Since its inception in 1957, the Company has gone through significant changes. Being an opportunist and thanks to IBM and the Justice Department in 1956 when the entire computer industry was under the monopoly of IBM, Walter R. Oreamuno and his associate came up with an idea of re-purchasing the computer equipment from IBM customers and leasing it back to the customers at a lower rate than what was being offered by IBM. This idea was a great boast to the MAI’s growth but did not last that long. During this time, the Company opted for an IPO with the objective of raising the US $ 300, 000 from the public. The stock performed really well rising to the US $ 66 per share in 1966.
Not realizing IBM’s strategy of depreciating its punch card equipment and the innovation of 360 third generation computer, MAI invested substantially in the older equipment that resulted in MAI’s growth to stall. During 1967, a major setback on merger plans with Transamerica, Oreamuno stepped down as the CEO and was replaced by Luther Schwalm an ex-IBM veteran.
With a shift in strategy, the earlier investment in the older IBM equipment did not prove to be fertile, Schwalm decided to write-off the outdated older equipment. MAI’s cash flow was impacted so substantially that its net worth in 1970 was negative $ 28 million. Oreamuno’s decision proved out to be so wrong that even Schwalm was unable to bring the Company out of trouble. It was that when in 1971 MAI’s CFO took over as the President. With a new strategy, Kurshan reorganized MAI into a holding company with various subsidiaries. Basic/Four and Sorbus subsidiaries of MAI did well in bringing MAI back to life. Sorbus took advantage of MAIs’ existing 1,200-person maintenance staff as its core and expanding from there. Basic/Four was a major success instantaneously. In 1972, Basic/Four .introduced the first multi-user transaction-processing mini-computer to use the Business Basic language.