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IBM: IT Powerhouse

December 7, 2015

International Business Machines popularly known as IBM began in 1911 as the Computing-Tabulating-Recording Company (CTR) as a result of the consolidation of The Tabulating Machine Company, the International Time Recording Company, the Computing Scale Company and the Bundy Manufacturing Company. CTR was renamed “International Business Machines” in 1924.

IBM was previously known for its hardware but has evolved to adapt to the changing business environment. Over the past decade, it has steadily shifted its business mix by exiting commoditized markets such as PCs, hard disk drives and DRAMs, and focusing on higher-value, more profitable markets such as business intelligence, data analytics, business continuity, security, cloud computing, virtualization and green solutions. This has resulted in a higher quality revenue stream and higher profit margin. The company’s operating margin expanded from 16.8 percent in 2004 to 24.3 percent in 2013, and net profit margins expanded from 9 percent in 2004 to 16.5 percent in 2013.

IBM is a storied and formidable company with 12 research laboratories worldwide, grouped into IBM Research. As of 2013, the company held the record for most patents generated by a business for 22 consecutive years. Its employees have garnered five Nobel Prizes, six Turing Awards, ten National Medals of Technology, and five National Medals of Sciences. Notable company inventions include the automated teller machine (IBM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, the Fortran programming language, SABRE airline reservation system, dynamic random access memory (DRAM), copper wiring in semiconductors, the silicon-on-insulator (SOI) semiconductor manufacturing process, and Watson artificial intelligence.

Despite all its achievement it has adjusted with the times having experienced its own ups and downs. It lost $8 billion in 1993 which was at the time the biggest in American corporate history. IBM has since gone back into profitability. Net income for 2014 was at $12 billion on total assets of $117.5 billion.

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