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History of IBM From Wikipedia, the free encyclopedia Jump to: navigation, search International Business Machines, abbreviated IBM and nicknamed "Big Blue" (for its official corporate color), is a multinational computer technology and IT consulting corporation headquartered in Armonk, New York, United States. The company is one of the few information technology companies with a continuous history dating back to the 19th century. IBM manufactures and sells computer hardware and software (with a focus on the latter), and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology.[1] Samuel J Palmisano is the chairman and CEO of IBM. IBM has been well known through most of its recent history as one of the world's largest computer companies and systems integrators.[2] With over 388,000 employees worldwide, IBM is one of the largest and most profitable information technology employers in the world. IBM holds more patents than any other U.S. based technology company and has eight research laboratories worldwide.[3] The company has scientists, engineers, consultants, and sales professionals in over 170 countries.[4] IBM employees have earned Five Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science.[5] Contents [hide] • 1 History ○ 1.1 1885–1924: The origin of IBM ○ 1.2 1925–1949: IBM's early growth 1.2.1 International subsidiaries growth 1.2.2 IBM during World War II ○ 1.3 1950–1960: Postwar recovery and the rise of business computing ○ 1.4 1960–1969: The System/360 era ○ 1.5 1970–1974: The challenges of success ○ 1.6 1975–1992: Information revolution, rise of software and PC industries ○ 1.7 1990–2005: IBM's near disaster and rebirth • 2 Topics, trends, and technologies ○ 2.1 Products and technologies 2.1.1 BICARSA (Billing, Inventory Control, Accounts Receivable, & Sales Analysis) 2.1.2 Evolution of IBM's computer hardware 2.1.3 Evolution of IBM's operating systems 2.1.4 High-level languages 2.1.5 IBM and AIX/UNIX/Linux/SCO 2.1.6 Midrange systems 2.1.7 Non-computer lines of business ○ 2.2 Organization 2.2.1 Federal Systems Division 2.2.2 IBM service organizations 2.2.3 ROLM Communication Systems Division ○ 2.3 Topics and events 2.3.1 Corporate Design Program 2.3.2 Unbundling of software and services in 1969 • 3 Key events ○ 3.1 1880s–1937 ○ 3.2 1938–1951 ○ 3.3 1952–1963 ○ 3.4 1964–1971 ○ 3.5 1972–1992 ○ 3.6 1993–present • 4 See also • 5 References • 6 Further reading • 7 External links [edit] History [edit] 1885–1924: The origin of IBM Year Gross income (in $m) Employees 1890 1895 1900 1905 1910 1915 4 1,672 1920 14 2,731 1925 13 3,698 Tabulating Machine Corporation plant in 1893. The roots of IBM date back the 1880s, decades before the development of electronic computers. The company was formed through a merger of three different companies: the Tabulating Machine Company (with origins in Washington, D.C. in the 1880s), the International Time Recording Company (founded 1900 in Endicott), and the Computing Scale Corporation (founded 1901 in Dayton, Ohio, USA).[6] The merger was engineered by noted financier Charles Flint, and the new company was called the Computing Tabulating Recording (CTR) Corporation.[7] CTR was incorporated on June 16, 1911 in Endicott, New York, U.S.A.. Flint remained a member of the board of CTR until his retirement in 1930.[8] The companies that merged to form CTR manufactured a wide range of products, including employee time-keeping systems, weighing scales, automatic meat slicers, coffee grinders, and most importantly for the development of the computer, punched card equipment. The product lines were very different, but Flint believed that since they all focused on equipment that made businesses more efficient, there were synergies and cross selling opportunities to be had. Based in New York City, the new 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. Of the companies merged to form CTR, the most technologically significant was the Tabulating Machine Company, founded by Herman Hollerith, and specialized in the development of punched card data processing equipment. Hollerith's series of patents on tabulating machine technology, first applied for in 1884, drew on his work at the U.S. Census Bureau from 1879–82. Hollerith was initially trying to reduce the time and complexity needed to tabulate the 1890 Census. His development of punched cards in 1886 set the industry standard for the next 80 years of tabulating and computing data input.[9] The Tabulating Machine Company originally sold some machines to a railway company but quickly focused on the challenges of the largest statistical endeavor of its day – the 1900 US Census. After winning the government contract, and completing the project with amazing speed, Hollerith was faced with the challenge of sustaining the company in non-Census years He returned to targeting private businesses both in the United States and abroad, attempting to identify industry applications for his automatic punching, tabulating and sorting machines. In 1911, Hollerith, now 51 and in failing health sold the business to Flint for $2.3 million (of which Hollerith got $1.2 million), who then created C-T-R. When the diversified businesses of C-T-R proved difficult to manage, Flint turned for help to the former No. 2 executive at the National Cash Register Company, Thomas J. Watson Sr.. Watson became General Manager of C-T-R in 1914 and President in 1915. By Drawing upon his managerial experience at NCR, Watson quickly implemented a series of effective business tactics: 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. As the sales force grew into a highly professional and knowledgeable arm of the company, Watson focused their attention on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. He also stressed the importance of the customer, a lasting IBM tenet. The strategy proved successful, as during Watson's first four years, revenues doubled to $2 million, and company operations expanded to Europe, South America, Asia and Australia. At the helm during this period, Watson played a central role in establishing what would become the IBM organization and culture. He launched a number of initiatives that collectively demonstrated an unwavering faith in his workers: he hired the company's first disabled worker in 1914, he formed the company's first employee education department in 1916, and in 1915 he introduced his favorite slogan, "THINK," which quickly became a corporate mantra. Watson boosted company spirit by encouraging any employee with a complaint to approach him or any other company executive – his famed Open Door policy. He also sponsored employee sports teams, family outings and a company band, believing that employees were most productive when they were supported by healthy and supportive families and communities. These initiatives – each deeply rooted in Watson's personal values system – became core aspects of IBM culture for the remainder of the century. Given the company's geographic growth (including the completion of three manufacturing facilities in Europe), and his own expansive vision, Watson found the C-T-R name too limiting,. A name of a publication from C-T-R's Canadian operation caught his eye, and on February 14, 1924, the C-T-R name was formally changed to International Business Machines Corporation, later to be abbreviated IBM. [edit] 1925–1949: IBM's early growth This section needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (August 2010) Year Gross income (in $m) Employees 1925 13 3,698 1930 19 6,346 1935 21 8,654 1940 45 12,656 1945 138 18,257 1950 266 30,261 The newly minted IBM continued to develop its core cultural attributes during the 1920s. It launched a flagship newspaper, Business Machines, which unified coverage of all of IBM's businesses under one publication. It introduced the Quarter Century Club, to honor employees with 25 years of service to the company. It launched the Hundred Percent Club, to reward sales personnel who met their annual quotas. In 1928, the Suggestion Plan program – which granted cash rewards to employees who contributed viable ideas on how to improve IBM products and procedures – made its debut. The company also expanded its product line through innovative engineering. Behind a core group of inventors – James Bryce, Clair Lake, Fred Carroll, and Royden Pierce – IBM produced a series of significant product innovations. In the optimistic years following World War I, C-T-R's engineering and research staff developed new and improved mechanisms to meet the broadening needs of its customers. In 1920, the company introduced the first complete school time control system, and launched the Electric Accounting Machine. Three years later the company introduced the first electric keypunch, and 1924's Carroll Rotary Press produced punched cards at previously unheard of speeds. In 1928, the company held its first customer engineering education class, demonstrating an early recognition of the importance of tailoring solutions to fit customer needs. It also introduced an 80-column punched card.[10] in 1928, which doubled its information capacity. This new format, soon dubbed the "IBM Card", became and remained an industry standard until the 1970s. The Great Depression of the 1930s presented an unprecedented economic challenge, and Watson met the challenge head on, continuing to invest in people, manufacturing, and technological innovation despite the difficult economic times.