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Ottó A. Michelsen

Updated: Jul 17, 2021

Published in Morgunblaðið 10.júní 2020

By Björn Jón Bragason

Translated by Bryndís Víglundsdóttir

black and white portrait of Ottó A. Michelsen
Ottó A. Michelsen

When modern society was rapidly forming in Iceland during the 20th century, calling for skills of various kinds great many needs emerged that had to be met. Among the new items on the scene were office machines that were a great asset with the accounting and communication. In the beginning the machines were just type writers and simple calculators, later accounting machines emerged and at last came the computer that developed with such speed that there is hardly the aspect of human life in our times that hasn´t been computerized. In the story that has been written about the beginning and development of the information technology in Iceland the name of the pioneer Ottó A. Michelsen is prominent and at the very top. Today there are 100 years from his birth. Ottó was born in Sauðárkrókur in the year 1920, the son of Jörgen Frank Michelsen and his wife Guðrún Pálsdóttir. Jörgen was a Dane, a watchmaker and a goldsmith.

Going Abroad in Uncertain Times

Ottó´s parents encouraged their children to learn a trade. Getting an apprenticeship contract in the midst of a world depression was quite difficult as many were competing for each apprenticeship space. Towards the fall of 1938 Ottó was losing all hope that he would have the chance to take up learning when he got the offer to go to Germany to study repair of typewriters and calculators that were being imported by the wholesaler Egill Guttormsson. Ottó sailed to Zella-Mehlis in Thüringen and studied during the winter with Mercedes Büro-Maschinen, which at that time was one of the largest producers of office machines in the world. Ottó returned home in the spring of 1939, worked at herring fishing off the north coast but went south to Reykjavík at the end of the herring season. Soon he realized that he must improve and add to his knowledge of more types of typewriters and calculators so he decided to go abroad again, altogether contrary to the advice of his family and friends who argued that considering the military development in Europe this was not advisable.

Stuck During the War

Ottó sailed to Copenhagen and soon he found work in his trade. As the war progressed the demand for all and any workers increased by day and he was hired by his former employer in Germany. Ottó was responsible for repairing typewriters all over Germany so he had to travel constantly for the next years. He applied for a position in Denmark but his request was refused. In 1944 he decided to flee to Denmark and went underground in Copenhagen for some time. The Danes didn´t accept Ottó´s German diplomas so he had to make good working as a 'post apprentice' for two years for very low wages but managed to improve his wages by buying old and used office machines, repairing and selling them.

The beginning of the Age of the Computer.

When Ottó returned home in 1946 he began working at his trade and established the firm Office Machines Ltd. Two years later he became an agent for all the IBM products. At that time all data processing was performed on punched cards and it may be said that the computer age rode into this country the fall of 1964 when The Office Machines of the State, the city of Reykjavík and the University of Reykjavík got machines from IBM. The University computer was a gigantic investment, equal to five or six apartments, an investment way beyond the financial capabilities of the University. Ottó used his influence and promoted the idea that IBM in the US would lower the price of the computer by 60% and the deed would be considered a 'university discount'. The idea was accepted and the Implementation Bank under the leadership of Benjamín H.J. Eiríksson provided the remainder of the amount. These machines were given several names but in 1965 dr. Sigurður Nordal professor suggested the word tölva, that was accepted and is still used for a computer.

Ottó standing by an IBM computer, 1981
Ottó standing by an IBM computer, 1981

The IBM branch established.

Each year the services with the office machines became more complicated and time consuming. The demand for new and costly IBM machines that Office Machines rented was steadily increasing. Finally the Icelandic authorities granted permission for establishing an IBM branch in Iceland that would rent out machinery and programs and render needed services. This was the same method IBM employed everywhere so this was in keeping with the practices of the international company. IBM in Iceland became a reality and Ottó was appointed the CEO. Ottó was the owner of Office Machines Ltd. and was the agent for the IBM products in Iceland. Even so IBM continued to trust the agency to him and this demonstrates the opinion the IBM leadership had on Ottó and his honesty. This approach by IBM was most likely not found in any other country.

A unique firm.

IBM in Iceland operated under strict rules set by the mother company. All employees had to read and demonstrate that they had read the IBM code of conduct and there as a dress code. Foreign experts were brought in to teach system engineering and programming as there was no teaching of these subjects available in Iceland during that time.


New employees were sent to take courses at the IBM schools east and west of the Atlantic. Soon there was knowledge enough accumulated to provide the training for the Icelandic employees on the IBM machinery. IBM used a performance enhancing bonus system, the employees could get bonuses and were invited on luxury trips abroad if certain goals were obtained. This was altogether a new approach in this country. The firm was doing very well, employed about a hundred employees at its peak and was in the highest tax paying bracket in Reykjavík. Being a 'good citizen' was the global policy of IBM. The firm was obliged to pay taxes wherever they were operating. There was an obvious problem concerning the Icelandic alphabet at the beginning of the Icelandic report technology: The machinery was made for the English speaking market where there are 26 letters but in Icelandic there are 10 more letters. Ottó had connection to many foreigners. Among them was a German gentleman by the name Wilhelm F. Bohn. He worked for IBM in Germany and was in charge of creating the charsets. Ottó managed to have Mr. Bohn and the directors of IBM include the Icelandic alphabet in a new international charset. For Ottó this was a burning issue, in line with his high goals for his country and people.

Nothing happens just by itself.

When Ottó was still a young man he vowed that he would first and foremost put demands on himself rather than on others. As a boss he did of course expect altogether good performance of his employees. Nothing would happen just by itself, people would have to earn everything. He talked about this attitude in an interview 1981. 'I have always been of the opinion that work should be a source of fullfilment but I feel that this opinion is being questioned lately. I think being healthy and able to work is plainly wonderful, being able to contribute to your people'. Ottó thought that creating consensus between the employee and the employer was imperative. He maintained that the propaganda that work could not be the source of joy was simply wrong and must be counteracted.

In 1982 when Ottó retired from IBM there were between 60 and 70 employees working for the firm and the staff at Office Machines close to 50. In 1992 some radical changes were made in IBM and a new Icelandic corporation, Nýherji, now named Origo was established.

Ottó and his wife, Gyða Jónsdóttir, 1955.
Ottó and his wife, Gyða Jónsdóttir, 1955.

The family man.

Ottó was married to Gyða Jónsdóttir, born 1924. Gyða was a textile teacher, had studied at art schools in Norway and Finland. They had four children. The oldest were the twins Kjartan, who was a professor at the University in Osló, died 2010 and Óttar, systems analyst. Next came Helga Ragnheiður, a nurse and the youngest is Geirlaug who is a gradeschool teacher. Prior to his marriage Ottó had Helga Ursula Ehlers, a journalist in Cologne and Theodór Kristinn, who is a business administrator.

Working for the church.

It is safe to say that Ottó was one of the most faithful non ordained servants of the church. He was on the board of the Icelandic church aid from its beginning to 1984, the chairman for the last four years. His largest contribution, however to the church was in his own parish when he was the chairman of the construction committee while Bústaðachurch was being built. Upon the retirement from IBM and Office Machines Ottó could turn his attention to charity. In 1982 he planned a fundraising for the Cancer Society that was extremely successful and the following year he initiated a fundraising for a little girl who needed a heart transplant. That fundraising was also a success and so was the transplant. In spite of travels around the world Ottó was nowhere as totally happy as when he was in Skagafjörður and said about the area of his youth: 'It is so very strange that as wide and far as I have travelled around the world nowhere have I seen such beauty as in Skagafjörður. I have never torn the strings tying me to Skagafjörður, I long to go north and am always nourished by going north and staying there, meeting again with my faithful, lifelong friends'.

Ottó passed away June 11th 2000.

1 Comment

Ottó Michelson was a well beloved uncle. He was ever kind and generous to our family especially when we lived in Iceland between 1978-1983. He is fondly remembered.


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