Happy 100th Birthday IBM! The original computer giant reaches milestone (and it's still bigger than Google and Apple)
Google, Apple and Facebook get all the attention.
But what about the company that invented barcodes, a computer that almost thinks like a human and enables you to save a file on your laptop or even get money from an ATM?
IBM - or International Business Machines - celebrates its 100th birthday tomorrow. If the aforementioned IT giants were celebrating such a milestone do you think it would pass so quietly? Not likely.
But its much younger competitors owe a lot to Big Blue.
Logo: IBM or Big Blue as it became known made scales, time clocks, cheese slicers and -
significantly for its future - machines that read data stored on punch cards
Old school: The IBM PC made its debut in 1981, 70 years after the company was first formed
Compact: An IBM ThinkPad computer, left, is shown next to a stack of text books that is
issued to the typical fifth-grade at certain elementary schools
After all, where would Groupon be without the supermarket bar code? Or Google without the mainframe computer?
Bob Djurdjevic, a former IBM employee and president of Annex Research, said: 'They were kind of like a cornerstone of that whole enterprise that has become the heart of the computer industry in the U.S.'
IBM dates to June 16, 1911, when three companies that made scales, punch-clocks for work and other machines merged to form the Computing Tabulating Recording Co. The modern-day name followed in 1924.
With a plant in Endicott, New York, the new business also made cheese slicers and - significantly for its future - machines that read data stored on punch cards.
By the 1930s, IBM's cards were keeping track of 26 million
Americans for the newly launched Social Security program.
Innovative: IBM magnetic stripe technology is used in 1971 at a shoe store, left,
and a dog sits on an international portable scale, right, also made by IBM
Invention: An IBM punch card machine is being assembled in 1971
These old, sprawling machines might seem quaint in the iPod era, but they had design elements similar to modern computers. They had places for data storage, math processing areas and output, says David A. Mindell, professor of the history of technology at the Massachusetts Institute of Technology.
Punch cards carted from station to station represented what business today might call 'data flow'.
'It was very sophisticated,' Mindell says.
The force behind IBM's early growth was Thomas J. Watson Sr. He, and later his son, Thomas Watson Jr., guided IBM into the computer age. Its machines were used to calculate everything from banking transactions to space shots.
As the company swelled after World War II, IBM threw its considerable resources at research to maintain its dominance in the market for mainframes, the hulking computers that power whole offices.
Donald Seraphim, who worked at IBM from 1957 until 1986 and was named a fellow, the company's highest honour for technical achievement, said: 'When we did semiconductors, we had thousands and thousands of people. They just know how to put the force behind the entrepreneurial things.'
By the late '60s, IBM was consistently the only high-tech company in the Fortune 500's top 10. It famously spent $5 billion during the decade to develop a family of computers designed so growing businesses could easily upgrade.
Inspection: A production worker at the IBM plant in Essex Junction, Vermont, checks a wafer of computer chips in 2005
New: Maciej Przepiorka of IBM Poland shows the companies newest $2million processor POWER7 at a news conference in Warsaw, Poland, in 2010
It introduced the magnetic hard drive in 1956 and the floppy disk in 1971. In the 1960s, IBM developed the first bar code, paving the way for automated supermarket checkouts. IBM introduced a high-speed processing system that allowed ATM transactions. It created magnetic strip technology for credit cards.
For much of the 20th century, IBM was the model of a dominant, paternalistic corporation. It was among the first to give workers paid holidays and life insurance.
It ran country clubs for employees generations before Google offered subsidized massages and free meals.
IBM's gold-plated reputation was based in part on ubiquity and reliability, as well as a relentless sales force. But its fortunes began to change as bureaucracy stifled innovation.
Information-technology managers used to joke that nobody ever got fired for buying IBM. But by the 1980s, Big Blue found itself adrift in a changing technology environment.
IBM had slipped with the rise of cheap microprocessors and rapid changes in the industry. In an infamous blunder, IBM introduced its influential personal computer in 1981, but it passed on buying the rights to the software that ran it - made by a startup called Microsoft.
Fifties: The Random Access Method of Accounting and Control (RAMAC) IBM RAM 305 from the 1950's, is shown in this photo
Beep: IBM developed the bar code in the 1960s
IBM helped make the PC a mainstream product, but it quickly found itself outmatched in a market it helped create. It relied on Intel for chips and Microsoft for software, leaving it vulnerable when the PC industry took off and rivals began using the same technology.
In addition, the rise of smaller computers that performed some of the same functions as mainframes threw IBM's main moneymaking business into disarray. With its legacy and very survival at stake, the company was forced to embark on a wrenching restructuring.
One of its major achievements turned out to be re-engineering itself during the upheavals of the 1990s. Viewed as too bureaucratic to compete in fast-changing times, IBM tapped an outsider as CEO in 1993 to help with a turnaround.
Louis Gerstner, a former executive with American Express and RJR Nabisco, had little knowledge of technology or IBM culture. In his first meeting with top IBM executives, he was the only one in the room with a blue shirt.
But he broke up old fiefdoms, slashed prices and eliminated jobs. IBM, which had peaked at 406,000 employees in 1985, shed more than 150,000 in the 1990s as the company lost nearly $16 billion over five years.
Gerstner resisted pressure to break up the company and instead focused on services, such as data storage and technical support.
Humanistic: IBM's Watson, powered by IBM POWER7, is a work-load optimized system that can answer questions posed in natural language over a nearly unlimited range of knowledge
The shift allowed IBM to ride out two recessions: When times are tough, businesses pay IBM to help them find ways to cut costs and handle technology chores that would be more expensive to perform in-house.
With around $100 billion in annual revenue today, IBM is ranked 18th in the Fortune 500. It's three times the size of Google and almost twice as big as Apple. Its market capitalization of around $200 billion beats Google and allowed IBM last month to briefly surpass its old nemesis, Microsoft.
Though transformed, IBM remains a pioneer, the envy of the technology industry. The company still spends heavily on research, about $6 billion a year. It still comes up with flashy feats of computing prowess, most recently when its Watson computer system handily defeated the world's best Jeopardy! players.
And, just as in 1911, it's still in the business of finding data solutions.
While IBM's Watson attracted buzz by beating two human Jeopardy! champions, the company wants to put it to real-world use as a medical diagnostic tool that can understand plain language and analyse mountains of information.
That's in line with IBM's focus on other big data projects, such as analysing traffic patterns citywide to predict and stave off traffic jams.
The company that built its success making sense of millions of punch card records sees future innovations in the analysis of the billions and billions of bits of data being transmitted in the 21st century.
Bernard Meyerson, IBM's vice president for innovation, said: 'The scale of that enables you to do discovery, whether it's in the case of drugs, medicine, crime - you name it.'
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