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Revisiting The Big Blue

April 30, 2012

Before Microsoft hogged the limelight, before Apple became famous then almost disappeared and came roaring back again, before Dell, Oracle, and all the names you hear today in the information technology world, there was IBM.  This was the big cheese that lorded over the scene for decades.

In a way IBM always did things in a big way. It wasn’t a small company that grew big. It started out with the merger of three companies.  In 1911 the Tabulating Machine Company, the International Time Recording Company and the Computing Scale Company of America merged to form the Computing-Tabulating-Recording Company (CTR).

A man by the name of Thomas J. Watson, Sr. joins this company in 1914 and guides the it into an emerging leader in technology and innovation over the next two decades.  Then the company changed its name to International Business Machines Corporation (IBM) in 1924 clearly showing its intent and ambition as a transnational company. It business was going beyond U.S. borders.  Business is so good that it was able to weather the Great Depression and grow.

The company continued its phenomenal growth for decades and grew larger and larger. By 1977 the company’s workforce was already over 300,000 personnel. Revenues reached $50 billion in 1985. Those figures are staggering even by today’s standards.

While it played such a dominant role in the computer world especially in the 70s including its role in the development of the personal computer, it became the victim of its own success. Newer companies were grabbing the initiative and reading future trends correctly.  IBM was like a huge super tanker; it could not maneuver quickly enough and make changes. It seemed to be stuck to its large mainframe computer world mindset. Bill Gates understood the importance of software and made a fortune out of it courtesy of a little help from IBM.

While its huge size and corporate culture was a hindrance, it was also an asset. Like a big battleship it was able to absorb the blows without sinking and managed to adapt and be profitable and growing. It moved into services and software and embraced the possibilities of the internet.

Once again it’s still the Big Blue. Last year it had $106.91 billion in revenue, $15.85 billion in net income, and over 400,000 employees; still staggering numbers.

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