International Business Machines Corporation

Activities

IBM formerly was very centered on the design and the marketing of computer materials and in particular of host computers (often called “mainframes”) to which its image remained associated a long time. IBM indeed had a decisive role in their development and their use by the majority of the large public or deprived organizations.

1993 were one pivotal year which launched the great transformation whose current society is the result. While at the same time the financial, anxious community of the bad results, made pressure so that the group is burst in multiple free independent companies to exploit the various lines of products, the choice was taken by the CEO recently named, Louis V. Gerstner, to preserve the integrity of the group. The made bet was that by a better management of the wallet of offers of products and services, IBM could better benefit from its historical forces (to be started with its powerful capacities in research and development) to propose solutions integrated and either only of the isolated products.

It is also the moment chosen to re-examine all the commercial organization. Will to be able to answer in a way total and unified the requests emanating of the large international customers.

It is still at this time that IBM launches out in a very voluntarist way in the lines of business with in particular the beginnings of the infogérance. The development of these lines of business in particular made it possible to recycle part of the employees whose stations had been removed following the reorganization.

In 2005, the contribution for the benefit of the various activities breaks up as follows:

Material and activities of Software financing = 28%
= 37%
Services = 35%

The services represent from now on a little more half of the turnover. This testifies to the deep transformation operated by IBM since ten years.

Since 2002 and the acquisition of the branch council of PricewaterhouseCoopers, IBM became the first entity of council in the whole world.

Material

Construction and maintenance of Mainframe S and large waiters (which has definitely more RAM and of storage space that the Ordinateur S general public).
Manufacture of hard drives. Technology invented by IBM in 1956. This activity however was yielded to Hitachi in 2002 when IBM was interested in Millepede.
Research in Nanotechnology (inter alia: Millepede).
IBM is one of the two architects and founders, and the principal promoter, of the processors PowerPC used in the series p of IBM (UNIX), in the Macintosh of Apple and in Onboard computing. In 2005, Apple announced its intention to migrate to processors x86 at the time when IBM devoted its new processor, named CONCEALMENT, with the game console PlayStation 3, but also with applications in the waiters.
Originator and assembler of the Blue Gene, one of the fastest computers in the world.
Manufacture of Semiconductor S (electronic chips) with in particular a service of foundry for companies Fabless of semiconductors.

In 2005, IBM Microelectronics point with the 19th place of the 20 larger manufacturers of semiconductors (without taking account of its service of foundry).

Software

Databases (Edgar F. Codd for the relational databases in 1970)
Built around the core of databases (DB2), the Logiciels branch (Group Software in jargon interns) was mainly made up by external growth. Its products, little known of the general public (Tivoli, Websphere, Lotus, DB2, Rational) but appreciated professionals, are is intermediate “layers” (middleware) between the software applicatifs (Microsoft Office, SAP…) and the operating systems, is “professional continuations” aiming at the market of the R & D (Rational Software). CATIA, the software package world number one of the CAD, is only distributed by IBM; its originator remains Dassault Systèmes.

Services

Services (IBM Global Services or IGS) represent half of the turnover of IBM in 2004, but the essence of the operating margin still comes from the hardware and the software, on which IBM has discrete but profitable dominant positions. The Consultant S of IGS cover three great activities:

the “council trade” (Total Business Services), which acts on the organisational low layers and the information systems of the company to improve the operational effectiveness of it
the data processing consultant (Total Technology Services), which delivers technical expertise on the optimization of the computing function of the company
the externalisation, initially of computing function (IT Outsourcing), lodging of waiters Intranet and extranet, security management, and maintaining functions support like accountancy, the pay or the purchases of conveniences.

An apparent strategy of IBM in the services is to be established the markets of services of mass while being freed from any technological connotation: IGTS is satisfied to propose the mark (which have a strong capital of confidence) and the firepower of its organization: when one is equipped to make the pay of 300.000 employees, to manage that of a few tens of thousands of additional employees of customers does not pose a real problem.

Anélia

Anélia is a French subsidiary company of IBM proposing of the solutions dedicated to SME SME. It provides like services:

ERP
Business Intelligence
Application Innovation

Principal contributions

magnetic Disk (RAMAC), 1956
Language FORTRAN, 1957
dynamic Storage (DRAM), 1966
relational Database, 1970
Geometry fractale, 1975
Dated Encryption Standard (DES), 1977
RISC architecture, 1980
on August 12th, 1981, IBM launched a new machine, " the IBM 5150 " , an innovation which was going to give rise to the market of the " computers personnels" and to involve a revolution.
Microscope with tunnel effect, 1986, Nobel
Supraconductivity with " moyenne" temperature, 1987, Nobel

In 12 years, IBM deposited 29.021 various patents. In 2005, IBM deposited 2.941 patents.

Culture

The company was often described like having a culture strongly turned towards the businesses. Its frameworks and managing directors were traditionally selected among its representatives. This recruitment, in addition, would often have been justified by the objective to concretize prospects for sales to important customers.

IBM is probably one of the structures which developed most strongly and precociously the principle of culture of company. During the major part of the 20th century, the uniform, consisted of one blue costume, of a white blouse and a sunk tie, was there of rigor. These codes were softened as from the Nineties. Currently, the clothing and the attitude of its employees do not differ hardly other mastodons of data processing.

Evolution of the company

IBM was directed since its creation by 9 chairmen which durably marked each one the Company.

George W. Fairchild: the founding father

President of International Time Recording Company since 1900, it made it amalgamate in 1911 with Tabulating Machine Company to form Computing-Tabulating-Recording Company; he re-elected it in International Business Machines in 1924, little before his death.

Thomas J. Watson Sr: the Data processing

The company developed in the Années 1930, thanks to the Brevet S on the Perforated card Hollerith.

Thomas J. Watson Jr: mainframes

In 1954, IBM launches on the market model 650, first calculator produced in great series: it cost a half-million dollars, occupied several cubic meters and was equipped with a random access memory of 2000 “words” (2 kilobytes). IBM France will make him forge for the occasion the neologism Ordinateur.

T. Vincent Learson

Frank T. Cary

T. Vincent Learson took over at the time of the departure of Watson Jr. This last became president of the steering committee before being named ambassador of the the United States in Soviet Union (1979). Quickly, it is Frank T. Cary which is elected chairman (1973). It is with him that the double task falls:

to develop the distributed Data-processing increasingly claimed by the customers (systems 32,34,36,8100…)
to make also pass IBM to the phase of the Microprocessing . After some machines of various successes (5100, System 23 Datamaster, Visiotexte…), it launches in the greatest secrecy the project Acorn , which will become in 3 years PC.

It makes relooker slightly the logo, and starts to break with the traditional policy of hiring alone: from now on, IBM sells also its machines, which causes a fresh money surge. During some time, contrary to what usually occurs in industry, IBM do not have any more a fresh financial , but of the financial benefit .

The lawsuit Antitrust which weighs on IBM letting fear a decision of dismantling of the company, it takes the initiative by reorganizing it in two large poles: mainframes and systems of great diffusion . Dismantling will in the final analysis not take place.

John R. Opel

John F. Akers

John Akers manages the success of PC and PC/AT, and introduced even PC/RT, but - impressed by the success of the Macintosh which then constitutes a closed system - it decides to close in his turn standard PC while launching in 1987 PS/2: new incompatible BIOS, drunk fixed with rights of use, external appearance deposited, OS/2 not still finalized: this decision will appear most catastrophic ever taken by IBM , which - without immediately including/understanding it - gives up thus de facto the continuity of the standard with Compaq and to the Clone S. the page where IBM carried out the dance with 21% of the market of the personal computer from now on is turned.

a severe judgment on John Akers (1991)

On the other hand, the die of System 38 become AS/400 (machine of midrange introduced in February 1988) is managed without the least fault: this machine at the secondary beginning, which succeeds system 38 and thus rests on the Technologie FS, will be at the end of the Akers years become a formidable success with more than 600.000 specimens, of which the half with companies not having data processing department into clean.

That does not compensate for the shortfall on PC and the Mainframes, and IBM then knows the first financial deficit of its history.

Louis V. Gerstner, Jr. : products towards the services

the company becomes strongly overdrawn in 1991. For the first time of its history, she entrusts her destiny either to one of her members, but to one of her former customers, Louis Gerstner (“Lou”). Its fundamental decision was not to yield at the requests of analysts and financial markets which claimed that IBM is cut out in multiple independent companies. He on the contrary affirmed his conviction that the added-value of an integrated wallet of activities (hardware, software and services) is higher than the sum of these taken activities separately. This one centres the company, launches a loan at hundred years (completely subscribed by the public in a few days), modernizes of it the infrastructure (which remained very centered on the Mainframe S) to generalize Lotus Notes there (rather than to buy licenses of them, it bought the company directly!), and returns it again advantageous - but amputated by a good part of her real inheritance. The produced plan drastiquement was also cleaned: thousands of products abandoned or are resold (Lexmark is old division printers of IBM), and the development of OS/2, the competitor operating system of Windows, is stopped.

IBM developed in first (2001) the concept of E-business one demand which can be defined as being the mobilization of the computer's resources according to the intensity of the customer line of business. The invoicing is done then according exact to consumption, as for electricity. This concept, related to that of Grid computing, seeks more to create the need that to answer waiting specifies near the great groups. In good health financial and thus able to support the financing of this kind of operation, IBM thus puts the pressure on its competitors, according to a strategy which is not without pointing out the military program Strategic Defense Initiative (SDI), called “Star Wars”, of the administration Reagan and the purpose of which was to saturate by reaction military research of the Soviets and thus to withdraw any capacity of initiative to him.

Lou Gerstner joined Thomas Watson with the row of the mythical figures of IBM. It is that which saved IBM by maintaining its integrity and transformed in-depth company. He will tell the history in his book of it: I made dance an elephant ( Who Says Elephants Can' T Dance? Inside IBM' S Historic Turnaround ).

Samuel J. Palmisano

" Sam" Palmisano continues the development of IBM towards the services and its disengagement of the technological lines of product.

in 2002, after having provided the foundations of the technology of storage of tomorrow Millepede, IBM calls upon specific problems of quality on its line of Deskstar discs to yield this activity to Hitachi. In fact, if Millepede succeeds, that means very exactly the death of the concept even of hard drive, and the company thus takes there an ambitious bet.
Strong signal: IBM more and more strongly engages on Linux and the fact knowledge. The fact of not developing a system " more; propriétaire" not only reduces the costs, but intends to mark the new policy of opening.
in October 2002, IBM buys the branch consulting (Anglo-Saxon concept integral council in traditional management and software firm) of PricewaterhouseCoopers and thus puts a point of organ at its strategy of diversification in the services: with this acquisition, IBM becomes world number one in manpower, before Accenture.
in 2004, IBM opened the specifications of architecture PowerPC and invited all the founders to take share there; the goal is to dispute with Intel the leadership in the field of the Micro-informatique with its architecture X86.
on December 8th 2004, the manufacturer of PC Chinese Lenovo repurchases for 1,25 billion dollar branch PC from IBM and becomes thus the third individual computer manufacturer in the world (after Dell and Hewlett-Packard). After the hard drives, it is another material floret of Big Blue which is sold. Officially, the branch was not profitable, the operational losses representing a few percent of the turnover. Since 1991, the apparent strategy of IBM as regards transfer of activity is to sell when the technological advantage is on the way more not to be sufficient to justify prices higher than those of the competitors.
in April 2005, IBM announces results in on this side objectives, which causes a clap of thunder on the money markets and pleasing of many questions on the relevance of the strategy “more services, less technology” of Palmisano.
At the end of May 2005, IBM loses the market of the computers Apple: as from 2006, those will be equipped with processors Intel.
Parallèlement, at the time of E3, it becomes official that it is IBM which will equip Microsoft, Nintendo and Sony out of processors Cell (variation of POWER4 equipped with several integrated processors multi-media) for the integrality of their new generation of consoles.

IBM and the Nazi regime

As of 1934 the German subsidiary company of IBM, Dehomag (for " DEutsche HOllerith MAschinen Gesellschaft") provides to the Nazi regime machines Mécanographique S of punching of Perforated cards which are used for the rearmament, to manage the labor force of the political prisoners and to many the Recensement S of the German population since 1933. Then with the calculation of the Jewish Population in the ghettos and Concentration camps during the Second world war.

They are these effective censuses, containing ethnic and religious data, which made it possible the German forces to seize quickly and almost completely the Jewish populations in Germany.

According to the book of Edwin Black entitled IBM and the Holocaust published in 2001, the computing system distributed by the corporation, and the printed Perforated cards with the the United States would have played a so essential part in the control of the Jewish population under the IIIe Reich that the Holocauste could never have had such a width without this technology. In support of this thesis, the book indicates the difference between death rates to the Netherlands, and in France, where Rene Carmille, chief of the national service of statistics, avoided delivering the files to the Nazi S, which led it itself to Dachau where he died in 1944.

Tattooing that on the arm the Jews with Auschwitz received corresponded to their identification number in the computing system.

According to the same source, Thomas J. Watson had been declared indifferent to the ethical aspect activities of IBM under the mode Nazi, although it was with the current of the racial policies of the mode Nazi.

After the publication of the book, IBM committed itself giving explanations. That does not seem yet to be done.

Verichip

IBM takes part in the company Verichip which proposes subcutaneous implants associating a tag RFID and a system of localization per satellite to the manner of GPS.

Logo

The Logotype such as we know it today was conceived by Paul Rand. In the Eighties, the characteristics of the logo of Apple seemed to make fun nicely of that of IBM, presented like its main thing " concurrent" at the time.

Influence on the public life

In 2000, the leaders of IBM Argentina poured 22 million dollars to members of the Argentinian government of Carlos Menem to obtain the market of the equipment of the public bank Capacitacion there Computacion Rural SA out of computers. They were immediately sanctioned by the head office.

Financial results

In 2004, IBM carried out, according to his annual report, a turnover of a little more than 96 billion dollars. The company then had a labor force of 330.000 men divided in 75 countries.

According to the same report/ratio, the Russia, the India, the China and the Brésil constituted its main motors of growth.

In 2005, the company yields its division PCD (Personal Computing Division), in charge of the personal computing, at the Chinese company Lenovo, and thus consolidates its strategy directed towards integration and the services.

In 2006, IBM in his annual report announces 91,4 billion dollars of Turnover for a benefit of 9,4 billion dollars. The systems (hardware) account for 23% of the pre-tax profits, the services 37% and the software 40%. IBM is present in 170 countries including 25% in the zone Europe/Moyen the East/Africa, 30% in the zone Asia/Pacifique and 45% in the Americas zone. The most outstanding increases in benefit relate to China (+16%), Brazil (+19%), Russia (+21%) and India (+38%).

This American Multinationale belongs to the companies dimensioned with the Dow Jones Industrial Average. It is also, which is less known, presents in NASDAQ.

References

See too

External bonds

Gate of IBM France
Size and decline of IBM, by Jean-Jacques Duby who was a long time scientific director of his French subsidiary company.
Article in 01net on IBM and the Financial markets
Autobiography of the company
Annual reports
IBM and the holocaust

Simple: IBM

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