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This article is about the International Business Machines Corporation; see IBM (disambiguation) for other uses of this abbreviation.


This article should include material from BlueEyes

International Business Machines Corporation (IBM, or colloquially, Big Blue) (incorporated June 15, 1911, in operation since 1888) is headquartered in Armonk, New York, USA. The company manufactures and sells computer hardware, software, and services.

With over 300,000 employees worldwide and revenues of $89 billion (figures from 2003), IBM is the largest information technology company in the world, and one of the few with a continuous history dating back to the 19th century. It has engineers and consultants in over 160 countries and development laboraties located all over the world, in all segments of computer science and information technology; some of them are pioneers in areas ranging from mainframe computers to nanotechnology.

In recent years, services and consulting revenues have been larger than those from manufacturing. Samuel J. Palmisano was elected CEO on January 29, 2002 after having led IBM's Global Services, and helping it to become a business with a $100 billion in backlog in 2004 [1].

The shift in focus has led the company to become increasingly technical; as of 2004 it employs about 191,000 technical professionals. That total includes 300-400 Distinguished Engineers and 50-60 IBM Fellows, its most senior engineers. IBM Research has eight research labs located in the Northern Hemisphere, with half of those locations outside of the United States. IBM employees have won five Nobel Prizes. In the USA, they have earned four Turing Awards, five National Medals of Technology , and five National Medals of Science, and outside the USA, many equivalents.


Current business activities

(click on the
year to go to
IBM's page of
for that year)
Year Patents
2003 3415
2002 3288
2001 3411
2000 2886
1999 2756
1998 2658
1997 1724
1996 1867
1995 1383
1994 1298
1993 1087

In 2002, IBM announced the beginning of a $10 billion program to research and implement the infrastructure technology necessary to be able to provide supercomputer-level resources "on demand" to all businesses as a metered utility.

In recent years IBM has steadily increased its patent portfolio, which is valuable for cross-licensing with other companies. In every year from 1993 until 2003, IBM has been granted significantly more U.S. patents than any other company. That eleven-year period has resulted in over 25,000 patents for which IBM is the primary assignee. [2]

Protection of the company's intellectual property has grown into a business in its own right, generating over $10 billion dollars [3] to the bottom line for the company during this period. [4], [5]


IBM has often been described as having a sales-centric or a sales-oriented business culture. Traditionally, many of its executives and general managers would be chosen from its sales force. In addition, middle and top management would often be enlisted to give direct support to salesmen in the process of making sales to important customers.

For most of the 20th century, a blue suit, white shirt and dark tie was the public uniform of IBM employees. But by the 1990s, IBM relaxed these codes; the dress and behavior of its employees does not differ appreciably from that of their counterparts in large technology companies.

IBM's culture has been recently influenced by the open source movement. The company invests billions of dollars in services and software based on Linux. This includes over 300 Linux kernel developers. IBM's open source involvement has not been trouble-free, however; see SCO v. IBM.


IBM's history dates back decades before the development of computers – before that it developed punched card data processing equipment. It originated as the Computing Tabulating Recording (CTR) Corporation, which was incorporated on June 15, 1911 in Binghamton, New York. This company was a merger of the Tabulating Machine Corporation, the Computing Scale Corporation and the International Time Recording Company. The president of the Tabulating Machine Corporation at that time was Herman Hollerith, who had founded the company in 1896. Thomas J. Watson Sr., the founder of IBM, became General Manager of CTR in 1914 and President in 1915. On February 14, 1924, CTR changed its name to International Business Machines Corporation.

The companies that merged to form CTR manufactured a wide range of products, including employee time keeping systems, weighing scales, automatic meat slicers, and most importantly for the development of the computer, punched card equipment. Over time CTR came to focus purely on the punched card business, and ceased its involvement in these other activities.

During World War II, IBM's German subsidiary Dehomag (an acronym formed from "German Hollerith Machine Company Ltd") provided the Nazi regime with punch card machines. Dehomag was taken over by the Nazis in 1939. In 2001 author Edwin Black published a book titled IBM and the Holocaust, which alleged that although IBM did not control Dehomag once World War II began, Thomas J. Watson nevertheless knew of the German regime's activities and was indifferent to any moral issues. The credibility of Black's book has been questioned, as has its claim that the Holocaust would have been impossible without Dehomag's data processing systems. As of 2004 IBM's possible complicity in the Holocaust is the subject of at least one unresolved lawsuit. IBM has donated more than 10,000 pages of archived documents concerning Dehomag to Hohenheim University in Germany and New York University.

In the 1950s, IBM became a chief contractor for developing computers for the United States Air Force's automated defense systems. Working on the SAGE anti-aircraft system, IBM gained access to crucial research being done at MIT, working on the first real-time, digital computer (which included many other advancements such as an integrated video display , magnetic core memory, light guns, the first effective algebraic computer language, analog-to-digital and digital-to-analog conversion techniques, digital data transmission over telephone lines, duplexing, multiprocessing, and networks). IBM built fifty-six SAGE computers at the price of $30 million each, and at the peak of the project devoted more than 7,000 employees (20% of its then workforce) to the project. More valuable to the company in the long run than the profits, however, was the access to cutting-edge research into digital computers being done under military auspices. IBM neglected, however, to gain an even more dominant role in the nascent industry by allowing the Rand Corporation to take over the job of programming the new computers, because, according to one project participant (Robert P. Crago), "we couldn't image where we could absorb two thousand programmers at IBM when this job would be over someday." IBM would use its experience designing massive, integrated real-time networks with SAGE to design its SABRE airline reservation system, which met with much success.

IBM's success in the mid-1960s led to enquiries as to IBM antitrust violations by the U.S. Department of Justice, which filed a complaint for the case U.S. v. IBM in the United States District Court for the Southern District of New York, on January 17, 1969. The suit alleged that IBM violated the Section 2 of the Sherman Act by monopolizing or attempting to monopolize the general purpose electronic digital computer system market, specifically computers designed primarily for business. Litigation continued until 1983, and had a significant impact on the company's practices.

On January 19, 1993 IBM announced a $4.97 billion loss for 1992, which was at that time the largest single-year corporate loss in United States history. Since that loss, IBM has made major changes in its business activities, shifting its focus significantly away from components and hardware and towards software and services.


  • The IBM Logo was designed by Paul Rand.
  • IBM Japan is one of the successful few foreign companies in the Japanese market; the other major players are General Electric and Boeing.
  • IBM invented many of the core technologies used in all forms of computing, including the first hard disk drive and the Winchester hard disk drive, the cursor (on computer screens), Dynamic RAM (DRAM), the Relational database, Thin Film recording heads, RISC architecture, the Scanning Tunneling Microscope, and the floppy disk. While the floppy disk is rapidly falling into disuse, the infamous Control Alt Delete keystroke (Bradly, 2001: "I invented it, but it was Bill that made it famous"), also invented at IBM, is still frequently used on PCs running Windows operating systems.
  • The first black employee was hired in 1899 by the Computing Scale Corporation (as it was known at the time).
  • IBM began hiring women to work as professional systems service staff in 1935. Thomas J. Watson Sr. wrote: "Men and women will do the same kind of work for equal pay. They will have the same treatment, the same responsibilities and the same opportunities for advancement."
  • From 1933 to 1944, IBM punch card machines were installed at various German concentration camps. It has been alleged by a journalist that IBM president Thomas J. Watson, Sr. was aware of their use. Note however that concentration camps are a perfectly legal war disposition regulated by the Geneva convention. The problem lies with extermination camps, about which there were already a lot of war rumours, but nothing that could be confirmed or infirmed formally before their discovery by allies in 1945. [6]
  • In 1944, IBM was the first corporation to support the United Negro College Fund.
  • In 1953, IBM published the first US corporate mandate on equal employment opportunity, stating that the company would hire people based on their ability, "regardless of race, color or creed". Sexual orientation was added to the nondiscrimination policy in 1984.
  • Whilst IBM did not invent the personal computer, architectures cloned from its design for the IBM PC (which relied on third-party componentry) became the industry standard, and are now often simply called the PC. The IBM PC was introduced on August 12 1981; Microsoft and Intel became monopoly suppliers of two of the key components of PC-compatible systems.

Recent acquisitions


  • Taligent, a joint-venture with Apple Computer.
  • Lexmark, the printer division.
  • Hitachi Global Storage Technologies now provides many of the hardware storage solutions formerly provided by IBM, including IBM Harddrives & The Microdrive. IBM continues to develop storage solutions, including Tape Backup , Storage software , etc.
  • ScanSoft now sell and support IBM's speech technology products under the ViaVoice brand.

See also

External links

Last updated: 10-24-2004 05:10:45