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IBM does a fantastic job of convincing people that
it the most high tech computer company in the world.
That's a bunch of rubbish. IBM is t he most high tech MARKETING and SALES company in the world. IBM is so good they could sell snow and ice cubes to Eskimos at premium prices if they wanted to. Of course that's not to say IBM couldn't be the most high tech computer company in the world. If they wanted to be that, they probably could be that. But they are too busy making money to worry about being the most high tech company in the world.
IBM has left its mark on century by Michael Hill and Jordan Robertson - Jun. 16, 2011 12:00 AM Associated Press ENDICOTT, N.Y. - Google, Apple and Facebook get all the attention. But the forgettable everyday tasks of technology - saving a file on your laptop, swiping your ATM card to get 40 bucks, scanning a gallon of milk at the checkout line - that's all IBM. International Business Machines Corp. turns 100 today without much fanfare. But its much younger competitors owe a lot to Big Blue. After all, where would Groupon be without the supermarket bar code? Or Google without the mainframe computer? "They were kind of like a cornerstone of that whole enterprise that has become the heart of the computer industry in the U.S.," says Bob Djurdjevic, a former IBM employee and president of Annex Research. 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. By the 1930s, IBM's cards were keeping track of 26 million Americans for the newly launched Social Security program. These old, sprawling machines might seem quaint in the iPod era, but they had design elements similar to modern computers. They had areas for data storage, math processing and output, says David A. Mindell, professor of the history of technology at the Massachusetts Institute of Technology. The force behind IBM's early growth was Thomas J. Watson Sr., a demanding boss with exacting standards. 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. By the late '60s, IBM was consistently the only high-tech company in the Fortune 500's top 10. 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 also 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. IBM's fortunes began to change as bureaucracy stifled innovation. By the 1980s, Big Blue found itself adrift in a changing technological 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. IBM didn't own the intellectual property inside its own machines. With its legacy and very survival at stake, the company was forced to embark on a wrenching restructuring. 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. But he broke up fiefdoms, slashed prices and cut 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 focused on services, such as data storage and technical support. The shift allowed IBM to ride out two recessions. With around $100 million in annual revenue today, IBM is ranked 18th in the Fortune 500. Some things haven't changed. 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. 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 analyze mountains of information. The company sees future innovations in the analysis of the billions of bits of data being transmitted in the 21st century. "The scale of that enables you to do discovery, whether it's in the case of drugs, medicine, crime - you name it," says Bernard Meyerson, IBM's vice president for innovation.
IBM cumple 100 años como pionera de la tecnología Por MICHAEL HILL y JORDAN ROBERTSON 06/16/2011 ENDICOTT, Nueva York, EE.UU. - Google, Apple y Facebook han acaparado toda la atención. Pero las tareas diarias que pasan inadvertidas para la tecnología, como guardar archivos en la laptop, usar la tarjeta en el cajero automático o escanear un galón de leche en el supermercado, todo es obra de IBM. International Business Machines cumple 100 años el jueves sin mucha fanfarria. Pero sus competidores mucho más jóvenes le deben mucho al Gigante Azul. Después de todo, ¿dónde estarían los cupones de Groupon sin el código de barras del supermercado? ¿O Google sin la computadora central? IBM data del 16 de junio de 1911, cuando tres empresas que hacían balanzas, relojes para marcar tarjeta de entrada o de salida del trabajo y otras máquinas se unieron para integrar Computing Tabulating Recording Co. El nombre que se conoce hoy en día surgió en 1924. Con una planta en Endicott, Nueva York, la nueva empresa también fabricó rebanadores de queso y algo muy importante para su futuro: máquinas que leían datos almacenados en tarjetas perforadas. Para la década de 1930, en las tarjetas de IBM estaban registrados 26 millones de estadounidenses para el recién lanzado programa de seguridad social. Estas viejas y raras máquinas podrían parecer pintorescas en la era del iPod, pero han diseñado elementos para las computadoras modernas. Tenían espacios para almacenar datos, áreas de procesamiento de matemáticas y de resultados, dice David A. Mindell, profesor de historia de la tecnología en el Instituto Tecnológico de Massachusetts. La fuerza motora del crecimiento inicial de IBM fue Thomas J. Watson Sr., un jefe demandante con rigurosos estándares para todo, desde la vestimenta para la oficina (camisa blanca y corbata), hasta la creatividad (su lema era: "Piensa"). Watson, y luego su hijo Thomas Watson Jr., guiaron a IBM hacia la era de las computadoras. Sus máquinas fueron utilizadas para calcular de todo, desde transacciones bancarias hasta lanzamientos espaciales. "Cuando hicimos los semiconductores, tuvimos miles y miles de personas", dice Donald Seraphim, quien trabajó en la empresa de 1957 a 1986. Para finales de la década de 1960, IBM fue por mucho la única empresa tecnológica en los primeros 10 lugares de la lista Fortune 500. IBM gastó maravillosamente 5.000 millones de dólares durante la década para desarrollar una familia de computadoras diseñadas para que las empresas en crecimiento pudieran actualizarlas fácilmente. Introdujo el disco duro magnético en 1956 y el disco floppy en 1971. En esa época también desarrolló el primer código de barras, un sistema que permitió las transacciones en los cajeros automáticos y la banda magnética para las tarjetas bancarias. Pero para la década de 1980, el Gigante Azul se encontró a la deriva en un cambiante entorno tecnológico. IBM se deslizó con el aumento de los microprocesadores económicos y rápidos cambios en la industria. En un error infame, la empresa introdujo su incluyente computadora personal (PC) en 1981, pero no compró los derechos del software que la hacía funcionar y que era fabricada por una empresa llamada Microsoft que apenas comenzaba. IBM ayudó a hacer de la PC un producto dominante, pero rápidamente se encontró fuera de un mercado que ayudó a crear. Se confió de Intel para los microprocesadores y de Microsoft para los programas, quedándose vulnerable cuando la industria de las PC despegó y los competidores comenzaron a utilizar la misma tecnología. La cubierta de la PC no era tan importante como la tecnología que había adentro e IBM no era dueña de la propiedad intelectual que estaba dentro de sus propias máquinas. Además, surgieron computadoras más pequeñas que hacían las mismas funciones mientras las computadoras centrales lanzaron a la deriva al negocio más rentable de IBM. Con su legado y mera supervivencia en juego, la empresa se vio obligada a embarcarse en una desgarradora reestructuración. El cambio en la estrategia era arriesgada para una empresa que ayudó a crear la industria de las PC, aunque IBM se ha reinventado hasta convertirse en el proveedor de servicios tecnológicos más grande del mundo. ___ Robertson contribuyó desde San Francisco.
100 Years of IBM: Milestones By Marc Ferranti, IDG News IBM is celebrating the 100th anniversary of its founding Thursday. Led by American capitalist icons Thomas J. Watson, Sr. and Thomas J. Watson, Jr. until the 1970s, the company grew from a pre-World War I conglomeration of companies making tabulating machines and time-keeping devices into a globe-spanning technology behemoth that pioneered the development of electronic computers and dominated the mainframe era. The company holds a mind-boggling array of patents and pioneered advances in a wide range of technologies including punched cards, processors, transistors, storage, word-processing, databases and OSes. As one of the emblematic 20th-century corporations, IBM also went through turbulent times. The U.S. government brought several antitrust lawsuits against the company, and critics have attacked it for alleged cosiness with repressive regimes. After Tom Watson Jr. retired in the 1971, the company seemed to lose its way as mainframe computing began to face competition from smaller, more modular systems. Increasing bureaucracy contributed to missteps during the PC revolution, and IBM suffered a series of annual losses in the early 1990s. Under the reins of then-CEO Lou Gerstner, starting in the mid-90s, the company bounced back to profit by focusing on software, system integration and other services, which remain key to the company's growth today. Though Hewlett-Packard, after its acquisition of Compaq, overtook IBM as the world's largest computer company by annual revenue, IBM's global reach and broad product portfolio still make it one of the largest and most profitable IT companies in the world, with about 427,000 employees and a profit of US$14.8 billion on sales of $99.9 billion last year. The following is a timeline of milestone events in one of the quintessential U.S. corporate success stories. --1889: Time-recording equipment maker Bundy Manufacturing Co. is incorporated. --1896: Punched-card, electric tabulating equipment maker The Tabulating Machine Co. is incorporated. --1911: Incorporation on June 16 of the Computing-Tabulating-Recording Company (C-T-R), which merges Bundy, the Tabulating Machine Co., the Computing Scale Company and the International Time Recording Co. Headed by trust organizer Charles Flint, the company has 1,300 employees. --1914: Thomas J. Watson, Sr., joins C-T-R at age 40, after learning aggressive sales tactics at the National Cash Register Co. that led to his conviction on antitrust charges. The verdict was set aside after an appeal. Within 11 months of joining C-T-R, Watson became its president. His focus on marketing and sales and large-scale tabulating solutions for businesses helped company revenue more than double in his first four years at C-T-R, to $9 million. Over the next four decades as IBM CEO Watson became an American business icon, pioneering worker benefits such as paid vacations and group insurance while instilling discipline and loyalty in generations of IBM workers. --1923: The first electric key punch is introduced, representing an advance on mechanical systems. --1924: Taking the name from a Canadian affiliate, C-T-R formally becomes International Business Machines. --1928: The 80-column IBM punched card, doubling prior capacity, is unveiled and remains a standard for 50 years. --1931: A watershed year in advances: IBM 400 accounting machines offer alphabetic data, the 600 series calculating machines perform multiplication and division, and the first automatic multiplying punch and reproducing punch machines are introduced. --1933: IBM acquires Electromatic Typewriters, acquiring entry in the typewriter business, which ultimately leads to innovations in word processing. --1936: Tom Watson, Sr.'s, insistence on making machines during the Depression, even when demand dried up, pays off when IBM is in a position to participate in what was then billed as the biggest accounting operation of all time, supplying punched-card equipment to the U.S. government in the wake of the 1935 Social Security Act. --1937: Tom Watson, Sr., is elected president of the International Chamber of Congress, and at a Berlin meeting promotes "World Peace Through Trade," taken on as a slogan by the ICC and IBM. Germany awards him with an Order of the German Eagle medal. He returns the medal in 1940, enraging the Fascist government, but IBM's business in Germany in the 30s stirs criticism over the years. --1944: IBM's first large-scale computer, the Automatic Sequence Controlled Calculator or the Mark I, is the first machine to accomplish long operations automatically, using electromechanical relays. --1946: IBM's 603 Electronic Multiplier is the first commercially available machine to offer electronic arithmetic circuits. It is more than 50 feet long, eight feet high, and weighs almost five tons. --1948: IBM releases the Selective Sequence Electronic Calculator, a large-scale digital calculating machine that uses electromechanical relays and offers for the first time the ability to modify a stored program. --1952: The IBM 701 is IBM's first production electronic computer, featuring tape-drive technology that ultimately led to the ascendance of magnetic tape. --1952: Thomas J. Watson, Jr., becomes IBM president. He was a force behind the 701, essentially a bet-the-company stance on electronic computers before they became more cost-effective than electromechanical machines, leading the way for IBM to dominate computing for the next few decades during the mainframe era. --1956: Consent decree ends a 1952 U.S. antitrust suit, as IBM adapts a more liberal policy toward licensing equipment. --1956: Tom Watson, Jr., takes over as CEO in May, before the death of his father in June. Tom Jr. moves to reorganize IBM along divisional lines, based on a "line and staff" concept that is adopted by American business at large. --1957: IBM introduces FORTRAN, which becomes the main language for technical work and is used to this day. --1961: The Selectric typewriter is released; later models offer memory and give rise to modern word processing. --1964: The IBM System/360 uses Solid Logic Technology microelectronics and introduces the concept of a family of computers that share compatible technology, in what was essentially a $5 billion bet on future trends. ---1966: IBM's Robert Dennard invents the Dynamic Random Access Memory cell, which remains an industry standard. --1969: IBM technology including an onboard computer used in first manned flight to the moon. --1971: Tom Watson Jr. steps down, is succeeded by Frank Cary, and the floppy disk is introduced; it later becomes the PC data storage standard. --1975: The IBM 5100 Portable Computer enters the market, weighing 50 pounds and priced at $9,000 to $20,000. --1981: The IBM Personal Computer becomes the smallest, and at $1,565, the lowest priced PC to date. IBM's deal for Microsoft to supply the operating system and allow competitors to buy it for "IBM-compatible" clones fuels a growing industry and paves the way for competitors such as Dell and Compaq. --1982: A U.S. antitrust suit filed in 1969 is dismissed, but arguably pushes IBM to further separate hardware from software, allowing customers to increasingly mix and match products from different companies, a trend that takes off during the PC era. --1984: The Personal Computer/AT, IBM's second-generation PC, runs on a 6MHz Intel 80286 processor. --1987: The IBM Personal System/2 (PS/2) is launched along with the OS/2 operating system, jointly developed by Microsoft and IBM. OS/2 offers multitasking capabilities and in six months one million PS/2s are shipped. But while IBM PC chief James Cannavino wants OS/2 to maintain compatibility with the AT going forward, Bill Gates wants to move on to machines built around the Intel 80386 chip. Windows 3.0, released in 1990, offers crude multitasking features but makes use of '386 memory management and becomes a hit, leaving OS/2 in the dust. --1990: IBM releases the System/390 family, comprising midrange machines and supercomputers, calling it the company's biggest product development in 25 years. New technology includes high-speed fiber optic channels, ultra-dense circuits and extended supercomputer capabilities. --1991: As Microsoft and PC clone makers rake in profits, client/server architecture takes off and IBM shocks long-time industry insiders by announcing an annual loss of $2.82 billion, the first of three annual losses in a row. Under CEO John Akers, IBM considers breaking up into smaller, nimbler companies. --1993: Louis Gerstner, former chief executive of RJR Nabisco, takes the reins as chairman and CEO. At his inaugural press conference, Gerstner plainly states his intention to keep IBM together as an integrated company, and his belief that there is a need for a broad-based IT company that can serve as both supplier and systems integrator to customers. --1995: IBM acquires Lotus Development Corp. and its Notes collaboration software, making IBM the world's largest software company. --1995: IBM introduces the ThinkPad 701cm, which runs on the Intel 133MHz Pentium processor. The sleek black design is a departure for IBM and wins accolades. --1996: IBM's launch of the DB2 Universal Database, capable of querying alphanumeric data as well as images, audio and video, marks IBM's firm embrace of the Internet. --1997: Deep Blue, an IBM RS/6000 SP supercomputer able to calculate 200 million chess positions per second, defeats grandmaster Garry Kasparov. --2001: The publication of Edwin Black's "IBM and the Holocaust" coincides with an Alien Tort Claims Act claim, later dismissed, against IBM for allegedly suppling punched card technology that enabled the Holocaust. IBM's response points out that along with hundreds of foreign-owned companies in Germany at that time, its affiliate came under the control of Nazi authorities prior to World War II. --2002: Sam Palmisano becomes CEO in March, and in July IBM signals it is further strengthening its services business with a $3.5 billion acquisition of the PricewaterhouseCoopers global business and consulting technology unit. --2005: Though IBM has sold more than 20 million ThinkPads, it announces the sale of its PC business to Lenovo in an effort to further focus on software and services. --2011: Watson, comprising 90 IBM Power 750 servers, shows off IBM's artificial intelligence and systems architecture expertise by defeating two Jeopardy game show champions in a two-game match. Sources: --IBM --Interview with James Birkenstock, interviewed in 1980 by Roger Stuewer and Erwin Tomash for the Charles Babbage Institute --"Big Blues: The Unmaking of IBM," by Paul Carroll, Crown Publishers, 1993 --IDG News Service archives
A century of IBM: Technology pioneer continues to ‘Think’ It’s a long way from data cards to a game-winning super-genius computer By Associated Press The Atlanta Journal-Constitution ENDICOTT, N.Y. — International Business Machines, better known as IBM, turns 100 today without much fanfare. But its much younger competitors, such as Hewlett-Packard and Apple, owe a lot to Big Blue. “Jeopardy” contest Ken Jennings, who won a record 74 consecutive games, and another player were bested by their opponent, an IBM computer called Watson, this year. Seth Wenig Associated Press “Jeopardy” contest Ken Jennings, who won a record 74 consecutive games, and another player were bested by their opponent, an IBM computer called Watson, this year. After all, where would Groupon be without the supermarket bar code? Or Google without the mainframe computer? “They were kind of like a cornerstone of that whole enterprise that has become the heart of the computer industry in the U.S.,” says Bob Djurdjevic, a former IBM employee and president of Annex Research. 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, N.Y., 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. These 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., a demanding boss with exacting standards for everything from office wear (white shirts, ties) to creativity (his slogan: “Think”). Watson, 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. By the late 1960s, IBM was consistently the only high-tech company in the Fortune 500’s top 10. IBM famously spent $5 billion during the decade to develop a family of computers designed so growing businesses could easily upgrade. 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. IBM’s gold-plated reputation was based in part on ubiquity and reliability. 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. 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. Louis Gerstner, a former executive with American Express and RJR Nabisco, came in as CEO in 1993. 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 focused on services, such as data storage and technical support. Services could be sold as an add-on to companies that had already bought IBM computers. 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. Hewlett-Packard Co.’s new CEO, Leo Apotheker, says one of his primary goals is to strengthen the company’s software and services businesses to compete better with IBM. Some things haven’t changed. 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. The company wants to put Watson to real-world use as a medical diagnostic tool that can understand plain language and analyze mountains of information. That’s in line with IBM’s focus on other big data projects. 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.
IBM joins elite group of 100-year-old companies By Matt Krantz and Jon Swartz, USA TODAY A hundred years ago the company made punch cards, scales and clocks. Today, its supercomputers can beat human chess champions or solve mind-bending business problems. IBM pioneered training courses for women so they could work in technical positions traditionally filled by men. The company is IBM. And today Big Blue joins the exclusive club of companies to have survived 100 years, a rare feat it accomplished by constantly adapting through the tumult of recessions, technology shifts and CEO succession. Don't make the mistake of thinking IBM is a corporate old-timer that just watched technology evolve. It has remained at the forefront through the decades and tops several of its whippersnapper rivals in some regards. Perhaps the most quantifiable hallmark is the value investors put on the company: $197 billion. That makes IBM the fifth-most-valuable U.S. company, just behind Microsoft at $200 billion and well ahead of Google at $162 billion. IBM's entrance to the club of U.S. companies to see their 100th birthdays is a milestone in business history. "It's the predominant pattern that companies eventually self-destruct," says management expert Jim Collins, author of books such as Built to Last, who studies corporate longevity. Companies that survive 100 years or longer are "a special and rarefied group." The numbers reveal just how rare it is. From the pool of more than 5,000 U.S. publicly traded companies, 486 are 100 years or older — excluding operating subsidiaries — according to an analysis by Standard & Poor's Capital IQ for USA TODAY. And just 23 private firms in the U.S. with audited financial statements are 100 years or older, Capital IQ says. Many of the best-known companies that have lived for 100 years or longer include the stalwarts of American business, including ExxonMobil, General Electric and Chevron. Yet others, such as industrial gas provider Praxair, medical supply company McKesson and chemical firm PPG Industries, may not be household names but have served their industries' niches for more than 10 decades. IBM's computer "Watson" faces off against "Jeopardy!" contestants including Ken Jennings, left, in January. Tech’s speed of change Staying on top of any industry is a feat. But adding to IBM's accomplishment is the fact it's one of the only major U.S. computer technology firms to become a centenarian. Technology trends are so fast-moving that many companies in the industry tend to rise fast only to flame out — outpaced by younger rivals only to wind up in the bankruptcy bin or as buyout fodder. But while the speed of change in technology makes longevity a challenge, IBM demonstrated a strength shared by most 100-year-old companies: the ability to change. IBM's legacy as one of the nation's most enduring companies was hardly a guarantee. It has risen and fallen over the years, riding the surge of popularity of the typewriter, which gave way to personal computers and the Internet. But through a rare blend of ingenuity, persistence and a strict adherence to its core objectives summarized by its motto, "Think," IBM survived not only the Depression and several recessions, but technological shifts and intense competition as well. Throughout its 100-year history, IBM has bet on the introduction of new technology, from time clocks, butcher scales and coffee grinders; to punch-card machines and typewriters; to tape storage, mainframes and personal computers; to acquiring the consulting arm of PricewaterhouseCoopers; and, now, to smart social media, says Jon Iwata, senior vice president of marketing and communication at IBM. "We have learned, from our history, to (roll with changes) in the world, like economic downturns and wars," Iwata says. "In downturns, we learned to invest more, acquire other companies and increase R&D, for example." "This isn't like the auto industry, where the combustible engine still exists, or oil, where many parts of the business are the same," Iwata says. "We have to let go of what we have invented. We stopped making typewriters, punch-card machines, PCs. We had to move on." IBM's staying power is an inspiration to many companies aspiring to stand the test of time and not join the corporate trash heap filled with firms whose founders' great ideas faded over time. Some foundations of long-term success: •Ability to move into new businesses without abandoning core tenets. IBM is a classic example of a company that had to get into entirely new businesses, without turning its back on what got it to where it is, Collins says. If you consider what IBM's mission is, it's not about computers or technology. It's about allowing its individual employees to create ways for its customers to solve operational problems, Collins says. Whether that's a task best done with scales, typewriters or computers doesn't matter; what matters is that customers' needs are answered, Collins says. IBM lost its focus on the customer in the 1990s to such an extent that many thought Big Blue was doomed, Collins says. The company's reliance on sales of mainframe computers, a technology largely being supplanted by less-costly personal computers, looked like the end of the line for IBM. But after Louis Gerstner arrived as CEO in April 1993, he succeeded in saving the company from ruin in large part by understanding that if IBM stuck to its focus on customers, its core, it could survive, Collins says. Gerstner reversed the company's plans to break itself into several pieces, recognizing that corporate and government customers wanted one large technology firm, like an IBM, to do business with. Gerstner transformed IBM from a flailing computing giant stretched paper thin in the 1990s to a world-class provider of computing services, a blueprint for its success since then. "Every market is going to change over time, especially in the fast-paced world of high-tech," says Charles O'Reilly, a management professor at Stanford University's Graduate School of Business who has written a research paper on how IBM adapted to regain its dominant place in the tech industry. •A strong sense of purpose. Companies that last almost always put making money secondary to a broader and more ambitious stretch goal, says Vicki TenHaken, professor of management at Hope College, who has studied companies that make it to their 100th birthday. Lasting companies have big goals that keep their employees motivated through the decades, she says. Merck (120 years old), for instance, has had a stated goal of improving human life and of measuring corporate success by its ability to defeat disease, TenHaken says. Much of IBM's early success came from its strong internal goals to push the limits, championed by its early leader, Thomas J. Watson Sr., who coined the company's motto "Think." The company's genesis was the melding of three small companies located in three different regions: New York, Ohio and Washington, D.C. It was Watson's mission for the combined company, first called the Computer-Tabulating-Recording Co., that would guide it then and continues to guide it now. •Careful innovation. The same thing that's often a knock against big companies — their reluctance to make huge gambles on untested businesses — is a secret to their longevity, TenHaken says. Hundred-year-old companies routinely have new businesses cooking in research labs and are constantly pursuing future businesses. Innovation is a prerequisite to survive. Yet these companies don't chase mad science innovations willy-nilly or desperately, but they "do it very carefully," she says. At 3M, for instance, employees are urged to spend 15% of their time on side projects. Some of those projects will turn into big business in the future, but the company plans it carefully. Grasping for that one magical market or new invention that will fix their business, in fact, is a hallmark of a company in nose dive toward destruction, Collins says. IBM, for instance, has been building a business to develop technology to process data to help cities reduce traffic, pollution and crime. It has gradually invested $14 billion buying tech firms making software to make this a business. "It is a key bet for us" as more of the world's population lives in or near urban centers, says Mark Cleverley, director of IBM's smarter-cities strategy. •Financially conservative. Just as long-lived companies don't take wild risks with their businesses, they carefully protect their finances as well. These older companies often have huge capital needs and widespread operations, yet they resist the temptation to load up on debt. Certainly, these companies may lag behind the profitability of their debt-laden rivals from time to time, but long term, the companies tend to make more money than their peers, TenHaken says. IBM carries about 95 cents of long-term debt for every $1 invested in the business by investors, says Thomson Reuters. That's well below the $138 in debt to every dollar of shareholder money invested in the average company in the S&P 500. Being financially conservative allows an older company to reward investors' patience and loyalty as it weathers the good times and bad. IBM's dividend payments to shareholders, for instance, have steadily increased over the past 100 years, despite a few large cuts in the 1990s, says Ken Winans, market historian and investment manager at Winans International. IBM has made mistakes While IBM has followed many of the winning patterns, it hasn't been infallible. In addition to its troubles in the PC industry as it finally ceded the business to Chinese firm Lenovo, it also famously developed — but failed to capitalize on — the first commercial router, which directs network traffic and is one of the key innovations of the Internet age, O'Reilly says: "They just blew it." Yet, IBM has racked up more wins than losses. And the company continues to use its slow-but-steady approach to turn interesting technology into tools that can help its large customers, often behind the scenes. For instance, while social-media sites Twitter and Facebook are all the rage now, IBM's social-media activity dates to the 1970s, when its mainframe programmers started online discussion forums on mainframes. And in 2007, IBM launched its own social-networking software for enterprises, called Lotus Connections. The next year, it opened its IBM Center for Social Software to help IBM's global network of researchers collaborate with corporate residents, university students and faculty. In many ways, IBM's constant pursuit of doing what it's done better is symbolic of what makes companies last. "Innovation is applied to business, technology and all manners of operation (at IBM)," says Bernie Meyerson, vice president of innovation at IBM. "We are here because we are innovators. We would not be here if not for it."
IBM's new future: Quantum computing Will IBM's last 100 years be remembered as its best? By Patrick Thibodeau June 16, 2011 09:23 AM ET Computerworld - IBM is marking its 100th anniversary by celebrating its record in technology innovation. It created dynamic RAM, the disk drive and the magnetic strips used on credit cards, among many other inventions. It is one of the most inventive companies in the world. But the computing industry is moving to a new future as disruptive and as radical as the era that began with the introduction of silicon chips, and that future is quantum computing. These are systems that use the behavior of subatomic particles to conduct calculations now performed with transistors on a chip. This future may be anywhere from 10 to 20 or more years away. But if the potential of quantum computing is fully realized, it may trigger a development rush in chip and hardware design reminiscent of what Silicon Valley experienced decades ago. "Think about the game changer we're now approaching," said Bernard Meyerson, IBM's vice president of innovation and a fellow at the company. It's Meyerson's job to help make sure that IBM's last 100 years aren't remembered as its best ones. That's one of the reasons he talks about the changes in the chip world. Following Moore's Law, and then shrinking by another factor of 10 from the leading-edge processors of today, these transistors will be so small that "you cross into a quantum mechanical regime of operation -- there's no precedent for that," Meyerson said. But even once this shrink limit is reached, in about 10 years, progress will continue as engineers build tightly coupled systems with massive levels of integration on blocks of chips, as well as make improvements in memory, caching and speed processing, Meyerson said. Those advances will extend the time frame to 20 years. But after that, "you better have a helluva trick up your sleeve," said Meyerson. One of those tricks may be quantum computing. IBM researchers have studied the theory and potential of quantum computing for years, and more recently they have been experimenting with the concepts, said Bill Gallagher, the senior manager of quantum computing at IBM Research. "It's one of our most significant fundamental research projects now, and may be one of the largest fundamental ones," said Gallagher, There's been "good progress, but a long way to go," he said. An ordinary computer is a collection of bits that can either be a 0 or a 1. But quantum bits can hold those states, 0 and 1, simultaneously. Instead of doing a calculation one after the other, the processing power in a quantum computer can increase exponentially. Two quantum bits, or qubits, can hold four distinct states, which can be processed simultaneously, three qubits can hold eight and 10 qubits can hold 1,024 states. In time, researchers expect machines with thousands of qubits. But the subatomic world of quantum computing is daunting. Approaches to maintaining "quantum coherence," a stable state for the interaction of atoms and electrons running calculations, include processing at temperatures near absolute zero, or -459.67 degrees Fahrenheit, to reduce thermal interference, and using superconducting metals. Lengthening the amount of time that a coherent state can be maintained is one of the challenges facing researchers. While research continues, a quantum computing market is emerging. One of the concerns is that quantum computers may eventually be able to break cryptographic protections. One company, Security Innovation, has already been thinking about the problem and has developed a public key algorithm, NTRUSignTM, that it says is resistant to quantum computing attacks. It recently received a patent. "Anyone who is building systems that need to be secure in 10 years' time and are hard to upgrade should be thinking seriously about what happens if quantum computing comes around," said William Whyte, the chief scientist at Security Innovation. Whyte's company is in the earliest wave of firms focused on the implications of quantum computing. And as Whyte watches the quantum computing market develop, he sees an industry exploring a wide range of ideas and materials for building these systems. "I think you are going to see a very creative outburst of ideas," said Whyte, with new companies sprouting up with the potential of "leapfrogging existing vendors." One company that is building quantum computing systems is D-Wave Systems of Burnaby, British Columbia. D-Wave announced last month that it had sold its first full system to Lockheed Martin. The company's research was also published last month in the scientific journal Nature. The company, which has been in business for 12 years, is working on a 128-qubit processor that is in its 23rd generation, said Geordie Rose, D-Wave's co-founder and chief technology officer. Quantum systems are intended to solve a class of problems that don't do well on conventional computers, such as machine learning, artificial intelligence and logistics. These are problems that require the checking of an enormous number of possibilities in order to find the best answer, Rose said. In the initial development phase, Rose believes startups have an advantage. "There's a lot less bureaucracy; the role of the visionary is a lot more important," he said. D-Wave is also evidence that even in the new frontier of quantum computing, startups will emerge to pose new challenges to the established companies. IBM's Myerson has inventor credentials, having earned numerous patents and having made contributions to the development of silicon germanium technology. Today, in his role of fostering innovation at IBM, Meyerson and his team are focused on providing the holistic, interdisciplinary integration that can lead to breakthroughs in new areas, but they also aim to ensure that there is a process at IBM for continuous improvement of existing technologies. Both approaches, the search for new breakthroughs and continuous improvement, are critical, said Meyerson. "What's unique about IBM is we have a culture that values both equally, because we recognized that the companies that haven't done so aren't with us any longer," he said.
IBM completes its centennial By SiliconIndia, Thursday, 16 June 2011, 03:06 Hrs Bangalore: IBM is marking the 100-year anniversary of its founding on June 16, 1911. To celebrate the milestone, the company released a book, "Making the World Work Better: The Ideas That Shaped a Century and a Company," and also debuted a new film 'Wild Ducks' and marked the anniversary by ringing the Opening Bell at the New York Stock Exchange. On this auspicious occasion of IBM's milestone its CEO J. Palmisano ended all the speculation as to his retirement and celebrated its centennialin a grand way. IBM completes its centennial During its first century, IBM has played a leading role in transforming business, science and society. The company's history can be seen as a succession of key milestones from investing in a research lab in the depths of the Great Depression, to developing the first hard disk drive that created the data storage industry, to working with the U.S. government to develop the Social Security System. It continued with such 'big bets' as a radical new computing model, the System/360 mainframe, the invention of the UPC code, the invention of the IBM Personal Computer that launched the PC revolution, and the recent development of Watson, the computer that triumphed on the TV game show Jeopardy!. Internation Business machines started its journey in the way back 1911 with three independent businesses merging to become one and Thomas Watson went on to become the company's general manager in 1914. In just ten years Watson posted revenues of $11 million (13 times its original annual sales), employing 3384 employees, expanding overseas beyond the UK, Canada and Germany and established its base firmly and its completion of 100 years affirms the fact that it is here to stay for quite a long time. Chairman of the Board, President and CEO Samuel J. Palmisano identified that the key lessons that IBM has learned over 100 years in order to succeed for the long term is that you must manage for the long term. "For IBMers, long-term thinking means continually moving to the future.IBM has survived and thrived for 100 years by remaining true to our core values, while being ready to change everything else. This has allowed us to transform technology, business and society through our first century, and we believe it will enable us to achieve even more in our second," he said. Shankar Annaswamy, Managing Director, IBM India, said, "It has been an exciting journey for IBM in India. Starting with just a small office, we have grown to become a microcosm of the IBM Corporation with presence and leadership across all segments. As we move ahead towards the next century, we will take forward this legacy of innovation and growth and continue to contribute to the economy and society in India." IBM India, as part of the centennial celebrations, will align itself to a unique global initiative wherein IBM employees worldwide will significantly increase their service in their local communities. Over 50 percent of the employees will pledge a minimum of 8 hours of voluntary service each and work with over 100 NGOs engaged in different community programs. Additionally, IBM will provide grants worth US $ 12 million to support the Celebration of Service globally, with a part of this grant being given in India as well. Since the time IBM set its footprints in India, IBM has seen many successes and has been a roller costar ride for them. Post liberalization, IBM went into a joint venture with TATA in 1992 and the global services department was set up in 1997. IBM became the first one to set up Research Organization in the year 1998. IBM then in 1999 became a private limited company. The year 2001 saw IBM set up its software lab. However, the turning point for IBM came in the year 2004 with its acquition of Daksh Company and its landmark deal with Bharati - Airtel of 750 million. The global delivery saw path breaking results for IBM India. At present IBM chips are serving 90 percent of gaming machines. IBM has also pioneered the industry of cloud. Its servers and data centers are vouched by clients all around the world. As far as banking is concerned, IBM has been able to bring tremendous transformation with its IT services. It has brought the system of core banking in banks like Canara bank and HDFC. One can now survey its non - performing assets. It has also extended its IT infrastructure services to rural banks like Bank of Karad, Maharastra. IBM completes its centennial Though IBM has been selective about public sector offerings, it has been fortunate to deliver good number of services. It has worked very closely with the Income Tax Department by providing IT infrastructure. It has also extended its IT infrastructure to Delhi and Hyderabad airport. Jet Airways is the next in the line to get infrastructure services from IBM. In the sphere of healthcare, by using nanotechnology IBM has successfully partnered with Bilcare Research. Some of the major community initiatives for which IBMers in India will be volunteering time include working with the following partners such as Retina India where 100 IBMers will put together a website which will match volunteers as scribes for people who are visually challenged and registered in with Retina India. IBMers will also volunteer as scribes at National Entrepreneurship Network. Then Centre for Sustainability Development where IBMers will work with CSD to present a citizen perspective on Environment related issues. In Spastic Society of Karnataka IBMers will provide communication skill training to children and in Akshara Foundation close to 15000 IBMers will volunteer at 1500 schools. Also Agasthaya Foundation for hosting science fairs in Hyderabad and Chennai. Over 20,000 children are expected to participate in these fairs. Nanhi Kali, an NGO that supports education for the girl child will also be part of this initiative, several IBMers will visit colleges for women and highlight diversity initiatives at IBM as well as employment opportunities. Over a 1000 IBM volunteers will go to Mewat and take the children enrolled in the literacy program through any one of the 4 modules that have been short listed for school children. |