IBM

International Business Machines Corporation
Type	Public
Traded as	NYSE: IBM; Dow Jones Industrial Average and S&P 500 component
Industry	Information technology, consulting, semiconductors
Founded	16 June 1911 as the Computing-Tabulating-Recording Company; renamed 1924
Founder	Charles Ranlett Flint; Thomas J. Watson as builder
Headquarters	Armonk, New York, United States
Area served	Worldwide
Key people	Arvind Krishna (chairman and chief executive), James Kavanaugh (chief financial officer)
Products	Mainframes, servers, storage, quantum computers, software, semiconductors, consulting and managed services
Revenue	Approximately US$62.8 billion (2024)
Employees	Approximately 270,000
Website	ibm.com

International Business Machines Corporation, known as IBM, is an American multinational technology company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company and renamed in 1924, it is among the oldest technology companies in existence and has at various times been the dominant supplier of tabulating machines, of mainframe computers, of personal computers and of information technology services.

IBM's contribution to computing is greater than that of any other company. Its laboratories produced the hard disk drive, the floppy disk, dynamic random access memory, the relational database and the SQL language, FORTRAN, the reduced instruction set computer, the universal product code, the automated teller machine, magnetic stripe cards, fractal geometry, the scanning tunnelling microscope and high-temperature superconductivity. Its researchers have received six Nobel Prizes and six Turing Awards, and the company was granted more United States patents than any other for 29 consecutive years until it ceased to pursue the record in 2022.

It has also been the subject of the longest antitrust action in American history, of a detailed and contested account of its dealings with Nazi Germany, and of a long decline from a position of dominance that no company has held over an industry since Standard Oil.

History

Punched cards and the Watson era, 1890 to 1956

The company's technical origin is Herman Hollerith's electric tabulating machine, developed to process the 1890 United States census, which had threatened to take longer to count than the decade between censuses. Hollerith encoded data as holes punched in cards, which were read by pins completing electrical circuits through them, and his machine reduced the count from years to months. He formed the Tabulating Machine Company in 1896.

Charles Ranlett Flint, a financier who assembled trusts, merged it in 1911 with the Computing Scale Company and the International Time Recording Company to form the Computing-Tabulating-Recording Company, a collection of businesses making scales, time clocks, meat slicers and tabulators that had little in common.

Thomas J. Watson arrived as general manager in 1914 from the National Cash Register Company, where he had been convicted of antitrust violations in a judgment later overturned. He reorganised the company around the tabulating business, renamed it International Business Machines in 1924, and built the culture for which it became known: dark suits and white shirts, a company song book, a prohibition on alcohol, generous employment terms including group life insurance from 1934 and paid holidays, and the single word THINK displayed in every office.

Two decisions made the company. The first was to lease machines rather than sell them, which produced recurring revenue, tied customers to IBM's service organisation and required that punched cards be bought from IBM, a requirement the Supreme Court struck down as unlawful tying in 1936. The second was to continue manufacturing through the Great Depression, accumulating inventory Watson had no orders for, a decision that appeared reckless until the Social Security Act of 1935 required the United States government to maintain employment records for 26 million people, a task for which IBM was the only company equipped.

During the Second World War the company produced ordnance and cryptanalytic equipment, and its German subsidiary Dehomag supplied tabulating machines and cards used by the Nazi state. Edwin Black's IBM and the Holocaust (2001) argued that IBM, through Watson personally and through its Geneva office, maintained control of Dehomag, customised machines for the purposes to which they were put, including the census and racial classification work that preceded deportations and the numbering of concentration camp prisoners, and profited throughout. IBM's response has been that it lost control of its German subsidiary in 1941, that the surviving records are incomplete and that it cannot verify the account; historians have generally accepted that the machines were used as described while dividing on the degree of the American company's knowledge and direction. Watson returned the Merit Cross of the German Eagle, awarded to him in 1937, in 1940.

The mainframe and System/360, 1952 to 1980

Thomas Watson Jr. became president in 1952 and moved the company into electronic computing against his father's scepticism. The IBM 701 of 1952 and the 650 of 1954, of which nearly two thousand were built where the company had forecast fifty, established it in the market. In 1956 the IBM 305 RAMAC introduced the hard disk drive, storing five megabytes on fifty 24-inch platters, the first device permitting data to be read in any order rather than sequentially from tape.

In the same year the company settled a Department of Justice antitrust action by consent decree, agreeing to sell machines as well as lease them and to license its patents.

The IBM System/360, announced on 7 April 1964, was the most consequential product in the history of computing after the stored-program computer itself. Before it, every computer model had its own instruction set, so that software had to be rewritten whenever a customer changed machines. The System/360 was a family of six computers spanning a very wide range of performance and price, all running the same programs, with a common set of peripherals. It created the concept of computer architecture as distinct from implementation, and it made software an asset that survived hardware.

The development cost approximately US$5 billion, more than the Manhattan Project in real terms and several times the company's annual revenue, and Watson described it as betting the company. Its operating system, OS/360, was late and enormously over budget, and Frederick Brooks's account of managing it, The Mythical Man-Month, became the foundational text of software engineering, containing the observation that adding people to a late software project makes it later.

The 360 and its successor the System/370 gave IBM approximately 70 per cent of the computer market. The company's dominance produced the antitrust action United States v. IBM, filed on the last day of the Johnson administration in January 1969 and withdrawn as without merit in January 1982, after thirteen years, hundreds of witnesses and a record of some 104,000 pages. Its effect was substantial regardless of the outcome: IBM unbundled software and services from hardware in 1969 in anticipation of it, which created the independent software industry, and the company's conduct for a decade was shaped by what its lawyers permitted.

The personal computer and the near-collapse, 1981 to 1993

The IBM Personal Computer, announced on 12 August 1981, was built in approximately a year by a small team in Boca Raton, Florida, operating outside the company's normal procedures under Don Estridge. To meet the schedule they used components available on the open market, an Intel 8088 processor, and an operating system licensed rather than written, and they published the technical documentation including the BIOS listing.

The decisions made the product an immediate success, because the openness attracted a very large supply of software and peripherals, and destroyed the company's position, because the same openness allowed competitors to build compatible machines. Compaq reverse-engineered the BIOS in 1982, an industry of clone manufacturers followed, and the value in the personal computer migrated to Intel, which supplied the processor, and to Microsoft, which had licensed rather than sold MS-DOS and was free to supply it to anyone. IBM had created a standard it did not own.

Its attempt to recover control through the PS/2 line and the proprietary Micro Channel Architecture in 1987, and through OS/2, an operating system developed with Microsoft and continued alone after Microsoft directed its effort to Windows, both failed.

The collapse came at the start of the 1990s. Customers moved from mainframes to networks of smaller machines, a transition IBM had described and had been unable to profit from, and the company reported a loss of US$8.1 billion in 1993, the largest in American corporate history to that date. It cut approximately 100,000 jobs, ending the practice of lifetime employment that had been central to its identity since Watson, and its board prepared to break it into separate businesses under the name Baby Blues.

Gerstner and the services company, 1993 to 2012

Louis V. Gerstner Jr. was appointed chief executive in April 1993, the first outsider to lead the company, having run RJR Nabisco and, before that, American Express and McKinsey. His decision not to break the company up is the central event of its modern history: he concluded that what customers valued was precisely IBM's ability to integrate technology from many sources, and that dividing it would remove the only thing that distinguished it.

He reduced costs, sold assets, changed the culture, including the dress code, which he abolished, and reoriented the company toward services and toward the internet. IBM Global Services grew into the largest information technology services organisation in the world, and the company's early embrace of Linux and open source, announcing a US$1 billion investment in 2000, gave it a position against Microsoft that its own operating systems had not.

Its research produced the results by which the period is remembered. Deep Blue defeated the world chess champion Garry Kasparov in May 1997, the first time a computer had beaten a reigning champion under tournament conditions. Watson defeated the two most successful human contestants on the quiz programme Jeopardy! in February 2011, a considerably harder problem because it required parsing puns and allusions in natural language.

Samuel Palmisano, who succeeded Gerstner in 2002, sold the personal computer business to Lenovo in 2005 for US$1.75 billion and bought PwC Consulting in 2002 for US$3.5 billion, completing the transformation from a hardware manufacturer to a services and software company. He also set a target of US$20 in earnings per share by 2015, the Roadmap, which committed his successors to a figure rather than to a strategy and which is widely considered to have damaged the company by encouraging financial engineering at the expense of investment.

Rometty, decline and reinvention, 2012 to 2020

Ginni Rometty became chief executive in 2012, the first woman to lead the company. Revenue fell in every quarter but one for the following five years, from approximately US$107 billion in 2011 to US$77 billion in 2019, as the services business was undercut by offshore competitors and by cloud computing, and as the hardware business shrank.

The company's response was to designate strategic imperatives, comprising cloud, analytics, mobile, security and social, and to invest heavily in Watson as a commercial artificial intelligence platform. Watson Health, assembled through acquisitions including Truven, Merge Healthcare and Phytel at a cost exceeding US$4 billion, was intended to apply the technology to oncology and to medical records; it failed, with reporting that its cancer treatment recommendations were unsafe in some cases, and the assets were sold to Francisco Partners in 2022 for a reported US$1 billion.

The judgement generally made is that IBM marketed a capability it did not have, that the gap between a system that answers quiz questions and one that makes clinical decisions was far larger than the company represented, and that the episode damaged the credibility of enterprise artificial intelligence for several years.

Its most significant transaction was the acquisition of Red Hat in July 2019 for US$34 billion, the largest in the company's history.

Krishna and the hybrid cloud, 2020 to 2026

Arvind Krishna, who had led the research division and had directed the Red Hat acquisition, became chief executive in April 2020 and chairman in 2021.

His strategy rests on hybrid cloud. IBM accepted that it could not compete with Amazon Web Services, Microsoft Azure and Google Cloud in supplying raw computing capacity, and positioned itself instead as the company that helps large organisations run workloads across several clouds and their own data centres, using Red Hat's OpenShift as the common layer. The proposition suits the customers IBM has, which are banks, insurers, governments, airlines and retailers with large amounts of software that cannot be moved.

In November 2021 IBM separated its managed infrastructure services business, the part of Global Services that operated customers' data centres, as Kyndryl, removing approximately US$19 billion of low-growth revenue and around 90,000 employees. The company also acquired a substantial number of consulting and software businesses, including Apptio for US$4.6 billion in 2023 and the HashiCorp infrastructure software company for US$6.4 billion in 2025.

Its artificial intelligence position has been rebuilt around watsonx, a platform emphasising smaller models, governance and the ability to run within a customer's own environment, on the argument that regulated organisations will not send their data to a third party's model. The company has reported book-of-business figures for generative artificial intelligence in the billions of dollars, the majority in consulting rather than software.

IBM has also emerged as a leader in quantum computing, described below, and returned to growth in revenue and in share price after a decade in which it produced neither.

Research

IBM Research is the largest industrial research organisation in the world by headcount, operating twelve laboratories on six continents, including Thomas J. Watson Research Center at Yorktown Heights, Almaden in California, Zurich, Haifa, Tokyo, Bangalore and Nairobi, the last being the first commercial research laboratory in Africa.

Its output is exceptional by any measure. Six of its researchers have received the Nobel Prize: Leo Esaki in 1973 for tunnelling in semiconductors; Gerd Binnig and Heinrich Rohrer in 1986 for the scanning tunnelling microscope, which made individual atoms visible and manipulable, demonstrated in 1989 when Don Eigler spelled the company's name in 35 xenon atoms; and Georg Bednorz and Alex Müller in 1987 for high-temperature superconductivity, awarded within a year of the discovery, an almost unprecedented interval.

Six have received the Turing Award, including John Backus for FORTRAN, Edgar Codd for the relational model of data, Frances Allen for compiler optimisation, the first woman to receive it, and Charles Bachman, Kenneth Iverson and John Cocke.

Its inventions in general use include the hard disk drive (1956); the floppy disk (1971); dynamic random access memory (1966, by Robert Dennard, whose scaling law also governed semiconductor design for four decades); the relational database and SQL, which derive from Codd's 1970 paper and the System R project and which underlie almost all business data processing; FORTRAN (1957), the first widely used high-level programming language; the universal product code (1973), designed by George Laurer; the magnetic stripe card; the automated teller machine; reduced instruction set computing, developed by John Cocke from the 801 project; fractal geometry, developed by Benoit Mandelbrot while at IBM; Deep Blue; copper interconnects and silicon-on-insulator in chip manufacture; and excimer laser surgery, the basis of LASIK, discovered incidentally while ablating polymer.

The company held the record for United States patents granted in a year for 29 consecutive years from 1993, receiving more than 9,000 in 2021, and announced in 2022 that it would no longer pursue the total, on the reasoning that the count had become an end in itself.

Products and businesses

Software

Software is the largest source of profit. It comprises Red Hat, whose Enterprise Linux and OpenShift container platform are the growth engine; transaction processing software including CICS and IMS, which run on mainframes and process a very large proportion of the world's banking, airline and retail transactions; Db2 and Informix databases; WebSphere application infrastructure; automation software including Apptio, Turbonomic and Instana; security software; and the watsonx artificial intelligence and data platform.

Consulting

IBM Consulting, the successor to Global Business Services, employs around 160,000 people advising and implementing technology change for large organisations. It competes with Accenture, Deloitte, the Indian services companies and the consulting arms of the accounting firms, and its principal advantage is its relationship with the clients whose systems IBM built.

Infrastructure

IBM Z mainframes remain in production and remain profitable. Approximately two thirds of Fortune 500 companies use them, they process the majority of credit card transactions and a very large share of banking, and the reason they persist is not sentiment but economics: a mainframe executes very high volumes of short transactions with extremely high reliability, its software has been running for decades, and rewriting it would cost more than the machine. The z16 and subsequent generations include on-chip artificial intelligence acceleration for fraud detection during a transaction rather than after it.

Power systems use IBM's own processors and run AIX, IBM i and Linux, serving similar customers. Storage and LinuxONE complete the range.

Semiconductors

IBM designed and manufactured its own semiconductors for decades and sold its manufacturing operations to GlobalFoundries in 2015, paying that company US$1.5 billion to take them, an arrangement that produced subsequent litigation when GlobalFoundries abandoned the advanced process technology IBM had contracted for.

It has continued semiconductor research at Albany, New York, where it announced the first 2-nanometre nanosheet transistor process in 2021 and has worked with Samsung, Intel, Rapidus of Japan and others on process development. Its research position in materials and device physics remains among the strongest in the industry even though it no longer manufactures at scale, and it was a principal advocate for the CHIPS and Science Act of 2022.

Quantum computing

IBM has pursued quantum computing longer than any other company and placed the first quantum processor on the public internet in 2016 through the IBM Quantum Experience, allowing anyone to run programs on real hardware. It developed Qiskit, the most widely used quantum programming framework.

Its superconducting processors have followed a published roadmap: Eagle with 127 qubits in 2021, Osprey with 433 in 2022, Condor with 1,121 in 2023, and Heron and its successors from 2023, which prioritised error rates and connectivity over qubit count. The company has shifted its stated objective toward error-corrected fault-tolerant systems, targeting Starling for the end of the decade, and has argued that quantum advantage for useful problems will arrive incrementally rather than as a single demonstration.

Its competitors are Google, which has pursued error correction demonstrations, Honeywell's Quantinuum with trapped ions, Microsoft with topological approaches, IonQ, Rigetti, PsiQuantum and Chinese state programmes.

Products in detail

Tabulating machines and punched cards

The punched card was IBM's principal product for half a century. The company standardised the 80-column rectangular-hole card in 1928, a format that persisted until the 1980s and whose 80-character width determined the line length of computer terminals, of the FORTRAN source line and, by descent, of the default width of a great many text displays today.

The associated machines sorted, collated, tabulated, calculated and printed, and an installation consisted of several of them operated by people moving trays of cards between them. The business was extremely profitable because the machines were leased and the cards were consumable, and the cards alone generated a substantial fraction of the company's revenue for decades.

Typewriters and office equipment

IBM was a major typewriter manufacturer. The Selectric, introduced in 1961 and designed by Eliot Noyes, replaced individual typebars with a single spherical element carrying all the characters, which moved across the page while the paper stayed still. It eliminated jamming, permitted typefaces to be changed by exchanging the element, and held a very large share of the office market for two decades. The Selectric mechanism was also the basis of the first word processing systems, and the magnetic tape and card versions of the early 1970s were the direct ancestors of word processing as a category.

The typewriter, printer and keyboard businesses were separated as Lexmark in 1991. The IBM Model M keyboard of 1985, with buckling spring switches, remains in production under other ownership and retains a following among typists that no subsequent keyboard has matched.

The PC and its descendants

The original IBM PC of 1981 was followed by the PC XT, the PC AT of 1984, whose 16-bit bus became the Industry Standard Architecture, the PS/2 line of 1987, which introduced the VGA display standard and the round keyboard and mouse connectors that bore its name for twenty years, and the ThinkPad of 1992, designed by Richard Sapper as a black rectangular box modelled on a Japanese lunch box, with the red TrackPoint pointing stick in the middle of the keyboard. The ThinkPad was among the most admired portable computers ever made and passed to Lenovo with the 2005 sale, which has continued it.

Cloud and platform

IBM Cloud offers infrastructure and platform services, including bare metal servers and specialised capacity for regulated industries and for the financial sector, where its Financial Services Cloud is designed around the controls banks require. It is a distant fourth or fifth among public cloud providers by revenue, and the company's strategy does not depend on changing that.

IBM in popular culture

The company's ubiquity in mid-century business made it a cultural reference point. HAL 9000 in 2001: A Space Odyssey is frequently said to be IBM shifted one letter, a reading Arthur C. Clarke denied firmly and repeatedly and which has nonetheless persisted; IBM had cooperated with the production and asked not to be associated with a malfunctioning computer.

Apple's 1984 advertisement for the Macintosh, directed by Ridley Scott and broadcast once during the Super Bowl, depicted IBM as a totalitarian authority without naming it, and its reception established the personal computer market as a contest of identities as well as products. The phrase nobody ever got fired for buying IBM, current from the 1970s, described both the company's reputation for safety and the conservatism of its customers, and was used against it as the industry changed.

The Soul of a New Machine, The Mythical Man-Month and Who Says Elephants Can't Dance?, the last Gerstner's own account of the turnaround, are among the most widely read books about the computer industry and all concern IBM directly or by contrast.

Competition

IBM competes with Microsoft, Oracle, SAP and Salesforce in enterprise software; with Accenture, Deloitte, Infosys, Tata Consultancy Services and Capgemini in consulting and services; with Amazon Web Services, Microsoft and Google in cloud, where it does not contend for the same business; with Hewlett Packard Enterprise, Dell and Fujitsu in infrastructure; and with Google, Quantinuum, IonQ and others in quantum computing.

Its mainframe business has no direct competitor. Fujitsu and Hitachi withdrew from compatible mainframes, and the competitive pressure comes not from another mainframe but from the option of rewriting the applications to run elsewhere, a project customers periodically begin and frequently abandon on discovering its cost.

Timeline

Key dates include Hollerith's census machine of 1890; the formation of the Computing-Tabulating-Recording Company on 16 June 1911; Thomas Watson's arrival in 1914; the renaming to International Business Machines in 1924; the Social Security contract of 1935; the 1936 Supreme Court tying decision; the wartime period and the Dehomag matter; the IBM 701 in 1952 and the 650 in 1954; the RAMAC hard disk in 1956 and the consent decree of the same year; FORTRAN in 1957; the Selectric in 1961; the System/360 on 7 April 1964; DRAM in 1966; the antitrust filing in January 1969 and unbundling in the same year; Codd's relational paper in 1970; the floppy disk in 1971 and the Paul Rand logo in 1972; the universal product code in 1973; the IBM PC on 12 August 1981; the dismissal of the antitrust case in January 1982; the scanning tunnelling microscope Nobel in 1986 and superconductivity in 1987; the ThinkPad in 1992; the US$8.1 billion loss of 1993 and Gerstner's appointment in April of that year; Deep Blue in May 1997; the Linux commitment in 2000; the PwC Consulting acquisition in 2002 and the sale of the PC business to Lenovo in 2005; Watson on Jeopardy! in February 2011; Rometty's appointment in 2012; the sale of semiconductor manufacturing in 2015; the quantum cloud service in 2016; the Red Hat acquisition in July 2019; Krishna's appointment in April 2020 and the withdrawal from facial recognition in June; the Kyndryl separation in November 2021; the 2-nanometre announcement in 2021; the end of the patent record in 2022; and the HashiCorp acquisition in 2025.

Corporate affairs

Culture and identity

IBM's corporate culture was for most of the twentieth century the most distinctive in American business and the most imitated. Watson's Basic Beliefs, formulated as respect for the individual, service to the customer and the pursuit of excellence, were taught to every employee; the company song book contained songs in praise of the company and its executives; the dress code was enforced; alcohol was prohibited at company functions; and employment was understood to be for life, with the company reassigning rather than dismissing people whose work was no longer required.

The identity was designed as well as lived. Thomas Watson Jr. engaged Eliot Noyes in 1956 to direct a design programme covering products, buildings, graphics and exhibitions, which drew in Paul Rand, who produced the eight-striped logo of 1972 and the Eye-Bee-M rebus poster; Charles and Ray Eames, who made Powers of Ten and the Mathematica exhibition for the company; Eero Saarinen and Mies van der Rohe, who designed its buildings; and Isamu Noguchi. The programme is among the most complete corporate design efforts ever conducted and was a direct influence on the identity programmes of most large companies thereafter.

The name Big Blue, in general use since the 1980s, derives variously from the logo, the machine cabinets and the dress code, and the company adopted it retrospectively.

Almost all of this ended between 1991 and 1995. Lifetime employment was abandoned with the redundancies, the dress code was abolished by Gerstner, and the company that emerged was conventional in its employment practices and considerably less distinct.

Employees

IBM employs approximately 270,000 people, the largest concentrations being in India, where it has more employees than in the United States, followed by the United States, Japan, Brazil and Europe. Its workforce has been reduced repeatedly and it does not disclose redundancy numbers, a practice criticised by employee organisations and by journalists who have documented reductions through other means.

The company has faced age discrimination claims arising from those reductions, including reporting by ProPublica in 2018 that it had removed approximately 20,000 American employees over forty in the preceding five years and had structured the process to avoid disclosure obligations, and a number of individual and class proceedings have followed with varying outcomes.

IBM was an early adopter of employment practices that later became common. It employed Black professional staff from 1899 and a Black salesman in 1946, adopted equal pay for equal work in 1935, appointed a female vice-president in 1943, and in 1953 Thomas Watson Jr. issued a policy letter stating that the company would hire without regard to race, colour or creed, a year before the Supreme Court decided Brown v. Board of Education and a decade before the Civil Rights Act; the company subsequently declined to operate segregated facilities in the American South. It extended benefits to the partners of employees in same-sex relationships in 1996, among the first large companies to do so.

Governance and finances

IBM reported revenue of approximately US$62.8 billion in 2024. Its revenue in 2011 was US$107 billion, and the reduction reflects the disposal of the personal computer, semiconductor manufacturing, printer, point-of-sale and managed infrastructure businesses rather than a contraction of what remains.

The company has paid a dividend every year since 1916 and has increased it annually for around three decades. It has been criticised for the scale of its share repurchases, which between 2000 and 2019 exceeded its capital investment by a considerable margin and which supported the earnings per share targets set under the Roadmap while the underlying business declined, and the practice has been reduced substantially since 2020.

Global operations

IBM operates in approximately 175 countries and has done so for longer than almost any American company; it established a European organisation in the 1920s and opened in Japan in 1937. Its international business was for decades organised as IBM World Trade Corporation, a separate subsidiary run by Arthur K. Watson, the founder's younger son, an arrangement that gave the overseas operations considerable autonomy and which was consolidated in the 1970s.

India is now its largest country by headcount, with well over 100,000 employees across Bengaluru, Pune, Hyderabad, Chennai, Kolkata and Gurugram, working in consulting, software development, research and delivery. The scale of the Indian operation, and the corresponding reduction in the American workforce, is the principal structural change in the company's employment over the past twenty years and has been the subject of political attention in the United States.

Other substantial operations are in Japan, where IBM Japan is among the largest technology companies in that country; Brazil; China, where the business has contracted sharply as government procurement policy has favoured domestic suppliers and where IBM closed its China research laboratory in 2021 and its China development operations in 2024; and across Europe, with Germany, France, the United Kingdom, Spain and Italy the largest.

The company withdrew from Russia in 2022, suspending business and subsequently terminating its operations there entirely, and it had earlier withdrawn from South Africa in 1987 under pressure over apartheid, returning in 1994.

Sponsorship and public programmes

IBM has supplied the scoring, data and digital platforms for Wimbledon since 1990, for the Masters Tournament since 1996 and for the US Open, relationships that function as continuous demonstrations of its analytics and, more recently, of its generative artificial intelligence, which produces commentary and match summaries. The arrangements are unusually long-lived for sponsorships and are treated within the company as engineering projects rather than marketing ones.

P-TECH, established in 2011 in Brooklyn with the New York City education authorities and the City University of New York, is a school model combining secondary education with an associate degree and workplace mentoring, aimed at students from low-income backgrounds and producing a qualification for technology employment without the cost of a full degree. It has been replicated in several hundred schools in more than twenty-eight countries and is among the more substantial corporate education initiatives conducted by any company.

IBM has also committed to training several million people in technology skills through free programmes, and its SkillsBuild platform provides courses and credentials at no charge.

Standards and open source

IBM has been among the most significant corporate participants in standards development and open source software. Its US$1 billion commitment to Linux in 2000 gave the operating system credibility with corporate buyers at a moment when Microsoft was arguing that it was unsafe to use, and the company subsequently pledged 500 patents to open source developers in 2005 and has been among the largest contributors to the Linux kernel.

It founded or helped found the Eclipse Foundation, contributing the Eclipse development environment; the Apache Software Foundation's early projects; the Open Invention Network, which acquires patents to protect Linux; and the Cloud Native Computing Foundation's projects through Red Hat. It was a principal developer of the Java platform outside Sun Microsystems, and of XML and web services standards.

The acquisition of Red Hat placed IBM in an unusual position with respect to open source: it owns the largest company whose entire business is the support of software it gives away, and the tension between IBM's commercial interests and the expectations of the communities Red Hat works within has surfaced periodically, most visibly in the 2023 decision to restrict access to Red Hat Enterprise Linux source code, which drew substantial criticism and prompted competitors to form an alternative.

Assessment of the research model

IBM Research is frequently cited alongside Bell Labs and Xerox PARC as an example of a corporate laboratory whose contribution to knowledge exceeded its contribution to its owner's revenue. The comparison is only partly fair: IBM commercialised the hard disk, DRAM, the relational database and the mainframe architecture very successfully, and the inventions it failed to capture, principally the personal computer standard and the RISC architecture it invented and Sun and others exploited, were lost for commercial rather than scientific reasons.

The model's survival is itself notable. Bell Labs was dismembered with AT&T and Xerox PARC's parent famously failed to exploit what it produced, while IBM Research has operated continuously since 1945 and has sustained fundamental physics research, including the Nobel-winning work on superconductivity and microscopy, through periods in which the company was losing several billion dollars a year. That it did so is generally attributed to a conviction, held from Watson Jr. onward, that a company selling the most advanced machines in existence must understand the physics they depend on.

Whether the model can be sustained is unsettled. The laboratory's headcount has been reduced, its output is directed more closely toward the company's businesses than it was, and the fields in which it now leads, quantum computing and semiconductor materials, are ones where the interval between discovery and revenue is measured in decades.

Controversies

IBM and the Holocaust

Edwin Black's 2001 book documented the use of Hollerith machines supplied by IBM's German subsidiary Dehomag in the German census of 1933 and 1939, in the identification and classification of Jewish populations, in the administration of the railways that carried deportees, and in the concentration camps, where prisoner numbers corresponded to punched card fields. The evidence that the machines were used for these purposes is not disputed; what is disputed is the degree of knowledge and control exercised by the American parent, which Black argues was substantial and continuous through the Geneva office, and which IBM says it cannot establish from surviving records.

The company has stated that the documents were destroyed or lost, that it lost control of Dehomag when the enemy property custodian took it over, and that it does not condone or defend what occurred. Litigation brought by survivors in 2001 was withdrawn. The episode is taught in business ethics and in histories of technology as the principal case of a technology company's product being essential to an atrocity.

Antitrust

United States v. IBM, filed in 1969 and dismissed in 1982, was the longest civil antitrust action brought by the American government. The European Commission conducted its own proceedings, resolved by undertakings in 1984 concerning interface disclosure, and further actions in the 2000s over mainframe maintenance. The company's conduct toward competitors in the mainframe era, including the announcement of products not yet built in order to deter purchases from rivals, a practice the industry named vapourware, was a recurring subject of complaint.

Other matters

IBM has paid penalties under the Foreign Corrupt Practices Act, including US$10 million in 2011 over payments in China and South Korea, and was charged again in 2023 over conduct in Brazil. It has been criticised over the failure of large public sector projects, including the Queensland Health payroll system in Australia, whose cost overrun produced a commission of inquiry in 2013, and the Phoenix pay system for the Canadian federal government, which IBM built and which failed to pay tens of thousands of public servants correctly over several years. The Watson Health programme is discussed above.

Its facial recognition research and the use of publicly posted photographs to train models drew criticism in 2019, and in June 2020 the company announced that it would cease general purpose facial recognition work entirely on the ground that the technology should not be used for mass surveillance or racial profiling, the first major company to do so.

Assessment

IBM occupies a position in the history of technology comparable to that of Bell Labs in the history of electronics: an organisation whose research output defined the field and whose commercial fortunes have been substantially independent of it. The hard disk, the relational database, FORTRAN, DRAM and the System/360 architecture are each foundations of modern computing, and the company failed to capture the value of several of them.

Its business history is a sequence of dominant positions lost and partially recovered. It dominated tabulating, then mainframes, then created the personal computer standard and lost it within five years, then became the largest services company in the world and lost that to offshore competitors and to cloud computing. Gerstner's refusal to break it up in 1993 and Krishna's concentration on hybrid cloud and Red Hat from 2020 are the two decisions generally credited with preserving it.

Its present position is smaller and more coherent than at any time since the 1960s: software, consulting and the mainframe franchise, with research in quantum computing and semiconductors whose commercial value is prospective. Whether the quantum programme produces a business, and whether the artificial intelligence position it has taken, emphasising governance and deployment within a customer's own environment, is the one large regulated organisations want, are the questions on which its next decade depends.