International Business Machines
International Business Machines (NYSE: IBM) provides computing-related consulting services to corporate clients, conducts computing-related research, and licenses a vast array of computing-related patents to other companies. Headquartered in Armonk, New York, IBM is currently led by Samuel J. Palmisano, its president, chairman, and CEO.
Some companies have exciting, dramatic origins involving radical inventions or colorful coincidences. IBM is not one of them. Its early years are full of punch-card tabulators, time clocks, and automatic scales. If you think "International Business Machines" is a fairly drab name, try its very first moniker from 1896, "The Tabulating Machine Company," or more yawn-inducing yet, the name under which it launched its current incarnation in 1911, "The Computing-Tabulating-Recording Corporation." The company wouldn't adopt its current name until Feb. 14, 1924 -- a very strange Valentine's Day gift indeed.
Things began to get interesting for the company during the Great Depression; though the economy crashed, the company kept busy, and its industriousness paid off. When the U.S. government needed an army of accounting machines to keep track of enrollment in a daring new plan called "Social Security," IBM had a whole bunch of ideal units ready and waiting. During World War II, IBM switched gears to manufacture military components for the U.S. armed forces; unfortunately, like General Motors, the company was also working for the Nazis via its seized European facilities. IBM's accounting machines have been accused of helping the Nazis track and hunt down the Jews of Europe far more efficiently than they would have otherwise, though the company denies any direct culpability to this day.
As the Cold War dawned, IBM kept busy building computers for military applications, which in turn helped it become by far the nation's leading provider of business mainframes in the 1950s and '60s. In the '60s, it pioneered the sale of customizable computer systems, allowing clients to select the components, capabilities, and processing power that were best for their respective businesses. It also separated hardware, software, and service sales, a move that eventually led to the rise of the software industry. And in 1981, IBM helped usher in the microcomputer age with the IBM PC, which also gave Intel processors and Microsoft's MS-DOS operating system their first big breaks.
But IBM proved almost too clever for its own good in this respect. As low-margin PCs conquered the business world, sales of IBM's high-margin mainframes dried up. Heavily dependent on this dinosaur of a business, IBM almost went extinct. The arrival of CEO Lou Gerstner in 1993 turned the company around, as Gerstner transformed IBM from a manufacturer of computer hardware to a provider of consulting and computer-related services for big business. A reenergized and profoundly prolific research arm began racking up record numbers of patents; IBM now holds the record for the most U.S. patents held by a single company, and earns a healthy chunk of revenue licensing those patents to others. In 2004, IBM sold the last of its computer-manufacturing operations, including the rights to its popular ThinkPad notebooks, to China's Lenovo. In March 2009, the company reportedly planned to purchase server and software stalwart Sun Microsystems in a $6.5 billion deal, but the acquisition fell through; Sun was later bought out by Oracle.
Technically, IBM's line of business remains incredibly boring -- but at least now, with global consulting services and the development of superfast processors involved, the company known as Big Blue is boring in whizzy, exciting, high-tech ways.
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