Happy Birthday IBM

This is pretty momentous- IBM turned 100! For any business, being able to evolve with new technology and services for a considerable time is impressive. I mean there are some total/ almost total flameouts like Digital Equipment, Wang Laboratories, Sun Microsystems, Netscape, Silicon Graphics, National Semiconductor and Nortel. So let’s give kudos to IBM for achieving many ‘firsts’:

· They did this in the 1930s with punch-card tabulation machines, a piece of stiff paper that contains digital information represented by the presence or absence of holes in predefined positions to start the whole information technology revolution for the next 3 decades.

· It introduced the magnetic hard drive in 1956 and the floppy disk in 1971.

· In the 1960s, IBM developed the first bar code, paving the way for automated supermarket checkouts.

· IBM introduced a high-speed processing system that allowed ATM transactions.

· It created magnetic strip technology for credit cards.

· The System/360 was the most successful mainframe computer of all time.

· The term "PC" was also introduced by IBM.

All the forgettable everyday tasks of technology like saving a file on your laptop, swiping your ATM card to get $40, scanning a container of milk at the checkout line — it's all IBM. People used to joke that no-one was ever fired by recommending IBM- and it’s more or less still true today.

It was not all gravy for big ol’ blue. In the 80’s, although IBM helped make the PC a mainstream product, it quickly found itself outmatched in a market it helped create. It relied on Intel for chips and Microsoft for software, leaving it vulnerable when the PC industry took off and rivals began using the same technology. Advances in technology created new companies and new capabilities and being nimble and quick to market made IBM look old and stodgy.

By the 90’s, viewed as too bureaucratic to compete in fast-changing times, IBM tapped an outsider, Louis Gerstner, as CEO, to help with a turnaround and he did. He broke up old fiefdoms, slashed prices and eliminated jobs. IBM had 406,000 employees in 1985; Gerstner shed more than 150,000 jobs in the 1990s as the company lost nearly $16 billion over five years. But he also resisted pressure to break up the company and instead focused on services, such as data storage and technical support. He reasoned that services could be sold as an add-on to companies that had already bought IBM computers. Even barely profitable pieces of hardware were used to open the door to more profitable deals. The result, as they say, is history.

Today, IBM Consulting is a formidable force in the business technology consulting market. And the century has given IBM many things that others cannot match - reputation, experience, network, clout and words of advice that people would value and listen to. IBM has around $100 billion in annual revenue today, is ranked 18th in the Fortune 500, is three times the size of Google and almost twice as big as Apple. Its market capitalization of around $200 billion beats Google and allowed IBM last month to briefly surpass its old nemesis, Microsoft. Not bad for a company that started with tabulation machines a hundred years back!