IBM: 1100100 and counting | The Economist
The secret of Big Blue’s longevity has less to do with machines or software than with strong customer relationships
THE long passage that connects the two wings of IBM’s headquarters in Armonk gives a new meaning to the expression “a walk down memory lane”. From punch cards to magnetic tapes and disk drives to memory chips, every means of storing information since the advent of modern calculating machines is on display, either as an exhibit or as a photo. Other relics of computing can be found in the building, an hour’s drive north of New York City. Near the boardroom sits a desk-sized calculator with hundreds of knobs. Visitors can also wonder about a tangle of wires connected to a metal plate—an early form of software called a “control panel”.
No other information technology (IT) company could boast such a collection and also claim to have built each of the items on display. The history of computing cannot be conceived without IBM, which celebrates its 100th birthday on June 16th. Remarkably, even though to many minds Big Blue, like the objects on show at Armonk, is a relic of the 20th century, the firm remains one of the IT industry’s leaders. Its market capitalisation again almost matches that of Microsoft, its archrival for many years (see chart 1).
The firm’s centenary is an occasion to reflect on many things digital, but one question stands out: why is IBM still alive and thriving after so long, in an industry characterised perhaps more than any other by innovation and change? This is not just of interest to business historians. As IBM enters its second century in good health, far younger IT giants, such as Cisco Systems, Intel, Microsoft and Nokia, are grappling with market shifts that threaten to make them much less relevant.