IBM: The Rise, Fall, and Reinvention of a Global Icon

For decades, IBM shaped the way the world did business. IBM products were in every large organization, and IBM corporate culture established a management style that was imitated by companies around the globe. It was “Big Blue,” an icon. And yet over the years, IBM has gone through both failure and success, surviving flatlining revenue and forced reinvention. The company almost went out of business in the early 1990s, then came back strong with new business strategies and an emphasis on artificial intelligence. In IBM, company insider James W. Cortada provides an authoritative, monumental history of one of the most influential American companies of the last century.

Read an excerpt from the Preface of IBM by James W. Cortada below.

Preface

Nobody ever lost their job for recommending the purchase of IBM products.

— Computer industry folk wisdom

More than any other company since World War II, IBM has shaped the way the modern world goes about its business. Large corporations and governments began to use IBM’s products before 1900. Its computers served as global computing gearboxes for decades before the public “discovered” the Internet in the 1990s. Many of IBM’s computers had been part of the Internet since the early 1970s and part of even older networks since the 1960s. The U.S. census of 1890 was the first in the world to be done using automation tools — the punch card — and that too came from what would come to be IBM. For a long time, the company has been at the center of much of what makes a modern society function.

By working in conference rooms and data centers for over a century, IBM made this achievement possible. For that reason, few people outside those two places knew what it did, or how. They just knew that it was big, important, and usually well run. What they understood was largely the product of a century-long marketing and public relations campaign by IBM to manage carefully what we imagine when thinking about the firm. Its influence proved so powerful for so long that whenever there were problems at IBM — and there always seemed to be — the information technology world was affected, including the operation of large enterprises and government agencies, stock markets, and even how national governments armed themselves for global wars.

So what? We live in an increasingly dangerous world, profoundly influenced by computing, so understanding the role of one of the world’s most important providers of such technologies is crucial and urgent. We face three problems: ongoing acts of terrorism; a cyberwar involving the United States, Russia, and China but also affecting other countries caught in the crossfire, evidenced by cyber-attacks on German elections, Chinese hacking of companies, and Russian influence on the U.S. presidential election in 2016, for example; and a global political and economic environment that is becoming increasingly uncertain as nations flirt with trade restrictions and efforts to keep jobs from migrating to other countries. In the thick of all these conditions, information processing plays a profound role, and in the middle of that role stands a few technology companies, notably IBM. Which would be more important for the security of a nation under a cyber-attack, IBM or Netflix, IBM or Apple? For decades, commercial enterprises and government agencies in the United States and in other nations considered IBM a national treasure.

When the West needed computing for national defense, it turned to IBM. In World War II, IBM provided the Allies with machines to organize national economies for the war effort; in the Cold War, it implemented a national air defense system, assisted in making space travel possible, and did intelligence work. IBM has nearly a century of experience dealing with Russian counterintelligence operations — today’s hacking and intelligence operations are not new to it. We again face a time when many countries need the skills long evident at IBM. Nevertheless, it is a company that has suffered chronic problems, a malaise that while it tries to shake it off leaves open questions about its long-term viability. Understanding what this company is capable of doing begins by appreciating its history. Such insight helps employees, citizens, companies, and entire industries and nations understand what they can do to ensure that IBM is there when they need it. The company is too important to do otherwise. That is what led me to write this book.

IBM is a company that has a century-long history of not being generous in explaining how it interacts with the world. Like most large multinational corporations, it works to control what the public knows about it, including its global practices. Why, for example, several years ago, was IBM willing to share with China the guts of some of its critical software in exchange for being allowed to sell in that country? Why does it have a history of also doing confidential work for the U.S. intelligence and military communities? During World War II, when it was a tiny company, the Allies and the Axis used its products. Is IBM as American a company as it was 30 or 50 years ago? With an estimated 75 percent of its workforce now located outside the United States, some tough questions have to be asked. Such national security interests are addressed in this book and head-on in the last chapter, because this company may be one of those too critical to allow to fail.

Business historians, economists, and business management professors have their own concerns as well. Scholars and journalists have studied IBM for decades. Historians are interested in how large corporations function, why they exist for decades, their effects on national economies, and how they influence their own industries. A crucial question raised by IBM’s experience is how it became an iconic company yet also experienced periods of severe business crises that nearly killed it. Across all of IBM’s history, nearly lethal troubles accompanied its successes. How could that be? What lessons for other firms can IBM’s story teach? What can be learned that scholars and managers can apply in their explorations of how other firms flourished, failed, or are floundering? Answering such questions is central to this book.

All Rights Reserved for MIT Press

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