Peoples Republic of South Devon

Big Blue – The ‘Forgotten Giant’

October 17th, 2008

The weekly technology column from those gurus of geek at Plymouth’s at Orange Crate

When thinking back to my computing youth in the 80s and 90s, one name stands out as being behind all of my early IT experiences – IBM. But apart from the interestingly vague yet targeted business ads on television, we don’t hear an awful lot about ‘Big Blue’ any more. Long gone are the days where their timelessly simple logo adorned the front of every home pc – so what the devil are they up to these days? Let’s find out…

Originally founded as the Tabulating Machine Company was back in 1898 in New York State, the company began by specializing in data processing and card punching equipment. By the time the name was changed to International Business Machines in 1924 they had already seen their product lines and profits steadily grow, and this continued to be the case up until the Second World War. Interestingly (and unexpectedly), during the USA’s involvement in WWII, IBM put their production capabilities in the hands of the American government, and were responsible for the manufacturing of the Browning Automatic Rifle and the Carbine M1 rifle. Their punch card technology was also extensively used in the Manhattan Project.

During the 1950s, IBM became the dominant force in the emerging computer industry, and this continued through the 60s and 70s where their development teams were responsible for some of the most important IT evolutionary steps of the times. But it was the information revolution of the 1980s that saw the real rise in PC and software industries, and IBM were in a position to reap the rewards. In 1981 they launched the IBM PC which, although expensive at $1565, proved extremely marketable and profitable due to it’s potential in the workplace. During the 80s many new rivals were born, and by the end of the decade it was becoming clear that no one company would control the IT market across the board, and that technology companies would have to specialize to survive.

Because of their continued success up until this point, IBM found this difficult to implement, and the early 90s were a torrid time for Big Blue – in 1993 they announced previous year financial losses of $8.1 billion, the largest single corporate loss in US history at that point. But IBM survived this wake up call, and were led away from the brink of disaster by a gradual shift from supplying services rather than products.

In 2005 IBM sold it’s PC division to Chinese company Lenovo for $655 million in cash and $600 million in Lenovo stock, and two years later announced the 51% sale of IBM Printing Systems to Ricoh for $725 million. These sales, combined with IBM’s business actions since 2004, showed a shift from hardware and technology to business consultancy – hence the IBM we see advertised on television today.

These days IBM are running a number of globally successful projects such as Eclipse and Developerworks, as well as developing semiconductor designs which are used in virtually all modern day gaming consoles amongst other things. Having embraced Linux and the open-source movement in the late 90s, they also provide impressive resources for emerging software developers and technologies.

Most home and business computers today are still built around the descendants of IBM compatible products, and IBM remain the world’s largest computer company, employing over 388,000 people globally, and with profits outweighing all of their competitors. So Big Blue is far from being a has-been – like any successful company, it is continuing it’s history of making informed decisions in terms of clients, products, and targeted audiences. And although IBM may seem much further from your own personal desktop than it did in the 80s and 90s, in a lot of ways it is just as close.

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