IBM
(International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) and personal computers. At the end of 2004, IBM sold its desktop PC line to Lenovo, China's largest computer manufacturer.
It all started in New York in 1911 when the Computing-Tabulating-Recording Company (CTR) was created by a merger of The Tabulating Machine Company (Hollerith's punch card company in Washington, DC), International Time Recording Company (time clock maker in NY state), Computing Scale Company (maker of scales and food slicers in Dayton, Ohio), and Bundy Manufacturing (time clock maker in Auburn, NY). CTR started out with 1,200 employees and a capital value of $17.5 million.
In 1914, Thomas J. Watson, Sr., became general manager. During the next 10 years, he dispensed with all non-tabulating business and turned it into an international enterprise renamed IBM in 1924. Watson instilled a strict, professional demeanor in his employees that set IBMers apart from the rest of the crowd.
IBM achieved spectacular success with its tabulating machines and the punch cards that were fed them. From the 1920s through the 1960s, it developed a huge customer base that was ideal for conversion to computers, and Watson's son, Thomas J. Watson, Jr., was an enthusiastic supporter of computers.
IBM launched its computer business in 1953 with the 701 and introduced the 650 a year later. By the end of the 1950s, the 650 was the most widely used computer in the world with 1,800 systems installed. The 1401, announced in 1959, was its second computer winner; and by the mid-1960s, an estimated 18,000 were in use.
In 1964, it announced the System/360, the first family of compatible computers ever developed. The 360s were enormously successful and set a standard underlying IBM mainframes to this day.
During the 1970s and 1980s, IBM made a variety of incompatible minicomputer systems, including the System/36 and System/38. Its highly successful AS/400, introduced in 1988 and renamed the "iSeries" in 2000, provides a broad family of compatible machines in this segment.
In 1981, IBM introduced the PC into a chaotic personal computer field and set the standard almost overnight. IBM is still one of the largest PC manufacturers, but the majority of PC sales come from the PC industry at large, from companies such as Dell and HP to mom-and-pop shops by the hundreds.
Like everyone else, IBM includes the Windows operating system on its PCs. In the mid-1990s, it tried to compete with its OS/2 operating system. Although highly praised and still used,offered in for desktop and server use, OS/2 never gained significant market share.
The early 1990s were gut-wrenching years for IBM. It experienced major losses for the first time due mainly to slowing sales of high-profit mainframes as companies embraced PCs and small servers by the millions. As a result, IBM reduced its workforce by more than 100,000.
In 1991, IBM teamed up with Apple and Motorola to produce the PowerPC chip, a single-chip version of IBM's RS/6000 workstations (see Apple-IBM alliance). Introduced in 1995, the PowerPC systems had little impact as stand-alone PCs, but the chips breathed new life into IBM's RS/6000 and AS/400 lines. In 1995, IBM purchased Lotus Development Corporation, publisher of Lotus 1-2-3 and the popular Notes groupware.
In the late 1990s, IBM embraced the Linux operating system and supports it on all of its product lines. This was a major shift for a company that was known for proprietary software for half a century. However, IBM is never a company to be underestimated. Under the astute leadership of Louis Gerstner, who took command in 1993, the company rebounded and returned to the profits it had been accustomed to (2000 revenues of $88 billion; $8 billion profit). Gerstner focused IBM on its core capabilities and removed many bureaucratic policies that kept the company from responding to a rapidly changing world. In fact, when he retired in 2002, he wrote the best-selling book, "Who Says Elephants Can't Dance: Inside IBM's Historic Turnaround."
Today, IBM mainframes still flourish as the bulk of data in most large enterprises still resides in machines that are the successors to System/360, dating back more than four decades. As each year goes by, more electronic history piles up, creating massive databases that IBM mainframes handle with ease. However, IBM derives most of its revenue from software and services and is, in fact, the largest software and services company in the world. See Microsoft and IBM.
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| The Man Who Built an Empire |
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| This photo of Thomas J. Watson, Sr., was taken in 1920, four years before he renamed the company IBM. (Image courtesy of International Business Machines Corporation. Unauthorized use not permitted.) |
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| IBM Office, London, 1935 |
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| "Dayton Money Making Machines" were sold all across the world. IBM became an international enterprise in the late 1930s. (Image courtesy of International Business Machines Corporation. Unauthorized use not permitted.) |