Ibm (International Business Machines)
International Business Machines Corporation (IBM), nicknamed "Big Blue," is the world's largest information technology company, as well as one of the world's leading supplier of computer-related products and services. Headquartered in Armonk, New York, IBM produces just about every type of equipment needed for information processing, storage, and retrieval.
IBM owes its beginning to three events occurring around 1890—the Industrial Revolution, the United States population expansion, and the inability of the Census Bureau to adequately count the population. Hoping to discover a more efficient way to count the census, American statistician Herman Hollerith invented the punched-card tabulating machine. With "punched-card" processing and Hollerith's machine the Census Bureau completed its census in three years, saving over five million dollars. With this success, Hollerith formed the Tabulating Machine Company in 1896. The company merged with the Computing Scale Company of America and the International Time Recording Company, and together became incorporated in 1911 as the Computing-Tabulating-Recording Company (C-T-R), manufacturing scales, time recorders, tabulators, and punch cards. Almost immediately C-T-R became difficult to manage, and Thomas Watson was hired in 1914 to conduct a reorganization. A management expert, Watson organized a loyal, well-trained, and well-paid staff, concentrating on customer importance and creating IBM's famous slogan "Think." The company's function was narrowed to providing custom-built, large-scale business tabulating machines. During this four-year period revenues doubled as the company transformed into an energetic organization. With a growing international presence, Watson changed the company's name to International Business Machines Corporation in 1924. During the Great Depression in the 1930s, Watson built up inventory in preparation for better times. When the economy began to recover IBM filled a historic governmental contract to develop employment records for 26 million people under the new 1935 Social Security Act. IBM effectively managed this contract and was awarded additional government contracts. With aggressive research and development in the 1930s and 1940s, IBM dominated the business machine market and Watson aggressively pursued international trade. At this point the Justice Department initiated antitrust cases against IBM, charging the corporation with the intent to monopolize its market.
World War II saw IBM producing more than thirty-six different military items. These war years also introduced IBM to computers. In association with Harvard professor Howard Aiken, the Automatic Sequence-Controlled Calculator (Mark I) was developed in 1944. It was the first computer consisting of a series of electromechanical calculators that automatically executed long computations (e.g., addition in one second, division in twelve seconds). Then, in 1952, IBM introduced its first commercially successful general-purpose computer, the IBM-701; it was designed for scientific calculations and featured vacuum tubes and the ability to perform 22,000 multiplications-per-second. After releasing the 700-series, IBM built the IBM-650, a computer that used the same card-processing peripherals as earlier calculators, starting the upgrade trend for loyal customers. The 650s were IBM's first mass-produced computers, but faster transistors soon overshadowed the vacuum tubes, and by 1959 IBM entered the digital computer market with the IBM-7090, one of the first fully transistorized mainframes. It performed 210,000 additions or subtractions-per-second. During this time IBM distinguished itself with several innovations: (1) a policy stating that no customer would be allowed to fail after implementing an IBM system, (2) the first computer with a 50-disk magnetic memory capable of storing 5 million-alphanumeric characters, and (3) FORTRAN, a symbolic programming language based on algebra, grammar, and syntax. At this time Watson retired, and his son Thomas Watson Jr. replaced him as president.
In 1964 IBM introduced what is often considered the most important announcement in the history of commercial computers, its new "family" of computers. The IBM-360, considered IBM's first genuine computer system, was the first to use interchangeable software and peripherals that ran across the entire family of computers. The IBM-360, with solid logic technology circuits, offered a choice of five processors and 19 combinations of power, speed, and memory. It became the best-selling computer of the 1960s and the basis for all commercial mainframes. The marketing of IBM products improved dramatically as exclusive packages were, for the first time, offered for individual sale. This "unbundling" of components helped IBM become the leader of the software and services industries. Thomas Watson Jr. retired as CEO in 1971, and was replaced by Frank Cary in 1973. During this time IBM introduced the floppy disk for storing computer data, the supermarket checkout laser station, and the Consumer Transaction Facility, precursor to the ATM (automatic teller machine).
From the 1960s until the 1980s IBM dominated the world mainframe market, although in the 1980s IBM lost market share to specialty manufacturers. In addition, when minicomputers were introduced in the 1970s, IBM viewed them as competition to their mainframes and, unlike other competitors, failed to recognize their potential. However, in 1981, under new CEO John Opel, IBM introduced its first personal computer, the IBM-PC, which quickly became the world's most popular personal computer (PC). For the first time IBM contracted out its component production; for instance, IBM let Intel make the microprocessor and Microsoft make the operating system (DOS). Other companies soon developed clones of the IBM-PC that could run the same software as IBM's PC. By the mid-1980s these IBM-compatible computers far outsold IBM personal computers. This time IBM was unable to dominate because smaller companies easily entered the field and quickly responded to technological change. John Akers became CEO in 1985, focusing on downsized operations and streamlined resources. Significant research during this time achieved breakthroughs in mathematics, memory storage, telecommunications, and computer capabilities. However, IBM still struggled with the switch from integrated business applications to desktop and personal computers. In the mid-1980s IBM collaborated with Microsoft to develop the OS/2 operating system. OS/2 ran older, DOS applications and newer, OS/2 applications in a process called "multitasking." Soon Microsoft and IBM ended their collaboration as IBM continued to release updated OS/2 versions, while Microsoft developed its Windows operating system. In the late 1980s IBM was the world's largest producer of a comprehensive line of computers, a leading producer of office equipment, and the largest manufacturer of integrated circuits. The sale of mainframe computers and related software and peripherals accounted for nearly half of IBM's business and over 70% of its profits. In the 1990s IBM reorganized itself into autonomous business units that were closely aligned with their markets. However, IBM suffered record losses in 1992 and, for the first time, cut stock dividends.
Akers resigned in 1993 and Louis Gerstner Jr. was named chairman. In 1995 IBM acquired Lotus Development in order to expand its software presence. Beginning in 1996, IBM returned to profitability through Gerstner's efforts in rebuilding IBM's product line and reducing expenses. In 1997 IBM supercomputer Deep Blue defeated world chess champion Garry Kasparov in a match that was considered a historic development in artificial intelligence. In 1998 IBM built the world's fastest supercomputer (with 3.9 trillion calculations-per-second) for the Department of Energy in order to simulate nuclear-weapons tests. In 1999 IBM teamed with Dell for a gigantic $16 billion, seven-year agreement to provide storage, networking, and display peripherals.
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