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IBM
This snapshot deals with IBM, the US hardware, software
and services giant that for most of last century was considered
by many to be the very embodiment of information technology.
It covers -
introduction
[under development]
the enterprise
What
is now IBM
began as a tabulator company, based on Hollerith's devices.
Although particular components can trace their history
back to the 1880s, the organisation had a recognisable
form from 1911 when the Computing Tabulating Recording
Company (CTR) - later renamed International Business Machines
- was established through the merger of the Computing
Scale Company and International Time Recording Company
with Hollerith's Tabulating Machine Company.
For the first thirty years it gained much of its revenue
from devices as prosaic as electronic scales and bundy
clocks - technologies whose importance is discussed in
works such as James Beninger's Control Revolution:
Technological & Economic Origins of the Information Society
(Cambridge: Harvard Uni Press 1989) and JoAnne Yates'
Control Through Communication: The Rise of System In
American Management (Baltimore: Johns Hopkins Uni
Press 1993).
It leveraged global dominance (achieved through superior
technology and business practices similar to those of
Microsoft) in punch-card machines when it somewhat reluctantly
entered the electronic computer market.
Several decades of outstanding success - highlighted in
landmark antitrust action by the US government - were
followed by managerial and financial crisis during the
1990s and the failure of offerings such as OS/2.
After spinning off its printer arm as Lexmark in 1991
IBM increasingly promoted itself as a services business,
acquiring Lotus (1995), Tivoli (US$743m in 1996), Unison
(1997), Software Artistry (1998), Mylex and Sequent (1999),
PwC Consulting for US$3.5bn and Rational Software for
US$2.1bn in 2002.
As of 2001 the company had sales of around US$85,000 million,
income of US$7,700 million and 319,000 employees. As of
2003 it was 8th on the Fortune 500 list of largest US
companies, ranked by revenue.
IBM has manufacturing operations in the US, Canada, Mexico,
Eire, Japan, France, China, the UK, India, Germany, Thailand,
Hungary and Singapore. Major research facilities are located
in the US, Israel, Japan, Switzerland, China and India:
the company is one of the largest global owners and generators
of patents. IBM is considered to be the world's largest
business and technology services consultancy (US$35 billion),
largest IT hardware company (US$33 billion) and the largest
financing company in the IT industry worldwide (operating
in more than 40 countries and with over US$40 billion
in assets as of 2002).
IBM services revenue surpassed IBM hardware revenue for
the first time in 2001.
Lotus was formed in 1982 by Mitch Kapor
(subsequently a co-founder of the EFF) and enjoyed major
success after release of its Lotus 1-2-3 spreadsheet product
for personal computers, overtaking VisiCalc and having
a greater market value than Microsoft.
At the end of the 1980s Microsoft
bundled Excel, its spreadsheet product, with Word - emerging
as the global industry standard. Lotus' market share dropped
from 75% in 1988 to 55% in 1991 and declined further before
the company was acquired by IBM in 1995 for its Lotus
Notes groupware product.
studies
Thomas J Watson Jr (with a little help from Peter Petrie)
wrote Father, Son & Co: My Life at IBM & Beyond
(New York: Bantam 1990), of interest in its own right
and for its perspective on the Lou Gerstner turnaround
at Big Blue. It might be read in conjunction with Kevin
Maney's The Maverick & His Machine: Thomas Watson
Sr and the Making of IBM (New York: Wiley 2003) and
The Watson Dynasty: The Fiery Reign and Troubled Legacy
of IBM’s Founding Father and Son (New York:
HarperBusiness 2003) by Richard Tedlow.
Geoffrey Austrian's Herman Hollerith (New York:
Columbia Uni Press 1982) is a definitive study of the
punch card king. The cards as a cultural artefact
are memorialised in Steven Lubar's 1991 paper
'Do not fold, spindle or mutilate': A Cultural History
of the Punch Card.
Watson Jr understandably concentrates more on the famous
'Think', IBM's corporate socialism - a considerable achievement
amid the 1930's dustbowls and dole queues - and IBM's
marketing prowess than on company songs with lyrics such
as
-
our
voices swell in admiration
of TJ Watson proudly sing
He'll ever be our inspiration
to him our voices loudly ring.
or
his father's profound resistance to the development of
electronic computing. Watson Sr's A Business &
Its Beliefs: The Ideas That Helped Build IBM (New
York: McGraw Hill 2003) is an interesting example of the
literature.
Emerson Pugh's Building IBM: Shaping an Industry &
its Technology (Cambridge: MIT Press 1995) is outstanding
academic history of Big Iron's early days. With its companion
volumes - IBMs 360 & Early 370 Systems (1991),
Memories That Shaped An Industry (1984) and IBMS's
Early Computers (1984) - it offers insights into the
company, technology and US business in the first half
of last century. There are insightful comments in
Sources of Industrial Leadership: Studies of Seven
Industries (Cambridge: Cambridge Uni Press 1999) edited
by David Mowery & Richard Nelson.
Before The Computer: IBM, NCR, Burroughs & Remington
Rand & the Industry They Created 1865-1956 (Princeton:
Princeton Uni Press 2000) by James Cortada is essential
reading.
Franklin Fisher's IBM & the U.S. Data Processing
Industry (New York: Praeger 1983) is an economic analysis
at the height of the bust-IBM wars, worth a visit to your
library.
Broken Promises: An Unconventional View of What Went Wrong
at IBM (Boston: Harvard Business School Press 1996)
by Daniel Quinn Mills blames corporate arteriosclerosis
for the decline in IBM's fortunes, arguing that the mixture
of jobs for life and proprietary systems was nearly fatal.
A perspective is provided by Sanford Jacoby's Modern
Manors: Welfare Capitalism Since The New Deal (Princeton:
Princeton Uni Press 1997) and Nikki Mandell's The Corporation
as Family: The Gendering of Corporate Welfare, 1890-1930
(Chapel Hill: Uni of North Carolina Press 2002).
The earlier Blue Magic: The People, Power & Politics
behind the IBM Personal Computer (London: Grafton
1989) by James Chposky & Ted Leonsis was deferential,
concentrated on corporate politics and barely recognised
the rise (and rise ... and rise) of Darth Gates and Deathstar
Microsoft. The Quality Journey: How Winning the
Baldridge Sparked the Remaking of IBM (New York: Dutton
1993) is a triumphalist tome by Joseph Boyett, Stephen
Schwartz & Roy Bauer - the world according to just-in-time
and quality circles.
Paul Ceruzzo's A History of Modern Computing (Cambridge:
MIT Press 1998) in discussing the IBM anti-trust litigation
notes that
...
both sides, with all their highly paid legal and research
staffs, utterly and completely missed what everyone
has since recognised as the obvious way that computing
would evolve ... one expert witness testified that "it
is most unlikely that any major new venture into the
general purpose computer industry can be expected.
As late as 1986 one Justice Department economist, still
fuming over dismissal of the case, complained that "IBM
faces no significant domestic or foreign competition
that could threaten its dominance".
Robert
Heller's The Fate of IBM (London: Little Brown
1994) and Computer Wars: The Fall of IBM & the
Future of Global Technology (New York: Times 1994)
by Charles Ferguson & Charles Morris caught the company
at its nadir, with speculation among the business press
that IBM was toast and its new CEO would be arranging
for a tasteful corporate burial. That speculation was
wrong, although the corporate socialism is now sleeping
with the fishes after the group shed 180,000 staff.
Doug Garr's IBM Redux: Lou Gerstner & the Business
Turnaround of the Decade (New York: Harper 1999) was
for us more engaging than Saving Big Blue: Leadership
Lessons & Turnaround Tactics of IBM's Lou Gerstner
(New York: McGraw Hill 1999) by Robert Slater. After the
heady days of the 1970s the turnaround from losses of
$20 billion began in a wave of panic, with one executive
reputedly being given his termination notice while in
a coma ... a cultural revolution for an organisation that
was one of the first to provide group life insurance,
survivor benefits and paid vacations.
Gerstner's autobiography Who Says Elephants Can't Dance?
Inside IBM's Historic Turnaround (New York: HarperCollins
2002) is reminiscent of Michael Eisner's self-regarding
Work in Progress (New York: Random 1998).
For Lenovo see The Lenovo Affair: The Growth of China’s
Computer Giant and Its Takeover of IBM-PC (New York:
Wiley 2006) by Ling Zhijun
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