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Type: Public
Industry: Information Technology and Services
Founded: 1911
Founder(s): Charles Ranlett Flint
Headquarters: New Orchard Road, Armonk,
New York, NY 10504
Country: USA
Employees: 399, 409 worldwide
Revenue: $ 99.870 billion as of 2010 [1]
Key People
Samuel J. Palmisano, Chairman, President and CEO

International Business Machines (IBM), also referred to as the Big Blue, is a multinational technology and consulting company. It is highly recognized as the leading computer and systems integrator worldwide. Samuel J Palmisano is the Chairman, President and CEO of the company, which is based in Armonk, New York.[2]

IBM offers a wide range of infrastructure and hosting services, a broad portfolio of middleware for collaboration, predictive analytics, provides the world's most advanced servers and develops computer hardware & software, systems management and consulting services in different technology such as the nanotechnology.[3] IBM employs hundreds of thousands of employees in more than 170 countries and it operates under the principle of building a smarter planet. [4]


Early Years of the Company

Charles Ranlett Flint engineered the merger between the International Time Recording Company, the Computing Scale Company and the Tabulating Machine Company to form the Computing Tabulating Recording (CTR) Company, IBM's predecesor. CTR was incorporated as a holding company on June 16, 1911. George Fairchild became the Chairman of the Board of Directors. Flint remained member of the board of CTR until his retirement in 1930.[5]

The newly-formed CTR consisted of over 1,300 employees, with a time-recording equipment manufacturing plant located in Endicott, New York; a scale production plant located in Dayton, Ohio; and a keypunch card manufacturing plant located in Washington, D.C.[6] After the merger, CTR started selling a wide range of products, ranging from meat slicers, clocks, commercial scales, punchcard tabulators and many other machineries.[7] The punchcard tabulating machine, originally invented by Herman Hollerith, founder of the Tabulating Machine Company that later became a part of CTR, paved the way for the development of computers.

CTR under Thomas J. Watson Sr.

Because of the diversity of CTR's product line, it was difficult for Flint to manage the business. He hired Thomas J. Watson Sr. in 1914 to serve as General Manager and help him revitalize the business. Watson aggressively introduced Hollerith's punchcard tabulators to the United States government during World War I. [8] During his management, the use of accounting machines began to spread and the company's product line expanded to include mechanical key punches, hand-operated gang punches, the vertical sorter, and the tabulator. Customers included railroad, chemical, utilities, and insurance companies.[9]

Watson Sr. Renames CTR

Watson was elected President and General Manager of CTR in 1915. After a decade, Watson changed the name of the company from CTR to the International Business Machines (IBM) Corporation due to the company's global and functionality expansions. By that time, IBM's gross income was already at $11 million and it had already established three manufacturing companies in Europe. The Electric Accounting Machine and the Carrol Rotary Card Press were also introduced in the market.[10]

IBM During the Great Depression

During the Great Depression of the 1930s, IBM was one of the few companies to maintain full employment. Instead of resorting to mass lay-offs, Watson Sr. supported the call of President Franklin Roosevelt's National Recovery Action Plan, and took care of his employees. Many companies went bankrupt and shut down their operations but Watson kept his men working and decided to manufacture parts for inventory and store them until after the depression.[11] IBM was one of the first companies to provide group life insurance (1934), survivor benefits (1935), and paid vacations (1937).[12]

IBM Landmark Contract

In 1935, the United States government passed The Social Security Act, which mandated the devlopment of a centralized record keeping system, including an index listing the name and number of all covered workers. This required that 26 million workers be issued social security numbers and 3.5 million employer identification numbers be issued. The project was considered the largest bookkeeping operation in the world's history. A French consultant for the government said, "It can't be done."[13]. IBM landed the contact for the project, and, with its large inventory of equipment and an already established research and development center, was prepared for the task. In 1937, the company developed the IBM O77 Collator, along with different mechanical card punches and tabulating devices, especially for the SSA program. The SSA used these machines until 1940s. IBM continued to develope and improve the record machines and in 1950 supplied the first electronic computing device, the IBM 604 Electronic Calculator, which was used to do benefit computations. In 1955, the SSA received the IBM 705, the first large-scale, general purpose computer, which was used for most accounting jobs related to the Social Security program. The IBM 705 was used until the 1960s and was eventually replaced by modern computers.[14]

After landing the SSA contract, IBM's business continued to flourish with orders from different government agencies and other private companies. It continued to develop computing equipment, and during this period came out with the IBM 701 ans the IBM 7090. The IBM 701, mainly used by the government and for research work, was the first large computer based on vacuum tubes and could execute 17,000 instructions per second. The IBM 7090 was able to perform 229,000 calculations per second, and was used by the U.S. Air Force to run its Ballistic Missile Early Warning System.[15]

After World War II, the company was the largest supplier of office equipment in the United States.[16] Year after year IBM continued to introduce different product lines, expanded its operations in different countries worldwide, and to record consistent increases in annual earnings.

IBM under Thomas Watson Jr.

In 1952 Thomas Watson, Sr. transferred his title as President to his son, Thomas Watson Jr., who oversaw the company's rapid technological development. After his father's death on June 19, 1956, Watson Jr. became the Chief Executive Officer of IBM. During his first year as CEO, he reorganized the company into six autonomous divisions and the World Trade Corporation. He formed a Corporate Staff to advise and assist the specialized divisions, and provided employees with the Family Major Medical Plan.

Thomas Watson Jr. served IBM until 1971. Among the notable products launched during his management include:[17]

  • 305 and 605 Random Access Method of Accounting and Control (RAMAC), the first computer disk storage system
  • FORTRAN (FORmula TRANSlation), a computer language based on algebra, grammar and syntax rules, which became one of the most widely used computer languages for technical work.
  • Model 7090 high capacity computer
  • 7070 Intermediate data processing system
  • Series 50 basic accounting machine
  • 632 Electronic typing calculator
  • 1401 data processing system
  • 1620 scientific computer
  • 357 data collection system
  • 1210 magnetic character reader/sorter
  • 9090 automatic airline reservation system
  • solid-state 7000 series computers
  • 1410 computer
  • STRETCH computing system, the world's most powerful computer
  • "Executory" PBX dictation system & portable dictation unit
  • 7710 data communications unit which allows computers in different locations to exchange information via high speed internet
  • 7750 which allows single computer to communicate with a large number of widely separated terminals
  • bank transit system
  • 1062 teller system
  • IBM 2361, the largest computer memory ever built, used by the NASA Space Center in Houston

And many other products and equipments.

Watson Jr. retired as CEO and Chairman of the Board in 1971 but remained member of the IBM Board of Directors until 1984.[18]

IBM after Watson's Chairmanship to Present

Vincent Learson suceeded became Chairman after Watson's retirement. During his term, some of IBM's significant achievements include the development of Speech Recognition Application enabling customer Engineers to communicate (talk and receive spoken messages) from the computer.[19] The IBM Haifa Research Laboratory is Israel was also established.[20] Learson served IBM until 1973.

Frank Cary served as Chairman from 1973-81 and during his time IBM became the leader in '"areal density"' after IBM's researchers developed the Thin Film Recording Heads,[21] a higher capacity and higher performance disk drive. IBM also built the first prototype computer using the RISC Architecture(Reduced Instruction Set Computer),[22] back then it was described as the dominant computing architecture of the future.

During the 1980s to early 90's John Opel and John Akers served as Chairman of the Board respectively. IBM continue to prosper and developed new products and expanded globally. Opel established three new divisions: the Entity System, National Distribution and Systems Technology. The IBM personal computers became available in 16 different countries around the world. ROLM Corporation became a wholly-owned subsidiary of IBM.[23] Opel serve as Chairman from 1983-86.

Akers established the IBM Educational Systems as a business unit to provide computer systems, educational courseware and services to elementary, secondary and vocational schools.[24] IBM's Federal Systems Division won a NASA contract to define and design the management system for the first permanently manned U.S. space station.He also established the Chairman's office in Europe, re-organized the IBM World Trade Americas/Far East, established the Publishing Systems Unit, and introduced the IBM Personal Computer line, a high speed work-station for technical professionals, and many other products during his eight years service as IBM Chairman.

Louis Gertner assumed as Chairman of the Board in 1993. He served the company for nine years until 2002 and among his significant contributions include the development of the Think Pad,[25] Scallable Parallel Systems, Prizma Switch, Deep Blue, [26] Interlocked Pipelined CMOS [27] etc.The company's laboratories in Austin, Texas, China and India were established. IBM also developed the Deep Blue Computing Institute and allocated $100 million to build a new super computer called Blue Gene, capable of more than one quadrillion operations.[28]

The Blue Gene Super Computer (BGW) was officially unveiled in 2003, Samuel Palmisano was the Chairman of the Board. BGW was ranked as the 73rd world's most powerful supercomputer.[29]

IBM continued to develop automatic computers and pioneered in developing the Nanotechnology.[30] The company also developed the world's largest privately-owned super computer known as the Watson Blue Gene System which was installed at the Thomas J. Watso Research Center in New York.[31]

During the 2010 Annual Report Palmisano announced that IBM recorded a high value market performance with $ 99.9 billion revenue and a $ 19.7 billion pre-tax income. He also announced the company's road map to 2015. He projects that IBM will deliver a $20 per share earnings by 2015 and it will generate a $100 billion cash flow and a $20 billion acquisitionbetween 2010 until 2015.[32]


  • Thomas Watson Sr. (1914-1956)
  • Thomas Watson Jr. (1956-1971)
  • T. Vincent Learson (1971-1973)
  • Frank T. Cary (1973-1981)
  • John R. Opel (1981-1985)
  • John F. Akers (1985-1993)
  • Louis V. Gertner, Jr. (1993-2002)
  • Samuel J. Palmisano (2002-present)

Corporate Rankings

In 2010, IBM ranked no. 20 in the Fortune 500 annual ranking for America's largest corporations[33] and ranked 33 in Forbes Global 2000.[34]

In 2011, IBM was ranked no. 12 as the World's Most Admired Companies by Fortune, ranked 23 for the Top 50 Brands in Social Media by Yomego, ranked 44 for Social Brands To 100 by Headstream and ranked no. 4 for BrandFinance Global 500 (100) by Brand Finance.[35]


IBM was one of the major American corporations to support the establishment of ICANN as a self-regulating body to take over internet addressing responsibilities.[36] Since ICANN's inception, IBM has been supportive of the programs and activities established by the organization for the internet community worldwide.


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