International Business Machines

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International Business Machines (IBM) is a large American company that makes and services large computers, sells them, consults about them, and runs back office IT operations.


IBM originated from the company that Herman Hollerith started in the 1890s to sell punch cards and card readers to government bureaus and insurance agencies. In 1924 the new owner Thomas Watson renamed the company "International Business Machines" and expanded into electric typewriters and other office machines. Watson built a highly motivated and disciplined sales force. The inside motto was "THINK", but users were warned not to "fold, spindle or mutilate" the cards. IBM's first experiments with computers in the 1940s and 1950s were humdrum; it surged to dominance in the 1960s with its Model 360 mainframe.


IBM offered a full range of hardware, software and service agreements, so that users as their needs grew would stay with "Big Blue." Since most software was custom-written by in-house programmers, and would run on only one brand of computers, it was too expensive to switch brands. Brushing off clone makers, and facing down a federal anti-trust suit, the giant sold reputation and security as well as hardware, and was the most admired American corporation of the 1970s and 1980s.


The 1990s were cruel to IBM--losses in 1993 exceeded $8 billion --as the mainframe giant failed to adjust quickly enough to the personal computer revolution. Desktop machines had the power needed, and were vastly easier for both users and managers than multi-million-dollar mainframes. IBM did introduce a popular line of microcomputers--but it was too popular. Clone makers undersold IBM, while the profits went to chip makers like Intel or software houses like Microsoft.


The mainframe computer entered American life in a major way in 1965 when IBM introduced its Model 360. This multi million dollar machine was quickly adopted by large businesses, government agencies and universities. Although it used transistors instead of vacuum tubes, the mainframe ran hot and required special facilities and 24-hour air conditioning, and was always attended by white-coated technicians. IBM dominated the worldwide computer market, as rivals (the "seven dwarfs") could match IBM's technology, but not its reputation. Technological advances every year brought bigger and faster mainframes and hastened the restructuring of most bureaucratic enterprises around the mainframe. The mainframe centralized computing power high up in an organization, where legions of FORTRAN and COBOL programmers wrote codes that harnessed raw computing power to specialized tasks. Bureaucracies expanded, assigning lower echelons the task of preparing forms for keypunching holes on cards that fed the machine. Most jobs were simple and routine, usually just the rapidly rapid processing of large numbers of highly stylized forms such as monthly electric bills. By the 1970s, distributed processing allowed clerks to use terminals connected directly to the mainframe. These were "dumb" terminals without their own computing power. Upstart companies introduced smaller, much cheaper "minicomputers" in the 1970s that handled most medium and small jobs as well as a mainframe. By the early 1990s, the mass introduction of PCs ("personal computers", originally called "microcomputers") radically undercut the market for mainframes and minis both.


While the term "IBM compatible" has been widely used to indicate that a personal computer can use the Microsoft Windows Operating System, as of 2005 IBM no longer directly manufactured personal computers. The personal computer manufacturing arm of IBM was sold to the Chinese company Lenovo in 2005 in return giving IBM an 18.9% ownership stake in Lenovo Group which makes IBM the second largest shareholder following the Chinese government[1]. This move gave IBM a crucial foothold in the very large Chinese information technology market. IBM currently sells computer hardware and software while continuing to offer infrastructure and consulting services for other businesses. IBM was the first company to introduce the desktop computer, in the form of the IBM 5100 series in 1975.


IBM is also a strong advocate[2] for the GNU/Linux operating system. This advocacy followed on the heels of IBM's failure to gain wide acceptance for its' OS/2 personal desktop operating system. In 2005 IBM stated that OS/2 users should consider migration to Linux[3]. Some OS/2 users and marketers created a rebranded OS/2 called eComStation with the permission of IBM. The eComStation operating system runs previous OS/2 applications as well as new applications ported from Open Source projects. Further development of eComStation continues by third parties to keep eComStation running on newer hardware.

Further reading

  • Carroll, Paul. Big Blues: The Unmaking of IBM (1994)
  • Chposky, James and Leonsis, Ted. Blue Magic: The People, Power and Politics behind the IBM Personal Computer. (1988). 228 pp.
  • Cortada, James W. Before the Computer: IBM, NCR, Burroughs, and Remington Rand and the Industry They Created, 1865-1956. (1993). 344 pp. on the punch-card era
  • Dassbach, Carl H. A. Global Enterprises and the World Economy: Ford, General Motors, and IBM. The Emergence of the Transnational Enterprise. (1989). 558 pp.
  • Fisher, Franklin M.; McKie, James W.; and Mancke, Richard B. IBM and the U.S. Data Processing Industry: An Economic History. (1983). 533 pp.
  • Garr, Doug. IBM Redux: Lou Gerstner and the Business Turnaround of the Decade (2000) excerpt and text search
  • Maney, Kevin. The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM(2004) excerpt and text search
  • Pugh, Emerson W. Building IBM: Shaping an Industry and Its Technology. (1995). 403 pp. scholarly history
  • Pugh, Emerson W. Memories That Shaped an Industry: Decisions Leading to IBM System/360. (1984). 323 pp.
  • Tedlow, Richard S. The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM's Founding Father and Son (2004) excerpt and text search

External Links


  1. Lenovo Acquires IBM's Personal Computing Division
  2. IBM and Linux
  3. OS/2 Warp Upgrades and migrations