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Home > Learn More > Tech > The History Of IBM

The History Of IBM

The History of IBM goes back further than the development of computers. It was originally a Tabulating Machine Company founded in 1896 by Herman Hollerith. It specialized in developing punched card data processing equipment. The patent for this technology was initially applied for in 1884. It began as a means for Hollerith to meet the demands in tabulating the 1890 Census. Punch cards introduced in 1896 laid the foundation for generations of equipment which would one day be known as IBM. The business was sold to Charles Flint in 1911 for 2.3 million dollars of which he received 1.2 million dollars to create Computing Tabulating Recording Corporation or CRT. Incorporation took place on June 16, 1911 in Endicott, New York.

There were three companies which merged. The computing Scale Corporation, the Time Recording Company and finally the Tabulating Machine Company. Flint was the key financier behind the merger and remained a member until 1930. In 1914 Thomas J. Watson Sr. became General Manager of CTR and in 1917 CTR entered the Canadian market using the name International Business Machines Co., Limited. Watson played an essential and key role in establishing what would later be known as IBM.

In 1928, IBM introduced a new 80 column rectangular-hole punched card, which became the standard IBM card used by tabulators and computers for many years to come. Later in the 1950’s IBM became the primary contractor in developing computers for the United States Air Force automated defense systems. While working on the SAGE interceptor control system IBM gained information critical to work being performed at Massachusetts Institute of Technology. This information spearheaded advancements for the company by learning information on digital data transition, algebraic computer language, light guns, integrated video display, analog to digital and digital to analog conversion. IMB built fifty six SAGE computers totaling thirty million dollars each and in its heyday employed more than seven thousand employees.

The 1980’s found IBM consolidating its mainframe business and expanding the breadth of mainframes with the ESA/390 and the S/390.  To create the illusion that IBM’s revenues and profits were much stronger than they really were in the mid to latter part of the decade, IBM embarked upon the practice of converting its large rental base of mainframes to lease arrangements. This spending shift caused management to scramble, which threatened the monopoly which IBM had enjoyed in the technology business.

Don Estridge was hired in the IBM Entry Systems Division in Boca Raton Florida. It was at this point that he along with his team known as “Project Chess” developed the IBM PC which was then introduced to the world on August 12 1981. Initially these systems were not affordable to the average person for personal use. The hefty price tag of $1.565 left the equipment primarily in the business sector, although these were not seen as a viable computers by the corporate computer departments. Often the purchases were made by middle management as they could see the value these systems had in relation to business.

IBM operating systems have paralleled hardware development. On earlier systems, operating systems represented a modest level of investment, and were typically viewed as an addition to the hardware. By the time of the System/360,  operating systems had assumed a much greater role, in terms of cost, complexity, value, and risk. IBM has widely been known for its dominant computer business. However, it has had major roles in many other industries. Today IBM enjoys continued success with systems easily applicable to businesses as well as personal use.
 
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