In 1952, IBM launched the sales of its 701 series of computers which soon dominated the computing scene. As for Univac, which was riding on the strength of the ENIAC experience, it has been said that it managed to snatch defeat from the jaws of victory. .
Under Watson Jr. IBM started expending its research and development activities. In fact, not only did it build effective development labs near its original operating site of Endicot, NY, but it moved soutward to build a lab in the "Lamb Estate", in Poughkeepsie NY, which employed some of the first scientists hired by IBM to look forward into the development of advanced concepts in the Physical Sciences that might advance the future of computing. Ralph Palmer headed the Poughkeepsie lab, and among the lead scientists hired there were Lloyd Hunter, and Seymour Keller who played a key role during the subsequent years of growh of the IBM Research institution. .
In 1956, IBM hired Emmanuel (Manny) Piore to head its R&D effort. Piore had come from U.S. government service where he was credited for building the strong infrastructure of research by government labs by discovering "where the money was", in defense. With respect to his influence on IBM's R&D deployment, the story circulating around IBM was the following. Piore prepared a chart showing the most successful U.S. companies at the end of the 19th century, and the most successful ones around the middle of the 20th. He pointed out to his boss, Watson Jr., that the names of the companies which appeared in both lists were those of the companies that had a strong research organization. His argument was apparently convincing, because he was authorized to expand the research activities of IBM and orient a sizable portion of these activities to "basic research". By 1960, IBM built its famed Research Labs in Yorktown Heights, NY, moving the majority of the research (as opposed to development) personnel from Poughkeepsie, and launching a vigorous recruiting campaign to staff new research activities.