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Can Big Blue survive another century?

100 down, 100 to go

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Big Blue, which more than any other company defined the modern IT industry, turns 100 today. Such longevity is an accomplishment that most corporations can only aspire to, and there is no guarantee, as IBM's near-death experience in the early 1990s aptly demonstrated, that it will be relevant, much less viable, for the next century.

A hundred years ago, on June 16, 1911, Charles Flint, also known as the "father of trusts" because of rubber and chewing gum conglomerates he created in the late 1890s, did a mashup of a bunch of hardware companies that sold meat scales and cheese slicers, time recording equipment (the punch clock), and Hollerith tabulating and punch-card equipment that had been created to automate the tabulation of statistics for the 1890 US Census. Data from the Census was punched on stiff paper cards by human operators and then run through mechanical tabulators that were a derivative of programmable looms; the Electric Tabulating System, which Herman Hollerith patented after writing his PhD thesis on the machine design at Columbia University, is the foundation of what would eventually become data processing and then turn itself into information technology.

Flint may have put the Computing Tabulating and Recording Company together, but chairman George Fairchild ran it for him and perhaps the most important other founding element that gave what would become IBM longevity was the hiring of Thomas Watson, the top salesman at National Cash Register who left that company under a cloud after being convicted of felony charges relating to dubious business practices against other makers of cash registers. It was Watson's second chance at the big time, and he did not blow it. CTR went public in 1916 and when Fairchild died in 1924, Watson took control of the company and changed its name to International Business Machines.


Early business machines, somewhat international, from CTR

At the time, a meat scale, a time clock, and a card-thwacking tabulator were business machines; so were cash registers, but IBM didn't get into that racket, with Watson already having seen how rough that business could be. IBM got rid of the meat scales from its product line in 1933 and sold off the time clocks in 1958, long after the punch-card tabulators had become its dominant product.

During the Depression and World War II, IBM was the dominant supplier of punch-card equipment used for early government and business accounting systems. Because of predatory technology and pricing practices that yielded IBM profits that even Microsoft and Google cannot match today with their Windows and search/ad-serving monopolies, Big Blue grew to have about 95 percent of that tabulating equipment market. And as the Computer Age dawned, IBM was sued by the Department of Justice on antitrust grounds. The company had always leased its equipment, which gave it tremendous control over pricing, but also gave customers the option of unplugging their gear with 30 days' notice.

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My first job was "tape monkeying" on IBM mainframes, graveyard shift in a data processing centre. Shift would finsih around 1am and I would then sneak around to the R&D dept and sit there until around 4:30am just reading the manuals and books, playing on the top notch ( for the time ) IBM PCs, learning stuff like Oracle, Lotus 123, Ingres, etc, even learned how to connect to BBS's from that job! ( Shows my age! )

We used to call IBM engineers at midnight and they'd be there within 45 mins to fix broken kit, these were real engineers mind. The sort with 20+ years of mainframe work, they could strip down a mainframe like a mechanic can strip down a car engine.

Great days, a little sad nostalgia.


@ Madeye

And while we are blaming IBM for the holocaust, let's go after James Watt for inventing the steam engine!! There never would have been all those cattle cars to Auschwitz and Treblinka without those steam-powered locomotives!!!

Any invention can be turned to evil use. Heck, I bet a skilled torturer can find all kinds of ways to make your life miserable using a paperclip or a knitting needle. Unless you can find some internal IBM memos stating that "Hey, the Krauts need some tabulating gear to count those nasty Jews before they are shipped off to the ovens! Tom, can you approve some special pricing for them!", then I think you are barking up the wrong tree.



May be IBM "plays it safe" according to Wall Street creed, but they also have spent greats amounts of money on research, and sometimes that research is well beyond pure business.

This research have allowed IBM to get a lot of patents, that may be what helps them to go through another 100 years.



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