IBM

IBM was founded in 1911 as the Computing-Tabulating-Recording Company through the merger of four businesses making punch card tabulators, time recording equipment, and weighing scales. Thomas J. Watson Sr. took over as general manager in 1914 and renamed the company International Business Machines in 1924. Watson's management philosophy — "Think" was the company motto, displayed throughout IBM offices — and his aggressive sales culture built IBM into the dominant supplier of business machines in the United States.

IBM launched the System/360 in April 1964 — a family of compatible mainframe computers that could run the same software regardless of size. The development cost $5 billion — more than the Manhattan Project adjusted for inflation — and was the largest privately funded commercial project in history at the time. The System/360 established the concept of a computer family with compatible software across different hardware configurations. IBM's revenues doubled in the five years following the launch.

IBM launched the IBM Personal Computer in August 1981, choosing to build it from off-the-shelf components and license the operating system from Microsoft rather than developing proprietary technology. IBM's open architecture allowed other manufacturers to clone the design legally. Within years, IBM-compatible PCs from Compaq, Dell, and dozens of others dominated the market — running Microsoft's operating system. IBM had created the personal computer industry and handed its most valuable components to its competitors.

By 1993, IBM was losing $8 billion per year — the largest annual loss in corporate history at the time. The board hired Lou Gerstner — a former McKinsey consultant who knew nothing about technology — as CEO. Gerstner cancelled a planned breakup of the company, refocused IBM on services rather than hardware, and transformed it from a struggling computer manufacturer into a technology consulting giant. IBM's stock rose 800% during his nine-year tenure.

IBM reported revenues of approximately $62 billion for fiscal year 2024, with its software segment — including Red Hat, acquired for $34 billion in 2019 — driving growth. The company had divested its managed infrastructure services business (renamed Kyndryl) in 2021 to focus on hybrid cloud and AI consulting. IBM Watson Health, the medical AI platform launched with great fanfare after Jeopardy!, had been sold in 2022 after failing to commercialise its capabilities. IBM had again identified an AI inflection point and was competing aggressively for enterprise AI consulting work — this time through its WatsonX platform — against Accenture, Deloitte, and the hyperscalers themselves. The company that had nearly gone bankrupt in 1993 was still fighting for relevance in the industry it had created.