The company, which was founded in 1888 and incorporated (as Computing-Tabulating-Recording Company (C-T-R)) on June 15, 1911, manufactures and sells computer hardware, software, infrastructure services, hosting services, and consulting services. With almost 330,000 employees worldwide and revenues of $91 billion annually (figures from 2005), IBM is the biggest information technology company in the world. IBM also holds more patents than any other technology company.

IBM is one of the few information technology companies with a continuous history dating back to the 19th century. It has engineers and consultants in over 170 countries and eight development laboratories located all over the world^[4], in all segments of computer science and information technology; some of them are pioneers in areas ranging from mainframe computers to nanotechnology.

In recent years, services and consulting revenues have been larger than those from manufacturing. Significantly, IBM has also been steadily increasing its workforce in developing countries (notably, in IBM India) and retrenching in the US and Europe ^[5][6][7]. Samuel J. Palmisano was elected CEO on January 29, 2002 after having led IBM's Global Services, and helping it to become a business with $100 billion in backlog in 2004.^[8] Palmisano replaced Louis V. Gerstner, who had held the job from 1993 to 2002, taking over from John Akers, who left during a period of financial difficulty for the company.

In 2002, the company strengthened its business advisory capabilities by acquiring the consulting arm of professional services firm PricewaterhouseCoopers. The company is increasingly focused on business solution driven consulting, services and software, with emphasis also on high value chips and hardware technologies; as of 2005 it employs about 195,000 technical professionals. That total includes about 350 Distinguished Engineers and 60 IBM Fellows, its most senior engineers.

IBM Research has eight laboratories, all located in the Northern Hemisphere, with five of those locations outside of the United States. IBM employees have won five Nobel Prizes. They have earned four Turing Awards, five National Medals of Technology, and five National Medals of Science in the USA, and many equivalents outside the USA.

History

Early years

IBM's history dates back decades before the development of electronic computers – before that it developed punched card data processing equipment. It originated as the Computing Tabulating Recording (CTR) Corporation, which was incorporated on June 15, 1911 in Endicott, New York a few miles west of Binghamton.

CTR was formed through a merger of three separate corporations: Tabulating Machine Corporation (founded 1896 in Washington D.C.), the Computing Scale Corporation (founded 1901 in Dayton, Ohio) and the International Time Recording Company (founded 1900 in Endicott, NY). The president of the Tabulating Machine Corporation at that time was Herman Hollerith, who had founded the company. The key person behind the merger was financier Charles Flint, who brought together the founders of the three companies to propose a merger and remained a member of the board of CTR until his retirement in 1930.^[9]

Thomas J. Watson Sr., the founder of IBM, became General Manager of CTR in 1914 and President in 1915. In 1917, the CTR entered the Canadian market under the name of International Business Machines Co., Limited and in February 14, 1924, CTR changed its name to International Business Machines Corporation.

The companies that merged to form CTR manufactured a wide range of products, including employee time-keeping systems, weighing scales, automatic meat slicers, and most importantly for the development of the computer, punched card equipment. Over time CTR came to focus purely on the punched card business, and ceased its involvement in the other activities.

World War II and Holocaust era

In 2001, author Edwin Black published IBM and the Holocaust, a book documenting how IBM's New York headquarters and CEO Thomas J. Watson acted through its overseas subsidiaries to provide the Third Reich with punch card machines knowing that the machines could help the Nazis prosecute their "Final Solution." The award-winning book documents how, with New York's cooperation, IBM's Geneva office and Dehomag, its German subsidiary, were intimately involved in supporting Nazi atrocities. Black also documents that these machines made the Nazis much more efficient in their efforts. The 2003 documentary film The Corporation also explores this issue.

IBM has mainly been silent about the book and its documentation.

During World War II, IBM manufactured the Browning Automatic Rifle and the M1 Carbine. Allied military forces widely utilized IBM's tabulating equipment for military accounting, logistics, and other War-related purposes. There was extensive use of IBM punch-card machines for calculations made at Los Alamos during the Manhattan Project for developing the first atomic bombs; this has been notably discussed by Richard Feynman in his well-read book, Surely You're Joking, Mr. Feynman!. During the War IBM also built the Harvard Mark I for the U.S. Navy, the first large-scale automatic digital computer in the U.S.

Airforce and airline projects

In the 1950s, IBM became a chief contractor for developing computers for the United States Air Force's automated defense systems. Working on the SAGE anti-aircraft system, IBM gained access to crucial research being done at MIT, working on the first real-time, digital computer (which included many other advancements such as an integrated video display, magnetic core memory, light guns, the first effective algebraic computer language, analog-to-digital and digital-to-analog conversion techniques, digital data transmission over telephone lines, duplexing, multiprocessing, and networks). IBM built fifty-six SAGE computers at the price of $30 million each, and at the peak of the project devoted more than 7,000 employees (20% of its then workforce) to the project. More valuable to the company in the long run than the profits, however, was the access to cutting-edge research into digital computers being done under military auspices. IBM neglected, however, to gain an even more dominant role in the nascent industry by allowing the RAND Corporation to take over the job of programming the new computers, because, according to one project participant (Robert P. Crago), "we couldn't imagine where we could absorb two thousand programmers at IBM when this job would be over someday." IBM would use its experience designing massive, integrated real-time networks with SAGE to design its SABRE airline reservation system, which met with much success.

Successes of the 1960s to 1980s

IBM was the largest of the eight major computer companies (with UNIVAC, Burroughs, Scientific Data Systems, Control Data Corporation, General Electric, RCA and Honeywell) through most of the 1960s. People in this business would talk of "IBM and the seven dwarfs", given the much smaller size of the other companies or of their computer divisions. When only Burroughs, Univac, NCR, and Honeywell produced mainframes, a bit later people talked of "IBM and the B.U.N.C.H." Most of those companies are now long gone as IBM competitors, except for Unisys, which is the result of multiple mergers that included UNIVAC and Burroughs. NCR and Honeywell dropped out of the general mainframe and mini sector and concentrated on lucrative niche markets, NCR's being cash registers (hence the name, National Cash Register), and Honeywell becoming the market leader in thermostats. General Electric remains one of the world's largest companies, but no longer operates in the computer market. The IBM computer range that earned it its position in the market at that time is still growing today. It was originally known as the IBM System/360 and, in far more modern 64-bit form, is now known as the IBM System z9 (often referred to as "IBM mainframes").

IBM's success in the mid-1960s led to inquiries as to IBM antitrust violations by the U.S. Department of Justice, which filed a complaint for the case U.S. v. IBM in the United States District Court for the Southern District of New York, on January 17, 1969. The suit alleged that IBM violated the Section 2 of the Sherman Act by monopolizing or attempting to monopolize the general purpose electronic digital computer system market, specifically computers designed primarily for business. Litigation continued until 1983, and had a significant impact on the company's practices.

The company hired Don Estridge at the IBM Entry Systems Division in Boca Raton, Florida. With a team known as "skunkworks", they built the IBM PC, released on August 11, 1981. Although not cheap, at a base price of $1,565 it was affordable for businesses — and it was business that purchased the PC. However it was not the corporate "computer department" that was responsible for this, for the PC was not seen as a "proper" computer. It was generally well educated middle managers that saw the potential — once the revolutionary VisiCalc spreadsheet, the "killer app," had been ported to the PC as the clone, Lotus 1-2-3. Reassured by the IBM name, they began buying the machines on their own budgets to help do the calculations they had learned at business school.