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For much of the 20th century, J. Lyons and Co was one of the UK's major catering and food manufacturing companies. In 1947, the company sent two of its senior managers, Oliver Standingford and Raymond Thompson, to the USA to look at new business methods that had been developed during the Second World War. As a result of meeting one of the developers of ENIAC, the first general-purpose electronic computer, they recognised the potential of computers to help administer a large business. They also learned that another computer, EDSAC, was being developed at the University of Cambridge. On returning home, Standingford and Thompson recommended that Lyons should acquire or build a computer to meet its business needs.
Following the successful completion of EDSAC, the board of J. Lyons agreed to start the construction of their own machine, expanding on the EDSAC design. The Lyons machine was christened Lyons Electronic Office, or LEO.
LEO was used initially for valuation work but its role was then extended to include payroll and inventory. One of its early tasks was dealing with the orders phoned in every afternoon from Lyons' many shops which were used to calculate the overnight production requirements, delivery schedules, invoices and management reports.
1954, Lyons decided to proceed with a second design, LEO II. With interest from other companies in using such machines, a dedicated company was formed to handle this activity - the company was called LEO Computers Ltd.
A range of new services were developed - by 1956, payroll services were being provided to Ford UK and others using a LEO machine, and LEO IIs were being used to provide bureau services. Another new role for these computers was in performing scientific computations.
The LEO and LEO II machines used thermionic valves. The first solid-state machine using transistors was completed in 1961, LEO III. Another innovation in this machine was the use of ferrite cores for memory. LEO III was micro-programmed and was controlled by a multi-tasking operating system.
1964, the year that the IBM 360 was announced, the Post Office, already a large LEO user, awarded the biggest computer order ever placed in Europe. It was for a network of LEO 326 systems round the country, handling telephone billing, National Savings and Premium Bonds as well as applications for other government departments. Later they were used to introduce the Giro. In its day the telephone invoicing operation was the biggest computer billing job in the world.