“Market Cap $202.54 B As of May 2014
At a Glance
- Industry: Computer Services
- Founded: 1911
- Country: United States
- CEO: Virginia Rometty
- Website: www.ibm.com
- Employees: 431,212
- Sales: $99.75 B
- Headquarters: Armonk, New York
#35 Global 2000
- #60 in Sales
- #23 in Profit
- #209 in Assets
- #19 in Market value
#4 World’s Most Valuable Brands
International Business Machines Corp. is an information technology company, which provides integrated solutions that leverage information technology and knowledge of business processes. The company operates its business through five segments: Global Technology Services, Global Business Services, Software, Systems & Technology and Global Financing. The Global Technology Services segment primarily provides IT infrastructure and business process services, delivering business value through the company’s global scale, standardization and automation. Its capabilities include Strategic Outsourcing Services and Global Process Services. The Strategic Outsourcing services include comprehensive IT outsourcing services, which are dedicated to transforming clients’ existing infrastructures. The Global Process Services activity provides a range of offerings from standardized processing platforms and business process outsourcing through transformational offerings that deliver improved business results to clients through the strategic change and/or operation of the client’s business processes, applications and infrastructure. The Integrated Technology services include project-based portfolio of services that enable clients to optimize their IT environments. The maintenance activities provide a line of support services from product maintenance through solution support to maintain and improve the availability of clients’ IT infrastructures. The GTS Services Delivery activity offers IBM’s technology- and process-based services, which include business transformation outsourcing, business process outsourcing and business process services. The Global Business Services segment primarily provides professional and application management services, delivering business value and innovation to clients through solutions which leverage industry and business-process expertise. Its capabilities include Consulting & Systems Integration and Application Management Services. The Consulting & Systems Integration activity offers value to clients through consulting services for strategy and transformation, application innovation services, enterprise applications (sap and oracle) and business analytics, and optimization. The Application Management Services activity provides application development, management, maintenance and support services for packaged software, as well as custom and legacy applications. The Software segment primarily consists of middleware and operating systems software. Middleware software enables clients to integrate systems, processes and applications across a standard software platform. Its capabilities include WebSphere Software, Information Management Software, Tivoli Software, Lotus Software and Rational Software. The WebSphere Software delivers capabilities that enable clients to integrate and manage business processes across their organizations. The Information Management Software solutions include advanced database management, enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management and predictive analytics. The Tivoli Software helps clients manage their technology and business assets by providing visibility, control and automation across their organizations. The Lotus Software enables businesses to connect people and processes for more effective communication and increased productivity through collaboration, messaging and social networking software. The Rational Software supports software development for both IT and embedded system solutions with a suite of application lifecycle management products. The Business Analytics offers Cognos’ business intelligence software, which provides comprehensive tools that range from querying to forecasting, as well as SPSS predictive analytics software. The Operating Systems software manages the fundamental processes that enable to run computers. The Systems & Technology segment provides clients with business solutions requiring advanced computing power and storage capabilities. It also provides semiconductor technology, products and packaging solutions to clients and for IBM’s own advanced technology needs. Its capabilities include Systems, Storage, Retail Store Solutions and Microelectronics. The Systems business provides a range of general purpose and integrated systems designed and optimized for specific business, public and scientific computing needs. The Storage capability provides data storage products and solutions and address critical client requirements for information retention and archiving, data de-duplication, availability and virtualization, and security and compliance. Its portfolio consists of a broad range of disk and tape storage systems and software, including the ultra-scalable disk storage system XIV. The Retail Store Solutions include point-of-sale retail systems, as well as solutions which connect them to other store systems. The Microelectronics engages in semiconductor design and manufacturing business primarily for use in IBM systems and storage products, as well as delivering semiconductors and related services to external clients. The Global Financing segment facilitates clients’ acquisition of IBM systems, software and services. It invests in financing assets, leverages with debt and manages the associated risks with the objective of generating consistently strong returns on equity. Its capabilities include client financing, commercial financing and remanufacturing and remarketing. International Business Machines was founded by Thomas J. Watson Sr. on June 16, 1911 and is headquartered in Armonk, NY.“
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.In the 1880s, various technologies came into existence that would form part of IBM’s predecessor company. Julius E. Pitrat patented the computing scale in 1885; Alexander Dey invented the dial recorder (1888);in 1889, 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.
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), 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, 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 programmed 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. The IBM Selectric typewriter was a highly successful model line of electric typewriters introduced by IBM on July 31, 1961.
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 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 application.
In 1974, IBM engineer George M. Laurer developed the Universal Product Code.On October 11, 1973, IBM introduced the IBM 3660, a laser-scanning point-of-sale barcode reader which would become the workhorse 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. That pack is now on display at the Smithsonian Institution’s National Museum of American History in Washington, D.C.
In the late 1970s, IBM underwent some internal convulsions between those in management wanting to concentrate on their bread-and-butter mainframe business, and those wanting the company to invest heavily in the emerging personal computer industry.
Financial swaps were first introduced to the public in 1981 when IBM and the World Bank entered into a swap agreement. The IBM PC, originally designated IBM 5150, was introduced in 1981, and it soon became the industry standard. In 1991, IBM sold Lexmark. In 1993, IBM posted what at the time was the biggest loss in the history of corporate America: US$8 billion.
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 the same year, 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. 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, 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 which was valued at $213.2 billion. It was the first time since 1996 that IBM exceeded its software rival based on closing price. On August 16, 2012, IBM announced it entered an agreement to buyTexas Memory Systems. Later that month, IBM announced it has agreed to buy Kenexa. The acquisition is expected to close in the fourth quarter. The deal is worth $1.3 billion and was paid in cash by IBM.
In June 2013, IBM acquired SoftLayer Technologies, a web hosting service, in a deal of around $2 billion.
In August 2013, US regulators began an investigation into how the firm reports revenue from its cloud computing business. Also in August, IBM acquired Trusteer, a Boston-based, privately held, computer-security company responsible for the development of Rapport security software, in a deal close to $1 billion.
IBM shareholders sued IBM because of the cooperation with the National Security Agency that caused the stock price to decline after the NSA mass espionage revelations, because of lower export sales that halted in countries like China.
IBM was also accused for lobbying for Cyber Intelligence Sharing and Protection Act which would allow IBM to share customer data with the NSA.
On February 27, 2014, IBM says it will layoff up to 25 percent of the hardware division, inline with X86 server business which is sold to Lenovo.
IBM’s headquarters 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 curtain wall. The building is located on a 25-acre (10 ha) site. IBM has been headquartered in Armonk since 1964.
The company has twelve research labs worldwide—Almaden, Austin, Australia, Brazil, China, Dublin, Israel, India, Tokyo, Watson (New York), Zurich and Nairobi—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, Cracow and Toronto; buildings in Chicago, Johannesburg, and 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, 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).
On January 21 2014 it was announced that IBM 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 for 2013, from the prior year. The company stated that it would invest more than $1.2bn expanding its data centers and cloud-storage business, building 15 new centers.”
*Information from Forbes.com and Wikipedia.org
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