International Business Machines (commonly referred to as IBM) is an American multinational technology company. The company started in 1911 with punch technology inspired by salon technology. IBM was originally called Computing-Tabulating-Recording Company (CTR) and was renamed" International Business Machines "in 1924.
IBM manufactures and markets computer hardware, middleware, and software, and provides hosting and consulting services in areas ranging from mainframe computers to nano. IBM is also a major research organization, which holds the record for most patents generated by a business (as of 2017) for 24 consecutive years.
Inventions by IBM include automated teller machines (ATM), floppy disks, hard disk drives, magnetic stripe cards, relational databases, SQL programming languages, UPC bar-codes, and dynamic random-access memory (DRAM).
When did you last think of IBM? Probably a long time ago, and it makes sense. As far as companies go, IBM can easily win the award for the most boring business. What do they do well, they make commercial machines. and all. Boring, isn't it?
But what if I told you that IBM could be interesting. For example, they are sliced bread, Band-Aid, and older than the state of Arizona. You know those weird self-playing pianos they always show in the old Western salons? It was those pianos, especially his paper roll, which gave birth to IBM. This was during the 1890s, a time when everything was done using pen and paper. As you can imagine, administrative work for the government was quite slow. No one faced more than the US Census Bureau. They had to calculate the population every ten years, but doing everything by hand was so slow that it took more than seven years to complete the 1880 census.
The whole thing was a nightmare, but where the most disaster was seen, a man saw an opportunity. The man was Herman Hollerith. He worked in the Census Bureau and was very fed up with how fast he developed the machine over the next ten years. He first invented the tabulator of the electromechanical counting machine. This is where our salon piano comes. Hollerith needed a way to store information, and the paper roll was his first solution. They ended up being very fragile, so instead, he went for the punch card. They may look ancient, but punch cards remained the standard for data storage until the 1970s. Hollerith's tabulator was the beginning of modern information technology, and he knew it, so in 1896 he founded his company. The Census Bureau rejoiced around the world and Hollerith became a very wealthy man.
By the time he sold his business in 1911, it was worth more than $ 2.3 million. This may sound cheap, but remember that this was during a time when the average worker barely earned two dollars a day. So, who bought Hollerith's company? This boy, Charles Flint. In 1911 he merged it with three other companies, making watches and scales. This was the birth of IBM. Well, it wasn't called IBM until 1924, but you have an idea. Hollerith's tabulators were at the heart of IBM's business, but as technology improved, they would expand their product range. During World War II, he also began making rifles and equipment for the US Army.
After the war ended and everyone went back into business, IBM was on its way to developing the first real computers: you know, which weighed 4 tons and could fill a room. During the 60s he collaborated with NASA for the Apollo mission. You know who puts Neil Armstrong and friends on the moon. The PC revolution of the 80s, however, was his biggest challenge. By that time, personal computers were built only about 5 years ago. The most popular one was Apple II, courtesy of Steve Jobs and Steve Wozniak. The market for personal computers was not yet large, but it was growing rapidly, and many leading companies had already settled.
IBM was late to the party but did not give up, and on August 12, 1981, after a short year of development, IBM revealed its trump card: IBM Personal Computer, or PC for short. Nobody saw it coming. IBM spent a fortune on its marketing campaign and, unlike previous projects, they supported third-party developers. This was a big step at a time when everyone was guarding their trade secrets. IBM PC was such a success that in less than two years they were selling one PC every minute. At this point, you are probably wondering what happened. After all, no one uses IBM computers in their home.
So where did it all go wrong?
Well, part of the answer lies in IBM's decision to borrow components from other companies. They did not develop its operating system or microprocessor but rather borrowed it from Microsoft and Intel. This is why they were so eager to give free access to third-party developers. By doing so, IBM inadvertently handed over the keys to the PC industry. What they accomplished was to build MS-DOS and Intel processors to industry standards. When other brands started copying this model, IBM had a hard time catching up. A flood of cheap "clones" forced IBM out of the market. He had a very difficult time in the years before the Internet, but despite losing the PC war of the 80s, he recovered surprisingly well.
Their main products, after all, had always been their mainframes: large, heavy computers that could power large businesses. Small personal computers can never replace mainframes, so IBM was back in the black only after a few years. The dot-com crash in 2000 helped IBM as many of its technology competitors went bankrupt. The Internet became a big opportunity for him. Now they could sell not only their mainframes but entire packs of software and services. Those who had become, essentially, the greatest men in the business world. I lied that no one has an IBM computer anymore. Many do so because IBM sold its PC division to Lenovo in 2005. His defeat during the 80s taught him how important it was to stay on top of technological progress. He had a huge role in the development of modern technology.
Take AI for example: In 1997 his Deep Blue event managed to defeat world chess champion, Gary Kasparov. More recently, his Watson AI won one million dollars! in 2011. IBM's most recent conflict has been with cloud computing. This is a very hot topic in enterprise technology right now, but the idea behind it is very simple.
Imagine a huge network of computing resources: think of large servers, powerful processors and lots, and lots of storage space. You or your business can use this network, and you can rent your vast resources for whatever you need. You don't need to see it, you don't need to maintain it, you don't even know about it.
This is the beauty of it: a single network can serve thousands of companies, who only have to pay a small fee to use it. This may sound fine and meaningless, but cloud computing is a major threat to IBM. Unlike the 80s, this time they are not against small tech startups.
Now they are facing the big guys: Amazon, Microsoft, and Google. And to be honest, things are not looking too bright for IBM. Cloud computing has the potential to replace the main source of income. Mainframes and business solutions have always been IBM's bread and butter. He has a presence in the cloud market, but all his competitors have other cash cows to rely on. Compared to them, IBM doesn't have much to fall back on. In a world where you can rent all your needs cheaply, no one will bother to buy IBM mainframes.
Now, does this mean that IBM will die in a few years? Probably right there. They can throw at the number of people I am sure they have the best brains to work on their next move. Will they survive the age of cloud computing? Who knows. I think we'll find out eventually.
Until then, be smart.
I hope you enjoy the story.
[IBM]
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