Discussions of the High-Tech Revolution: Part A

Case In Point: IBM

Around 1890, during the height of the Industrial Revolution, the U.S. Census Bureau was in an information crisis. As a result, the Bureau sponsored a contest to find a more efficient means of tabulating census data. The winner was Herman Hollerith. His Punch Card Tabulating Machine used an electric current to sense holes in punched cards and keep a running total of data. Capitalizing on his success, Hollerith formed the Tabulating Machine Company in 1896. It was the world’s first electric tabulating and accounting machine company.

In 1911, Charles F. Flint engineered the merger of Hollerith’s Tabulating Machine Company with two other ventures. The New York-based company invited George Fairchild to become its first chairman of the board of directors. In 1914, Thomas J. Watson, Sr. joined the company as general manager. In 1924, the company was renamed International Business Machines Corporation, or IBM. In the 1940s IBM introduced the Selective Sequence Electronic Calculator system which greatly increased the efficiency with which enormous quantities of data could be stored and processed; like payroll calculations, invoicing, and design calculations. Watson Sr. died in 1956 and by 1957 IBM was completely reorganized, focusing on electronic computing; its revenues from the computer division topped $1 billion.

In 1964, IBM introduced the System/360, a broad line of compatible mainframe computers with peripherals for a wide range of uses. Total development costs including software were some $5 billion. By the late 1970s, they became the institutional mainframe computers. By the mid-1980s the 360 Series and its direct descendants had accounted for more than $100 billion in revenue for IBM. In the fall of 2002, with IBM topping $81 billion in annual revenues and 315,899 employees around the world, the U.S. Department of Energy awarded IBM a $290 million contract to build supercomputers capable of equaling the theoretical processing power of the human brain.

SOURCE: Roadmap To Entrepreneurial Success