  and worked as an electrician at night.After a brief stint as a TV parts  consultant for a copyright law firm,  Mario becomes an associate professor at  Columbia University earning about $4,500 a year.  Very good money for the time, but  Tchou longs for his home in Italy.## OlivettiIn 1908, a man named Camillo Olvetti  founded the Olivetti Company in Ivrea,  a town in northern Italy.Born to a well-to-do family, Camillo worked  in London and toured the United States. There,  he saw the new inventions being created  by people like Edison and was inspired.He started producing typewriters on his own.  His first breakout typewriter was the M1. No  relation to the Apple chip. The Olivetti  M1 distinguished itself because it was  very well-made and people could rapidly  type on its keys. Underrated benefit.People loved the design and craftsmanship  of these Olivetti typewriters. Camillo  used to brag that his M20 typewriter not  only typed faster than its competitors,  but that you can throw it out of a window  without a dent. It was nigh indestructible.The company grew well. In the 1920s,  Camillo's son Adriano joins the business and  becomes general manager. He institutes new  work practices brought over from the  United States, which were successful.By 1933, the company and its 870 employees  produced nearly 25,000 typewriters a year.The next year, the company begins researching  and producing mechanical calculator machines.  In 1940, Olivetti introduces the Summa MC4S  adding machine, their first mechanical calculator.Then came the War. The Olivettis had  Jewish ancestry. Camillo passed away  in 1943 and Adriano flees to Switzerland in 1944.  He returns a few years after the end of the war.Business boomed in those post-war days. The  company grew its capital 10 times over from  1947 to 1951 on the back of strong export sales.  Their products not only retained their incredible  craftsmanship, but were also sold by an aggressive  salesforce. One French competitor complained:> The trouble with competing with  Olivetti is that, if you throw two  of their men out the door, another one  will be trying to climb into the window.Products like the Lexikon 80 typewriter are  recognized as iconic designs - worthy of a museum.  The Museum of Modern Art exhibited Olivetti  typewriters in 1952, saying in a brochure:> The Olivetti Company, many critics  agree, is the leading corporation  in the western world in the field of  design. For patronage in architecture,  product design, and advertising, it would  indeed be difficult to name a second …In some ways, Olivetti was like the  Apple of its day. Iconic design,  well-made products, and with a  visionary leader at the helm.## Pursuing the ComputerThat visionary Adriano Olivetti was racing  ahead towards the electronic future.In 1949, Olivetti struck a retail  sales partnership with the French  punched-card maker Bull. Bull had  just entered the computer business,  giving Adriano and Olivetti a  window into this technology.A year later in 1950, Olivetti tried  to start an Italian computer project  with Italy’s INAC ("National Institute for  Calculation Applications") computing center.  But the project did not move forward  due to a lack of government funding.This persistent pursuit of computers must  have confused many people. But Adriano was  convinced that the future was in electronics.  He foresaw the electronic data processor to  be at the heart of the "office of  the future", and wanted to make it.In 1952, Olivetti sets up a lab in New Canaan,  Connecticut to monitor new computer technologies.  Adriano wants a similar lab in Italy so he travels  to New York City to recruit talents to staff it.There are a few stories floating around about  how Adriano Olivetti and Mario Tchou first met.  I think one such story suggests that they were  introduced by the famous physicist Enrico Fermi.But this is what I think is most  plausible. Mario went to school  with a man named Guglielmo Negri.  Negri - himself a notable jurist in  his career - worked in Olivetti's  foreign trade office at the time.So when Adriano sought a talented  engineer for his lab, Negri put him  in touch with Mario. Mario recalled in a  later interview Adriano being impressed by  the Chinese-Italian's human qualities as well as  his obvious expertise in electronic computers.By the end of the job interview, the 30-year old  Mario Tchou decides that he will return to Italy  to run the Olivetti Electronic Research Laboratory  and puts in his leave of absence from Columbia.## PisaNow let us travel across the Atlantic to Italy.Sometime in the spring of 1954, the University  of Pisa received a large amount of money from  several local governments to help build a particle  accelerator designed by their physics institute.Unfortunately, the authorities eventually  built that synchrotron in a town closer to  Rome. This toppled egg onto the faces of  the Pisa physicists, who suddenly needed  to come up with something else to do with  this money to raise the area's prestige.After a long discussion in the summer of 1954,  they proposed to use some of the allocated funds  - worth about 2 million euro today - to build  an electronic computer for scientific research.Italy had recently imported two  of its first computers. Italy's  INAC had an English Ferranti  Mark I computer named FINAC.And Milan Polytechnic's Numerical  Computations Center bought a CRC  102A for scientific research and  educating people in computer science.Those two computers came from  other countries. This proposed  computer would be the first such  to be designed and built in Italy.However, local politicians - mayor  of Pisa Renato Pagni and provincial  President Antonino Maccarrone - leaned towards  skepticism. Synchrotrons and other such things  related to atomic energy were hot at  the time. Who cares about a computer?In response, the Pisa physicists  recruited the towering Enrico  Fermi - the Nobel-prize winning Italian  physicist. He is well known for his role  in designing the first nuclear  reactor and the atomic bomb.Fermi wrote a letter to the consortium in charge,  endorsing the computer option as "by far the  best choice". Read at a October 4th meeting,  the letter swayed the balance and everyone in Pisa  largely fell onto the idea of building a computer.The project sought a private partner,  and Olivetti leapt at the chance. In March  1955, Mario drew up a four-year plan for the  "Calcolatrice Elettronica Pisana" ("Pisa  Electronic Computer") or CEP project.A year later in May 1956, the  two sealed a formal agreement.  The university would provide  free access to any patents,  and Olivetti pledged 10 million lire in annual  expenditure and to loan staff for the project.The CEP was eventually delivered in 1961  after a year and a half delay. It operated  for about seven years and worked well. But  by then, the vacuum tube-based computer was  already far behind its global competitors. We  will remember it more for kickstarting ELEA.## The ELEA ProjectIn the spring of 1955, Mario recruits a  team of physicists and engineers to join  his laboratory. He specifically  wanted younger people, saying:> New things are only done with young people. Only  the young throw themselves into it with  enthusiasm, and collaborate in harmony  without ego and without the obstacles  derived from a conventional mindset.Of course, he himself was only about 30 at the  time. Over hundreds of job interviews, Mario  focused less on candidates' academic knowledge  and more on their ideas and real-world projects.The first hire, Lucio Borriello, remembers:> I was hired and arrived in  Pisa at the end of October 1955,  the first to arrive of the newly  forming group. Mario Tchou told me:  'You will take care of mass storage,' and  I internally wondered what that was ...They were all pioneers. In early 1956, the  laboratory was moved to a mansion in Barbaricina,  a residential suburb of Pisa. One  technician arriving there recalls:> Climbing to the first floor of the villa and  looking out to the balcony, you could see fields  and trees as far as the eye could see. In  this pleasant place, the thoroughbreds of  Dormello-Olgiata came to winter. In those years,  it wasn't unusual to see the great Ribot pass by.In case you are wondering like I  was, Ribot was a famous thoroughbred  racehorse. One of the most famous  of the 20th century. Continuing on …> Mario Tchou's office was furnished  almost spartanly with furniture produced  by Olivetti. I remember perfectly the rich  library with volumes all strictly in EnglishThere, the team self-educated  themselves on this new, dynamic field.## Machine Zero and the 9002After about a year, they eventually produce  their first computer prototype - "Machine Zero".This computer was based on a Von Neumann  machine and thus had a calculations unit,  a control unit to manage calculation operations,  and a central memory unit to store  both programs and program data.Machine Zero was later renamed  to the ELEA 9001. ELEA stands for  "Elaboratore Elettronico Automatico",  or "electronic automatic computer".This first ELEA 9001 was made from  wires and vacuum tubes. The tubes  were the size of eggs and ran extremely  hot. The thing functioned, but barely so.One spring day in 1957, Adriano  Olivetti, his son Roberto,  and other company executives arrived at  the factory to look at Machine Zero. People  recall Mario seemed nervous and a little  worried for the first time in a while.Mario showed the guests the new computer and how  it worked. Despite its shortcomings, Adriano was  sufficiently impressed to give the green light  for the next step in the computer project.The team plunged into that next big step  - transistors. Transistors were smaller,  used less power and did not have the same heat  issues. This second prototype - the 9002 - was so  successful that Mario and his lab of 30 convinces  Adriano to transistorize the whole thing.## SGSOne of the work's major issues  had been the lack of solid state  semiconductors. Later Elea computers would  use over 100,000 transistors and diodes.Adriano Olivetti, his son Roberto, and Mario  Tchou are all convinced that transistors and  other solid state electronics were  key to unlocking technology's future.But they did not want to import  them from the United States or  West Germany or the Netherlands. They  wanted to make them here in Italy.So in 1957, Adriano and his friend  Virgilio Floriani - founder of the  Italian telecommunications company  Telettra - partnered 50-50 to  found a company called Società  Generale Semiconduttori, or SGS.SGS sets up a small lab in Milan. A year later,  a factory in nearby Agrate to take advantage  of Milan's big industrial base. With a  design licensed from General Electric,  they start producing their  first germanium diodes in 1959.A year later though, they would reach  out to Fairchild Semiconductor and  license their planar process for producing  transistors - dumping germanium for silicon.One of the many talented engineers to  pass through SGS’s doors is Federico  Faggin - then just 19 years old. He later joined  Intel and helped design the Intel 4004  - the first commercial microprocessor.Over the next few decades, the company struck the  right balance of selective technology transfer  through partnerships and indigenous research  to carve out a good niche in linear circuits.SGS continues to survive to this day. In 1987 they  merged with the French semiconductor  maker Thomson to create SGS-Thomson.They later changed that name to  STMicroelectronics. Today they are  one of Europe's leading semiconductor makers - a  perhaps-surprising consequence of Olivetti's work.## The 9003The fully transistorized 9003 computer  is completed in 1959 and it is a beauty.Powered by SGS's germanium transistors, the  9003 was one of the first fully transistorized  stored-program computers - released  shortly after IBM's 7070 models in 1958.You can input information into the computer  using a keyboard, paper tape reader, and punch  card reader. It can output information to you  with a card punch, magnetic tape, or a printer.It was capable of performing 5,000  addition operations per second.  Which kind of sounds like a lot. To compare,  today's Nvidia H100 AI accelerator can do up  to 4 quadrillion floating point operations  each second. That also sounds like a lot.Notably, the computer used magnetic core  memory to store and run programs. This  system - also known as ferrite  core memory - is made up of sets  of tiny magnetic rings strung up  with fine copper wires in grids.Each of these rings can carry a magnetic field in  a clockwise or counter-clockwise direction. This  maps out to either a 1 or 0. This memory could  be expanded from 20,000 characters to 160,000.Workers on the ground floor of the 2-floor  Olivetti production factory in Milan wove these  core memories together by hand. This factory  would eventually employ a thousand people.Magnetic core memory is a predecessor to  the memory chips of today and it gave the  9003 the power to run up to 3 programs at  the same time - multiprogramming. If its  work were to be interrupted, then it could  run an automatic program to handle things.## 9003's DesignThe computer's industrial  design was crafted by the  Italian architect Ettore Sottsass  - the division's head designer.Sottsass faced a compelling  problem. He needed to create  a design for an entirely new category  of machines with no real precedents.He knew that the 9003 would be incredibly  expensive - about 9.2 million euro today.  As a result, the machine needed to look  good for its core buyers of universities,  banks, and government agencies.Like Adriano, Sottsass had a utopian vision for  computer technology. They envisioned a class of  bourgeois intellectuals working together  in an enlightened capitalist society.In such a world, a computer would  not be a machine like in a factory,  but rather furniture. Users at work  should be able to casually move around  their rooms and be surrounded by  their computer without discomfort.So Sottsass designed a modular, flexible system  made up of metal-framed cabinets, much like  furniture. The cabinets were given colored  stripes per their function. Sottsass wrote:> the computer is like a bull who fights in the  arena, and who has ribbons, because you decorate  bulls when they fights; the computer for me  is a bull ... it is like a powerful monsterYou can easily re-configure the setup.  In order to give it this flexibility,  the ELEA 9003 had a red-colored busway of  wires and power cables suspended above.  This was a big differentiator from the IBM  computers, which buried those under the floor.The design also considered ergonomic  and human factors. For instance,  the computer cabinets were about 150  centimeters tall. This was because  computers were very noisy so technicians needed  to be able to make eye contact with each other.This wonderful design won Sottsass the prestigious  Golden Compass industrial design prize in 1959.## Mario in the LabOver all this time, Mario Tchou  managed the lab with incredible skill.The Chinese-Italian was a natural leader.  He ran things with absolute authority,  but deftly employed that authority in such a  way to make people of all sorts and  backgrounds buy in to his mission.He was not a micromanager. Rather, he assigned  broad tasks and goals to his teams and let  them go about it without making a big deal of  how they did it. And like any great manager,  he shielded his guys from interference from  authorities back at headquarters in Ivrea.Mario's family upbringing in diplomacy endowed  him with the right tools to soothe big egos,  calm nerves and tensions, and give  everyone their own due. Despite the  high pressure and intense work,  they got along with each other.## Price and SellingThe first 9003 was installed in November 1959  in the headquarters of a Milan  textile factory called Marzotto.The second was installed at one of the world's  oldest surviving banks - the Monte dei Paschi  di Siena. This computer was eventually  preserved and can still be seen today.The computer received a fair amount of  publicity. Their computer factory was  featured in the popular magazine Epoca.  The Olivetti Film Office produced a  documentary called "Elea classe 9000", which  discussed how computers can help industry.Over forty 9003s were produced for customers -  eventually taking 30% of the Italian computer  market in the early 1960s. Customers included  banks, automotive clubs, and Eni the oil company.Then in April 1961, Olivetti launched a  cheaper version of the 9003 - the ELEA  6001. From 1961 to 1965, the 6001 would  sell about a hundred units to universities  and small businesses. It became a standard  toolset for university programming centers.## ChallengesDespite this success, ELEA  suffered many product challenges.First and foremost was the software. From the  very start, ELEA's development heavily focused  on its hardware aspects. It sort of makes sense.  Olivetti began with typewriters and hardware.For this reason, the ELEA 9003 development team  gave insufficient resources to the software,  which caused many problems later on.The small software team spent most of  their time studying high-level languages,  completely neglecting application software.  This was left to another team at Olivetti,  which scrambled to produce software for  whatever the customer needed. As a result  the innovative multi programming feature I  mentioned earlier was never used in practice.ELEA also suffered a cash issue.  Following IBM's practices,  these computers were not sold but rather  rented to customers. It should be fine in  the long term. But in the short term, revenue  fell short of cost - a cash timing mismatch.This problem was worsened by the fact that  Olivetti's computer efforts were entirely  self-funded without any financial support from the  national government. In an interview Mario said:> Currently, we can consider ourselves at  the same level [as our competitors] from  a qualitative point of view. However,  others receive enormous aid from the  State. The United States allocates  large sums for electronic research,  especially for military purposes. Great  Britain also spends millions of pounds.> Olivetti's effort is relatively notable,  but others have a more secure future  than ours, being helped by the State.This issue becomes far more serious for Olivetti's  computer division as the company  began to run into difficulty.## UnderwoodIn October 1959, Adriano purchases one  of his American competitors - Underwood.Underwood is a typewriter manufacturer  founded back in 1895. They had once  been an innovator. They were  the original inspiration for  Camillo Olivetti when he visited  the United States in the 1920s.But the company had fallen into distress.  They spent years paying a high dividend  rather than investing in their business -  leaving their equipment decades out of date.They allowed IBM and Remington Rand to leapfrog  them in the electronic typewriter market,  leaving them only with an overpriced product in a  declining manual typewriter market. Unable to find  an American acquirer, they finally took Olivetti's  offer - seeing it as "manna from Heaven".With this purchase, Adriano wanted to use  Underwood's massive commercial network  to tap the American market. Olivetti  America and Underwood combined would  gross over $90 million in 1959 revenues  - making it a major player in the market.Olivetti’s domestic market was losing tariff  protections due to the forthcoming European  Community. Taking over the American Underwood  factory would give greater access to the US.His management team examined the  books and were very worried but  Adriano believed he can turn them  around. Olivetti eventually spent  $92 million - nearly a billion dollars  today - to purchase 69% of the company.## TragedySadly, Adriano never made good on  his pledge to turn Underwood around.On February 27th, 1960, just a few  months after the Underwood takeover,  he died of an apparent heart attack in a  train in Switzerland. He was 58 years old.His death derailed the work  of integrating Underwood into  Olivetti. He was overseeing a stock sale  to fund the acquisition and making plans  for slimming down Underwood's  18 product lines to just 3.A year later in November 1961, tragedy struck  again. Mario Tchou was killed in a car crash.He had set out for a software development  meeting that morning in Ivrea - a two hour  drive away. He was riding in a Buick  Skylark with his company driver.He had apparently liked that car a lot,  jokingly telling designer Sottsass,  "You see now I am no longer  afraid to go from Milan to Ivrea."The fastest way there is the Milan-Turin,  back then a three-lane highway with a shared  passing lane. This lane was called "suicide  alley" for its frequent head-on collisions.One point where you have to go over a  railway bridge is particularly dangerous,  because there is little visibility. An  87-year old driver was driving a 2-3  ton truck and saw Tchou's Buick coming  at him after overtaking another truck.  The truck hit the Buick head-on,  killing both Tchou and his driver.Mario Tchou was then 37 years old, and  left behind a wife and two children.## Turmoil and SaleThese deaths came at the worst  possible time. Olivetti in the  early 1960s was a heavily leveraged company  in desperate need of stable leadership.Their bank debts grew almost five times over  from $7.6 million in 1958 to $32.5 million  at the end of 1963. Many of these  debts were held by American banks.This debt is almost entirely due to  the disastrous Underwood acquisition.  The subsidiary's net worth by  then was negative $8.6 million.At the same time, the company's fortunes were  hit by both a broad economic downturn and a  competitive upsurge from Japanese exports.  Warehouses filled with unsold products.Olivetti's publicly-traded shares fell from  11,000 lire at the start of 1962  to about 1,500 lire in March 1964.The company fell into financial  difficulty and had to be rescued.  As a result, the Olivetti family  lost control over their company to  an "Intervention Group" consisting  of Fiat, Pirelli and a few banks.The Group told top management and the Olivetti  family that the company had to either sell  Underwood or the electronics division. Management  managed to convince the banks that they can turn  Underwood around by closing sales branches and  replacing them with a network of sales agents.This left the electronics division. With the  Italian government uninterested in a bailout,  Olivetti sold a 75% share in their computer  division to General Electric in September  1964. This sale came a month after GE  bought the French computer-maker Bull.## P101The division had other products in  the works at the time of the sale.This included the 9004 - successor  to the 9003 - and the ELEA 4001 - a  medium sized calculator. Most  of these left to go to General  Electric. But a small team stayed  with the original Olivetti company.Pier Giorgio Perotto had worked with Mario  Tchou on the first ELEA project. He did not  want to move to GE so Roberto Olivetti  arranged to keep him and a few others  around. Perotto eventually started working  on a project that came to him in a dream:> I dreamed of a friendly machine  to which to delegate the operations  producing mental fatigue and error, a machine  that could docilely learn and then perform,  that stored data and simple and intuitive  instructions, whose use was within everyone’s  capacity, cheap and the same size as other  office devices which people already used.Sounds like a PC to me. Using newly available  silicon transistors, cheaper delay line  memory technology, and an innovative "magnetic  program card", they produced the Programma 101.The P101 was a programmable desktop calculator  kind of like the Wang 300 from Wang Labs.It can do the four big math  functions, square roots,  more. You can upload a program card and have  it execute operations on data in seconds.Introduced in October 1965, a year  before the Wang 300, it sold over  44,000 units in the United States. NASA bought 10  of them and used them for the Apollo 11 mission.Unfortunately, Olivetti's top management was busy  dealing with the labor impact of the mechanical  business's decline and could not easily pivot to  this new business of programmable calculators.It took another 3 years for Olivetti to  release a successor to the P101 - the  Logos 328 calculator in 1968. New  products took up to five years to  develop and release. The boom faded and  Olivetti hasn't been relevant since.## ConclusionI have read some conspiracy-mongering  about Olivetti's dual tragedies.That Adrian Olivetti and Mario Tchou were  murdered by the Americans to protect IBM's  computing monopoly. There is a book called "The  Mysterious Affair at Olivetti" talking about it.It is hard for me to buy into this theory. I don't  doubt that the CIA can do evil conspiratorial  things, but it is not uncommon for a 58-year  old man to die from a heart attack. And Tchou's  car accident did happen on a dangerous section  of highway. Sometimes a spade is just a spade.Pinning Olivetti's fall on some nefarious  American conspiracy cheapens the lessons  from their decline. The financial distress and  debt from the Underwood acquisition are more than  sufficient explanations. If Adriano so believed in  electronics being the future, why did he spend so  much more money on a failing mechanical typewriter  manufacturer? Perhaps he was dazzled by nostalgia.And success in the electronics division was  far from guaranteed even if both men lived.  Olivetti’s software deficiencies  were quite serious. And the Europe  of the 1960s was far from ready to adopt  computing - let alone personal computing.The one real question that I ponder is  why the Italian national government never  lifted a finger to save their national  champion computer maker. At least France  launched Plan Calcul after GE took  over their national champion Bull.What couldn’t the Italian government see in  the potential of funding their own IBM? It is  a real miss and it leads one to wonder what could  have been for Olivetti and the Italian computer.