J. Lyons and Co., one of the UK's leading catering and food manufacturing companies in the first half of the 20th century, sent two of its senior managers to the USA in 1947 to look at new business methods developed during the Second World War. During their visit they came across digital computers then used exclusively for engineering and mathematical computations. They saw the potential of computers to help solve the problem of administering a major business enterprise. They also learned that Cambridge University, back in the UK, was actually building such a machine, the pioneering EDSAC computer.
On their return to company headquarters in London they made a recommendation to the Lyons' Board that Lyons should acquire or build a computer to meet their business needs. This was accepted, and it was agreed that Cambridge University should receive some financial support if the University of Cambridge Mathematical Laboratory gave some help to the Lyons' initiative.
Cambridge provided training and support for the Lyons' engineers. By 1949 they had the basics of a computer specifically designed for business data processing running and on 17 November 1951 rolled out the first commercial business application. The computer was called the LEO—Lyons Electronic Office.
LEO I's clock speed was 500 kHz, with most instructions taking about 1.5 ms to execute. To be useful for business applications the computer had to be able to handle a number of data streams, input and output, simultaneously and its chief designer, Dr. John Pinkerton, therefore designed the machine to have multiple input/output buffers. In the first instance these were linked to fast paper tape readers and punches, fast punched card readers and punches, and a 100 line a minute tabulator. Later other devices including magnetic tape were added. Its ultrasonic delay line memory based on tanks of mercury, with 2K (2048) 35-bit words (i.e., 4¾ K bytes), was four times as large as that of EDSAC. The systems analysis was carried out by David Caminer.
Lyons used LEO I initially for valuation jobs, but its role was extended to include payroll, inventory and so on. One of its early tasks was the elaboration of daily orders which were phoned in every afternoon by the shops and used to calculate the overnight production requirements, assembly instructions, delivery schedules, invoices, costings and management reports. This, arguably, was the first instance of an integrated management information system plus a computerised call centre. The LEO project was also a pioneer in outsourcing: in 1956 Lyons started doing the payroll calculations for Ford UK and others on the LEO I machine. The success of this led to the company dedicating one of its LEO II machines to bureau services. Later, the system was used for scientific computations as well. Met Office office staff used a LEO I before the Met Office bought its own computer, a Ferranti Mercury.
In 1954, with the decision to proceed with LEO II and interest from other commercial companies, Lyons formed LEO Computers Ltd. The first LEO III was completed in 1961. This was a solid-state machine with a ferrite core memory. It was micro-programmed and was controlled by a multi-tasking operating system. In 1963 LEO Computers Ltd was merged into English Electric Company and this led to the breaking up of the team that had inspired LEO computers. English Electric Company continued to build the LEO III, and went on to build the faster LEO 360 and even faster LEO 326 models, which had been designed by the LEO team before the takeover. All LEO IIIs allowed concurrent running of as many as 12 application programs through the Master program operating system. Some were still in commercial use in British Telecom until 1981. Many users fondly remember the LEO III and enthuse about some of its quirkier features, such as having a loudspeaker connected to the central processor which enabled operators to tell if a program was looping by the distinctive sound it made.
English Electric LEO Computers Ltd or English Electric Leo Marconi (EELM) eventually merged with International Computers and Tabulators (ICT) and others to become in 1968 International Computers Limited (ICL).