Today International Business Machines Corp. (IBM) celebrated a relative rarity in the tech business -- its one hundredth anniversary. By contrast Google Inc. (GOOG) is a mere 12 years old, Apple Inc. (AAPL) is 35, Microsoft Corp. (MSFT) is 36, and Hewlett-Packard, Comp. (HPQ) is 72 years old.
IBM was born in a different era in which computers were mechanical not electronic. It formed from merger of three rising stars -- Computing Scale Comp., Tabulating Machine Comp. and International Time Recording Comp. The company was named Computing Tabulating Recording Corporation (CTR), but in 1924 would be renamed IBM.
In 1911 it had 1,346 employees and had $950,920.43 USD in income. Thomas Watson took over the chief executive position in 1915 and by 1920 the company was making nearly $14M USD and had 2,700 employees.
The company is sometimes referred to as having invented the "world's first computer program" -- the plug board used in its tabulation machines from the 1920s. Technically that honor goes to predecessor Tabulating Recording Corp. and its founder, inventor Herman Hollerith. Likewise Mr. Hollerith invented the punch card -- another invention often attributed to IBM, who helped make it famous.
But IBM did invent a thing or two -- the electric typewriter, the mainframe, the photoconducting office copier, word processing, fractals, the programming language FORTRAN, speech recognition, relational databases, the scanning tunneling microscope (STM), the web server, the floppy disc, the hard drive, nanotubes, and LASIK surgery.
Its computers helped to land man on the moon and were found in America's first Space Shuttle.
The company also was a socially progressive force, pushing the first "open door" policy for complaints. In 1935 IBM joined only a few companies of its time in hiring female engineers. In 1946 it hired a black salesman. And in 1953, Thomas Watson, Jr., son of the company's iconic executive, instituted an equal opportunity policy. In 1984 IBM became one of the first companies to ban sexual discrimination.
Today IBM is America's third largest technology company behind Apple and barely behind Microsoft. The company employs over 425,000 people worldwide. Stock prices are at an all time high and the company is approaching $100B USD in yearly revenue, falling just millions short of that mark last year.
Since 2000 IBM has has $109B USD in free cash -- $60B USD of which it reinvested into research and development. The company today holds over 5,896 patents -- the most of any active company in the world.
The key to the company success in recent years was to morph its business to fix the market. In the 1990s that meant reinventing itself as primarily a hardware company into a mixture of a hardware maker and services provider. IBM has also expanded its software offerings in recent years.
Ultimately IBM's biggest strength is its diversity. For that reason the future looks bright for this centenarian.