11. Programming Enterprise
Women Entrepreneurs in Software and Computer Services
Jeffrey R. Yost
This chapter focuses on alternative paths women take to leadership positions in the IT world, concentrating on women entrepreneurs in the software and computer services industries from the 1960s through the 1980s. The history of women entrepreneurs across all industries has been grossly understudied, owing in part to the trend of business history to focus only on large firms or small ones that grow to larger corporate giants, and in the field of gender and women’s' history, few have focused on women who are business elites until recent years. This chapter begins with an examination of the broader environment for IT employment for women, then presents three case studies of women who ran successful small software and computer services businesses for years, and who were leaders in two trade organizations. The first software services firms emerged in the mid-1950s, and by the 1960s the industry had expanded from mainframe computer customer organizations to include service bureaus, facilities management firms, and diversified providers. A number of service organizations began to produce software in the 1960s, and within a few years had transformed into software products businesses. The programming occupation has a long and complicated relationship to gender, with the field being simultaneously more open to women than other occupations but also hostile and with little room to advance if you were a woman, but the perpetual software crisis of the 1960s led to a substantial increase in the opportunities for women. Scoring well on an aptitude test could lead to a job in programming, but there was still a male hiring bias and unequal compensation abound.
"That women found it more difficult to gain employment at computer and software firms, and that throughout at least much of the industry women programmers and systems analysts made less than men, leads us to the cases of three women who initially worked for sizable corporations/organizations but then took a different path- starting their own software and computer services enterprises."
The first case is that of Luanne Johnson, born 1938 in Orville, Ohio. She was hired as a programming trainee, making more than she had as a legal secretary, for Almeda County. She was put in charge of programming court calendars, the only position to take night shifts at times, and would occasionally need to bring her infant daughter in with her at 2 in the morning. This insensitive scheduling for a single mother led Johnson to seek other career opportunities, and she changed jobs four times in the next five years, each time for higher compensation. In 1969 she joined the small computer services company, Comm-Sci, which consisted of the founder Bill Adair, programmer Tom Mosely, and a few contractors. In 1971, Adair, facing personal troubles, was planning to shut the business down, but Johnson offered to buy the rights (for a small royalty on future sales for two years) to the payroll and accounts payable systems they had developed, and thus became an entrepreneur in the software products industry. She named the firm Argonaut Information Systems, in part to appear at the front of the phone book.
Thanks to Larry Welke's ICP Software Directory, the firm was national from the very beginning, and was low-overhead, essentially just Johnson running the executive aspects out of a room in her house and relying on three or four independent contractors to assist with installations. In its first year, Argonaut Information Systems had around $60,000 in gross revenue, and by the second year was large enough that it was moved out of Johnson's home into a small office, and an administrative assistant was hired. Within the next several years she hired a small staff of four or five programmers. Johnson focused on small and mid-size firms and organizations since the larger software firms were aiming to net Fortune 500s as their customer base. By the early 1980s, Argonaut Information Systems had grown to about fifteen employees and was generating millions of dollars a year, and Johnson felt pressure from her employees to expand the firm. She wasn't interested in this, having succeeded in her goal of developing robust products, with excellent documentation, that could sell virtually off the shelf. She sold her firm and would later go on to be the president of ADAPSO, but we will return to this when we come to trade associations.
Our next case, Grace Marie Gentry, was also born in 1938, went through various academic interests until finally settling on a career in statistics. After doing especially well on an IBM programming aptitude test, and knowing that government sector jobs were one of the best places for women, she took the position of Management Intern with the Social Security Administration, where she advanced as far as she could until faced with a choice of continuing that trajectory and moving to Maryland, or leaving. She was contacted by the University of California Statewide Electronic Data Processing Center and hired as a business analyst, responsible for interviewing users and translating their needs to systems analysts, who in turn oversaw the programmers. In the 1970s, her husband Richard Gentry, having left his position with IBM San Francisco, got a contract from Almeda County that required he incorporate a business for himself, and Grace used her own considerable skill as well as five independently contracted women she knew from UC Statewide, and within a couple of years, Gentry, Inc. was being run full-time by Grace, with Richard working as the lead consultant for the firm.
All of the initial hires were women, who saw it as an opportunity to earn a higher wage and have flexibility to enter and exit the workforce at will. Grace ran the firm out of her kitchen for over half a decade and there was almost no overhead. They charged their clients a fraction of the rates of IBM or Lambda, and, like Argonaut, focused on small and midsize clients who were price conscious and would only need one to several independent contractors to help them. Grace throughout hired the most talented contractors she could find, regardless of gender, and though her initial hires were all women this changed as men grew less anxious over the uncertainty of independent contractor work. Grace also strove to help her contractors extend their skills and make career advances like they would at a larger company, she didn't want their contracts to be 'just a job.' She diversified the firm in the late 1970s by adding a software products division and a third-party products division, and hired technicians as employees for the first time, but as personal computer sales increased in the 1980s, it hurt the minicomputing business that Gentry Inc. had been relying on for their software products on turnkey solutions, and both the new divisions were being supported by contracting before they had to be sold off. In 1986, Section 1706 was added to the U.S. Federal Tax bill, effectively outlawing IT firms that used independent contractors by removing the tax-safe status that applies to all of types of businesses using ICs. To mobilize against it, a number of IT services firms including Gentry, Inc. launched the National Association of Computer Consultant Businesses (NACCB). In July of 1998, Grace and Richard sold the firm to Personnel Group of America (PGA) for $12.5 million to keep it from going under in the so-called dot.com IT collapse.
Our third case study is that of Phyllis Murphy. She learned to program in 1966 on a Univac 1004, and was soon the Director of IT at the real estate management firm Draper and Kramer. In 1974 she joined Consumer Systems, an IT services consultancy, where she started as just a consultant but quickly began to manage IT projects for large clients. Her husband took an opportunity to advance his career that moved them to Los Angeles, where she found herself dissatisfied with Consumer Systems Los Angeles office. Upon finding better options at other firms in the area, in 1981 she decided to start her own business, Phyllis Murphy and Associates.
Using a 60-40 mix of salaried employees to ICs, she ran the business from her home for the first year, but by the third year Murphy had more than 20 employees/contractors and an office space. She managed the finances and accounting herself, and unlike Johnson or Gentry, targeted larger firms as she believed they were more reliable and professional. In 1987 she became very actively involved with the NACCB and was one of the most vocal critics of Section 1706. NAACB helped her greatly in return, and she was able to switch to an all-employee model. She still owns and runs this successful enterprise and has no plans to retire.
A uniting factor in each of these cases is that all these women became leaders in trade organizations. Luanne Johnson had been an active ADAPSO member since 1973 and once she had sold Argonaut Information Systems, she accepted the invitation to run the newly formed ADAPSO Foundation, and under her leadership it focused on various initiatives to help disadvantaged and disabled children. She was asked to be the executive director of ADAPSO in the late 1980s, by that time a large and multidivisional association, and through the late 80s and early 90s she helped to develop a long-term plan focusing on increasing membership services. In 1991 it became the Information Technology Association of America. Johnson's title was changed from executive director to President, and that same year a woman, Judith Hamilton, became Chair of the Board. Johnson retired from her position as president in 1995 but continues to work on international issues with the World Information Technology and Services Alliance, an organization she helped to create.
NACCB was a significantly smaller organization, which had far fewer funds and represented a very specific industry segment, the IT consulting services brokerages. Grace Gentry was not only one of the founders, but also an early president. Both Gentry and Murphy, who had been the leader of one of the predecessors of NACCB, were important in pushing for a standard "Code of Ethics," which helped to cut down considerably on unprofessional behaviors like hiring away talent from client organizations or submitting contractor resumes for a job without checking availability, that had been giving the industry as a whole a bad name. There were significant numbers of women involved from the beginning of the NACCB, and the first Executive Director was Peggy Smith.