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International Business Machines Corporation
IBM
FormerlyComputing-Tabulating-Recording Company (1911–1924)
Company typePublic
ISINISIN: US4592001014
IndustryInformation technology
PredecessorsBundy Manufacturing Company
Computing Scale Company of America
International Time Recording Company
Tabulating Machine Company
Computing-Tabulating-Recording Company
FoundedJune 16, 1924; 100 years ago (1924-06-16) (as Computing-Tabulating-Recording Company)
Endicott, New York, U.S.[1]
FoundersGeorge Winthrop Fairchild
Charles Ranlett Flint
Herman Hollerith
Headquarters1 Orchard Road,
Armonk, New York
,
United States
Area served
177 countries
Key people
ProductsAutomation
Robotics
Artificial intelligence
Cloud computing
Consulting
Blockchain
Computer hardware
Software
Quantum computing
Brands
Services
RevenueIncrease US$61.860 billion (2023)
Increase US$8.690 billion (2023)
Increase US$7.502 billion (2023)
Total assets Increase US$135.241 billion (2023)
Total equityIncrease US$22.613 billion (2023)
Number of employees
282,200 (December 2023)
SubsidiariesList of subsidiaries
Websiteibm.com
Footnotes / references
[5]

International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue,[6] is an American multinational technology company headquartered in Armonk, New York and present in over 175 countries.[7][8] IBM is the largest industrial research organization in the world, with 19 research facilities across a dozen countries, having held the record for most annual U.S. patents generated by a business for 29 consecutive years from 1993 to 2021.[9][10][11]

IBM was founded in 1911 as the Computing-Tabulating-Recording Company (CTR), a holding company of manufacturers of record-keeping and measuring systems. It was renamed "International Business Machines" in 1924 and soon became the leading manufacturer of punch-card tabulating systems. During the 1960s and 1970s, the IBM mainframe, exemplified by the System/360, was the world's dominant computing platform, with the company producing 80 percent of computers in the U.S. and 70 percent of computers worldwide.[12]

IBM entered the microcomputer market in the 1980s with the IBM Personal Computer, which soon became known as the PC, one of IBM's best selling products. Due to a lack of foresight by IBM,[13][14] the PC was not well protected by intellectual property laws. As a consequence, IBM quickly began losing its market dominance to emerging competitors in the PC market, while at the same time the openness of the PC platform has ensured PC's longevity as the most popular microcomputer standard.

Beginning in the 1990s, the company began downsizing its operations and divesting from commodity production, most notably selling its personal computer division to the Lenovo Group in 2005. IBM has since concentrated on computer services, software, supercomputers, and scientific research. Since 2000, its supercomputers have consistently ranked among the most powerful in the world, and in 2001 it became the first company to generate more than 3,000 patents in one year, beating this record in 2008 with over 4,000 patents.[12] As of 2022, the company held 150,000 patents.[15]

As one of the world's oldest and largest technology companies, IBM has been responsible for several technological innovations, including the automated teller machine (ATM), dynamic random-access memory (DRAM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the SQL programming language, and the UPC barcode. The company has made inroads in advanced computer chips, quantum computing, artificial intelligence, and data infrastructure.[16][17][18] IBM employees and alumni have won various recognitions for their scientific research and inventions, including six Nobel Prizes and six Turing Awards.[19]

IBM is a publicly traded company and one of 30 companies in the Dow Jones Industrial Average. It is among the world's largest employers, with over 297,900 employees worldwide in 2022.[20] Despite its relative decline within the technology sector,[21] IBM remains the seventh largest technology company by revenue, and 67th largest overall company by revenue in the United States. It is also consistently ranked among the world's most recognizable and valuable brands.[22]

History

Main article: History of IBM

IBM originated with several technological innovations developed and commercialized in the late 19th century. Julius E. Pitrap patented the computing scale in 1885;[23] Alexander Dey invented the dial recorder (1888);[24] Herman Hollerith patented the Electric Tabulating Machine (1889);[25] and Willard Bundy invented a time clock to record workers' arrival and departure times on a paper tape (1889).[26] On June 16, 1911, their four companies were amalgamated in New York State by Charles Ranlett Flint forming a fifth company, the Computing-Tabulating-Recording Company (CTR) based in Endicott, New York.[1][27] The five companies had 1,300 employees and offices and plants in Endicott and Binghamton, New York; Dayton, Ohio; Detroit, Michigan; Washington, D.C.; and Toronto, Canada.[28]

Collectively, the companies manufactured a wide array of machinery for sale and lease, ranging from commercial scales and industrial time recorders, meat and cheese slicers, to tabulators and punched cards. Thomas J. Watson, Sr., fired from the National Cash Register Company by John Henry Patterson, called on Flint and, in 1914, was offered a position at CTR.[29] Watson joined CTR as general manager and then, 11 months later, was made President when antitrust cases relating to his time at NCR were resolved.[30] Having learned Patterson's pioneering business practices, Watson proceeded to put the stamp of NCR onto CTR's companies.[31] He implemented sales conventions, "generous sales incentives, a focus on customer service, an insistence on well-groomed, dark-suited salesmen and had an evangelical fervor for instilling company pride and loyalty in every worker".[32][33] His favorite slogan, "THINK", became a mantra for each company's employees.[32] During Watson's first four years, revenues reached $9 million ($158 million today) and the company's operations expanded to Europe, South America, Asia and Australia.[32] Watson never liked the clumsy hyphenated name "Computing-Tabulating-Recording Company" and chose to replace it with the more expansive title "International Business Machines" which had previously been used as the name of CTR's Canadian Division;[34] the name was changed on February 14, 1924.[35] By 1933, most of the subsidiaries had been merged into one company, IBM.[36]

NACA researchers using an IBM type 704 electronic data processing machine in 1957

The Nazis made extensive use of Hollerith punch card and alphabetical accounting equipment and IBM's majority-owned German subsidiary, Deutsche Hollerith Maschinen GmbH (Dehomag), supplied this equipment from the early 1930s. This equipment was critical to Nazi efforts to categorize citizens of both Germany and other nations that fell under Nazi control through ongoing censuses. These census data were used to facilitate the round-up of Jews and other targeted groups, and to catalog their movements through the machinery of the Holocaust, including internment in the concentration camps.[37] Nazi concentration camps operated a Hollerith department called Hollerith Abteilung, which had IBM machines, including calculating and sorting machines.[38]

IBM produced 6% of the M1 Carbine rifles used in World War II, about 346,500 of them, between August 1943 and May. IBM never produced guns for civilian sales, only for the military.

IBM built the Automatic Sequence Controlled Calculator, an electromechanical computer, during World War II. It offered its first commercial stored-program computer, the vacuum tube based IBM 701, in 1952. The IBM 305 RAMAC introduced the hard disk drive in 1956. The company switched to transistorized designs with the 7000 and 1400 series, beginning in 1958.

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 scientific programming language was developed. In 1961, IBM developed the SABRE reservation system for American Airlines and introduced the highly successful Selectric typewriter.

In 1963, IBM employees and computers helped NASA track the orbital flights 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. IBM also developed and manufactured the Saturn V's Instrument Unit and Apollo spacecraft guidance computers.

An IBM System/360 in use at the University of Michigan c. 1969
IBM guidance computer hardware for the Saturn V Instrument Unit

On April 7, 1964, IBM launched the first computer system family, the IBM System/360. 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 applications. It was followed by the IBM System/370 in 1970. Together the 360 and 370 made the IBM mainframe the dominant mainframe computer and the dominant computing platform in the industry throughout this period and into the early 1980s. They and the operating systems that ran on them such as OS/VS1 and MVS, and the middleware built on top of those such as the CICS transaction processing monitor, had a near-monopoly-level market share and became the thing IBM was most known for during this period.[39]

In 1969, the United States of America alleged that IBM violated the Sherman Antitrust Act by monopolizing or attempting to monopolize the general-purpose electronic digital computer system market, specifically computers designed primarily for business, and subsequently alleged that IBM violated the antitrust laws in IBM's actions directed against leasing companies and plug-compatible peripheral manufacturers. Shortly after, IBM unbundled its software and services in what many observers believed was a direct result of the lawsuit, creating a competitive market for software. In 1982, the Department of Justice dropped the case as "without merit".[40]

Also in 1969, IBM engineer Forrest Parry invented the magnetic stripe card that would become ubiquitous for credit/debit/ATM cards, driver's licenses, rapid transit cards and a multitude of other identity and access control applications. IBM pioneered the manufacture of these cards, and for most of the 1970s, the data processing systems and software for such applications ran exclusively on IBM computers. In 1974, IBM engineer George J. Laurer developed the Universal Product Code.[41] IBM and the World Bank first introduced financial swaps to the public in 1981, when they entered into a swap agreement.[42] The IBM PC, originally designated IBM 5150, was introduced in 1981, and it soon became an industry standard.

In 1991 IBM began spinning off its many divisions into autonomous subsidiaries (so-called "Baby Blues") in an attempt to make the company more manageable and to streamline IBM by having other investors finance those companies.[43][44] These included AdStar, dedicated to disk drives and other data storage products; IBM Application Business Systems, dedicated to mid-range computers; IBM Enterprise Systems, dedicated to mainframes; Pennant Systems, dedicated to mid-range and large printers; Lexmark, dedicated to small printers; and more.[45] Lexmark was acquired by Clayton & Dubilier in a leveraged buyout shortly after its formation.[46]

In September 1992, IBM completed the spin-off of their various non-mainframe and non-midrange, personal computer manufacturing divisions, combining them into an autonomous wholly owned subsidiary known as the IBM Personal Computer Company (IBM PC Co.).[47][48] This corporate restructuring came after IBM reported a sharp drop in profit margins during the second quarter of fiscal year 1992; market analysts attributed the drop to a fierce price war in the personal computer market over the summer of 1992.[49] The corporate restructuring was one of the largest and most expensive in history up to that point.[50] By the summer of 1993, the IBM PC Co. had divided into multiple business units itself, including Ambra Computer Corporation and the IBM Power Personal Systems Group, the former an attempt to design and market "clone" computers of IBM's own architecture and the latter responsible for IBM's PowerPC-based workstations.[51][52]

In 1993, IBM posted an $8 billion loss – at the time the biggest in American corporate history.[53] Lou Gerstner was hired as CEO from RJR Nabisco to turn the company around.[54] In 2002 IBM acquired PwC Consulting, the consulting arm of PwC which was merged into its IBM Global Services.[55][56]

IBM inventions (clockwise from top-left): the hard-disk drive, DRAM, the UPC bar code, and the magnetic stripe card

In 1998, IBM merged the enterprise-oriented Personal Systems Group of the IBM PC Co. into IBM's own Global Services personal computer consulting and customer service division. The resulting merged business units then became known simply as IBM Personal Systems Group.[57] A year later, IBM stopped selling their computers at retail outlets after their market share in this sector had fallen considerably behind competitors Compaq and Dell.[58] Immediately afterwards, the IBM PC Co. was dissolved and merged into IBM Personal Systems Group.[59]

On September 14, 2004, LG and IBM announced that their business alliance in the South Korean market would end at the end of that year. Both companies stated that it was unrelated to the charges of bribery earlier that year.[60][61][62][63] Xnote was originally part of the joint venture and was sold by LG in 2012.[64]

In 2005, the company sold all of its personal computer business to Chinese technology company Lenovo[65] and, 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. The company also celebrated its 100th anniversary in the same year on June 16. In 2012, IBM announced it had agreed to buy Kenexa and Texas Memory Systems,[66] and a year later it also acquired SoftLayer Technologies, a web hosting service, in a deal worth around $2 billion.[67] Also that year, the company designed a video surveillance system for Davao City.[68]

In 2014 IBM announced it would sell its x86 server division to Lenovo for $2.1 billion.[69] while continuing to offer Power ISA-based servers. Also that year, IBM began announcing several major partnerships with other companies, including Apple Inc.,[70][71] Twitter,[72] Facebook,[73] Tencent,[74] Cisco,[75] UnderArmour,[76] Box,[77] Microsoft,[78] VMware,[79] CSC,[80] Macy's,[81] Sesame Workshop,[82] the parent company of Sesame Street, and Salesforce.com.[83]

In 2015, IBM announced three major acquisitions: Merge Healthcare for $1 billion,[84] data storage vendor Cleversafe, and all digital assets from The Weather Company, including Weather.com and the Weather Channel mobile app.[85][86] Also that year, IBM employees created the film A Boy and His Atom, which was the first molecule movie to tell a story. In 2016, IBM acquired video conferencing service Ustream and formed a new cloud video unit.[87][88] In April 2016, it posted a 14-year low in quarterly sales.[89] The following month, Groupon sued IBM accusing it of patent infringement, two months after IBM accused Groupon of patent infringement in a separate lawsuit.[90]

In 2015, IBM bought the digital part of The Weather Company,[91] Truven Health Analytics for $2.6 billion in 2016, and in October 2018, IBM announced its intention to acquire Red Hat for $34 billion,[92][93][94] which was completed on July 9, 2019.[95]

In February of 2020, IBM's John Kelly III joined Brad Smith of Microsoft to sign a pledge with the Vatican to ensure the ethical use and practice of Artificial Intelligence (AI).[96]

IBM announced in October 2020 that it would divest the Managed Infrastructure Services unit of its Global Technology Services division into a new public company.[97] The new company, Kyndryl, will have 90,000 employees, 4,600 clients in 115 countries, with a backlog of $60 billion.[98][99][100] IBM's spin off was greater than any of its previous divestitures, and welcomed by investors.[101][102][103] IBM appointed Martin Schroeter, who had been IBM's CFO from 2014 through the end of 2017, as CEO of Kyndryl.[104][105]

On March 7, 2022, a few days after the start of the Russian invasion of Ukraine, IBM CEO Arvind Krishna published a Ukrainian flag and announced that "we have suspended all business in Russia". All Russian articles were also removed from the IBM website.[106] On June 7, Krishna announced that IBM would carry out an "orderly wind-down" of its operations in Russia.[107]

In 2023, IBM acquired Manta Software Inc. to complement its data and A.I. governance capabilities for an undisclosed amount.[108] On November 16, 2023, IBM suspended ads on Twitter after ads were found next to pro-Nazi content.[109][110]

In December 2023, IBM announced it would acquire Software AG's StreamSets and webMethods platforms for €2.13 billion ($2.33 billion).[111]

Corporate affairs

IBM's market capitalization was valued at over $153 billion as of May 2024.[112] IBM ranked No. 38 on the 2020 Fortune 500 rankings of the largest United States corporations by total revenue.[113] In 2014, IBM was accused of using "financial engineering" to hit its quarterly earnings targets rather than investing for the longer term.[114][115][116]

The key trends of IBM are (as at the financial year ending December 31):[117][118]

Year Revenue
(US$ bn) 		Net income
(US$ bn) 		Employees
2014 92.7 12.0 379,592
2015 81.7 13.1 377,757
2016 79.9 11.8 380,300
2017 79.1 5.7 366,600
2018 79.5 8.7 350,600
2019 77.1 9.4 352,600
2020 73.6 5.5 345,900
2021[a] 57.3 5.7 282,100
2022 60.5 1.6 288,300
2023 61.8 7.5 282,200

Headquarters and offices

Pangu Plaza, one of IBM's offices in Beijing, China

IBM is headquartered in Armonk, New York, a community 37 miles (60 km) north of Midtown Manhattan.[119] A nickname for the company is the "Colossus of Armonk".[120] Its principal building, referred to as CHQ, is a 283,000-square-foot (26,300 m2) glass and stone edifice on a 25-acre (10 ha) parcel amid a 432-acre former apple orchard the company purchased in the mid-1950s.[121] There are two other IBM buildings within walking distance of CHQ: the North Castle office, which previously served as IBM's headquarters; and the Louis V. Gerstner, Jr., Center for Learning[122] (formerly known as IBM Learning Center (ILC)), a resort hotel and training center, which has 182 guest rooms, 31 meeting rooms, and various amenities.[123]

IBM operates in 174 countries as of 2016,[2] with mobility centers in smaller market areas and major campuses in the larger ones. In New York City, IBM has several offices besides CHQ, including the IBM Watson headquarters at Astor Place in Manhattan. Outside of New York, major campuses in the United States include Austin, Texas; Research Triangle Park (Raleigh-Durham), North Carolina; Rochester, Minnesota; and Silicon Valley, California.

IBM's real estate holdings are varied and globally diverse. Towers occupied by IBM include 1250 René-Lévesque (Montreal, Canada) and One Atlantic Center (Atlanta, Georgia, US). In Beijing, China, IBM occupies Pangu Plaza,[124] the city's seventh tallest building and overlooking Beijing National Stadium ("Bird's Nest"), home to the 2008 Summer Olympics.

IBM India Private Limited is the Indian subsidiary of IBM, which is headquartered at Bangalore, Karnataka. It has facilities in Coimbatore, Chennai, Kochi, Ahmedabad, Delhi, Kolkata, Mumbai, Pune, Gurugram, Noida, Bhubaneshwar, Surat, Visakhapatnam, Hyderabad, Bangalore and Jamshedpur.

Other notable buildings include the IBM Rome Software Lab (Rome, Italy), Hursley House (Winchester, UK), 330 North Wabash (Chicago, Illinois, United States), the Cambridge Scientific Center (Cambridge, Massachusetts, United States), the IBM Toronto Software Lab (Toronto, Canada), the IBM Building, Johannesburg (Johannesburg, South Africa), the IBM Building (Seattle) (Seattle, Washington, United States), the IBM Hakozaki Facility (Tokyo, Japan), the IBM Yamato Facility (Yamato, Japan), the IBM Canada Head Office Building (Ontario, Canada) and the Watson IoT Headquarters[125] (Munich, Germany). Defunct IBM campuses include the IBM Somers Office Complex (Somers, New York), Spango Valley (Greenock, Scotland), and Tour Descartes (Paris, France). The company's contributions to industrial architecture and design include works by Marcel Breuer, Eero Saarinen, Ludwig Mies van der Rohe, I.M. Pei and Ricardo Legorreta. Van der Rohe's building in Chicago was recognized with the 1990 Honor Award from the National Building Museum.[126]

IBM was recognized as one of the Top 20 Best Workplaces for Commuters by the United States Environmental Protection Agency (EPA) in 2005, which recognized Fortune 500 companies that provided employees with excellent commuter benefits to help reduce traffic and air pollution.[127] In 2004, concerns were raised related to IBM's contribution in its early days to pollution in its original location in Endicott, New York.[128][129]

Products and services

See also: List of IBM products
Blue Gene was awarded the National Medal of Technology and Innovation in 2009.

IBM has a large and diverse portfolio of products and services. As of 2016, these offerings fall into the categories of cloud computing, artificial intelligence, commerce, data and analytics, Internet of things (IoT),[130] IT infrastructure, mobile, digital workplace[131] and cybersecurity.[132]

IBM Cloud includes infrastructure as a service (IaaS), software as a service (SaaS) and platform as a service (PaaS) offered through public, private and hybrid cloud delivery models. For instance, the IBM Bluemix PaaS enables developers to quickly create complex websites on a pay-as-you-go model. IBM SoftLayer is a dedicated server, managed hosting and cloud computing provider, which in 2011 reported hosting more than 81,000 servers for more than 26,000 customers.[133] IBM also provides Cloud Data Encryption Services (ICDES), using cryptographic splitting to secure customer data.[134]

Hardware designed by IBM for these categories include IBM's Power microprocessors, which were designed into many console gaming systems, including Xbox 360,[135] PlayStation 3, and Nintendo's Wii U.[136][137] IBM Secure Blue is encryption hardware that can be built into microprocessors,[138] and in 2014, the company revealed TrueNorth, a neuromorphic CMOS integrated circuit and announced a $3 billion investment over the following five years 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.[139] In 2016, the company launched all-flash arrays designed for small and midsized companies, which includes software for data compression, provisioning, and snapshots across various systems.[140]

IT outsourcing also represents a major service provided by IBM, with more than 60 data centers worldwide.[141] IBM Developer is IBM's source for emerging software technologies, and SPSS is a software package used for statistical analysis. IBM's Kenexa suite provides employment and retention solutions[buzzword], and includes the BrassRing, an applicant tracking system used by thousands of companies for recruiting.[142] IBM also owns The Weather Company, which provides weather forecasting and includes weather.com and Weather Underground.[143]

Smarter Planet is an initiative that seeks to achieve economic growth, near-term efficiency, sustainable development, and societal progress,[144][145] targeting opportunities such as smart grids,[146] water management systems,[147] solutions to traffic congestion,[148] and greener buildings.[149]

Services provisions include Redbooks, which are publicly available online books about best practices with IBM products, and developerWorks, a website for software developers and IT professionals with how-to articles and tutorials, as well as software downloads, code samples, discussion forums, podcasts, blogs, wikis, and other resources for developers and technical professionals.[150]

IBM Watson is a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data.[151] Watson was debuted in 2011 on the American game show Jeopardy!, where it competed against champions Ken Jennings and Brad Rutter in a three-game tournament and won. Watson has since been applied to business, healthcare, developers, and universities. For example, IBM has partnered with Memorial Sloan Kettering Cancer Center to assist with considering treatment options for oncology patients and for doing melanoma screenings.[152] Several companies use Watson for call centers, either replacing or assisting customer service agents.[153]

IBM Q System One (2019), the first circuit-based commercial quantum computer

In January 2019, IBM introduced its first commercial quantum computer: IBM Q System One.[154]

IBM also provides infrastructure for the New York City Police Department through their IBM Cognos Analytics to perform data visualizations of CompStat crime data.[155]

In March 2020, it was announced that IBM will build the first quantum computer in Germany. The computer should allow researchers to harness the technology without falling foul of the EU's increasingly assertive stance on data sovereignty.[156]

In June 2020, IBM announced that it was exiting the facial recognition business. In a letter to congress,[157] IBM's Chief Executive Officer Arvind Krishna told lawmakers, "now is the time to begin a national dialogue on whether and how facial recognition technology should be employed by domestic law enforcement agencies."[158]

In May 2022, IBM announced the company had signed a multi-year Strategic Collaboration Agreement with Amazon Web Services to make a wide variety of IBM software available as a service on AWS Marketplace. Additionally, the deal includes both companies making joint investments that make it easier for companies to consume IBM's offering and integrate them with AWS, including developer training and software development for select markets.[159]

In November 2022, the company came out with a chip called the 433-qubit Osprey. Time called it "the world's most powerful quantum processor" and noted that if the processor's speed were represented in bits, the number would be larger than the total number of atoms in the universe.[160]

In May 2023, IBM revealed Watsonx, a Generative AI toolkit that is powered by IBM's own Granite models with option to use other publicly available LLMs. Watsonx has multiple services for training and fine tuning models based on confidential data.[161] A year later, IBM open-sourced Granite code models and put them on Hugging Face for public use.[162]

In an effort to streamline its products and services, beginning in the 1990s, IBM has regularly sold off low margin assets while shifting its focus to higher-value, more profitable markets. In 1991, the company spun off its printer and keyboard manufacturing division to Lexmark, in 2005 it sold its personal computer (ThinkPad/ThinkCentre) business to Lenovo, in 2015 it adopted a "fabless" model with semiconductors design and offloaded manufacturing to GlobalFoundries, and in 2021 it spun-off its managed infrastructure services unit into a new public company named Kyndryl.[163][164] IBM also announced the acquisition of the enterprise software company Turbonomic for $1.5 billion.[165] In 2022, IBM announced it would sell Watson Health to private equity firm Francisco Partners.[166] IBM also started a collaboration with new Japanese manufacturer Rapidus in late 2022,[167] which led GlobalFoundries to file a lawsuit against IBM the following year.[168]

Research

The Thomas J. Watson Research Center in Yorktown Heights, New York, is one of 12 IBM research labs worldwide.
IBM Fellow Benoit Mandelbrot discusses fractal geometry, 2010.

Research has been part of IBM since its founding, and its organized efforts trace their roots back to 1945, when the Watson Scientific Computing Laboratory was founded at Columbia University in New York City, converting a renovated fraternity house on Manhattan's West Side into IBM's first laboratory. Now, IBM Research constitutes the largest industrial research organization in the world, with 12 labs on 6 continents.[169] IBM Research is headquartered at the Thomas J. Watson Research Center in New York, and facilities 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, Zurichlab and Africa lab in Nairobi.

In terms of investment, IBM's R&D expenditure totals several billion dollars each year. In 2012, that expenditure was approximately $6.9 billion.[170] Recent allocations have included $1 billion to create a business unit for Watson in 2014, and $3 billion to create a next-gen semiconductor along with $4 billion towards growing the company's "strategic imperatives" (cloud, analytics, mobile, security, social) in 2015.[171]

IBM has been a leading proponent of the Open Source Initiative, and began supporting Linux in 1998.[172] 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.[173] IBM has also released code under different open-source licenses, such as the platform-independent software framework Eclipse (worth approximately $40 million at the time of the donation),[174] 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 and developments by IBM include: the automated teller machine (ATM), dynamic random access memory (DRAM), the electronic keypunch, the financial swap, the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, RISC, the SABRE airline reservation system, SQL, the Universal Product Code (UPC) bar code, and the virtual machine. Additionally, in 1990 company scientists used a scanning tunneling microscope to arrange 35 individual xenon atoms to spell out the company acronym, marking the first structure assembled one atom at a time.[175] A major part of IBM research is the generation of patents. Since its first patent for a traffic signaling device, IBM has been one of the world's most prolific patent sources. In 2021, the company held the record for most patents generated by a business for 29 consecutive years for the achievement.[9]

Five IBM employees have received the Nobel Prize: Leo Esaki, of the Thomas J. Watson Research Center in Yorktown Heights, N.Y., in 1973, for work in semiconductors; Gerd Binnig and Heinrich Rohrer, of the Zurich Research Center, in 1986, for the scanning tunneling microscope;[176] and Georg Bednorz and Alex Müller, also of Zurich, in 1987, for research in superconductivity. Six IBM employees have won the Turing Award, including the first female recipient Frances E. Allen.[177] Ten National Medals of Technology (USA) and five National Medals of Science (USA) have been awarded to IBM employees.

Brand and reputation

IBM ads at John F. Kennedy International Airport, 2013

IBM is nicknamed Big Blue partly due to its blue logo and color scheme,[178][179] and also in reference to its former de facto dress code of white shirts with blue suits.[178][180] The company logo has undergone several changes over the years, with its current "8-bar" logo designed in 1972 by graphic designer Paul Rand.[181] It was a general replacement for a 13-bar logo, since period photocopiers did not render narrow (as opposed to tall) stripes well. Aside from the logo, IBM used Helvetica as a corporate typeface for 50 years, until it was replaced in 2017 by the custom-designed IBM Plex.

IBM has a valuable brand as a result of over 100 years of operations and marketing campaigns. Since 1996, IBM has been the exclusive technology partner for the Masters Tournament, one of the four major championships in professional golf, with IBM creating the first Masters.org (1996), the first course cam (1998), the first iPhone app with live streaming (2009), and first-ever live 4K Ultra High Definition feed in the United States for a major sporting event (2016).[182] As a result, IBM CEO Ginni Rometty became the third female member of the Master's governing body, the Augusta National Golf Club.[183] IBM is also a major sponsor in professional tennis, with engagements at the U.S. Open, Wimbledon, the Australian Open, and the French Open.[184] The company also sponsored the Olympic Games from 1960 to 2000,[185] and the National Football League from 2003 to 2012.[186]

In 2012, IBM's brand was valued at $75.5 billion and ranked by Interbrand as the third-best brand worldwide.[187] That same year, it was also ranked the top company for leaders (Fortune), the number two green company in the U.S. (Newsweek),[188] the second-most respected company (Barron's),[189] the fifth-most admired company (Fortune), the 18th-most innovative company (Fast Company), and the number one in technology consulting and number two in outsourcing (Vault).[190] In 2015, Forbes ranked IBM as the fifth-most valuable brand,[191] and for 2020, the Drucker Institute named IBM the No. 3 best-managed company.[192] During the 2022 Russian invasion of Ukraine, IBM donated $250,000 to Polish Humanitarian Action and the same amount to People in Need, Czech Republic.[193]

In terms of ESG, IBM reported its total CO2e emissions (direct and indirect) for the twelve months ending December 31, 2020 at 621 kilotons (-324 /-34.3% year-on-year).[194] In February 2021, IBM committed to achieve net zero greenhouse gas emissions by the year 2030.[195]

People and culture

Employees

See also: IBM and unions and List of IBM CEOs
New IBM employees being welcomed to a bootcamp at IBM Austin, 2015
Employees demonstrating IBM Watson capabilities in a Jeopardy! exhibition match on campus, 2011

IBM has one of the largest workforces in the world, and employees at Big Blue are referred to as "IBMers". The company pioneered in several employment practices unheard of at the time. IBM was among the first corporations to provide group life insurance (1934), survivor benefits (1935), training for women (1935), paid vacations (1937), and training for disabled people (1942). IBM hired its first black salesperson in 1946, and in 1952, CEO 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. The Human Rights Campaign has rated IBM 100% on its index of gay-friendliness every year since 2003,[196] with IBM providing same-sex partners of its employees with health benefits and an anti-discrimination clause. Additionally, in 2005, IBM became the first major company in the world to formally commit to not using genetic information in employment decisions. In 2017, IBM was named to Working Mother's 100 Best Companies List for the 32nd consecutive year.[197]

IBM has several leadership development and recognition programs to recognize employee potential and achievements. For early-career high potential employees, IBM sponsors leadership development programs by discipline (e.g., general management (GMLDP), human resources (HRLDP), finance (FLDP)). Each year, the company also selects 500 IBM employees for the IBM Corporate Service Corps (CSC),[198] which gives top employees a month to do humanitarian work abroad.[199] For certain interns, IBM also has a program called Extreme Blue that partners with top business and technical students to develop high-value technology and compete to present their business case to the company's CEO at internship's end.[200]

The company also has various designations for exceptional individual contributors such as Senior Technical Staff Member (STSM), Research Staff Member (RSM), Distinguished Engineer (DE), and Distinguished Designer (DD).[201] Prolific inventors can also achieve patent plateaus and earn the designation of Master Inventor. The company's most prestigious designation is that of IBM Fellow. Since 1963, the company names a handful of Fellows each year based on technical achievement. Other programs recognize years of service such as the Quarter Century Club established in 1924, and sellers are eligible to join the Hundred Percent Club, composed of IBM salesmen who meet their quotas, convened in Atlantic City, New Jersey. Each year, the company also selects 1,000 IBM employees annually to award the Best of IBM Award, which includes an all-expenses-paid trip to the awards ceremony in an exotic location.

IBM's culture has evolved significantly over its century of operations. In its early days, a dark (or gray) suit, white shirt, and a "sincere" tie constituted the public uniform for IBM employees.[202] During IBM's management transformation in the 1990s, CEO Louis V. Gerstner Jr. relaxed these codes, normalizing the dress and behavior of IBM employees.[203] The company's culture has also given to different plays on the company acronym (IBM), with some saying it stands for "I've Been Moved" due to relocations and layoffs,[204] others saying it stands for "I'm By Myself" pursuant to a prevalent work-from-anywhere norm,[205] and others saying it stands for "I'm Being Mentored" due to the company's open door policy and encouragement for mentoring at all levels.[206] In terms of labor relations, the company has traditionally resisted labor union organizing,[207] although unions represent some IBM workers outside the United States.[208] In Japan, IBM employees also have an American football team complete with pro stadium, cheerleaders and televised games, competing in the Japanese X-League as the "Big Blue".[209]

In 2015, IBM started giving employees the option of choosing Mac as their primary work device, next to the option of a PC or a Linux distribution.[210] In 2016, IBM eliminated forced rankings and changed its annual performance review system to focus more on frequent feedback, coaching, and skills development.[211]

IBM alumni

Many IBM employees have achieved notability outside of work and after leaving IBM. In business, former IBM employees include Apple Inc. CEO Tim Cook,[212] former EDS CEO and politician Ross Perot, Microsoft chairman John W. Thompson, SAP co-founder Hasso Plattner, Gartner founder Gideon Gartner, Advanced Micro Devices (AMD) CEO Lisa Su,[213] Cadence Design Systems CEO Anirudh Devgan,[214] former Citizens Financial Group CEO Ellen Alemany, former Yahoo! chairman Alfred Amoroso, former AT&T CEO C. Michael Armstrong, former Xerox Corporation CEOs David T. Kearns and G. Richard Thoman,[215] former Fair Isaac Corporation CEO Mark N. Greene,[216] Citrix Systems co-founder Ed Iacobucci, ASOS.com chairman Brian McBride, former Lenovo CEO Steve Ward, and former Teradata CEO Kenneth Simonds.

In government, alumna Patricia Roberts Harris served as United States Secretary of Housing and Urban Development, the first African American woman to serve in the United States Cabinet.[217] Samuel K. Skinner served as U.S. Secretary of Transportation and as the White House Chief of Staff. Alumni also include U.S. Senators Mack Mattingly and Thom Tillis; Wisconsin governor Scott Walker;[218] former U.S. Ambassadors Vincent Obsitnik (Slovakia), Arthur K. Watson (France), and Thomas Watson Jr. (Soviet Union); and former U.S. Representatives Todd Akin,[219] Glenn Andrews, Robert Garcia, Katherine Harris,[220] Amo Houghton, Jim Ross Lightfoot, Thomas J. Manton, Donald W. Riegle Jr., and Ed Zschau.

Other former IBM employees include NASA astronaut Michael J. Massimino, Canadian astronaut and former Governor General Julie Payette, noted musician Dave Matthews,[221] Harvey Mudd College president Maria Klawe, Western Governors University president emeritus Robert Mendenhall, former University of Kentucky president Lee T. Todd Jr., former University of Iowa president Bruce Harreld, NFL referee Bill Carollo,[222] former Rangers F.C. chairman John McClelland, and recipient of the Nobel Prize in Literature J. M. Coetzee. Thomas Watson Jr. also served as the 11th national president of the Boy Scouts of America.

Board and shareholders

The company's 15-member board of directors are responsible for overall corporate management and includes the current or former CEOs of Anthem, Dow Chemical, Johnson and Johnson, Royal Dutch Shell, UPS, and Vanguard as well as the president of Cornell University and a retired U.S. Navy admiral.[223] Vanguard Group is the largest shareholder of IBM and as of March 31, 2023, held 15.7% of total shares outstanding.[224]

In 2011, IBM became the first technology company Warren Buffett's holding company Berkshire Hathaway invested in.[225] Initially he bought 64 million shares costing $10.5 billion. Over the years, Buffett increased his IBM holdings, but by the end of 2017 had reduced them by 94.5% to 2.05 million shares; by May 2018, he was completely out of IBM.[226]

See also

Notes

  1. ^ IBM's financial statements from the 2021 annual report have adjusted revenue, income numbers, employee count for the previous years to account for discontinued operations related to the separation of Kyndryl.

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Further reading

For additional books about IBM, biographies, memoirs, technology and more, see History of IBM § Further reading.
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