How IBM Climbed To The Top.

By: Susan Sportman


The history of IBM Corporation may possibly have begun in 1890 when an revolutionary method was designed by Herman Hollerith to document census data. Hollerith designed a code that could be punched into hard paper cards in which the holes would correspond to certain data. His tabulating machine would then arrange and sum up the data by reading the holes in the punched cards. Hollerith founded the Tabulating Machine Company in 1896 to sell these codes and tabulating machines.

In 1911, the International Time Recording Company, the Computing Scale Corporation, as well as the Tabulating Machine Company merged to create the Computing Tabulating Recording Company or CTR. This amalgamation was made possible by Charles Flint, a noted financier. They manufactured various products including weighing scales, time-keeping machines, coffee grinders, and naturally, the punched card machines.

CTR hired Thomas J. Watson in 1914 to become their general manager. Watson was a visionary and an incredibly competent manager. He was able to strengthen their base products, increased their profits and extended their operations abroad. It was in 1924 when he officially modified the name of the company from CTR to International Business Machines Corporation or IBM.

IBM rented their tabulating machines to customers because the original price was quite high at the time. This gave IBM recurring revenue and enabled it to survive the great economic depression of the 1930s. They continued to manufacture data processing machines while other companies were going bankrupt. The lack of competiton made them an easy choice when the Social Security Administration required data processing equipment in 1935. IBM was in a position to secure the contract.

Thomas J. Watson Jr., Watson’s son, was hired as a salesman in 1937. He would eventually go on to become the next chief executive officer of IBM. Watson Jr. was fascinated with the idea of electronic computing and this was embodied when IBM became involved with the development of Mark I, a big electronic computing machine built at Harvard University in 1944. The 701 and the RAMAC 305 followed next in 1952 and 1956, respectively. However, these machines were so costly that only a small quantity of companies could afford them.

Mainframe industry standard:
It had been in the 1960s when IBM began it's dominance of the mainframe computer industry. Though there were other players in the industry, IBM was often the choice. There was no standard hardware and software development procedures at the time and each player made their very own computer as they saw fit. Watson Jr. aimed to set an industry standard with the use of an evolving technology generally known as the microchip. He directed IBM to develop the Solid Logic Technology (SLT) which would be the foundation of the IBM System 360 computer.

The SLT chip was a breakthrough in IBM’s hardware components. It contained numerous transistors embedded into a very small wafer of silicone. IBM also developed the OS/360 which was the standard operating system of the computer. These components would be implemented throughout the development of the System 3xx series, greatly improving on them each time. The System 390 eventually became the standard mainframe computer of this industry and it proved to be one of the most respected computers of IBM.

The IBM PC
When John Opel assumed the position of CEO at IBM in 1981, he planned to build the very first personal computer. His plan met with strong opposition - mainly from the employees building the mainframes, as this would have a terrific impact on the mainframe’s market. This forced Opel to create a separate facility in Florida to implement his plans. Phil Estridge was tasked to head the PC project and was given the authority to take the choices needed to finish the project.

Estridge sought the services of two new companies, Microsoft and Intel, which would supply the operating system generally known as DOS, and the processors, respectively. Entridge’s directive was to make the IBM PC with open architecture so additional components and peripherals might be attached. This proved to be the defacto standard architecture among all of the PC designs at the time. Through the 1980s IBM was the name in computing. They seemed to have an indisputable position at the pinnacle of computer manufacturing, way ahead of their competitors.

However, in 1992 IBM crashed under the administration of John Akers. IBM experienced heavy losses and was forced to lay-off or retire thousands of its employees around the world. Akers was replaced by Louis Gerstner Jr. in 1993. His ultimate task was to save the company. He redefined the company’s goals and minimized the bureaucracy within IBM. Steadily, he was able to bring back IBM to the path of profitability. He wrote a famous book about it called 'Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround'. Read it. It's great.

Today, IBM Corporation continues to be competitive and pursuing development in the computer-related technologies, outsourcing, and web-based businesses. It has an excellent reputation and is often referred to affectionately as 'Big Blue'. It employs over 400,000 people in 200 countries.

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