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The winner was Herman Hollerith, a German immigrant and Census Bureau statistician, whose Punch Card Tabulating Machine used an electric current to sense holes in punch cards and keep a running total of data. Capitalizing on his success, Hollerith formed the Tabulating Machine Co. in 1896.
In 1911, Charles R. Flint, a noted trust organizer, engineered the merger of Hollerith's company with two others, Computing Scale Co. of America and International time Recording Co. also known as C-T-R.
In 1914 Thomas J. Watson, the former No. 2 executive at the National Cash Register Co. joined the company as general manager. Within 11 months, Watson became its president. The company focused on providing large-scale, custom-built tabulating solutions for businesses, leaving the market for small office products to others. During Watson's first four years, revenues doubled to $2 million. He expanded the company's operations to Europe, South America, Asia and Australia. In 1924, to reflect C-T-R's growing worldwide presence, its name was changed to International Business Machines Corp. or IBM.(1)
Today IBM is the world's leading information technology company and
focuses on two basic ideas:
1. Creating the industry's most advanced information
technologies.
2. Helping customers apply those technologies to
improve what they do and how they do it.(2)
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Timelines: Key Events
| 1890-1938 | 1939-1963 | 1964-1980 | 1981-1992 | 1993-Present |
1914 - Thomas Watson joins C-T-R (Computing - Tabulating - Recording Co)
1915 - Thomas Watson becomes president of C-T-R
1924 - C-T-R changes name to International Business Machines
Corporation
(3)
1956 - Thomas Watson Jr. becomes CEO
1956 - Thomas J. Watson Sr. dies at age 82
(4)
1964 - System/360
1971 - Thomas Watson Jr. steps down; T. Vincent Learson becomes CEO
1973 - Frank T. Cary becomes CEO
(5)
1981 - John R. Opel becomes CEO
1981 - IBM PC
1985 - John F. Akers becomes CEO
1985 - Thomas Watson Jr. steps down from IBM board
1991 - IBM, Apple, Motorola form PowerPC joint venture
1992 - ThinkPad
(6)
1993 - IBM posts record loss
1997 - Deep Blue defeats World Chess Champion
(7)
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We have two fundamental missions:
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When IBM's 1997 fiscal year ended on December 31,
1997, IBM's market value was up $23 billion from 1996. For 14 straight
quarters IBM has delivered consistent revenue growth. Over the year,
IBM's stock prices rose 38 percent, and reached its all-time high.
Last year, IBM's stock split for the first time since 1979.
(10)
Up 3 percent from the previous year, IBM remains
on solid financial ground. For the third straight year IBM has reported
record revenue growth, up to $78.5 billion for 1997. Once you adjust
for the effects of currency shifts, that 8 percent.
(11)
In 1997, earnings rose to $6.1 billion from $5.4
billion in 1996. Earnings per common share increased about 12 percent,
to a record $6.18, from $5.53 in 1996.
(12)
IBM increased their investment on the exploration
and development of future technologies in 1997. They invested $5.5
billion dollars in research and development, up $300 million from 1996.
To strengthen existing businesses, IBM invested nearly $7 billion on capital
expenditures. IBM has also announced plans to invest $700 million
to build one of the world's most advanced semiconductor development facilities.
Even with all of IBM's investments, they still had a substantial amount
of cash on hand to return to it's shareholders. After all of it's
investments and returns to their shareholders, IBM still ended 1997 with
$7.6 billion in cash.
(13)
| For the year: |
1997
|
1996
|
| Revenue
Earning before income taxes Income taxes Net earnings Per share of common stock Per share of common stock assuming dilution Cash dividends paid in common stock Per share of common stock Investment in plant, rental machines and other property Average number of common shares outstanding (in millions) At end of year: |
$ 78,508
$ 9,027
$ 2,934
$ 6,093
$ 6.18
$ 6.01
$ 763
$ .775*
$ 6,793
983
1997
|
$ 75,947
$ 8,587
$ 3,158
$ 5,429
$ 5.12*
$ 5.01*
$ 686
$ .65*
$ 5,883
1,057
1998
|
| Total assets
Net investment in plant, rental machines and other property Working capital Total debt Stockholder's equity Number of employees in IBM/wholly owned subsidiaries Number of common stock holders |
$ 81,499
$ 18,347
$ 6,911
$ 26,926
$ 19,816
269,465
623,537
|
$ 81,132
$ 17,407
$ 6,695
$ 22,829
$ 21,628
240,615
622,594
|
IBM started the year 1998 neck and neck with the S&P 500, but in late January IBM was being outperformed by the S&P 500. In June 1998, IBM managed to catch back up to the S&P 500 for a short time, but again started to be outperformed by the S&P 500. In August 1998, IBM has finally been able to outperform the S&P 500.
The company's first quarter results were impacted by expenditures on Olympic Marketing, and the weakness in the Asian market.(16) IBM's revenue for 1998's first quarter was up to $17.618 billion compared to 1997's $17.308 billion. In 1998, cost was up as well for IBM. The cost went up to $11.168 billion from 1997's cost of $10.716 billion. This left IBM with a Gross Profit margin of $6.450 billion for 1998, compared to a GPM of $6.592 billion in 1997.(86) Another reason why IBM did not do so well in the first quarter is due to its hardware sales. Total revenue for the first quarter of 1998 was $7.120 billion with a total cost of $5.102 billion and a Gross Profit of $2.018 billion. This was down from 1997's figures which showed IBM with a total revenue for hardware sales as $7.761 billion, total costs as $5.244 billion, and a GP of $2.517 billion.(87) On the other hand, to offset the losses, IBM's services, software, mid-range servers and OEM products had a strong quarter.(88) For a more detailed report on IBM's First Quarter Report click here.
IBM's second quarter along with the first quarter results showed mixed results. Due to the economic conditions caused by the Asian markets, and other factors, IBM was still behind its forecasted goals, but was making progress towards them.(17) IBM's overall gross profit margin for the second quarter was down 38.0 percent compared to 1997's second quarter.(89) For the six months ending on June 30, 1998, IBM's Hardware sales Gross Profit was $4.300 billion compared to 1997's GP of $5.574 billion.(90) One area that saw an increase from 1997, was software revenue. The Gross Profit of software rose from $4.215 billion from 1997's first six months to $4.721 billion in the first six months of 1998.(91) For a more detailed look at IBM's second quarter Report click here.
The company's third-quarter results indicate that
its business has accelerated significantly during the third quarter with
strong revenue and earnings growth across nearly all parts of its product
line.(18) IBM's business is still being affected
by the weakness in the Asian Market, and now the Latin American market.
(92) In the third quarter, revenue as a result of operations were
up to $20.095 billion from 1997's third quarter revenue of $18.605 billion.(93)
IBM's software revenue was still going strong showing a third increase
from 1997's third quarter revenue of $2.135 billion to $2.370 billion dollars.
For a more detailed look at IBM's third quarter result click here.
In the past 5 years, IBM has managed to stay ahead of the S&P 500.
Apple Computers is one of IBM's direct competitors. Both make products from software, to hardware, to servers and so on and so forth. Although Apple Computers may not be nearly as big as IBM they have managed to stay alive in the highly competitive computer industry. Apple's Macintosh G-3s have been the driving force behind Apple Computer's slow comeback. To visit Apple Computer's home page click here.http://www.apple.com/
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| Oct 1998 | 125.0625 | 149.8125 | 116.8125 | 148.5 | 5,590,400 | 148.21 |
| Sep 1998 | 113 | 136.1875 | 110.75 | 128.5 | 4,536,600 | 128.31 |
| Aug 1998 | 134 | 134.875 | 112.625 | 112.625 | 4,597,200 | 112.459 |
| Jul 1998 | 116 | 138.125 | 112.75 | 132.5 | 4,059,600 | 132.304 |
| Jun 1998 | 117.375 | 120 | 106 | 114.8125 | 3,747,800 | 114.643 |
| May 1998 | 115.9375 | 129.3125 | 115.5 | 117.5 | 3,748,400 | 117.327 |
| Apr 1998 | 103.875 | 120 | 103.3125 | 115.875 | 4,160,900 | 115.704 |
| Mar 1998 | 104.1875 | 106.6875 | 95.875 | 103.875 | 3,615,800 | 103.722 |
| Feb 1998 | 100 | 105.875 | 97.5 | 104.4375 | 3,706,000 | 104.283 |
| Jan 1998 | 104.5 | 108.375 | 95.625 | 98.75 | 5,046,500 | 98.6042 |
| Dec 1997 | 110 | 113.5 | 96.375 | 104.625 | 4,233,300 | 104.471 |
| Nov 1997 | 99.125 | 109.9375 | 95.25 | 109.5 | 3,760,800 | 109.338 |
| Oct 1997 | 106.125 | 107.25 | 88.625 | 98.5 | 4,962,500 | 98.3546 |
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In September 1998, IBM also unveiled the world's smallest and lightest disk drive. The new microdrive is about the size of a small coin, weighs less than an AA battery and can store over 200 times more data than a floppy disk. Its small size and high performance make the microdrive suitable for use in portable electronic devices, including still and video digital cameras and handheld or "companion" PCs. Compared with similarly-sized solid-state memory cards based on flash memory semiconductor technology, the new 340 megabyte microdrive device has a much lower cost per megabyte and can hold five times more content. The microdrive will become available in mid 1999.(32)
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Security
As new problems arise involving everything from
fraud to the downloading of viruses from the Internet, IBM has been diligently
working to counteract these problems. The introduction of the Smart
Card has helped consolidate information to enable organizations to receive
comprehensive data regarding the holder of the card. In the future,
theft of paper money may be prevented, as it is replaced by the Smart Card.(74)
IBM's Global Security Analysis
Lab is another one of their weapons, which will battle computer crimes.
Security Analysis is helping Block "hackers" from entering company systems.
This product, which is tailored to the individual needs of the company,
is a proactive attempt of getting outsiders into confidential data and
information.(75)
Computer viruses are another problem plaguing computer
users. This problem has increased dramatically since the introduction
of the Internet. IBM's Watson Research Center has been coming
up with innovative solutions to this problem--mainly the Immune System
for Cyberspace. This program allows detected viruses to be automatically
"captured" and sent via the Internet to a virus analysis center.
Here a cure may be found and then transmitted globally to others facing
the same problem.(34)
Advanced Commerce
Electronic Commerce has become increasingly popular,
as individuals and businesses are able to purchase anything form CD's to
flowers to airline tickets. One example that was given was ticketless
travel, which is being provided by Swiss Railway. Here individuals
are able to access travel information, purchase tickets, plan their itinerary,
and select the method in which they will receive their tickets.(35)
Mobile Computing
IBM researchers have come up
with a new network called Personal Area Network (PAN) technology.
PAN technology uses a tiny electrical current to transmit the user's information
from one person to another or even to objects such as cars, telephones,
and ATM's.(36)
Network Technologies
The Internet is the most obvious example of the
biggest change in computing since IBM's introduction of the PC in the early
1980's. IBM researchers are at the forefront of networking technologies,
addressing many issues that include bandwidth, network programming, and
languages such as Java.(37)
IBM is using Grand Central Station to search the
World Wide Web for delivery of precise information as soon as it becomes
available. By summarizing information, GCS can find and deliver specific
information that the user requests. GCS has many search engines you
can call them, that sorts and combines information which are geographically
divided. The crawlers go out and find all sorts of information from
Web servers, news servers, database systems and file systems such
as corporate presentations and tape archives.(76)
Multimedia
HotVideo is something similar to Hypervideo which
extends hyperlinks from text and images to any object within a video.
HotVideo allows sections of digital video to link to various locations
including home pages, audio clips, text, etc. Video clips can be stored
in disks, CD ROM, server files and over the Internet. HotVideo includes
a authoring tool that lets users customize a look of their hotlinks. (38)
PanoramIX allows people to see 3-D pictures of places
before actually going there. It's like virtual reality. Developed
at IBM Research, PanoramIX combines images with sound, animation, and hotlinks
to give ultimate multimedia experience. Images can capture 360-degree views
up and down, left and right, and zooming.(77)
Datahiding is an IBM technology that enables the
embedding of data invisibly into media, video, audio data or still images.
This process changes the original data but the change cannot be detected
visually. Datahiding is a good way of authors to secure content in
a way of a patent.(78)
Display Technology
Touch input technology is becoming very popular.
Instead of punching in numbers on a key pad, all you do is touch the screen
for information. This technology uses force sensors under the screen.
When a finger presses the screen, the forces are measured and used to calculate
the touch position.(39)
Monet, which is a project that IBM researchers created
is made of thin film transistor liquid crystal displays with resolutions
of 150 dpi. This project is designed for notebook computers, but
may go to desktops. The benefits of Monet are faster reading, less
eye fatigue, and less time waiting for printouts. The technology uses aluminum
and copper to conduct electricity and tighter design tolerances and demonstrates
advance manufacturing technology. (79)
Human Computer Interaction
IBM Research has created the digital
pen and clipboard. The digital pad records everything taken on paper,
then allows transferability to PC. Ink Manager software allows the
creator to edit, search documents, and transfer handwriting to text form.
A microprocessor and flash memory
enable the clipboard to digitize signals from the users pen. Ink
Manager is one of the few softwares available that offers an advanced handwriting
recognition system.(40)
Java
IBM scientists are hard at work finding ways to
make java a practical reality in many areas of computing from games to
network-based e-mail applications.
Researchers at IBM's Haifa Research
Lab came up with mapuccino, an innovative application that lets webmasters
and end users view visual maps of websites for easy navigation and management.(80)
Java is a dynamic language for computer networks
and is independent of the type of central processing unit on which it runs.
IBM Research has donated tools such as the Jikes compiler, Jikes debugger,
and DejaVu to make things convenient for programmers who use it.
(41)
Mathematics
IBM researchers are finding ways to combine music and
computers. Results are creating waves of debugging software applications
and handling tasks such as novel composition and performance.
The Mandelbrot set has been
described as the most complex object ever seen in mathematics. The
study of fractals has brought new insight to a variety of fields, including
math, physics, earth science, economics, and computer graphics and animation.(81)
IBM is taking algorithms to a new level that promises
to solve problems that were once considered too costly or time consuming.
These processes open up solutions for businesses that may change
industries.(42)
Data Management
IBM has introduced a new disk drive technology that
holds 16.8 gigabytes of disk space. This technology was established
from giant magnetoresistive (GMR) effect. It demonstrates large resistance
changes in a magnetic field for certain materials composed of alternating
thin layers of various metallic elements.
IBM developed a load/unload
mechanism which allows the read/write head to rest on a ramp when it is
not reading and writing data on the disk. The load-unload design
offers the user several benefits. Smooth disks may by used which
allow for increased density and poses little danger for scratching the
disk surface.(82)
Scalable Computing
IBM Research is leading efforts in the field of
scalable computing--combining two to hundreds of computer processors--to
breakdown complex, data intensive jobs and speed their completion.
The goal of this work is to bring more computing benefits to consumers,
government and industry, whether it's speeding up queries of complex databases
or providing web servers that support thousands of concurrent video streams.(44)
IBM has come up with a system that clusters computers
together to perform better than normal systems. The goal of this
idea is to develop infrastructure so that end users never know they are
actually working off a cluster. Why is clustering popular?
Because it permits organizations to boost processing power using commodity
components. This provides scalability that lets organizations increase
their computing power while preserving existing investments without extra
expenses.(83)
Chip Technology
As a world leader in semiconductor research, IBM
is finding new processes and technologies that will extend silicon to its
absolute limits and open doors to new materials and manufacturing techniques.(45)
Nanotechnology
IBM Research teams are hard at work on projects
on the tiniest scale, exploring the manipulations of materials--and even
data--at the atomic level. These tiny marvels are bringing new advances
for fields such as computer storage technology.(46)
IBM is also exploring potential technologies such
as atomic force microscopy and holographic data storage that enables data
densities beyond the current storage density of magnetic recordings.
(AFM) technology provides 100 times more density than normal computer data
storage capacity.(84)
Computational Biology
At IBM, the combination of mathematics and other
sciences are helping to unlock the secrets that will benefit governments
and industries. IBM researchers are working on projects involving computational
biology, chemistry, and material science. Detailed studies by these scientists
are aimed at providing new clues for the synthesis and design of novel
materials such as pharmaceutical chemicals and new products for agriculture.(47)
Materials Science
IBM Research has teams of scientists studying materials
and their properties, with the goal of expanding our knowledge base, which
in turn will lead to new discoveries and products.(48)
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New York
Thomas J. Watson Research Center
Westchester County, N.Y.
Established: 1961
Number of employees: 1,400
Focus: Semiconductors, physical and computer sciences, and mathematics
California
Almaden Research Center
San Jose, California
Established: 1986
Number of employees: 700
Focus: Storage systems and technology, computer science, and science
and technology
Texas
Austin Research Laboratory
Austin, Texas
Established: 1995
Number of employees: 30
Focus: Advanced circuit design, new design techniques and tools for
very high performance
microprocessors.
China
China Research Laboratory
Beijing, China
Established: 1995
Number of employees: 20
Focus: Chinese language and speech recognition, digital library technology
research and applications
Israel
Haifa Research Laboratory
Haifa, Israel
Established: 1982
Number of employees: 255
Focus: Applied mathematics, computer science, multimedia, compiler
technology and VLSI design
verification.
Japan
Tokyo Research Laboratory
Yamato, Japan
Established: 1982
Number of employees: 175
Focus: Software technology, system technology, network and solutions
technology, computer science
theory.
Switzerland
Zurich Research Laboratory
Rueschlikon, Switzerland
Established: 1956
Number of employees: 160
Focus: Communication systems and related technology solutions, optoelectronics
and physical sciences.
India
Delhi Solutions Research Center
Delhi, India
Established: 1997
Number of employees: 20
Focus: Weather forecasting, electronic commerce, supply-chain management
and distribution, cellular
and mobile telephone systems and distance.
(49)
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Copper Chip Technology
IBM has long been a leader in innovative semiconductor
research. Recently, IBM promised to unveil its new technology and to expand
teh capabilities of small circuits. The new chips will enhance tthe
capabilities of copper circuitry which allows electrical currents to flow
more easily than aluminum. Aluminum has always been the traditional
metal used in wires to connect transistors in silicon chips. The
new copper chip technology will produce smaller and faster chips that have
a tremendous capacity for holding and transmitting information. These
copper chips are schduled to be in production in 1998.(51)
Giant Magnetoresistive Head (GMR)
The Giant Magnetoresistive effect (GMR) was discovered
by two European scientists in the late 1980s. IBM Research scientists devised
processes to economically build GMR microstructures and harness the power
of GMR. By using GMR structures in Magnetic Recording heads, IBM has introduced
products with the highest area densities in the world. IBM's GMR head technology
will lead to disk drives of up to 40 Gigabits per square inch. Increased
area density allows for complete digital image and even video production
using a single desktop machine.(52)
Speech Recognition Technology
IBM continued advancement in computerized speech
recognition will affect the way in which computers are used in business,
government, academic and international settings. IBM devised a way
to apply statistics to a technique called dynamic programming, which addresses
the problems associated with variation in how fast or slow words and parts
of words are spoken. IBM ViaVoice is now available in nine languages
around the world. Other recognition projects currently in development
are to expand and enhance the vocabulary of speech recognition, and to
make the computer recoginze what words are spoken, as well as those spoke
them and what was the intention behind the words.(53)
Scalable Parallel Systems
IBM is a leader in scalable parallel computing,
which is a technology that offers flexibility by combining multiple computer
processors and breaking down complex, data-intensive jobs to speed up completion.
These systems are used in design simulations including weather prediction,
oil exploration and manufacturing design for jets, automobiles and turbine
engines. Parallel architecture allows users to link personal desktop computers
in a way that will achieve the computing power with high-end mainframes.
A key benefit of this new technology is the ability to maximize or minimize
computing power by linking several computers to use as one system.(54)
Token-Ring Networking
IBM researchers were working on this type of technology
that connects printers, workstations and various servers in office buildings,
factories and college campuses. IBM devised token-ring technology to control
LAN traffic more efficiently and reliably. A token ring controls access
of individual computers to the network. Since its introduction in 1985,
IBM's token-ring architecture has become an industry standard for LANs.(55)
High-Temperature Superconductivity
Two IBM scientists received the Nobel Prize in physics
for their discovery of high-temperature superconductivity in ceramic materials.
These materials required less cooling than previous superconductors and
are far more efficient than copper materials currently in use. As research
in this area continues, high-temperature superconductors can be used for
commercial applications ranging from high-speed interconnects on integrated
circuits to more efficient electrical motors, power transmission lines,
and magnetically levitated trains.(56)
Thin-Film Magnetic Recording Heads
The thin-film recording head, introduced into hard
disk drives by IBM in 1979 stores the most data in the least space. Using
photolithography and plating techniques to make the coil for the inductive
elements, IBM designers made heads with higher performance than those made
of ferrite ceramic. This development led to higher-capacity and higher-performance
disk drives as well as providing critical manufacturing expertise that
enables future developments to be quickly incorporated into IBM products.(58)
Scanning Tunneling Microscope
The invention of the scanning tunneling microscope
(STM) allows scientists to view the world from an atomic perspective. IBM
researchers Gerd Binnig and Heinrich Rohrer received the 1986 Nobel Prize
in physics. As the STM evolved, its capabilities have greatly expanded
the abilities of research scientists to study a wide variety of atomic-scale
structures and properties, and manipulate individual atoms and molecules.(59)
Formula Translation System (FORTRAN)
Formula Translation System (FORTRAN), represented
a great advancement in computer programming languages. FORTRAN was the
first high-level language to gain widespread acceptance in scientific communities,
and to set a high standard for the way computers were programmed.
Most of the world's large-scale simulation models are written in FORTRAN.(60)
Reduced Instruction Set Computer (RISC) Architecture
Reduced Instruction Set Computer (RISC) architecture
is the basis for most workstations and UNIX based servers in use today,
and is widely viewed as the computing architecture of the future. The RISC
concept simplified the instructions given to run computers, making them
much faster and more powerful. Today, this powerful computer architecture
has applications in many fields and is evolving as the basis of a faster
and more powerful personal computing devices.(61)
Relational Database
Individuals and businesses are able to manage and
access large amounts of data faster and more easily because of the relational
database. The conceptenables computer users to easily query a database
and quickly access the findings.(62)
Magnetic Disk Storage
IBM revolutionized computing by announcing the first
magnetic hard disk for data storage. The 305 Random Access Method of Accounting
and Control (RAMAC) offered the highest performance by permitting random
access to any of the 5 million bytes of data stored on both sides of 50
two-foot-diameter disks. With the success of magnetic hard disks
IBM built pioneering research, development and product organizations that
continue to lead the data storage industry.(63)
One-Transistor Dynamic RAM (DRAM)
Most all computer memory chips today use the Dynamic
Random Access Memory (DRAM) technology. The one-transistor memory cell
simplified a circuit in which multiple transistors were once used, permitting
a significant increase in memory density. Today's DRAM chips typically
store 64 million bits. DRAM is a key component of large computers, personal
computers, and many other electronic products.(64)
In 1997, Deep Blue, a chess playing computer at IBM's
Thomas J. Research Center beat the world chess champion and chess
grandmaster Garry Kasparov.(68) The computer
that beat Kasparov holds an IBM RS/6000 SP parallel supercomputer with
chess coprocessors. Deep Blue is able to examine 200 million moves
per second or 50 billion positions in the alloted time for a move in chess.(69)
This match was history in the making for technology.
The reason that Deep Blue was able to defeat chess grandmaster Kasparov,
was due to the powerful processors it had and the evaluation function that
gave it the ability to learn chess.(70) For a
moment Deep Blue used its abilities to resemble human thought.(71)
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