Before everyone had a desktop at home and a laptop for school or work, the International Business Machines Company, commonly known as IBM, dominated the computing space. IBM is still a force in the tech industry today, but unless you’re shelling out $75,000 for a mainframe computer, you likely won’t see IBM products used as at-home, personal computers.
IBM Mission and Products
Part of IBM’s corporate mission is to “lead in the creation, development and manufacture of the industry’s most advanced information technologies,” and the tech company has a legacy of living up to that statement. Its modern creations include innovations like the Summit supercomputer with the most powerful processor known to man and Watson, the artificial intelligence machine that understands the human side of language, like puns and sarcasm, and defeated Jeopardy champions at the trivia game. IBM has even put an AI astronaut companion on the International Space Station, named CIMON.
Down here on earth, IBM still provides businesses with IT infrastructure, cloud data centers and blockchain services.
IBM Origin and History
IBM was known as the Computing, Tabulating and Recording company until 1924, when its name changed to International Business Machines Company. IBM’s first significant impact on society came just four years later, when IBM-patented tabulating machines and punch cards were used by the U.S. government for census records. Previously, no other technology could keep up with the demands of such a high volume of data. The U.S. government could only implement the Social Security Act of 1935 with the help of IBM, which recorded employment information for around 26 million Americans.
In 1969, IBM assisted NASA with the computer building and software programming necessary to complete the Apollo moon landing mission. Though it wouldn’t last, IBM pioneered the use of personal computers by bringing the smallest and most affordable (at the time) PC to the market in 1981. In 2005, the IBM PC business was sold to Lenovo, ending that era and pivoting IBM’s focus to business mainframes and scientific endeavors.
IBM in Today’s Market
Keeping with its laser-focus on enterprise systems instead of PCs, IBM has been busy acquiring and forming alliances with other tech companies to create a complex, integrated cloud platform for businesses. In July 2019, IBM acquired the open-source software company Red Hat for $34 billion. One week later, IBM announced an expanded, multiyear alliance with AT&T Business Solutions that will migrate their applications into the IBM cloud.
“AT&T and IBM together will be building an edge mobile platform particularly for enterprise clients,” Ginny Rometty, IBM CEO, told Jim Cramer on CNBC’s Mad Money. “We bought Red Hat in order to be the hybrid, multiform platform out there.”
It appears that IBM is carefully making business deals to competitively position itself as the premiere cloud platform for enterprise customers in the coming years.
Competition in Tech Space
In the constantly evolving tech space, the fact that IBM has survived for over a century is impressive by itself. But with that long timespan comes new competitors. In its current iteration, IBM is a business-to-business company with an emphasis on cloud technology. These factors eliminate major players like Apple because IBM has mostly left the personal consumer market.
However, the top cloud providers are now IBM’s formidable competitors. Companies like Amazon Web Services, Google Cloud and Microsoft Azure are competing to create the most sought after cloud service. IBM’s positioning as a multicloud, hybrid service may give it an advantage, as the company may provide features in its cloud for free, like AI. Customers with other cloud service companies may have to pay an additional fee for those add-on features.
Because IBM has an active presence in over 180 countries and has been in business for more than 100 years, its brand name recognition is incredibly strong. Nevertheless, modern tech consumers require more from technology than sophisticated hardware and intuitive software design. Tech marketing usually pairs technology with morality, and IBM is no exception.
In the “Dear Tech” IBM commercial series, the ethical tech ad features celebrities who showcase how IBM is changing the industry and the world for the better. In one female-empowered commercial, actress Mayim Bialik from The Big Bang Theory, singer Janelle Monáe and media mogul Arianna Huffington implore the tech industry to do better using IBM’s STEM division, blockchain and quantum technology.
IBM in the News
The recent Red Hat and AT&T deals with IBM were precluded by layoffs at the company. The change in focus to an enterprise cloud provider has also led to unfortunate changes in staffing. In June 2019, IBM laid off 0.5% of its workforce, which seems like a small percentage but affected around 1,700 jobs at the company. The staff repositioning to meet IBM’s future goals also means new hiring opportunities. As of July 2019 there are more than 7,500 open positions.
The IBM market capitalization is valued at $127.07 billion. While market capitalization considers the total value of unsold shares, brand value calculates a company’s present value by looking at income, cash flow and areas where the company has saved money. Forbes places the IBM brand value at $48.5 billion, ranking it as the fourth most powerful brand in the world.
From census records to space expeditions, IBM continues to expand its reach and impact the industry, society and the world. As one of the oldest tech companies, IBM’s transformative ability has shown that a company can evolve with the times and remain an industry leader even a century later. Today, the industry is witnessing IBM innovate once again into a hybrid, multicloud platform for enterprises.