International Business Machines Corporation

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 on signs 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, a principle that underpins modern computing. 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. The decision was made to bring the product to market quickly. 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 company was preparing to break itself into separate divisions. The board hired Lou Gerstner — a former McKinsey consultant and RJR Nabisco CEO who knew nothing about technology — as CEO. Gerstner cancelled the breakup, 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's Watson computer defeated Jeopardy! champions Ken Jennings and Brad Rutter in February 2011, demonstrating natural language processing capabilities that seemed almost supernatural to viewers. IBM positioned Watson as the foundation of an AI services business that would generate billions in revenue. The commercial reality proved more difficult than the Jeopardy performance suggested; Watson Health was sold in 2022 after failing to deliver on its medical AI promises. IBM had again identified a technological inflection point and struggled to commercialise it.