International Business Machines (IBM) (NYSE: IBM) is an American multinational technology and consulting firm headquartered in Armonk, New York. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
The company was founded in 1911 as the Computing Tabulating Recording Corporation through a merger of four companies: the Tabulating Machine Company, the International Time Recording Company, the Computing Scale Corporation, and the Bundy Manufacturing Company. CTR adopted the name International Business Machines in 1924, using a name previously designated to CTR's subsidiary in Canada and later South America. Its distinctive culture and product branding has given it the nickname Big Blue.
In 2011, Fortune ranked IBM the 18th largest firm in the U.S., as well as the 7th most profitable. Globally, the company was ranked the 33rd largest firm by Forbes for 2010. Other rankings for 2010 include #1 company for leaders (Fortune), #2 best global brand (Interbrand), #3 green company (Newsweek), #15 most admired company (Fortune), and #18 most innovative company (Fast Company). IBM employs more than 425,000 employees (sometimes referred to as "IBMers") in over 200 countries, with occupations including scientists, engineers, consultants, and sales professionals.
IBM holds more patents than any other U.S.-based technology company and has nine research laboratories worldwide. Its employees have garnered five Nobel Prizes, four Turing Awards, nine National Medals of Technology, and five National Medals of Science. The company has undergone several organizational changes since its inception, acquiring companies like SPSS (2009) and PwC consulting (2002) and spinning off companies like Lexmark (1991).
Starting in the 1880s, various technologies came into existence that would form part of IBM's predecessor company. Julius E. Pitrap patented the computing scale in 1885, Alexander Dey invented the dial recorder in 1888, and a year later Herman Hollerith patented the Electric Tabulating Machine, and Willard Bundy invented a time clock to record a worker's arrival and departure time on a paper tape. On June 16, 1911, these technologies and their respective companies were merged by Charles Ranlett Flint to form the Computing-Tabulating-Recording Company (C-T-R). The New York City-based company had 1,300 employees and offices and plants in Endicott and Binghamton, New York; Dayton, Ohio; Detroit, Michigan; Washington, D.C.; and Toronto, Ontario. It manufactured and sold machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers, along with tabulators and punched cards.
Flint recruited Thomas J. Watson, Sr., from the National Cash Register Company to help lead the company in 1914. Watson implemented "generous sales incentives, a focus on customer service, an insistence on well-groomed, dark-suited salesmen and an evangelical fervor for instilling company pride and loyalty in every worker". His favorite slogan, "THINK," became a mantra for C-T-R's employees, and within 11 months of joining C-T-R, Watson became its president. The company focused on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. During Watson's first four years, revenues more than doubled to $9 million and the company's operations expanded to Europe, South America, Asia, and Australia. On February 14, 1924, C-T-R was renamed the International Business Machines Corporation (IBM), citing the need to align its name with the "growth and extension of [its] activities".
In 1937, the U.S. Government deployed IBM tabulating equipment to maintain the employment records for 26 million people pursuant to the Social Security Act. In 1938, the IBM World Headquarters Building, located at 590 Madison Avenue in New York, New York, was dedicated.
In 1952, Thomas J. Watson, Jr., became president of the company, ending almost 40 years of leadership by his father. In 1956, Arthur L. Samuel of IBM's Poughkeepsie, New York, laboratory programed an IBM 704 to play checkers using a method in which the machine can "learn" from its own experience. It is believed to be the first "self-learning" program, a demonstration of the concept of artificial intelligence. In 1957, IBM developed the FORTRAN (FORmula TRANslation) scientific programming language. In 1961, Thomas J. Watson, Jr., was elected chairman of the board and Albert L. Williams became president of the company. IBM develops the SABRE (Semi-Automatic Business-Related Environment) reservation system for American Airlines.
In 1963, IBM employees and computers helped NASA track the orbital flight of the Mercury astronauts, and a year later, the company moved its corporate headquarters from New York City to Armonk, New York. The latter half of that decade saw IBM continue its support of space exploration, with IBM participating in the 1965 Gemini flights, the 1966 Saturn flights, and the 1969 mission to land a man on the moon.
On April 7, 1964 IBM announced the first computer system family, the IBM System/360. Sold between 1964 and 1978, it was the first family of computers designed to cover the complete range of applications, from small to large, both commercial and scientific. For the first time, companies could upgrade their computing capabilities with a new model without rewriting their applications.
In 1973, IBM engineer George J. Laurer developed the Universal Product Code.
Financial swaps were first introduced to the public in 1981 when IBM and the World Bank entered into a swap agreement. In 1991, IBM sold Lexmark, and in 2002, it acquired PwC consulting. In 2003, IBM initiated a project to rewrite its company values. Using its Jam technology, the company hosted Internet-based online discussions on key business issues with 50,000 employees over 3 days. The discussions were analyzed by sophisticated text analysis software (eClassifier) to mine online comments for themes. As a result of the 2003 Jam, the company values were updated to reflect three modern business, marketplace and employee views: "Dedication to every client's success", "Innovation that matters - for our company and for the world", "Trust and personal responsibility in all relationships". In 2004, another Jam was conducted during which 52,000 employees exchanged best practices for 72 hours. They focused on finding actionable ideas to support implementation of the values previously identified.
In 2005 the company sold its personal computer business to Lenovo, and in 2009, it acquired software company SPSS Inc. Later in 2009, IBM's Blue Gene supercomputing program was awarded the National Medal of Technology and Innovation by U.S. President Barack Obama.
In 2011, IBM gained worldwide attention for its artificial intelligence program Watson, which was exhibited on Jeopardy! where it won against game show champions Ken Jennings and Brad Rutter.
IBM's headquarter complex is located in Armonk, Town of North Castle, New York, United States. The 283,000-square-foot (26,300 m2) IBM building has three levels of custom curtainwall. The building is located on a 25 acre site. IBM has been headquartered in Armonk since 1964.
The company has nine research labs worldwide—Almaden, Austin, Brazil, China, Haifa, India , Tokyo, Watson (New York), and Zurich—with Watson (dedicated in 1961) serving as headquarters for the research division and the site of its annual meeting. Other campus installations include towers in Montreal, Paris, and Atlanta; software labs in Raleigh-Durham, Rome and Toronto; buildings in Chicago, Johannesburg, and Seattle; and facilities in Hakozaki and Yamato. The company also operates the IBM Scientific Center, the Hursley House, the Canada Head Office Building, IBM Rochester, and the Somers Office Complex. The company's contributions to architecture and design, including Chicago's 330 North Wabash building designed by Ludwig Mies van der Rohe, were recognized with the 1990 Honor Award from the National Building Museum.
IBM's Board of Directors, with 14 members, is responsible for the overall management of the company. With Cathie Black's resignation from the board in November 2010, the remaining 13 members (along with their affiliation and year of joining the board) are as follows: Alain J. P. Belda '08 (Alcoa), William R. Brody '07 (Salk Institute / Johns Hopkins University), Kenneth Chenault '98 (American Express), Michael L. Eskew '05 (UPS), Shirley Ann Jackson '05 (Rensselaer Polytechnic Institute), Andrew N. Liveris '10 (Dow Chemical), W. James McNerney, Jr. '09 (Boeing), James W. Owens '06 (Caterpillar), Samuel J. Palmisano '00 (IBM), Joan Spero '04 (Doris Duke Charitable Foundation), Sidney Taurel '01 (Eli Lilly), and Lorenzo Zambrano '03 (Cemex).
Various IBM facilities
Corporate recognition and brand
In 2011, Fortune ranked IBM the 18th largest firm in the U.S., as well as the 7th most profitable. Globally, the company was ranked the 33rd largest firm by Forbes for 2010. Other rankings for 2010 include the following:
#1 company for leaders (Fortune)
For 2010, IBM's brand was valued at $64.7 billion.
Working at IBM
In 2010, IBM employed 105,000 workers in the U.S., a drop of 30,000 since 2003, and 75,000 people in India, up from 9,000 seven years previous.
IBM's employee management practices can be traced back to its roots. In 1914, CEO Thomas J. Watson boosted company spirit by creating employee sports teams, hosting family outings, and furnishing a company band. In 1924, the Quarter Century Club, which recognizes employees with 25 years of service, was organized and the first issue of Business Machines, IBM's internal publication, was published. In 1925, the first meeting of the Hundred Percent Club, composed of IBM salesmen who meet their quotas, convened in Atlantic City, New Jersey.
IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935) and paid vacations (1937). In 1932 IBM created an Education Department to oversee training for employees, which oversaw the completion of the IBM Schoolhouse at Endicott in 1933. In 1935, the employee magazine Think was created. Also that year, IBM held its first training class for women systems service professionals. In 1942, IBM launched a program to train and employ disabled people in Topeka, Kansas. The next year classes begin in New York City, and soon the company was asked to join the President's Committee for Employment of the Handicapped. In 1946, the company hired its first black salesman, 18 years before the Civil Rights Act of 1964. In 1947, IBM announces a Total and Permanent Disability Income Plan for employees. A vested rights pension is added to the IBM retirement plan.
In 1952, Thomas J. Watson, Jr., published the company's first written equal opportunity policy letter, one year before the U.S. Supreme Court decision in Brown vs. Board of Education and 11 years before the Civil Rights Act of 1964. In 1961, IBM's nondiscrimination policy is expanded to include sex, national origin, and age. The following year, IBM hosted its first Invention Award Dinner honoring 34 outstanding IBM inventors; and in 1963, the company named the first eight IBM Fellows in a new Fellowship Program that recognizes senior IBM scientists, engineers and other professionals for outstanding technical achievements.
On September 21, 1953, Thomas Watson, Jr., the company's president at the time, sent out a controversial letter to all IBM employees stating that IBM needed to hire the best people, regardless of their race, ethnic origin, or gender. He also publicized the policy so that in his negotiations to build new manufacturing plants with the governors of two states in the U.S. South, he could be clear that IBM would not build "separate-but-equal" workplaces. In 1984, IBM added sexual orientation to its nondiscrimination policy. The company stated that this would give IBM a competitive advantage because IBM would then be able to hire talented people its competitors would turn down.
IBM was the only technology company ranked in Working Mother magazine's Top 10 for 2004, and one of two technology companies in 2005. On October 10, 2005, IBM became the first major company in the world to commit formally to not using genetic information in employment decisions. The announcement was made shortly after IBM began working with the National Geographic Society on its Genographic Project.
IBM provides same-sex partners of its employees with health benefits and provides an anti-discrimination clause. The Human Rights Campaign has consistently rated IBM 100% on its index of gay-friendliness since 2003 (in 2002, the year it began compiling its report on major companies, IBM scored 86%). In 2007 and again in 2010, IBM UK was ranked first in Stonewall's annual Workplace Equality Index for UK employers.
The company has traditionally resisted labor union organizing, although unions represent some IBM workers outside the United States. In 2009, the Unite union stated that several hundred employees joined following the announcement in the UK of pension cuts that left many employees facing a shortfall in projected pensions.
A dark (or gray) suit, white shirt, and a "sincere" tie was the public uniform for IBM employees for most of the 20th century. During IBM's management transformation in the 1990s, CEO Louis V. Gerstner, Jr. relaxed these codes, normalizing the dress and behavior of IBM employees to resemble their counterparts in other large technology companies. Since then IBM's dress code is business casual although employees often wear formal clothes during client meetings.
In 1945, The Watson Scientific Computing Laboratory was founded at Columbia University in New York, New York. The renovated fraternity house on Manhattan's West Side was used as IBM's first laboratory devoted to pure science. The lab was the forerunner of IBM's Research Division, which today operates research facilities around the world.
In 1966, IBM researcher Robert H. Dennard invented Dynamic Random Access Memory (DRAM) cells, one-transistor memory cells that store each single bit of information as an electrical charge in an electronic circuit. The technology permits major increases in memory density, and is widely adopted throughout the industry where it remains in widespread use today.
IBM has been a leading proponent of the Open Source Initiative, and began supporting Linux in 1998. The company invests billions of dollars in services and software based on Linux through the IBM Linux Technology Center, which includes over 300 Linux kernel developers. IBM has also released code under different open source licenses, such as the platform-independent software framework Eclipse (worth approximately US$40 million at the time of the donation), the three-sentence International Components for Unicode (ICU) license, and the Java-based relational database management system (RDBMS) Apache Derby. IBM's open source involvement has not been trouble-free, however (see SCO v. IBM).
Selected current projects
developerWorks is a website run by IBM for software developers and IT professionals. It contains how-to articles and tutorials, as well as software downloads and code samples, discussion forums, podcasts, blogs, wikis, and other resources for developers and technical professionals. Subjects range from open, industry-standard technologies like Java, Linux, SOA and web services, web development, Ajax, PHP, and XML to IBM's products (WebSphere, Rational, Lotus, Tivoli and Information Management). In 2007, developerWorks was inducted into the Jolt Hall of Fame.
alphaWorks is IBM's source for emerging software technologies. These technologies include:
Flexible Internet Evaluation Report Architecture – A highly flexible architecture for the design, display, and reporting of Internet surveys.
Virtually all console gaming systems of the latest generation use microprocessors developed by IBM. The Xbox 360 contains a PowerPC tri-core processor, which was designed and produced by IBM in less than 24 months. Sony's PlayStation 3 features the Cell BE microprocessor designed jointly by IBM, Toshiba, and Sony. Nintendo's seventh-generation console, Wii, features an IBM chip codenamed Broadway. The older Nintendo GameCube utilizes the Gekko processor, also designed by IBM.
In May 2002, IBM and Butterfly.net, Inc. announced the Butterfly Grid, a commercial grid for the online video gaming market. In March 2006, IBM announced separate agreements with Hoplon Infotainment, Online Game Services Incorporated (OGSI), and RenderRocket to provide on-demand content management and blade server computing resources.
IBM announced it will launch its new software, called "Open Client Offering" which is to run on Linux, Microsoft Windows and Apple's Mac OS X. The company states that its new product allows businesses to offer employees a choice of using the same software on Windows and its alternatives. This means that "Open Client Offering" is to cut costs of managing whether to use Linux or Apple relative to Windows. There will be no necessity for companies to pay Microsoft for its licenses for operating systems since the operating systems will no longer rely on software which is Windows-based. One alternative to Microsoft's office document formats is the Open Document Format software, whose development IBM supports. It is going to be used for several tasks like: word processing, presentations, along with collaboration with Lotus Notes, instant messaging and blog tools as well as an Internet Explorer competitor – the Mozilla Firefox web browser. IBM plans to install Open Client on 5% of its desktop PCs. The Linux offering has been made available as the IBM Client for Smart Work product on the Ubuntu and Red Hat Enterprise Linux platforms.
UC2 (Unified Communications and Collaboration) is an IBM and Cisco Systems joint project based on Eclipse and OSGi. It will offer the numerous Eclipse application developers a unified platform for an easier work environment. The software based on UC2 platform will provide major enterprises with easy-to-use communication solutions, such as the Lotus based Sametime. In the future the Sametime users will benefit from such additional functions as click-to-call and voice mailing.
Redbooks are publicly available online books about best practices with IBM products. They describe the products features, field experience and dos and don'ts, while leaving aside marketing buzz. Available formats are Redbooks, Redpapers and Redpieces.
Extreme Blue is a company initiative that uses experienced IBM engineers, talented interns, and business managers to develop high-value technology. The project is designed to analyze emerging business needs and the technologies that can solve them. These projects mostly involve rapid-prototyping of high-profile software and hardware projects.
In May 2007, IBM unveiled Project Big Green, a re-direction of $1 billion per year across its businesses to increase energy efficiency.
On November 2008, IBM’s CEO, Sam Palmisano, during a speech at the Council on Foreign Relations, outlined a new agenda for building a Smarter Planet. In addition, an official company blog exists. Smarter Planet @ IBM
IBM has a long history in dealing with environmental problems. It established a corporate policy on environmental protection in 1971, with the support of a comprehensive global environmental management system. According to IBM, its total hazardous waste decreased by 44% over the past five years, and has decreased by 94.6% since 1987. IBM's total hazardous waste calculation consists of waste from both non-manufacturing and manufacturing operations. Waste from manufacturing operations includes waste recycled in closed-loop systems where process chemicals are recovered for subsequent reuse, rather than just disposing of them and using new chemical materials. Over the years, IBM has redesigned processes to eliminate almost all closed loop recycling and now uses more environmental-friendly materials in their place. IBM has also now built a modelling solution to help protect the environment and reduce its own Carbon Footprint using Lean and Six Sigma principles Green Sigma.
IBM was recognized as one of the "Top 20 Best Workplaces for Commuters" by the United States Environmental Protection Agency (EPA) in 2005. The award was to recognize Fortune 500 companies which provided employees with excellent commuter benefits to help reduce traffic and air pollution.
The birthplace of IBM, Endicott, suffered pollution for decades, however. IBM used liquid cleaning agents in circuit board assembly operation for more than two decades, and six spills and leaks were recorded, including one leak in 1979 of 4,100 gallons from an underground tank. These left behind volatile organic compounds in the town's soil and aquifer. Trace elements of volatile organic compounds have been identified in Endicott’s drinking water, but the levels are within regulatory limits. Also, from 1980, IBM has pumped out 78,000 gallons of chemicals, including trichloroethane, freon, benzene and perchloroethene to the air and allegedly caused several cancer cases among the townspeople. IBM Endicott has been identified by the Department of Environmental Conservation as the major source of pollution, though traces of contaminants from a local dry cleaner and other polluters were also found. Despite the amount of pollutant, state health officials could not verify whether air or water pollution in Endicott has actually caused any health problems. According to city officials, tests show that the water is safe to drink.
Tokyo Ohka Kogyo Co., Ltd. (TOK) and IBM are collaborating to establish new, low-cost methods for bringing the next generation of solar energy products, called CIGS (Copper-Indium-Gallium-Selenide) solar cell modules, to market. Use of thin film technology, such as CIGS, has great promise in reducing the overall cost of solar cells and further enabling their widespread adoption.
IBM is exploring four main areas of photovoltaic research: using current technologies to develop cheaper and more efficient silicon solar cells, developing new solution processed thin film photovoltaic devices, concentrator photovoltaics, and future generation photovoltaic architectures based upon nanostructures such as semiconductor quantum dots and nanowires.
Green Sigma is an Active Management Six Sigma system which is currently being developed and enhanced through the Innovation Centre in Dublin. Its goal is to manage and reduce IBM's carbon footprint and achieve associated economic and environmental benefits. The system focuses on carbon, water, atmospheric emissions, liquid waste, solid waste, ground emissions, and the reporting on these elements. IBM Green SigmaTM consultants continually work with the client team to establish optimization of core processes and KPMGs.
Phase I: Define Key Performance Indicators (KPIs)
IBM’s goal with the Green Sigma offering is to business partner with clients, both for economic benefits for the business and a reduction of the company's impact on the environment.
Company logo and nickname
IBM's current "8-bar" logo was designed in 1972 by graphic designer Paul Rand. Logos designed in the 1970s tended to be sensitive to the technical limitations of photocopiers, which were then being widely deployed. A logo with large solid areas tended to be poorly copied by copiers in the 1970s, so companies preferred logos that avoided large solid areas. The 1972 IBM logos are an example of this tendency. With the advent of digital copiers in the mid-1980s this technical restriction had largely disappeared; at roughly the same time, the 13-bar logo was abandoned for almost the opposite reason – it was difficult to render accurately on the low-resolution digital printers (240 dots per inch) of the time.
Big Blue is a nickname for IBM. There are several theories explaining the origin of the name. One theory, substantiated by people who worked for IBM at the time, is that IBM field representatives coined the term in the 1960s, referring to the color of the mainframes IBM installed in the 1960s and early 1970s. "True Blue" was a term used to describe a loyal IBM customer, and business writers later picked up the term. Another theory suggests that Big Blue simply refers to the Company's logo. A third theory suggests that Big Blue refers to a former company dress code that required many IBM employees to wear only white shirts and many wore blue suits. In any event, IBM keyboards, typewriters, and some other manufactured devices have played on the "Big Blue" concept, using the color for enter keys and carriage returns. IBM has also used blue logos since 1947, making blue the defining color of the company's corporate design, which might be another, more plausible reason for the term.
^ a b c d e f "2010 Form 10-K, International Business Machines Corporation". United States Securities and Exchange Commission.