Friday, 12 July 2013


Main articles: History of IBM and Computing Tabulating Recording Company 1880–1929

Starting in the 1880s, various technologies came into existence that would form part of IBM's predecessor company. Julius E. Pitrat patented the computing scale in 1885; Alexander Dey invented the dial recorder (1888); in 1889, Herman Hollerith patented the Electric Tabulating Machine and Willard Bundy invented a time clock to record a worker's arrival and departure time on a paper tape.

On June 16, 1911, these technologies and their respective companies were merged by Charles Ranlett Flint to form the Computing-Tabulating-Recording Company (C-T-R). The New York City-based company had 1,300 employees and offices and plants in Endicott and Binghamton, New York; Dayton, Ohio; Detroit, Michigan; Washington, D.C.; and Toronto, Ontario. It manufactured and sold machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers, along with tabulators and punched cards.

Flint recruited Thomas J. Watson, Sr., from the National Cash Register Company to help lead the company in 1914. Watson implemented "generous sales incentives, a focus on customer service, an insistence on well-groomed, dark-suited salesmen and an evangelical fervor for instilling company pride and loyalty in every worker". His favorite slogan, "THINK", became a mantra for C-T-R's employees, and within 11 months of joining C-T-R, Watson became its president. The company focused on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. During Watson's first four years, revenues more than doubled to $9 million and the company's operations expanded to Europe, South America, Asia, and Australia. On February 14, 1924, C-T-R was renamed the International Business Machines Corporation (IBM), citing the need to align its name with the "growth and extension of activities".

1930–1979 NACA researchers using an IBM type 704 electronic data processing machine in 1957

In 1937, IBM's tabulating equipment enabled organizations to process unprecedented amounts of data, its clients including the U.S. Government, during its first effort to maintain the employment records for 26 million people pursuant to the Social Security Act, and the Third Reich, largely through the German subsidiary Dehomag. During the Second World War the company produced small arms for the American war effort (M1 Carbine, and Browning Automatic Rifle). In 1947, IBM opened its first office in Bahrain. And in 1990, GBM was formed as a spin off of IBM and since then operates as the sole distributor for IBM in the Gulf excluding selected products and services and excluding Saudi Arabia.

In 1952, Thomas J. Watson, Jr., became president of the company, ending almost 40 years of leadership by his father. In 1956, Arthur L. Samuel of IBM's Poughkeepsie, New York, laboratory programmed an IBM 704 to play checkers using a method in which the machine can "learn" from its own experience. It is believed to be the first "self-learning" program, a demonstration of the concept of artificial intelligence. In 1957, IBM developed the FORTRAN (FORmula TRANslation) scientific programming language. In 1961, Thomas J. Watson, Jr., was elected chairman of the board and Albert L. Williams became president of the company. IBM develops the SABRE (Semi-Automatic Business-Related Environment) reservation system for American Airlines. The IBM Selectric typewriter was a highly successful model line of electric typewriters introduced by IBM on July 31, 1961.

In 1963, IBM employees and computers helped NASA track the orbital flight of the Mercury astronauts, and a year later, the company moved its corporate headquarters from New York City to Armonk, New York. The latter half of that decade saw IBM continue its support of space exploration, with IBM participating in the 1965 Gemini flights, the 1966 Saturn flights, and the 1969 mission to land a man on the moon.

On April 7, 1964 IBM announced the first computer system family, the IBM System/360. Sold between 1964 and 1978, it was the first family of computers designed to cover the complete range of applications, from small to large, both commercial and scientific. For the first time, companies could upgrade their computing capabilities with a new model without rewriting their applications.

In 1974, IBM engineer George J. Laurer developed the Universal Product Code. On October 11, 1973, IBM introduced the IBM 3660, a laser-scanning point-of-sale barcode reader which would become the workhorse of retail checkouts. On June 26, 1974, at Marsh's supermarket in Troy, Ohio, a pack of Wrigley's Juicy Fruit chewing gum was the first-ever product scanned. That pack is now on display at the Smithsonian Institution’s National Museum of American History in Washington, D.C.

IBM's Blue Gene supercomputers were awarded the National Medal of Technology and Innovation by U.S. President Barack Obama on September 18, 2009.

In the late 1970s, IBM underwent some internal convulsions between those in management wanting to concentrate on their bread-and-butter mainframe business, and those wanting the company to invest heavily in the emerging personal computer industry.


Financial swaps were first introduced to the public in 1981 when IBM and the World Bank entered into a swap agreement. The IBM PC, originally designated IBM 5150, was introduced in 1981, and it soon became the industry standard. In 1991, IBM sold Lexmark. In 1993, IBM posted what at the time was the biggest loss in the history of corporate America : US$8 billion.

In 2002, it acquired PwC consulting. In 2003, IBM initiated a project to rewrite its company values. Using its Jam technology, the company hosted Internet-based online discussions on key business issues with 50,000 employees over 3 days. The discussions were analyzed by sophisticated text analysis software (eClassifier) to mine online comments for themes. As a result of the 2003 Jam, the company values were updated to reflect three modern business, marketplace and employee views: "Dedication to every client's success", "Innovation that matters—for our company and for the world", "Trust and personal responsibility in all relationships". In 2004, another Jam was conducted during which 52,000 employees exchanged best practices for 72 hours. They focused on finding actionable ideas to support implementation of the values previously identified.

IBM showing their various innovations at CeBIT 2010 in Hanover, Germany

In 2005, the company sold its personal computer business to Lenovo, and in the same year, agreed to acquire Micromuse. A year later, IBM launched Secure Blue, a low-cost hardware design for data encryption that can be built into a microprocessor. In 2009, it acquired software company SPSS Inc. Later in 2009, IBM's Blue Gene supercomputing program was awarded the National Medal of Technology and Innovation by U.S. President Barack Obama. In 2011, IBM gained worldwide attention for its artificial intelligence program Watson, which was exhibited on Jeopardy! where it won against game show champions Ken Jennings and Brad Rutter. As of 2011, IBM had been the top annual recipient of U.S. patents for 19 consecutive years.

IBM's closing value of $214 billion on September 29, 2011 surpassed Microsoft which was valued at $213.2 billion. It was the first time since 1996 that IBM exceeded its software rival based on closing price. On August 16, 2012, IBM announced it entered an agreement to buy Texas Memory Systems. Later that month, IBM announced it has agreed to buy Kenexa. The acquisition is expected to close in the fourth quarter. The deal is worth $1.3 billion dollars and was paid in cash by IBM.

In June 2013, IBM acquired SoftLayer Technologies, a web hosting service, in a deal of around $2 billion.

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