Friday, June 17, 2011

The 100 Year Old Tech Firm

Wait, but tech firms all started in the 1990s you're saying. And most of them folded by 2000 for that matter and none of them go back much further than the 1970s. Ah, but there is one that does.

Originally founded on June 16, 1911, the Computing Tabulating Recording Co. turned 100 on Thursday. You probably know them better by the name they re-branded themselves with in 1924, International Business Machines or IBM.

IBM became the first computer company to turn centurion this week and an industry whose history seems fleeting and instantaneous, suddenly seems slightly more rooted and historical. It's similar to those European soccer teams like Barcelona and Manchester United that go back 100 years or more and still compete today.

Through its ups and downs, IBM has remained a cornerstone of the global computer industry. The company started by manufacturing scales, punch clocks and cheese slicers. In the 1920s the Computing Tabulating Recording Co changed their name and soon, rather fortuitously, began making machines that read data on punch cards. Those machines were eventually used to track data related to 26 million people when Social Security was inaugurated in the 1930s.

Like those storied European soccer sides, IBM's list of achievements is long and startlingly impressive. In 1956 the company introduced the magnetic hard drive. In 1960, the bar code and in 1971, the floppy disk.

But even like the best of soccer sides, IBM has occasionally been outplayed. Like in 1981 when they introduced their innovative personal computer but declined to acquire the rights to the software that was used to operate it. That software was made by a then start-up called Microsoft.

Like the athletic shoe giants Puma and Adidas, IBM was outplayed throughout the 80s and 90s. But while Puma and Adidas were losing out to Nike, IBM was getting dusted by Microsoft, Apple and a host of others. When innovative new companies began manufacturing smaller computers that could perform the same functions as the hulking mainframes that were the cornerstone of IBM's business, the company's survival became threatened.

However like Puma and Adidas, IBM was able to adapt and survive. Puma and Adidas did so in part by going back to their celebrated past and introducing lines of "originals" and "classics" that were reissued models of retro styles from the 60s and 70s. IBM revived its fortunes by going forward.

The company brought in Louis Gerstner as CEO in the mid-90s. Gerstner was ruthless in his reinvention of IBM as a leaner, more agile modern tech company. He cut jobs, slashed prices and presided over a period in which the company lost some $16 billion.

But Gerstner succeeded in shifting IBM's focus to data storage and technical support, which eventually became the foundations of the company's business. Today IBM is the biggest provider of technology services in the world.

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