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Meet LEO, the world’s first business computer

1,200 words

Published: 9 November 2018

A national chain of teashops might seem an unlikely birthplace for technology that would transform office work and kick-start the British computer industry—but when the Lyons Electronic Office (LEO) went into operation in 1951, it did just that.

What is the LEO computer?

  • A pioneering electronic computer, built 1949–1951, to manage Lyons tea shop orders
  • Based on electronic digital computers developed and used during the Second World War
  • Ran the world’s first routine, real-time office application 

Why did Lyons tea shops need a computer?

J. Lyons & Co. was Britain’s largest catering company, with restaurants and cafés all over the country as well interests in food manufacturing and outside catering.

The company’s visionary Comptroller (or chief accountant) John Simmons speculated as early as the 1930s about automating some of the tedious back office processes necessary to keep track of profit and loss. At the time, armies of young women sat all day tapping at manual adding machines.

Tea, cakes and hot meals were the staples of the 200 Lyons teashops in London, which at lunchtime filled with office workers looking for inexpensive and nutritious meals in pleasant surroundings. Managing the stock was a vital part of the operation.

Customers enjoying afternoon tea at Lyon's Corner House on Coventry Street, London, 1942 © IWM (D 6573) © IWM (D 6573) Image source
Customers enjoying afternoon tea at Lyon's Corner House on Coventry Street, London, 1942

Every afternoon the manageress of each Lyons teashop picked up the telephone and called head office. She would phone through any changes that needed to be made to her standard order of goods for the next day. 

Lyons was the first company in the world to see that computers could be used to make businesses more efficient, as well as to carry out mathematical calculations.

Who built LEO—and how?

After the Second World War, Simmons sent two of his junior managers, Oliver Standingford and Raymond Thompson, to investigate office methods in the USA. They came back filled with enthusiasm for electronic computing.

The American authorities had recently declassified the technology and it was greeted on both sides of the Atlantic with excited headlines about ‘electronic brains’.

Maurice Wilkes with EDSAC 1 under construction, c.1949 © Computer Laboratory, University of Cambridge, (CC BY 2.0 UK)
Maurice Wilkes with EDSAC 1 under construction

Thompson and Standingford had also discovered that Maurice Wilkes at Cambridge University was at that very moment building a computer, the Electronic Delay Storage Automatic Calculator (EDSAC).

EDSAC’s electronics were thermionic valves (or vacuum tubes) and its memory was stored in mercury delay lines—tubes of mercury that carried trains of pulses in more condensed form than in copper wires. Simmons quickly struck a deal with Wilkes to part fund the project to the tune of £3000 if Lyons could build a copy once it worked.

EDSAC duly delivered, and in 1949 John Pinkerton, a Cambridge engineer hired by Lyons to head the project, began to build LEO with a small team.

At the same time Thompson began to recruit a team of programmers. David Caminer, Head of Systems Research at Lyons, drew up flowcharts of the sequence of instructions and information to be delivered to the computer in a form that it could understand.

What tasks could LEO carry out?

LEO, which occupied all the space in a large room, was ready to attempt its first business program in November 1951.

It was called Bakery Valuations, and computed the costs of all the ingredients that went into the bread and cakes produced at the Lyons factory at Cadby Hall in southwest London. This has gone down in history as the world’s first routine, real-time office application.

Soon afterwards LEO began to run the payroll for Lyons’ workers, and despite the inherent unreliability of the machine, a stringent regime of testing and maintenance meant that no one was ever paid late.

What difference did LEO make to efficiency?

The efficiency of the teashops was vital to the profitability of the company. Each customer spent a small sum, perhaps buying a bun and a cup of tea for a few pence. The profit on the transaction was minimal, and so it was crucial to minimise waste and maximise sales.

To restock, manageresses had to fill out forms in six different order books. Deliveries took more than a day to reach the shops, by which time their needs might have changed.

To improve efficiency, David Caminer designed the Teashops Distribution job, which came into use from 1953.

He created a standard order for each teashop, based on its past performance, and introduced the daily telephone update to ensure the orders were accurate. Using the telephone was a stroke of genius, implementing real-time, online connectivity long before the age of the internet.

At the Cadby Hall end of the phone was a key punch operator, who encoded the variations to the order as a pattern of holes punched in a specially-designed card. When she had punched all the cards, the operator took them to a card feeder that delivered their coded message to the computer in parallel with the standard order.

LEO ran its program and printed out lists of goods needed by each shop, so that the goods needed for the first shop on the round would be loaded on the vans last. The goods were delivered first thing the following morning.

The manageresses were delighted:

This is a great time-saver, and work-saver, and we are grateful for it.

Lyon's tea shop manageress

What else was LEO used for?

LEO was also kept busy with contract work, including calculating missile trajectories for the Ministry of Defence and doing the payroll for thousands of workers at the Ford motor company Dagenham factory. In 1954 the Lyons board agreed to found a subsidiary, Leo Computers Ltd, to manufacture computers for sale.

LEO II was little different from LEO I, although the last few were made with the more compact magnetic core storage. In the early 1960s Leo Computers adopted transistor technology for the first time, building a state of the art machine, LEO III.

Explore LEO:

Were there other computers to rival LEO?

British companies were slow to recognise the advantages of computerisation, especially given the high price tag. By this time, too, there were many more computer manufacturers competing in the same market. 

The American company IBM had been slow to see the possibilities of electronic computing in the office, but once it caught up it produced computers in numbers that the Leo team could only dream about.

Is LEO still being used today?

Leo Computers was sold to English Electric in 1964, and absorbed into ICT (later ICL) in 1968 through a merger between several British computing companies. 

The last of the LEOs, which were owned by the Post Office and calculated telephone bills, came out of service in 1981—the same year, poignantly, that the last of the Lyons teashops closed its doors.