Translated by
2019/02/11 16:38:51

History of IBM

The history of IBM, one of the largest koraporation in the market of information technologies, fascinates the scale.


Some facts from the history of IBM are taken out in separate articles:


IBM punished for lies when developing the website by the state order

In the middle of June 2019 IBM and its subsidiary company Curam Software agreed to pay $14.8 million for settlement of the charges brought by the state medical insurance company Maryland Health Benefit Exchange. Read more here.

IBM invests $2 billion in the equipment for artificial intelligence

In February, 2019 IBM announced investment of $2 billion into creation and improvement of the equipment for accomplishment of the tasks connected with artificial intelligence.

For this purpose the company will create R&D-центр in the territory of a campus of Polytechnical institute   (SUNY Polytechnic Institute) in the city of Albany (the State of New York, the USA). The staff of this laboratory will be engaged in researches, developments and testing of the computer chips used for the AI purposes.

In February, 2019 IBM announced investment of $2 billion into creation and improvement of the equipment for accomplishment of the tasks connected with artificial intelligence.
In February, 2019 IBM announced investment of $2 billion into creation and improvement of the equipment for accomplishment of the tasks connected with artificial intelligence.

IBM is going to select not less than $30 million for joint projects with Polytechnical institute, and the university will spend for them up to $25 million. The company hopes that the development center of AI devices will be able to attract the new AI companies and researchers from the state organizations and also will contribute to the economic development of the region and creation of additional jobs. The center will cooperate with the different technology companies, including Samsung and Tokyo Electron Limited.

Under the leadership of the governor our partnership with the companies will promote further scientific breaks and economic growth. We will be able to work on anything — from fight against diseases and cancer before mitigation of the consequences of climate change — reported the doctor of science of SUNY Kristina Johnson.

The government of New York was supported the project of IBM and agreed to provide $300 million for purchase and equipment installation which is necessary for the company for work. Besides, the parties agreed about joint investment of $55 million into the researches connected with artificial intelligence at the University of the State of New York     (State University of New York).

The statement for development of IBM of hardware AI technologies in New York was made jointly by company executives and the governor of the state  Andrew Cuomo. The last noted that this project will allow New York to take the leading positions in the field of researches of artificial intelligence.[1]

Release of base from 1 million photos of persons for training of the biometric systems

At the end of January, 2019 IBM issued the database containing 1 million photos of the persons taken from Flickr service to help developers to train the biometric systems. Read more here.

Beginning of certification of specialists in data

On January 29, 2019 IBM and consortium The Open Group started certification of specialists in processing and studying of data to formalize training within one of the most popular areas for career development. Read more here.


Groupon will pay IBM about $57 million for patent infringement

On October 1, 2018 Groupon announced settlement of a patent dispute with IBM according to the results of which the Internet service of group discounts will pay the opponent $57 million. Also the companies signed the agreement on mutual licensing of patents. Read more here.

IBM raises prices for products because of the import duties of Trump by value to 25%

At the end of July, 2018 IBM told the business partners that it raises the prices of the wide range of tape drives and joint products by 25%, in particular, because of import, the materials entered by the American president Donald Trump and concerning import from China.

IBM provided to partners the list from 137 goods, the price for which for certain will increase: from power supply cords for $19 to a streamer of IBM TS1155 3592 FFE based on Ethernet for $65 thousand. The price of the majority of goods increased by 25%, however in certain cases this digit reached 26 or 27%. Increase in prices did not concern the goods ordered till July 24, 2018 and products to which special rates of duties extend.

Tape drives of IBM will rise in price for 25%
Tape drives of IBM will rise in price for 25%

One of suppliers of IBM noted that increase in prices at worst will only for a while reduce turnover, however not all are so sure of it. Though the prices will grow for all suppliers, their influence on demand can differ depending on scope of application, in certain cases the goods turnover is rather small, in others – depends on a season, but at the same time is quite strictly limited and cannot easily change under the influence of increase in prices. However their growth because of the import duties is capable to reduce demand in all directions.

In addition to IBM, announced Gigabyte, the Taiwan producer of a broad spectrum of IT products from keyboards and mousepads to servers and the PC price increase. The company told the suppliers and developers that in August, 2018 he can raise the prices for 10% for a certain equipment depending on results of negotiations between the USA and China.

The prices of motherboards, video cards, hard drives, mice, coolers for the processor and power supplies will grow. However the prices of such goods as computers, servers, notebooks, keyboards, memory cards, headsets, PC body and mousepads, will not change. Gigabyte also reminds that laws on the import duties will become effective not earlier than the end of August, 2018.[2]


Lost profit for billions of dollars

At the end of December, 2017 the analyst of Bernstein Tony Sacconaghi criticized IBM for careless strategy: the company earns billions of dollars, but directs them to share repurchase of stocks and dividend payout to shareholders instead of undertaking something resolute — for example, to purchase large players of IT market.

By the expert's estimates, during the period from 2012 to 2017 total amount of money, received by the company, was about $92 billion, however IBM returned 80% of this amount (nearly $74 billion) to investors in the form of dividends or the redeemed shares. Blue Giant spent nearly $50 billion only for acquisition of the securities, notes Sakkonagi.

IBM was criticized for careless expenditure to the dena
IBM was criticized for careless expenditure to the dena

It is not the best strategy, considering that sales of IBM are reduced for 22 quarters in a row, and profit before taxation during the considered period decreased from $23 to $14.3 billion.

Looking back, it becomes obvious that the management of IBM obviously underestimated difficulties which the company met... The question is in what could be made in a different way? — Sakkonagi in an analytical note from which excerpts are published by the British edition The Register reflects.

According to the specialist, affairs of IBM would go absolutely differently if in 2012 it spent $20 billion for purchase of the developer of CRM systems and corporate software of or purchased the ServiceNow company proposing solutions for control automation by IT services for $4-5 billion.

Us the question does not leave whether IBM is not necessary instead of relying on own forces (that it actually did, redeeming the shares), to select other way and to work more actively in respect of acquisitions (and sales) assets to recreate and diversify the business — writes Sakkonagi.

The analyst considers that $47.5 billion spent by IBM for redemption of stocks could be used for absorption of SaaS companies which threaten traditional to IT players today. Alternatively Sakkonagi sees sale of some minor divisions, such as IBM Global Business Services.[3]

Creation of the first-ever 5-nanometer chip

On June 5, 2017 IBM announced the first-ever chip created on the basis of 5-nanometer technology process. Similar solutions lay claim to the fastest and economic.

Development of a 5-nanometer chip was performed by joint efforts of IBM, Globalfoundries and Samsung. They created the chip of the size of a human nail on which 30 billion transistors whereas at 7-nanometer solutions this number does not exceed 20 billion find room. According to developers, use of new technology allows to increase processor capacity by 40%, and energy efficiency — for 75% in comparison with comparable 10-nanometer products. Even more compact and fast chips will find application writes the Fortune edition with reference to the message of IBM in the systems of artificial intelligence, virtual reality and other applications requiring high performance.

The employee of IBM holds a plate with 5-nanometer chips
The employee of IBM holds a plate with 5-nanometer chips
It is good chance in development of transistors — the founder and the senior analyst of Tirias Research Jim McGregor comments on the announcement of 5-nanometer chips of IBM. — The purpose is to continue to reduce transistors and at the same time to increase performance.

According to the expert, by the beginning of June, 2017 the semiconductor market gradually passes from 10-to 7-nanometer technical process, and the 5-nanometer technology will become following. IBM is going to begin production of such chips approximately in 2020.

The head of department of semiconductor devices of division of IBM Research Huiming Bu noted that 5-nanometer chips will be made on a photolithographic technology in deep ultraviolet (extreme ultraviolet lithography, EUV) which was never used earlier on commercial production. Extreme ultraviolet has wavelength only 13.5 nanometers against 193 nanometers at traditional lithographic systems.

Mastering of 5-nanometer process should allow the semiconductor market to follow the law of Moore according to which the number of the transistors placed on an integrated circuit chip doubles each two years.[4]

Creation of the most exact system of speech recognition

In March, 2017 IBM announced creation of the most exact system of speech recognition in the world. The American IT giant broke the record set by Microsoft.

According to the statement of IBM, company it was succeeded to lower a share of errors in computer speech recognition to 5.5% that became the best result for all history. Earlier IBM tried to obtain an indicator in 6.9%, and Microsoft — 5.9%.

For comparison, people does not sort about 5% of words in the heard natural speech. Thus, IBM brought closer the artificial intelligence to human opportunities. In the company set the purpose on decrease in a share of errors at speech recognition to 5.1%.

Office IBM
Office IBM

In March, 2017 IBM reported that the software of the company cannot still catch all nuances of the speech, such as its tone or metaphors, however, decrease in a share of errors at recognition of a direct sense of words became big achievement. IBM intends to continue work on that machine learning did not concede to people on "complexity of interaction of human ears, a voice and a brain".

Developments of IBM are the cornerstone a recurrent LSTM neuronet (long short-term memory; so-called long-term krakovremennaya architecture) and the algorithm for synthesis of the human speech of WaveNet allowing to achieve realistic simulation of a voice. Measurements of accuracy of speech recognition it was carried out in the SWITCHBOARD and CallHome programs. The first of them is used in the industry about two decades.

Despite impressive progress of the last years, achievement of human results in such tasks for artificial intelligence as speech recognition or objects, remains a scientific call. Standard tests not always show distinctions and difficulties of real data — Yoshua Bengio, the head of laboratory on training of algorithms at Montreal University notes.[5]

Strategic partnership with Salesforce

In March, 2017 IBM and Salesforce announced the international strategic partnership and agreed about promotion of the joint solutions created using AI technologies. Such services will allow the companies to make more weighed decisions quicker, than ever. Within partnership of Bluewolf also opened the new direction which will provide to customers quick access to cognitive solutions and data in multicloud environments of Salesforce.


Declaration of winners of the IBM Health Corps program

At the end of September, 2016 IBM declared the first winners of the medical Health Corps program. Within the next six months the most talented staff of the company from the different countries will render free consulting services in the field of health care which total market value is $2.5 million Read more here.

Fight against a Zika virus

On July 27, 2016 the IBM company announced plans to provide the technologies and resources to help to monitor spread of a virus of a Zika disease, transfers Reuters news agency.

Brazilian scientific Fund of Osvaldo Cruz (Fiocruz; the leading research institute connected with the Ministry of Health of Brazil) is going to use the software of IBM for the analysis of different data on a virus — from official information on movements of sick people to mentioned in social networks separate cases of infection.

Zika disease — the acute infectious disease widespread in Africa, North and South America, Asia and the Pacific region. Disease symptoms — fever, skin rash and conjunctivitis. By the end of July, 2016 of a special complex of treatment and the vaccine against a Zika virus does not exist.

IBM provided software for fight against a Zika virus
IBM provided software for fight against a Zika virus

In 2016 the World Health Organization (WHO) recognized that quickly extending virus of a Zika disease is global threat, and announced introduction of an emergency rule. Then WHO warned that the virus can extend over all countries of the New World, except for Canada and Chile. According to forecasts of the organization, infected in the territory of North and South America there can be about 4 million people.

IBM gives any support in fight against this virus. At the end of July, 2016 the company announced intentions to provide to the United Nations Children's Fund (UNICEF) the platform for collection of information about daily rainfall, average temperature and humidity which are key factors of distribution of mosquitoes carriers of a Zika virus. This project is to a large extent focused on Brazil.

Besides, together with the New York Institute of a research of an ecosystem of Cary Institute of Ecosystem Studies biological and ecological data with the purpose of algorithm elaboration, allowing to define what primacies are virus carriers began to collect and analyze IBM.

At last, IBM supported the project under the name OpenZika started within an initiative of World Community Grid (its participants voluntarily agree to load software which involves not used computing powers of their computers and mobile devices).[6]


IBM will open to China source codes of the software

On October 16, 2015 it became known that IBM will show to the Chinese authorities source codes of the software. Thus, "the blue giant" can become the first large American IT company which agreed to observe requirements of Beijing concerning the strengthened control of foreign technologies, The Wall Street Journal (WSJ) writes.

According to two informed sources of the edition, IBM will allow the staff of the Ministry of the industry and information technologies of the People's Republic of China (Ministry of Industry and Information Technology, MIIT) to study source codes of some software products. However, authorities will be able to get access to these data only in the special enclosed space from where they will prohibit them carrying out of any information.

IBM agreed to a step, unprecedented for the American companies — to open to the Chinese authorities access to the source code of some software products
IBM agreed to a step, unprecedented for the American companies — to open to the Chinese authorities access to the source code of some software products

Media do not know what source codes of software IBM will share and as long the staff of MIIT will be able to study them in that confidential room. Interlocutors of the edition say that such practice for the People's Republic of China is new. Official comments were not provided neither in IBM, nor in MIIT.

As notes the Reuters agency, foreign IT products applying for use in the Chinese public financial institutions, undergo tough testing for security that strongly complicates activity of the American companies in Celestial Empire.[7]

Earlier in 2015 the American business called the Chinese government for "urgent negotiations" concerning review of requirements to cyber security according to which the foreign companies which are engaged in sale of a computer hardware to the Chinese banks should open source codes of the products and implement in them the Chinese encryption algorithms.

The interlocutors of WSJ familiar with the strategy of IBM claim that IBM was ready to deepening of partner communications with the government of the People's Republic of China, unlike other American companies.

During the performance in Beijing on October 15, 2015 the senior vice president of IBM Steve Mills declared the companies determination to provide to China access to source codes of the software to confirm its security for the country. Next day there was a publication of WSJ.[8]

Prohibition on use of servers of IBM in missile defense systems of Naval Forces

On May 19, 2015 it became known that the American Navies (N) can refuse use of servers of IBM in the computer systems managing antimissile complexes. In armed forces are afraid of effects of gaining access to technologies of corporation from the Chinese computer maker of Lenovo.

In 2014 Lenovo purchased at IBM the division releasing servers of standard architecture of x86, including the BladeCenter systems applied in work of the ship fighting management information Idzhis system.

US Navy will refuse servers of IBM because of the transaction with Lenovo

US Navy will refuse servers of IBM because of the transaction with Lenovo

Idzhis is capable to monitor at the same time the purposes and to strike them on  the land, in  water, under  water and  in air. The decision on  defeat of the purposes menacing to the ship can automatically be made thanks to advanced IT systems.

According to The Wall Street Journal (WSJ) with reference to the official representative of Naval Forces, saw Department of internal security of the USA (U.S. Department of Homeland Security, DHS) in the transaction between IBM and Lenovo of a security concern in this connection it limited purchases of the BladeCenter servers by federal bodies.

According to the portal of Naval institute of the USA (USNI), the servers of IBM used in system operation Idzhis will be replaced. At the same time the source did not specify a name of the new supplier. The press service of Naval Forces did not give definite answer to a question of replacement of servers of IBM.

The press secretary of Lenovo Ray Gorman reported to WSJ that the company does not comment on contracts of clients, but at the same time she continues to sell servers and other products to the U.S. Government.

The Lockheed Martin company which develops the antimissile Idzhis complexes refrained from informative comments and only noted that it sorts the matter with Naval Forces, and according to the results of discussions "the suitable action plan" will be selected.

It should be noted that because of a complication of the political relations between Washington and Beijing to the Chinese companies it became difficult to work in the USA, as well as American in China. Such situation can affect market opportunities of some producers, the analyst of Gartner Errol Rasit believes.[9]

Forbes: Three reasons for which Apple it is necessary to purchase IBM

On May 5, 2015 the magazine Forbes published article under Apple IBM the heading "Three Reasons for Which It Is Necessary to Purchase". Free translation of this publication of TAdviser offers in this material.

Tim Cook knows IBM

The CEO of Apple Tim Cook worked in IBM from 1982 to 1994. At the time of leaving the company it was her director supervising production and distribution questions in North American representative office.

From the moment of Cook's arrival to the management of Apple of the relation of the company with IBM improved. The American IT giant began joint development of the mobile software of a corporate class and were engaged in distribution of iPad tablets among elderly residents of Japan. However, this partnership does not stimulate sale of iPad yet: in January-March, 2015 12.6 million these devices were sold that is 23% less, than the previous year.

Apple CEO Tim Cook and CEO of IBM Virginia Rometty

At the end of April, 2015 Tim Cook expressed the optimistic relation to cooperation with IBM, having noted that the companies "want to change work of people. There are too many enterprises which still got stuck in other era".

Apple is able to afford large purchase

As of May 5, 2015 market capitalization of IBM makes more than $171 billion against $741 billion at Apple. If to assume that the iPhone and iPad producer will be ready to pay for IBM 20% more it costs (about $205 billion), then the transaction will cost Apple only 28% of its stocks.

IBM needs management

Purchase of IBM will make for Apple economic sense only if the transaction is able to generate the sufficient volume of additional cash flows to compensate expenses on acquisition. According to observers, merge of IBM and Apple will allow to reduce rent costs of premises and to save on consolidation of the duplicative departments which are responsible, in particular, for financial activities, the personnel and purchases.

Besides, Apple can abolish some divisions which do not fit into work of the joint corporation — for example, business on release of mainframes.

IBM has well developed sales channel and strong consulting division which are focused on corporate and state clients who at Apple are not enough. At last, "the blue giant" has an extensive portfolio of patents and technologies among which Apple can find the intellectual property allowing to create products necessary for business.

Perhaps, suitable time for merger of IBM enduring financial recession really came. In January-March, 2015 revenue of the company dropped by 12% (to $19.59 billion), and this quarter decrease was the 12th in succession. Purchase of IBM will be effective if Apple is able to make business of the company a fast-growing way of sale of the corporate products which are in high demand. For this purpose true skill of management will be required, Forbes writes.[10]

Creation of division of Watson Health: honey data from devices of Apple are flown down in IBM

On April 13, 2015 it became known that IBM created new division which received the name IBM Watson Health. It will manage a cloud service in which data of medical character from different sources, including fitness trackers, smartphones and the smartwatch will be flown down. Afterwards this information on health of users can be transferred to doctors and insurance companies for preparation of personal medical care.

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Data on health of owners of iPhone and Apple Watch with their permission will be transferred to a cloud of IBM

Mobile devices of Apple became a part of this ecosystem. Read more here.

As IBM invests $3 billion in Internet of Things

On March 31, 2015 IBM announced large investments in the market of Internet of Things (Internet of Things, IoT). The American corporation wants to earn from the experience in area of collecting and data analysis in real time, Reuters reports.[11]

During the period from 2015 to 2018 IBM is going to spend about $3 billion for creation of new division of Internet of Things. It will offer the companies the cloud services allowing clients of IBM to look for new and to increase greatly the operating sources of data collection (smartphones, home appliances, sensors of automation of buildings, etc.) for improvement of own products.

The first large partner of IBM within large-scale work in the IoT-market selects meteorological company Weather Co. Its IT department WSI collecting information about more than 2 billion sensors worldwide, allowing to generate over 26 billion weather reports daily, will transfer the services to a cloud of IBM.

The first large partner of IBM within large-scale work in the IoT-market selects meteorological company Weather Co.

At the expense of it the companies will be able to use meteodata together with  analytical tools of "the blue giant". Practical benefits of it will be derived, for example, by insurance companies which will be able to notify the clients motorists on the approaching hail that those managed to hide the vehicles to safer places in time. Those can warn a loss occurrence.

Also retailers will use fruits of cooperation of Weather Co. and IBM. Connecting meteorological data with indicators of sales, retail stores will be able to arrange logistics and work of personnel under purchasing activity at a certain weather.

According to IBM, the company already began work with a number of large partners, including the German producer of buses of Continental AG and producer of jet engines Pratt & Whitney, helping them to use effectively data bulks in the working purposes.

Cooperation with Weather Co. and the announced investments into Internet of Things are a part of strategy of IBM within which the company separates from equipment manufacturing and consulting business towards cloud, mobile and analytical computing and also solutions in the field of social services and information security. Expects to earn $40 billion in 2018 from these products of IBM that corresponds to 45% of the general sales of the producer predicted by analysts.

Creation of cloud division

At the beginning of January, 2015 it became known that IBM  started formation of the division which is responsible for development of cloud business. The company did not confirm officially this information, but earlier spoke about desire to create special child structure which will supervise the cloud direction.

According to the informed sources of Bloomberg news agency, the new cloud division received the name IBM Cloud. It was headed by Robert LeBlanc who before the appointment was the senior vice president of the company for the direction of binding software solutions. At a new position LeBlanc will personally report to the CEO of IBM Ginni Rometty.[12]

The management of IBM lays great hopes on cloud business in the conditions of financial recession of the company. In 2015 the producer expects to earn from cloud products $7 billion against $4.4 billion in 2013. On a global scale IBM predicts the amount of this market at the level of $200 billion by 2020.

In January, 2015 IBM began to create cloud division of IBM Cloud

In January, 2015 IBM began to create cloud division of IBM Cloud

The vice president and the chief financial officer of IBM Martin Schroeter announced creation of cloud division in October, 2014 at the conference devoted to the publication of quarter results. Then the top manager reported that through new structure the company will make the cloud investments more purposeful, will improve integration and will accelerate development of new solutions. Schroeter then did not announce any detailed information on IBM Cloud.

According to the analyst of Gabriel Consulting Group Dan Olds, in fight in the highly competitive cloud market IBM will be able to be selected thanks to high quality of service and support. The company will also be helped by its active geographical expansion within which "the blue giant" increases number of cloud data centers, the expert noted.

2014: Increase in number of data centers worldwide

On December 17, 2014 IBM announced 25 percent expansion of number of the data centers (to 49) servicing cloud infrastructure. On one data processing center IBM opened in Frankfurt, Mexico City and Tokyo. Besides, the producer announced start of nine platforms of cloud computing in the territory of Australia, France, Japan, Singapore, Holland and the USA together with global operator of data centers Equinix.

2013: Creation of division of Cloud Services

In May, 2013 IBM announced that it is going to earn from the market of cloud services $7 billion in the next 18 months. As one of the main measures for fixing in this market the head of IBM Ginny Rometti created separate division of Cloud Services and delivered to direct new structure of the old friend,Erich Clementi, the vice president of IBM Global Technology Services.

2012: Charges of unfair criticism of SAP products

The American chemical giant Avantor Performance Materials submitted a claim against IBM with charge of the IT company of dishonest business concerning products of SAP. On November 10, 2012 ComputerWorld reported about it.

The essence of the claim consists that according to Avantor, IBM misled the company concerning product quality of SAP to receive the contract for implementation of the ERP system.

Avantor Performance Materials in 2010 made the decision to update the existing ERP system which was based on SAP, said in the claim submitted to district court the cities of New York, USA.

The claimant claims what played IBM that Avantor could not suffer any failures in work of systems or applications, and assured the claimant that his Express Life Sciences Solution system will meet all requirements though the solution is developed on the platform of the same SAP which was initially used by Avantor.

After implementing solution of IBM the claimant detected a number of discrepancies in the stated functionality. Also Avantor was dissatisfied with quality of consulting services when consultants made "numerous and rash design, configuring and software failures".

One more reason of the claim was the fact that according to Avantor IBM did not warn the customer about possible risks and hurried to start the project, without having analyzed current situation at the enterprise.

After completion of implementation of IBM did not begin to pay attention to results of test operation therefore a system worked "worse than ever" and could not process correctly orders and lost a part of the documents made for some officials according to requirements of the legislation.

Avantor estimates the losses at several tens of millions of dollars, and also considerable blow to reputation of the company. The claimant claims that he, despite bad performance of the contract, already earned by IBM more than 13 million dollars.

"Now IBM requires in addition several million dollars for reorganization of the implemented system", said in the claim.

IBM in turn disproves all charges in the direction and is ready to protect itself and the reputation in court. At the same time some staff of the company claims that the ERP system of SAP implemented earlier in Avantor - the worst implementation which was seen ever.

Avantor calculates within court more specifically to define the damage caused by implementation of the ERP system of IBM.

SAP is not aware of the statement of claim Avantor to IBM and did not begin to comment on current situation.


Charges of bribery of officials of Asia

The U.S. Securities and Exchange Commission (Securities and Exchange Commission, SEC) brought charges of the relation of the IBM corporation suspected of the organization of a long campaign for bribery of officials in South Korea and China in exchange for the conclusion of multimillion delivery contracts of ADP equipment.

According to the investigation, more than 100 employees of IBM local branches, including two top managers who were engaged in bribery of officials for more than 10 years - from 1998 to 2009 were involved in bribery. In certain cases employees carried officials on rest and also gave them gifts - notebooks and digital cameras.

During the period from 1998 to 2003 the total amount of bribes to representatives of government (bribes were got by 16 people) in South Korea was $207 thousand. Having paid this money, "the blue giant" had an opportunity to deliver personal computers, Mainframes, Storage systems and other equipment. Money was transferred on personal meetings which, as a rule, took place near the house of the official or his work.

IBM caused excessive suspicion for the reason that the company performance with a state machinery was continued even after a number of contracts were failure.

IBM did not recognize, but also did not disprove the fault, having stated that it forces the employees to observe the royal corporate standards and also about intention to take urgent measures for resolving the situation. Besides, the corporation agreed to pay compensation in the amount of $10 million.

Charges of SEC are brought within the campaign of the federal authority for the fight against bribery to foreign officials waged according to the law "About Foreign Corruption Practicians" which began about a year ago (Foreign Corrupt Practices Act, FCPA). Published in 1977 it prohibits all citizens, the companies and the organizations of the USA to offer bribes to any officials, political candidates and political parties of the foreign states.

Meanwhile for IBM these charges inopportunely - the company planned expansion in developing countries about which there is just a speech. For the last financial year consolidated revenues of vendor in such states grew by 16% and were more fifth part of a total annual income almost in $100 billion. By the end of 2015 the company is going to increase an income share from emerging markets to 30%.

IBM got off with rather small penalty which within FCPA can reach $100 million, and in the presence of fraudulent schemes - several hundred millions of dollars. In November Hewlett-Packard agreed to pay a penalty. The size of a penalty was $16.3 million.

Movies on a case of century of the company

In 2011 the company noted century from the date of the creation. Movies were about it released.

Hundred people are presented in the first movie under the name "100 x 100", each of which describes a certain achievement of IBM which happened in a year of its birth. This film was shot by Joe Pytka, one of the most influential and successful commercial directors.

IBM Centennial Film: 100 X 100-A century of achievements that have changed the world

The second movie, "They Were There" removed by the winner of an award the Oscar the director-documentary film maker Errol Morris (Errol Morris) and the accompanied music of the famous composer Philip Glass, tells about the heads and inventors who performed some of the most significant achievements of IBM including the invention of the UPC code, participation in the project of disembarkation of the first person to the surface of the Moon and release of the first mainframe.

The third movie which carries the name "Wild Ducks" is shot now by the winner of an award Davis Guggenheim, the director of documentaries "An Inconvenient Truth" (The inconvenient truth) and "Waiting for Superman" (Waiting for the Superman). This movie aims to reflect spirit of invention and risk which defines the nature of IBM corporation.

The IBM Watson supercomputer wins a TV-show against people

In 2011 supercomputer IBM Watson consisting of 90 IBM Power 750 servers shows achievements of corporation in the area artificial intelligence and system architecture, winning a convincing victory in the American prototype of the television quiz show "The Game" over two of her repeated champions.

The billionaire Warren Buffett takes 5.4% of shares of IBM

In November, 2011 it became known that the American investor and the billionaire Warren Buffett took 5.4% of shares of IBM which cost is estimated at 7.5 billion pounds sterling.

IBM moves medium business to "clouds"

Understanding of the events defines active participation of IBM in this market, its help to partners in the PaaS market (the platform - as-service) and to potential clients. "In this space of the cloud market develops quicker, than in larger enterprises, - he noted, speaking at the summit of IBM devoted to medium business. – Using "cloud" such clients try to seize as it is possible a large number of new opportunities and as soon as possible".

Last week IBM started implementation of sales by integrators and other partners of IBM SmartCloud services under their trade names. This solution is entered in more large-scale plan of IBM for providing services to medium business only through partners who, according to Monsho, understand needs of the clients better, than IBM.

The cloud market for medium business very much differs from the market for large enterprises, Monsho considers. IBM defines medium business as the organizations numbering up to 1000 staff. The annual average IT budget of such companies makes about $130 thousand, and the IT personnel can total about 15 people.

In IT-Business these companies, by estimates of IBM, in total generate $214 billion a year. Such organizations make smaller operating costs, and, as a rule, their development overtakes similar processes of larger companies. They perceive cloud services as cheaper alternative, and sometimes and the only option for expansion of the services, Monsho noted. Also among the companies of average value the tendency not to employ the IT specialists capable "independently to integrate" systems is observed.

Mike Grandinetti, the managing director of Southboro Capital venture capital company who also spoke at the summit supported the representative of IBM, having noted that in former years the innovation startups could invest in servers. Today it becomes extremely seldom. Instead, the companies create the systems by means of cloud services and the software on the basis of the open code. "Speeds of development of such enterprises amaze. The companies which in the past could spend three years for receiving one million users achieve these results within three months", - he told.

Two years ago IBM changed the strategy of relationship in space of medium business: the company does not sell the services directly any more, but assumes to work only with partners. According to Monsho, partners know a situation in the specific markets much better. Small enterprises, as a rule, consider today business solutions in specific industry niches and require subject-oriented, specialized approach for the solution of the tasks. "Our clients perform purchases with participation of the entrusted business partners and they buy experience of use. It is very seldom possible to hear a wish: "I want that my applications worked only on servers of IBM of x86", - he told.

Gary Barnett, the IT analyst and the technical director of the company of Bathwick Group participating in the summit noted uniqueness of the movement IBM in the direction of providing cloud computing to small business in comparison with the cloud strategy of other large providers of systems, such as Hewlett-Packard. Most of system providers are not ready to divide "clouds" into small portions, such as one or two virtual servers. Quotations of IBM are still higher, than the Amazon service focused on the consumer, and reduction of prices will be required, but they move in the right direction, the analyst noted.

2010: Investigations of European Commission about monopoly in the market of mainframes

In July, 2010. The European Commission announced the beginning of two new investigations concerning IBM and its dominant position in the market of mainframes. The first investigation was initiated by the T3 Technologies and Turbo Hercules companies which are engaged in software development for emulation. They claim that IBM imposes to the proprietary operating system for mainframes of ZOS own hardware. It makes impossible use of technologies of emulation for start of mainframes-applications on cheaper equipment produced by third-party vendors.

The European Commission acted as the initiator of the second investigation. Regulators suspect that IBM which, in addition to release of servers and software, is engaged in rendering services in repair and service of mainframes interferes with activity of other companies working in this direction. According to some data, the corporation intentionally delays or even blocks deliveries of spare parts which except it nobody releases.

The beginning of investigations does not mean that the EC locates proofs of violation of antiponopolny laws, Associated Press, and only adds desire of regulatory authority to find out features of work of corporation in the European market.

Regulators insist that the market of mainframes is an independent segment of world economy, and in IBM — that only a part of more extensive server market. The company claims that leaders of today's market of servers are such companies as HP and Dell which Servers are based on Intel processors. According to corporation, in 2009 only 0.02% of deliveries of servers of all types were the share of mainframes, and on total revenue this segment occupied less than 10%.

IBM suspects that behind these investigations there is Microsoft interested in promotion of the servers working running the Windows operating system (just two months ago Microsoft invested in T3 and Turbo Hercules). "The companies which could not achieve the wished success in this segment try to use the help of antimonopoly authorities now", - consider in IBM. The corporation, nevertheless, is completely open for cooperation with EC, intended to protect the intellectual property from the companies filing complaints "from scratch".


Start of the Reasonable Planet program

In 2008 the initiative "The reasonable planet" (Smarter Planet) which idea consists in use of opportunities of global information systems for improvement of processes of the real world started. The system of intellectual monitoring of pollution of one of gulfs at coast of Ireland designed to protect population of sea fishes became the first project.

The DPC of IBM in Switzerland warms up water in the pool

New data-center IBM in the Swiss city of Uitikon (near Zurich), constructed in 2008, warms up water in the local pool using heat which is taken away from servers. There would be enough emitted heat for heating of 80 houses.

2000-2004: Era of consulting

  • 2001: there is a book IBM and Holocaust; file a lawsuit against corporation on the basis of the American law of 1789 on offenses concerning foreign citizens, incriminating deliveries of tabulators for accounting of prisoners in fascist concentration camps. Later this claim was withdrawn. IBM justified itself the fact that its German branch together with in hundreds of other foreign companies before World War II got under control of the Nazi authorities.

  • 2002: in March Sam Palmisano becomes the CEO of corporation, and in July IBM declared further expansion of service business by purchase for 3.5 billion dollars of the global division of PricewaterhouseCoopers which is engaged technology and business consulting. Later this business, joined division of IBM Global Business Services and became the most profitable in structure of IBM, bringing more than a half of income of the company.

  • At the end of 2003 the prosecutor's office of South Korea carried out searches at three offices of South Korean division of IBM. Then the staff of corporation was suspected of bribery to local officials for providing exclusive rights on deliveries of computers to the government.

  • In 2004 in IBM there were 329 thousand employees in 170 countries.

The 1990th: Crisis

  • 1990: IBM releases System/390 family consisting of computers of the average level and supercomputers. Corporation System/390 considers the largest product development for the last 25 years. Among new technologies — high-speed optical links, superdense schemes, etc.

  • 1991: Microsoft and producers of clones of the PC get huge profits, the client-server architecture begins to develop, and IBM shocks old participants of the industry with the declaration of annual losses for the amount of 2.82 billion dollars, the first of a three-year series. At this time John Eykers managed corporation, and the management thinks of breaking IBM into several smaller companies.

  • 1993: Luís Gerstner, the former CEO of RJR Nabisco company, passes into IBM and holds posts of the CEO and chairman of the board. At an inaugural press conference Gerstner says that he intends to save IBM as uniform corporation and speaks about the determination to turn it into the IT organization of a wide profile capable to execute for customers a role and the supplier, and the system integrator.

  • In 1995 IBM represents the ThinkPad 701cm notebook working on the Intel processor Pentium with clock rate 133 MHz. Its elegant black design not characteristic of products of IBM receives the mass of laudatory comments.

  • 1997: IBM "invented" eBusiness, having announced that the Internet turns into the tool for business, and having proclaimed approach of an era of e-commerce.

Deep Blue, the IBM RS/6000 SP supercomputer capable to count 200 million chess courses per second defeats the world champion Garry Kasparov.

Chess match of Garry Kasparov against the Deep Blue computer, 1997
Chess match of Garry Kasparov against the Deep Blue computer, 1997

The 1980th: The personal PC - the lost battle

  • 1981: there is IBM PC, the most compact and inexpensive (1565 dollars) at that time the personal computer. The 64th kilobyte of RAM and one or two floppi-disk drives quite was enough to perform the DOS operating system offered by small company Microsoft and some applications.

It is remarkable that the company management first did not attach to this machine significance at all: the group of everything in 4 persons was engaged in development (under the leadership of Philipp Donald Estridzha). And — that had the most noticeable effects — contrary to the tough principles of protection of intellectual property, IBM did not patent DOS (with the Basic language interpreter), one more revolutionary invention of developers: BIOS. As a result more perspicacious third-party developers, using the published specifications, did IBM PC clones, and the considerable share of this quickly growing market for IBM was lost.

IBM concludes the bargain with Microsoft on development of the operating system for the PC and allows competitors to purchase this system for installation on "IBM compatible" clones. As a result the fast-growing industry is born and there are her new giants — Dell, Compaq, etc.

  • 1982: the antimonopoly claim made by the U.S. Government to IBM in 1969 is withdrawn. Perhaps, it urges on IBM to further separation of the equipment from the software therefore customers had even more opportunities to mix products of the different companies.

  • 1984: To the middle of the 80th years computers of IBM learned to understand "aurally" 5 thousand words with an accuracy of 95%. Today sensing technologies of the speech found for themselves application in the most different applications — at office, at home and in way.

  • 1986: scientists of IBM get the Nobel Prize on physics for creation of the scanning tunnel microscope; showing it to an opportunity, researchers could manipulate separate atoms, having put from them the letters I-B-M.

This year IBM conceded the first place on sales on it the most generated market of personal computers.

  • 1987: there is IBM Personal System/2 (PS/2) and OS/2 operating system developed jointly by Microsoft and IBM. OS/2 maintains multitasking. In total one million pieces of PS/2 are sold for half a year. The head IBM PC James Kannavino wants to save compatibility of OS/2 with AT, however the head of Microsoft Bill Gates wishes to pass to the new computers based on processor Intel 80386. In Windows 3.0 which appeared in 1990 there are primitive means of multitasking, but as this cover is able to use the memory management system which is built in processors 386, it becomes a hit of sales. OS/2 remains far behind.

The 1960-1970th

  • 1961: the Selectric printing machine is released. Its later models will have a memory, and they will become the ancestors of modern word-processors.

  • 1962: IBM and American Airlines unrolled SABRE, the first-ever system of computer reservation of aviation tickets which gave start to masshtany works on technologies of online banking.

  • 1964: there is an IBM System/360 computer in which solid logical microelectronic circuits are used. The concept of family of the computers based on standard technologies is for the first time applied. In fact, it was the rate in 5 billion dollars on a future trend.

  • 1966: Robert Dennard from IBM invents a cell of a dynamic random access memory which remains the industry standard to this day.

  • 1969: the on-board computer and other technologies of IBM are used during the first flight of the person to the Moon. The IBM laboratory developed a magnetic band for credit cards. Without it and today it is impossible to provide ID cards, driver's licenses and plastic cards for ATMs.

  • In 1969 the MAGI company created the first-ever television advertizing filmlet executed on the computer by request of IBM corporation.

  • 1971: Thomas Watson Jr. leaves a post of the head of IBM. It is replaced by Frank Cary. There is a floppy disk, will become later it the standard information medium for personal computers.

  • In 1972 the updated logo (letters from blue strips) the companies used so far was provided. The designer Paul Rand worked on a logo. The nickname of the company — Big Blue extends that it is possible to translate from English as "big blue" or "the blue giant". According to one version the name came from the mainframes delivered by the company in the 1950th — the 1960th years. They were of the size of the room and had blue coloring. According to other theory the nickname just refers to a logo of the company. One more version claims that this name goes from the former dress-code of the company which demanded from many workers of wearing shirts and suits of blue color.

  • 1973: supermarkets began to use the systems of shaped coding based on the UPC standard offered IBM. Today with their help all trace literally — from goods in clothing stores to milking cows.

  • 1975: the portable computer IBM 5100 which weighs nearly 23 kg and costs from 9 to 20 thousand dollars is put on the market.

The 1940-1950th: Small arms and the first computers

In the years of World War II the company produced small arms (M1 of Carbine and Browning Automatic Rifle).

  • 1944: the first computer of IBM — Automatic Sequence Controlled Calculator, or Mark I weighing about 4.5 tons is created. It is the first machine capable in the automatic mode to execute series of transactions. The computer was based on electromechanical relays.

  • 1946: there is IBM Electronic Multiplier 603 — the first commercially available machine on the electronic circuits capable to execute arithmetic transactions. Its length — more than 15 m, height is about 2.5 m, and weight is nearly 5 t.

  • 1948: IBM releases Selective Sequence Electronic Calculator, the large-size digital computer with electromechanical relays in which the possibility of modification of the stored program for the first time appeared.

  • 1952: Thomas Watson Jr. becomes the president of IBM. Exactly thanks to him IBM 701 - the first serially released electronic computer — on electro vacuum lamps was created. It is equipped with the tape drive; will become later technology of data storage on the tape dominating. The new president of IBM relied on electronic computers still before they became economically more profitable, than electromechanical machines. Thanks to it IBM predominated in the computer market for several decades, i.e. throughout an era of mainframes.

  • In 1956 the settlement agreement put an end to the antimonopoly claim made by the U.S. Government to IBM in 1952, and IBM begins to pursue more liberal policy for licensing of the equipment. In May the post of the CEO of corporation is held by Tom Watson Jr., and in June his father dies. The son carries out reorganization of IBM, putting the concept of line and functional departments. This concept will be adopted later by all American business.

IBM load the hard drive of 5 MB, 1956 year.
IBM load the hard drive of 5 MB, 1956 year.
  • 1957: IBM created FORTRAN (FORmula TRANslation) which became the main programming language for the solution of technical tasks. Features of language became one of the main sources of "A problem of 2000". This language is used to this day.

  • In 1959 there were first computers of IBM on transistors which reached such level of reliability and high-speed performance at which the U.S. Air Force found it possible to use them in the system of the early notification of air defense.

The 1930th

  • 1931 is marked by the whole bouquet of achievements: the booking apparatuses IBM 400 work with alphabetic data, calculating machines of the 600th series execute multiplication and division, the first perforator multiplicator and the first copying perforator appears.

  • 1935: the IBM corporation for the first time organized training courses for women that they could work at technical positions, by tradition getting only to men until then.

  • 1936: Thomas Watson Sr. insisted on continuing production of calculating machines in the period of the Great depression contrary to sharp decline in demand. Its efforts paid off when IBM invited as the supplier of tabulating machines for the "largest accounting transaction of all times" which is carried out by the U.S. Government after adoption in 1935 of the Social Security Act.

In days of the Great depression "only multimillion income helped be kept afloat" by IBM. Despite crisis, the president of the company Thomas Watson Sr. continues to finance researches and to pay to workers salary. Large orders of the U.S. Government in 1935 — 1936 helped to recover from crisis of IBM.

  • 1937: Thomas Watson Sr. is elected the president of the International chamber of commerce and at the Berlin meeting supports "world peace thanks to trade". This slogan was adopted by MTP and IBM. Germany awards the order to Watson of the German eagle. In 1940 it returns an award and by that the Nazi government infuriates.

Nevertheless afterwards IBM repeatedly became a criticism object for the fact that did business in Germany in the 30th years. German "subsidiary" of IBM, Dehomag company, in the 1930th supplied the equipment for processing of results of a racial census in Germany. Following the results the Jews, Roma and the half-blooded who are liable to destruction were registered.

1888 — 1924: Basis and formation of IBM

  • In 1889 the Bundy Manufacturing corporation, producer of the chronometric equipment is created.

  • In 1890 in the territory of the USA there took place the population census. The "electric tabulator" invented by Herman Hollerith was for the first time used to processing of its results. Thanks to it, these censuses managed to be processed in only 3 months, instead of expected 24.

  • In 1896 Herman Hollerith inspired with success creates The Tabulating Machine company, the producer of electric tabulators in which punched cards are used.

  • On June 16, 1911 Bundy, Tabulating Machine, Computing Scale Company of America and International Time Recording companies integrate in Computing-Tabulating-Recording Company corporation (C-T-R) which is headed by Charles Flint. Its state totals 1300 employees.

  • In 1914 40-year-old Thomas Watson Sr. who before was in time to master aggressive tactics of sales in National Cash Register company because of which he was arrested on a charge of monopolism comes to work to C-T-R. Having worked in C-T-R corporation of 11 months, Watson became its president. He improved sale and marketing, having headed for delivery of large sets of tabulators for commercial enterprises. For the first four years of work of Watson in C-T-R turnover of corporation increased more than twice and reached 9 million dollars. In the next four decades Watson holding a post of the CEO of IBM corporation became this icon of the American business. It introduced privileges usual now for workers for the first time: paid leaves and collective insurance, maintained discipline and loyalty at several generations of employees of IBM.

  • 1923: there was the first electric keyboard perforator

  • 1924: C-T-R is officially renamed into International Business Machines, by the name of one of the Canadian branches.

Image:IBM logo Evolution.jpg
  • 1928: there is a punched card of IBM on 80 columns. It will become the standard for the next 50 years.