books & arts The IBM story

IBM: The Rise to invest in new technology and inventory computing to Intel and Microsoft, IBM and Fall and during the Great Depression. This risky bet nearly collapsed in the late 1980s and Reinvention of a paid off as IBM won major contracts for early 1990s. It had to lay off 200,000 Global Icon data processing equipment from the Social employees in order to survive. Starting Security Administration and other Federal in 1992, Louis Gerstner, IBM’s new CEO, agencies in the US during the New Deal revived the corporation by reorientating it (reforms to restore prosperity that began toward software and IT services. And his By James W. in 1933). Wartime demand further fuelled successors followed suit. Over the last two Cortada IBM’s growth in the first half of the 1940s. decades, IBM has remained a major player After World War II, IBM made a in computing and is still a very large and successful transition to an entirely different profitable corporation with a high market MIT PRESS: 2019. data handling technology: electronic capitalization. But the shift from hardware 752PP. £35.00 computing. Cortada argues that Thomas to IT services came at a cost, according to Watson Jr, the son of IBM’s long-time CEO, Cortada. IBM’s upper managers invested he history of IBM is a well-trodden and a group of hand-picked managers drove less in innovation, slashed employee topic in the history of computing. that transformation. They restructured benefits, and shifted employment from TMost books on the subject have the corporation and adroitly used military the United States to India, where labour focused on the firm’s technologies, especially investments in computer technology to costs were lower. They also increasingly the many computers it designed and establish IBM as a major manufacturer of repurchased IBM’s own stock, to the tune commercialized. With IBM: The Rise and large digital computers, the mainframes. of US$162 billion between 1997 and 2018, Fall and Reinvention of a Global Icon, James Betting the corporation like his father in order to increase its value. Cortada instead provides a business-centred had done during the Great Depression, IBM: The Rise and Fall and Reinvention history of the corporation. Cortada is a Thomas Watson Jr initiated the design of a Global Icon is a good read. It is engaging well-known historian of computing, and the and fabrication of a new line of computers and replete with juicy tidbits. The detailed author of numerous books on the computer named System/360. The System/360 line discussion about sales, arguably the firm’s industry and the introduction of computing made IBM’s own machines, as well as those most influential function and its main into different economic sectors. He is also of its competitors, obsolete, and set the source of competitiveness for much of an IBM insider. For nearly forty years, he standard for mainframes globally, including the twentieth century, is the book’s key worked as an IBM salesman, consultant, and in Japan and the Soviet Union. System/360 contribution to the literature on IBM. manager. This unusual combination makes also transformed IBM into the dominant Cortada also aptly shows how critical for a detailed and insightful narrative. It also player in the global computer industry from customers were in shaping IBM’s response makes for an impassioned one. Like many the 1960s to the 1980s. to emerging technologies. For example, the IBMers, Cortada is proud of the company’s Despite this success, IBM nearly missed large corporations using IBM’s tabulating accomplishments and he remains deeply the technological shift to distributed equipment urged the Thomas Watsons to attached to his former employer. But he is computing. The introduction of the PC move into digital computers. Later, these also critical of current management, which in 1981 was a promising start, but the customers spurred the shift to novel storage he believes has strayed from the formula that firm quickly lost its early lead to Compaq technologies such as magnetic tape and disk made IBM such a powerful and long-lasting and other start-ups. Cortada argues that drives. They also instigated the company’s corporation: customer orientation and a reasons for this reversal were many. The entry into personal computers. deep respect for employees. new generation of IBM’s upper managers, Cortada is less persuasive when he Since its formation in 1911, IBM has men such as John Opel and John Akers who depicts IBM as an ethical firm committed navigated its way — with varying degrees had made their careers in the mainframe to the welfare of its employees. IBM was of success — through three successive business, did not comprehend the dispersal clearly a paternalistic organization until data processing platforms: tabulating of computing brought about by small the late 1980s. But this does not mean that technology, mainframe computing, and machines. They let IBM’s bureaucratic it had the best interest of its employees at more recently distributed computing. The structure stifle the development of personal heart. Occupational health research has, in firm originated as a trust, a merger of several computers, slowing down the introduction particular, suggested that workers involved small corporations, that aimed to control of new products. They also made strategic in the manufacture of IBM computers may the US market for office machinery. Its mistakes, such as failing to secure rights have been exposed to harmful chemicals, crown jewel was the mechanical equipment to the PC’s main components, Intel’s which have subsequently had a detrimental for automatic data handling, which was microprocessors and Microsoft’s operating effect on their health. ❐ inherited from one of its constituent firms, system, and refusing to invest in Microsoft. the Tabulating Machine Company. Thomas Deepening IBM’s predicament were the Reviewed by Christophe Lécuyer Watson Sr, the company’s CEO from 1914 massive investments Opel and Akers made Sorbonne Université, Paris, France. to 1956, shaped IBM into a fearsome sales in mainframe design and manufacturing in e-mail: [email protected] machine and built a quasi-monopoly in the first half of the 1980s. the market of tabulating equipment. He Saddled by these unproductive Published online: 17 May 2019 made gutsy decisions, such as continuing investments and losing its lead in https://doi.org/10.1038/s41928-019-0251-0

172 Nature Electronics | VOL 2 | MAY 2019 | 172 | www.nature.com/natureelectronics