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Definition: IBM


(International Business Machines Corporation, Armonk, NY) The oldest major technology company in business. With more than 300,000 employees and revenues exceeding $70 billion in 2020, IBM derives its income from computers, software and services. See IBM Cloud.

IBM's hardware lines include its Z mainframes, midrange Power models and cloud-based Linux machines (see IBM Z, Power Systems and LinuxONE).

Punch Cards Were an Outstanding Success
In 1911, IBM began operation as the Computing-Tabulating-Recording Company, a merger of companies making punch cards, scales and time clocks (see CTR). In 1914, Thomas J. Watson, Sr. became general manager. During the next decade, he kept the punch cards and eliminated everything else, turning CTR into an international enterprise renamed IBM in 1924. Watson also instilled a strict, professional demeanor in his employees. Even service engineers wore suits. Before making repairs on greasy mechanical machines, they took off their jackets and tucked their ties into their white shirts. This set apart IBMers from the rest of the crowd.

IBM achieved spectacular success with its punch cards. Although there was competition from Remington Rand, data processing throughout the world was mostly done on IBM machines. From the 1920s through the 1960s, IBM developed a massive customer base that was ideal for conversion to computers, later spearheaded by Watson's son, Thomas J. Watson, Jr.

IBM Became Synonymous With Computers
IBM launched its computer business in 1953 with the 701 and introduced the 650 a year later. By the end of the 1950s, the 650 was the most widely used computer in the world. The 1401, announced in 1959, was IBM's second winner. See IBM 650 and IBM 1401.

In 1964, IBM announced the System/360, the first family of computers ever developed. The 360s were enormously successful and set a standard underlying IBM mainframes to this day. During the 1970s and 1980s, IBM introduced several minicomputers, the most popular of which was the AS/400. IBM was so successful in the 1960s and 1970s that the computer industry was known as "IBM and the Seven Dwarfs." Like the tech giants in Silicon Valley today, IBM was the "big bad boy" that got all the slings and arrows. See System/360, System 34, System 36, System/38 and AS/400.

In and Out of PCs
In 1981, IBM introduced the PC into a chaotic personal computer field and set the standard almost overnight. Although one of the largest PC vendors for many years, IBM sold its PC business to Lenovo starting in 2004. IBM let Lenovo, HP, Dell, Toshiba and others compete in the end-user market it created. See System X, IBM PC and Lenovo.

IBM Mainframes Still Exist
In the late 1990s, IBM embraced the Linux operating system on all of its product lines. This was a major shift for a company known for proprietary software. Today, IBM mainframes continue to flourish as a huge amount of enterprise data is still processed by these machines with a lineage dating back six decades. See mainframe.




The Man Who Built an Empire
This photo of Thomas J. Watson, Sr., was taken in 1920, four years before he renamed the company IBM. (Image courtesy of IBM.)