|Traded as||NYSE: IBM
Dow Jones Industrial Average Component
S&P 500 Component
|Founded||Endicott, New York, U.S.
(June 16, 1911 )
|Founder||Charles Ranlett Flint|
|Headquarters||Armonk, New York, U.S.|
(Chairman, President, and CEO)
|Products||See IBM products|
|Revenue||US$ 92.793 billion (2014)|
|US$ 19.986 billion (2014)|
|US$ 12.023 billion (2014)|
|Total assets||US$ 117.53 billion (2014)|
|Total equity||US$ 11.868 billion (2014)|
Number of employees
|Divisions||Hardware, Services, Software|
The International Business Machines Corporation (commonly referred to as IBM) is an American multinational technology and consulting corporation, with headquarters in Armonk, New York. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
The company originated in 1911 as the Computing-Tabulating-Recording Company (CTR) through a merger of the Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company. CTR was changed to "International Business Machines" in 1924, using a name which had originated with CTR's Canadian subsidiary. The initialism IBM followed. Securities analysts nicknamed the company Big Blue for its size and common use of the color in products, packaging, and logo.
IBM has constantly evolved since its inception. Over the past decade, it has steadily shifted its business mix by exiting commoditizing markets such as PCs, hard disk drives and DRAMs and focusing on higher-value, more profitable markets such as business intelligence, data analytics, business continuity, security, cloud computing, virtualization and green solutions, resulting in a higher quality revenue stream and higher profit margins. IBM's operating margin expanded from 16.8% in 2004 to 24.3% in 2013, and net profit margins expanded from 9.0% in 2004 to 16.5% in 2013.
In 2012, Fortune ranked IBM the No. 2 largest U.S. firm in terms of number of employees (435,000 worldwide), the No. 4 largest in terms of market capitalization, the No. 9 most profitable, and the No. 19 largest firm in terms of revenue. Globally, the company was ranked the No. 31 largest in terms of revenue by Forbes for 2011. Other rankings for 2011/2012 include No. 1 company for leaders (Fortune), No. 1 green company in the U.S. (Newsweek), No. 2 best global brand (Interbrand), No. 2 most respected company (Barron's), No. 5 most admired company (Fortune), and No. 18 most innovative company (Fast Company).
IBM has 12 research laboratories worldwide, bundled into IBM Research. As of 2013[update] the company held the record for most patents generated by a business for 22 consecutive years. Its employees have garnered five Nobel Prizes, six Turing Awards, ten National Medals of Technology, and five National Medals of Science. Notable company inventions include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, the Fortran programming language, SABRE airline reservation system, DRAM, copper wiring in semiconductors, the silicon-on-insulator (SOI) semiconductor manufacturing process, and Watson artificial intelligence.
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In the 1880s, three technologies emerged that would ultimately form the core of what would become International Business Machines (IBM). Julius E. Pitrat patented the computing scale in 1885; Alexander Dey invented the dial recorder (1888); and 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 in 1889.
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., formerly of 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),[not in citation given] citing the need to align its name with the "growth and extension of [its] activities".
In 1937, IBM's tabulating equipment enabled organizations to process unprecedented amounts of data, its clients including the U.S. Government, during its first effort to maintain the employment records for 26 million people pursuant to the Social Security Act, and the Third Reich, largely through the German subsidiary Dehomag. During the Second World War the company produced small arms for the American war effort (M1 Carbine, and Browning Automatic Rifle). IBM provided translation services for the Nuremberg Trials. In 1947, IBM opened its first office in Bahrain, as well as an office in Saudi Arabia to service the needs of the Arabian-American Oil Company that would grow to become Saudi Business Machines (SBM).
In 1952, Thomas Watson, Sr., stepped down after almost 40 years at the company helm; his son, Thomas Watson, Jr., was named president. In 1956, the company demonstrated the first practical example of artificial intelligence when Arthur L. Samuel of IBM's Poughkeepsie, New York, laboratory programmed an IBM 704 not merely to play checkers but "learn" from its own experience. In 1957, the FORTRAN (FORmula TRANslation) scientific programming language was developed. In 1961, Thomas J. Watson, Jr., was elected chairman of the board and Albert L. Williams became company president. The same year IBM developed the SABRE (Semi-Automatic Business-Related Environment) reservation system for American Airlines and introduced the highly successful Selectric typewriter.
In 1963, IBM employees and computers helped NASA track the orbital flight of the Mercury astronauts. A year later it moved its corporate headquarters from New York City to Armonk, New York. The latter half of the 1960s saw IBM continue its support of space exploration, participating in the 1965 Gemini flights, 1966 Saturn flights, and 1969 lunar mission.
On April 7, 1964, IBM announced the first computer system family, the revolutionary IBM System/360. Sold between 1964 and 1978, it spanned the complete range of commercial and scientific applications from large to small, allowing companies for the first time to upgrade to models with greater computing capability without having to rewrite their application.
In 1974, IBM engineer George J. Laurer developed the Universal Product Code. On October 11, 1973, IBM introduced the IBM 3666, a laser-scanning point-of-sale barcode reader which would become the backbone of retail checkouts. On June 26, 1974, at Marsh's supermarket in Troy, Ohio, a pack of Wrigley's Juicy Fruit chewing gum was the first-ever product scanned. It is now on display at the Smithsonian Institution’s National Museum of American History in Washington, D.C.
In the late 1970s, IBM underwent a wave of internal convulsions between a management faction wanting to concentrate on its bread-and-butter mainframe business and one desiring to expand into the emerging personal computer industry.
IBM and the World Bank first introduced financial swaps to the public in 1981 when they entered into a swap agreement. The IBM PC, originally designated IBM 5150, was introduced in 1981, and it soon became an industry standard. In 1991, IBM sold printer manufacturer Lexmark. In 1993, IBM posted a US$8 billion loss - at the time the biggest in American corporate history.
In May 1997, IBM's Deep Blue super computer defeated World Chess Champion Garry Kasparov. Deep Blue's success was the first time a computer had beaten a top-ranked chess player in tournament play.
In 2002, IBM acquired PwC consulting. In 2003 it initiated a project to redefine company values. Using its Jam technology, it hosted a three-day Internet-based online discussion of key business issues with 50,000 employees. Results were data mined with sophisticated text analysis software (eClassifier) for common themes. Three emerged, expressed as: "Dedication to every client's success", "Innovation that matters—for our company and for the world", and "Trust and personal responsibility in all relationships". Another three-day Jam took place in 2004, with 52,000 employees discussing ways to implement company values in practice.
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.
In 2005, the company sold its personal computer business to Lenovo, and in the same year it agreed to acquire Micromuse. A year later IBM launched Secure Blue, a low-cost hardware design for data encryption that can be built into a microprocessor. In 2009 it acquired software company SPSS Inc. for $1.2 billion in a move to expand its Information On Demand business portfolio. 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. As of 2012[update], IBM had been the top annual recipient of U.S. patents for 20 consecutive years.
IBM's closing value of $214 billion on September 29, 2011 surpassed Microsoft's $213.2 billion valuation. It was the first time since 1996 that IBM's closing price exceeded that of its software rival. On August 16, 2012, IBM announced that it had entered an agreement to buy Texas Memory Systems. Later that month, IBM announced it has agreed to buy Kenexa, a recruiting and talent management software vendor, for $1.3 billion.
In June 2013 IBM acquired SoftLayer Technologies, a web hosting service, in a deal worth around $2 billion; and in July 2014 the company announced a partnership with Apple Inc. in mobile enterprise. Following the acquisition of SoftLayer, in January 2014, IBM announced plans to invest more than $1.2bn (£735m) into its data centers and cloud storage business. It plans to build 15 new centers around the world, bringing the total number up to 40 during 2014.
In July 2014, the company revealed it was investing $3 billion over the following five years to create computer functionality to resemble how the human brain thinks. A spokesman said that basic computer architecture had not altered since the 1940s. IBM says its goal is to design a neural chip that mimics the human brain, with 10 billion neurons and 100 trillion synapses, but that uses just 1 kilowatt of power.
On August 11, 2014, IBM announced it had acquired the business operations of Lighthouse Security Group, LLC, a premier cloud-security services provider. Financial terms were not disclosed.
As part of a push to reduce the size IBM's hardware division, in September 2014 it was announced that IBM would sell its x86 server division to Lenovo for a fee of $2.1 billion. That same year, Reuters referred to IBM as "largely a computer services supplier". Following in October 2014, IBM announced that it would be offloading IBM Micro Electronics semiconductor manufacturing to GlobalFoundries, a leader in advanced technology manufacturing, citing that semiconductor manufacturing is a capital-intensive business which is challenging to operate without scale.
In November 2014, IBM and Twitter announced a global landmark partnership which they claim will change how institutions and businesses understand their customers, markets and trends. With Twitter's data on people and IBM's cloud-based analytics and customer-engagement platforms they plan to help enterprises make better, more informed decisions. The partnership will give enterprises and institutions a way to make sense of Twitter's mountain of data using IBM's Watson supercomputer.
In March 2015, the company announced plans to invest $3 billion over four years to establish an Internet of Things (IoT) unit, whose first task is to build a cloud-based open platform.
IBM Global Services is the world's largest business and technology services provider. It employs over 190,000 people across more than 160 countries. IBM Global Services started in the spring of 1991, with the aim towards helping companies manage their IT operations and resources. Global Services has two major divisions: Global Business Services (GBS) and Global Technology Services (GTS).
IBM Global Technology Services is the infrastructure services arm of IBM. Global Technology Services provides consulting related to security, continuity, and resilience. In 2012, Vault ranked IBM Global Technology Services as the number one vendor in technology consulting for cyber security, operations, and implementation.
The IBM Systems and Technology Group (STG) provides hardware solutions for IBM and third-party software products. The STG provides hardware solutions for projects ranging from consumer electronics to super computers.
The IBM Software Group provides Groupware, Collaborative software, Enterprise messaging systems, and enterprise systems management tools. The four product areas within the Software Group are the Lotus Corporation, Tivoli, Rational, and Websphere.
The IBM Global Financing group provides financing options to companies looking to implement IBM and non-IBM IT products and solutions.
The company's 14 member Board of Directors is responsible for overall corporate management. As of Cathie Black's resignation in November 2010 its membership (by affiliation and year of joining) included: 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).
On January 21, 2014 IBM announced that company executives would forgo bonuses for fiscal year 2013. The move came as the firm reported a 5% drop in sales and 1% decline in net profit over 2012. It also committed to a $1.2bn plus expansion of its data center and cloud-storage business, including the development of 15 new data centers. After ten successive quarters of flat or sliding sales under Chief Executive Virginia Rometty IBM is being forced to look at new approaches. Said Rometty, “We’ve got to reinvent ourselves like we’ve done in prior generations.”
Since July 2011, IBM has partnered with Pennies, the electronic charity box, and produced a software solution for IBM retail customers that provides an easy way to donate money when paying in-store by credit or debit card. Customers donate just a few pence (1p-99p) a time and every donation goes to UK charities.
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 female systems service professionals. In 1942, IBM launched a program to train and employ disabled people in Topeka, Kansas. The next year classes began 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 announced a Total and Permanent Disability Income Plan for employees. A vested rights pension was added to the IBM retirement plan. During IBM's management transformation in the 1990s revisions were made to these pension plans to reduce IBM's pension liabilities.
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 was 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 use 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 business suits during client meetings.
On June 16, 2011, as part of its centenary celebrations the company announced IBM100, a year-long grants program to fund employee participation in volunteer projects.
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. Traces 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. Remediation and testing are ongoing, however 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.
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:
The company has twelve research labs worldwide, bundled under IBM Research and headquartered at the Thomas J. Watson Research Center in New York. Others include the Almaden lab in California, Austin lab in Texas, Australia lab in Melbourne, Brazil lab in São Paulo and Rio de Janeiro, China lab in Beijing and Shanghai, Ireland lab in Dublin, Haifa lab, in Israel, India lab in Delhi and Bangalore, Tokyo lab, Zurich lab and Africa lab in Nairobi.
Other major campus installations include towers in Montreal, Paris, and Atlanta; software labs in Raleigh-Durham, Rome, Cracow and Toronto; Johannesburg, Seattle; and facilities in Hakozaki and Yamato. The company also operates the IBM Scientific Center, Hursley House, the Canada Head Office Building, IBM Rochester, and the Somers Office Complex. The company's contributions to architecture and design, which include works by Eero Saarinen, Ludwig Mies van der Rohe, and I.M. Pei, have been recognized. Van der Rohe's 330 North Wabash building in Chicago, the original center of the company's research division post-World War II, was recognized with the 1990 Honor Award from the National Building Museum.
IBM Rochester (Minnesota), nicknamed the "Big Blue Zoo"
IBM Avenida de América Building in Madrid, Spain
IBM Japan Makuhari Technical Center, designed by Yoshio Taniguchi
In 2012, Fortune ranked IBM the No. 2 largest U.S. firm in terms of number of employees, the No. 4 largest in terms of market capitalization, the No. 9 most profitable, and the No. 19 largest firm in terms of revenue. Globally, the company was ranked the No. 31 largest firm in terms of revenue by Forbes for 2011. Other rankings for 2011/2012 include the following:
IBM's world headquarters are located in Armonk, New York. The 283,000-square-foot (26,300 m2) glass and stone building sits on a 25-acre (10 ha) parcel amid a 432-acre former apple orchard the company purchased in the mid-1950s.
IBM's current "8-bar" logo was designed in 1972 by graphic designer Paul Rand. It was a general replacement for a 13-bar logo that first appeared in public on the 1966 release of the TSS/360. Logos designed in the 1970s tended to reflect the inability of period photocopiers to render large areas well, hence discrete horizontal bars.
Early dot matrix printers also had difficulty rendering either large solids or narrow bars in resolutions as low as 240 dots per inch. In 1990 company scientists used a scanning tunneling microscope to arrange 35 individual xenon atoms to spell out the company acronym. It was the first structure assembled one atom at a time.
Big Blue is a nickname for IBM derived in the 1960s from the company's blue logo and color scheme, originally adopted in 1947. True Blue referred to a loyal IBM customer, and business writers later picked up the term. IBM once had a de facto dress code that saw many IBM employees wear white shirts with blue suits.
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. It was the forerunner of IBM Research, the largest industrial research organization in the world, with twelve labs on six continents.
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.
Virtually all console gaming systems of the previous generation used 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. IBM also provided the microprocessor that serves as the heart of Nintendo's new Wii U system, which debuted in 2012. The new Power Architecture-based microprocessor includes IBM's latest technology in an energy-saving silicon package. Nintendo's seventh-generation console, Wii, features an IBM chip codenamed Broadway. The older Nintendo GameCube utilizes the Gekko processor, also designed by IBM.
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).
Famous inventions by IBM include the following:
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