Balrog is one of the most impressing creatures found in the 'Rings'. Though it is described as evil, in the third age they were in practice extinct and Gandalf kills with great sacrifices the last of them in Moria. The image above is from Silmarillion which describes times before third age when there were several battles with balrogs of this kind.
The idea giving a name balrog to Our research machine was that of power. To be frank, model 220 isn't nowadays impressive at all but at that time it was something new compared to those old PCs. And it was made by notorius IBM which we knew by the evil PC technology...
The balance the situation, Our new X terminal Galadriel was named after elf Queen because of it's cute look. And because the IBM and AIX wasn'
t so bad at all. Well, a little odd perhaps, but workable.