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For technology pioneer IBM, 100 years of 'Think'

By Michael Hill

Associated Press

Published: Thursday, June 16 2011 11:14 a.m. MDT

In this May 31, 2011 photo, Alan Jones, a retired Senior Engineer at IBM, attempts to work a Blood Cell Processor, circa 1972, that Jones invented, at the Center for Technology & Innovation in Binghamton, N.Y.

Heather Ainsworth, AP

ENDICOTT, N.Y. — Google, Apple and Facebook get all the attention. But the forgettable everyday tasks of technology — saving a file on your laptop, swiping your ATM card to get 40 bucks, scanning a gallon of milk at the checkout line — that's all IBM.

International Business Machines turns 100 on Thursday without much fanfare. But its much younger competitors owe a lot to Big Blue.

After all, where would Groupon be without the supermarket bar code? Or Google without the mainframe computer?

"They were kind of like a cornerstone of that whole enterprise that has become the heart of the computer industry in the U.S.," says Bob Djurdjevic, a former IBM employee and president of Annex Research.

IBM dates to June 16, 1911, when three companies that made scales, punch-clocks for work and other machines merged to form the Computing Tabulating Recording Co. The modern-day name followed in 1924.

With a plant in Endicott, N.Y., the new business also made cheese slicers and — significantly for its future — machines that read data stored on punch cards. By the 1930s, IBM's cards were keeping track of 26 million Americans for the newly launched Social Security program.

These old, sprawling machines might seem quaint in the iPod era, but they had design elements similar to modern computers. They had places for data storage, math processing areas and output, says David A. Mindell, professor of the history of technology at the Massachusetts Institute of Technology.

Punch cards carted from station to station represented what business today might call "data flow."

"It was very sophisticated," Mindell says.

The force behind IBM's early growth was Thomas J. Watson Sr., a demanding boss with exacting standards for everything from office wear (white shirts, ties) to creativity (his slogan: "Think").

Watson, and later his son, Thomas Watson Jr., guided IBM into the computer age. Its machines were used to calculate everything from banking transactions to space shots. As the company swelled after World War II, IBM threw its considerable resources at research to maintain its dominance in the market for mainframes, the hulking computers that power whole offices.

"When we did semiconductors, we had thousands and thousands of people," says Donald Seraphim, who worked at IBM from 1957 until 1986 and was named a fellow, the company's highest honor for technical achievement. "They just know how to put the force behind the entrepreneurial things."

By the late '60s, IBM was consistently the only high-tech company in the Fortune 500's top 10. IBM famously spent $5 billion during the decade to develop a family of computers designed so growing businesses could easily upgrade.

It introduced the magnetic hard drive in 1956 and the floppy disk in 1971. In the 1960s, IBM developed the first bar code, paving the way for automated supermarket checkouts. IBM introduced a high-speed processing system that allowed ATM transactions. It created magnetic strip technology for credit cards.

For much of the 20th century, IBM was the model of a dominant, paternalistic corporation. It was among the first to give workers paid holidays and life insurance.

It ran country clubs for employees generations before Google offered subsidized massages and free meals.

"The model really was you joined IBM and you built your career for life there," says David Finegold, dean of the School of Management and Labor Relations at Rutgers University. Transfers to other cities were still common enough that employees joked IBM really stood for "I've Been Moved."

The origins of the company's nickname, Big Blue, are something of a mystery. It may simply derive from IBM's global size and the color of its logo.

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