June 16, 2011

IBM Turns 100-Years-Old

IBM had its 100-year birthday on today with a market capitalization of $197 billion as the world's 14th most valuable technology company.

IBM dates its birth to the June 16, 1911 merger of three firms:  the Tabulating Machine Co, the International Time Recording Co. and the Computer Scale Co. of America.

Thomas Watson Sr. is the man credited with building IBM into a powerhouse and he joined the new company, Computing-Tabulating-Recording Co. (CTR) in 1914 and renamed it International Business Machines Corp. in 1924.

Rivals have mocked IBM's corporate culture of conformity over the years, but that has not stopped the company from being at the forefront of technological innovation.

IBM claims to hold more U.S. patents than any other company and five of its employees have won Nobel prizes for physics.

Dag Spicer, senior curator of the Computer History Museum in Mountain View, California, said in a statement that the company's success can be traced back to its readiness to take "big gambles."

"During the Depression, Tom Watson kept making machines even though there was no market," Spicer said.

"In 1935, FDR (president Franklin Delano Roosevelt) passed the Social Security Act. The law passed and IBM was the only company that had the equipment ready to go," he said.

Spicer said Thomas Watson Jr., who took over the presidency of IBM in 1952 from his father, took on a gamble of his own in 1964.

"Tom Watson Jr decided to bet essentially the whole company -- $5 billion, probably the equivalent of $100 billion today -- on a new computer system, the System/360," he said. "It made all of IBM's products obsolete.

"The System/360 was the most successful mainframe computer of all time, sealing the blue letters IBM in the public imagination," he said in a statement.

However, IBM was unable to emulate its success with mainframe computers with personal computers and the company struggled in the late 1980s and early 1990s.

"Microsoft and Intel were the big winners in the personal computer market, which IBM defined but did not long dominate," Thomas Misa, a history of science and technology professor at the University of Minnesota, said in a statement.


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