History of Computing William Aspray and Thomas J Misa, editors Janet Abbate, Gender in the History of Computing: Reimagining Expertise, Opportunity, and Achievement through Women’s Lives John Agar, The Government Machine: A Revolutionary History of the Computer William Aspray, John von Neumann and the Origins of Modern Computing William Aspray and Paul E Ceruzzi, The Internet and American Business Charles J Bashe, Lyle R Johnson, John H Palmer, and Emerson W Pugh, IBM’s Early Computers Martin Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry Paul E Ceruzzi, A History of Modern Computing I Bernard Cohen, Howard Aiken: Portrait of a Computer Pioneer I Bernard Cohen and Gregory W Welch, editors, Makin’ Numbers: Howard Aiken and the Computer James W Cortada, IBM: The Rise and Fall and Reinvention of a Global Icon Thomas Haigh, Mark Priestley, and Crispin Rope, ENIAC in Action: Making and Remaking the Modern Computer John Hendry, Innovating for Failure: Government Policy and the Early British Computer Industry Marie Hicks, Programmed Inequality: How Britain Discarded Women Technologists and Lost Its Edge in Computing Michael Lindgren, Glory and Failure: The Difference Engines of Johann Müller, Charles Babbage, and Georg and Edvard Scheutz David E Lundstrom, A Few Good Men from Univac René Moreau, The Computer Comes of Age: The People, the Hardware, and the Software Arthur L Norberg, Computers and Commerce: A Study of Technology and Management at Eckert-Mauchly Computer Company, Engineering Research Associates, and Remington Rand, 1946–1957 Emerson W Pugh, Building IBM: Shaping an Industry and Its Technology Emerson W Pugh, Memories That Shaped an Industry Emerson W Pugh, Lyle R Johnson, and John H Palmer, IBM’s 360 and Early 370 Systems Kent C Redmond and Thomas M Smith, From Whirlwind to MITRE: The R&D Story of the SAGE Air Defense Computer Raúl Rojas and Ulf Hashagen, editors, The First Computers—History and Architectures Alex Roland with Philip Shiman, Strategic Computing: DARPA and the Quest for Machine Intelligence, 1983–1993 Dinesh C Sharma, The Outsourcer: A Comprehensive History of India’s IT Revolution Dorothy Stein, Ada: A Life and a Legacy John Vardalas, The Computer Revolution in Canada: Building National Technological Competence, 1945– 1980 Maurice V Wilkes, Memoirs of a Computer Pioneer Jeffrey R Yost, Making IT Work: A History of the Computer Services Industry IBM The Rise and Fall and Reinvention of a Global Icon JAMES W CORTADA The MIT Press Cambridge, Massachusetts London, England © 2019 Massachusetts Institute of Technology All rights reserved No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher This book was set in Adobe Garamond Pro and Berthold Akzidenz Grotesk by Westchester Publishing Services Printed and bound in the United States of America Library of Congress Cataloging-in-Publication Data Names: Cortada, James W., author Title: IBM : the rise and fall and reinvention of a global icon / James W Cortada Description: Cambridge, MA : The MIT Press, [2019] | Series: History of computing | Includes bibliographical references and index Identifiers: LCCN 2018023090 | ISBN 9780262039444 (hardcover : alk paper) Subjects: LCSH: International Business Machines Corporation—History | Computer industry—United States—History Classification: LCC HD9696.2.U6 C67 2019 | DDC 338.7/61004—dc23 LC record available at https://lccn.loc.gov/2018023090 To IBMers, customers, and historians who taught me what I know about IBM Contents Preface   I   From Birth to Identity: IBM in Its Early Years, 1880s–1945   1   Origins, 1880s–1914   2   Thomas J Watson Sr and the Creation of IBM, 1914–1924   3   The Emergence of IBM and the Culture of THINK   4   IBM and the Great Depression   5   IBM in World War II, 1939–1945  II   IBM the Computer Behemoth, 1945–1985   6   IBM Gets into the Computer Business, 1945–1964   7   How Customers, IBM, and a New Industry Evolved, 1945–1964   8   System 360: One of the Greatest Products in History?   9   “The IBM Way”: How It Worked, 1964–1993 10   “The IBM Way”: What the World Saw, 1964–1993 11   IBM on the Global Stage 12   Two Decades of Antitrust Suits, 1960s–1980s 13   Communist Computers 14   “A Tool for Modern Times”: IBM and the Personal Computer III   A Time of Crisis, 1985–1994 15   Storms, Crisis, and Near Death, 1985–1993 16   IBM’s Initial Response, 1985–1993 17   How IBM Was Rescued, 1993–1994 IV   IBM in the New Century 18   A New IBM, 1995–2012 19   Hard Times, Again, and Another Transformation 20   THINK: IBM Today and Its Legacy Author’s Note: In the Spirit of Transparency Bibliographic Essay Index List of Figures Figure 1.1 Charles Flint was highly creative in forming new stock-holding companies, including C-T-R, the core of the future International Business Machines Corporation Photo courtesy of IBM Corporate Archives Figure 1.2 Tabulating machine Herman Hollerith’s machines were used by U.S and European census takers and companies in the 1890s and early 1900s They were considered the most sophisticated data processing equipment of their day Photo courtesy of IBM Corporate Archives Figure 1.3 Herman Hollerith, inventor of the tabulating equipment used by governments and corporations for half a century Photo courtesy of IBM Corporate Archives Figure 1.4 Thomas J Watson Sr in his 40s, when he had taken over C-T-R to shape it into IBM Photo courtesy of IBM Corporate Archives Figure 2.1 John H Patterson was the creator of NCR and had a reputation for being an innovative and successful executive Photo courtesy of IBM Corporate Archives Figure 2.2 An early branch office (1927), this one located in Washington, D.C., with its staff These offices were a combination retail outlet and training center Photo courtesy of IBM Corporate Archives Figure 2.3 Number of C-T-R branch openings, 1914–1924 Figure 3.1 C-T-R/IBM had only two logos until the end of the 1940s The IBM logo did not become a highly recognized image until the late 1940s, although it was respected earlier by its customers Photo courtesy of IBM Corporate Archives Figure 3.2 The IBM Type 405 was sold as a “system,” not as one product, and was introduced just as IBM’s customers’ volume and complexity of work expanded dramatically Photo courtesy of IBM Corporate Archives Figure 4.1 The U.S government became a massive user of IBM punch cards beginning in the 1930s in support of the Social Security Act Photo courtesy of IBM Corporate Archives Figure 4.2 The IBM exhibit at the New York World’s Fair, 1939–1940 Photo courtesy of IBM Corporate Archives Figure 5.1 IBM Mark I This system gave IBM engineers exposure to the possibilities of advanced electronics It was the largest calculator built in the United States before the arrival of the computer Photo courtesy of IBM Corporate Archives Figure 5.2 IBM 604 The success of the IBM 604 convinced many executives that advanced electronics was the wave of the future, including Thomas Watson Jr., who would lead the charge into computing Photo courtesy of IBM Corporate Archives Figure 5.3 Arthur Watson in uniform Arthur is the lesser known of the Watson boys It was during his military service that he, like his brother, matured before assuming significant responsibilities at IBM Photo courtesy of IBM Corporate Archives Figure 6.1 The IBM 704 computer established IBM as a serious supplier of digital computing for commercial users, suggesting that business uses would expand Photo courtesy of IBM Corporate Archives Figure 6.2 IBM’s 650 computer was its most successful data processing product of the late 1950s Massproduced and widely accepted by customers, it solidified IBM’s lead in the computer industry Photo courtesy of IBM Corporate Archives Figure 6.3 The IBM 305 Disk Storage Unit made it possible for data processing users to access data directly, making online systems possible in the 1960s The device was also known as RAMAC Photo courtesy of IBM Corporate Archives Figure 7.1 A summary of IBM’s business performance and growth while led by Thomas J Watson Sr Courtesy of Peter E Greulich, copyright © 2017 MBI Concepts Corporation Figure 8.1 This image of the System 360—known as the fisheye 360—was widely used in IBM’s advertising and marketing materials Photo courtesy of IBM Corporate Archives Figure 8.2 Revenue, income, and employee growth under Thomas J Watson Jr Courtesy of Peter E Greulich, copyright © 2017 MBI Concepts Corporation Figure 10.1 IBM System 370 Model 158, introduced in 1972, became a computer workhorse for large organizations Photo courtesy of IBM Corporate Archives Figure 10.2 IBM’s information ecosystem, 1960s to 1980s Figure 11.1 Arthur K Watson, the first leader of World Trade Corporation Photo courtesy of IBM Corporate Archives Figure 11.2 More than any other IBM CEO, Frank T Cary turned IBM into a global behemoth Photo courtesy of IBM Corporate Archives Figure 11.3 Revenue, income, and employee growth under Frank T Cary, 1972–1983 Courtesy of Peter E Greulich, copyright © 2017 MBI Concepts Corporation Figure 12.1 Thomas Barr led IBM’s defense against the federal antitrust suit in the 1970s and early 1980s Photo courtesy of IBM Corporate Archives Figure 14.1 Bill Lowe A lifelong IBMer, Lowe was the “Father of the PC” at IBM Photo courtesy of IBM Corporate Archives Figure 14.2 Don Estridge, the popular PC executive who ran the IBM PC business during its successful period Photo courtesy of IBM Corporate Archives Figure 14.3 Charlie Chaplin The PC/1, introduced in 1981, had one of the most iconic advertising campaigns in IBM’s history Photo courtesy of IBM Corporate Archives and Charlie Chaplin Estate Charlie Chaplin™ © Bubbles Inc S.A Figure 15.1 John F Akers was the first CEO at IBM to be dismissed by the company for poor performance He was IBM’s chairman of the board from 1986 to 1993 and CEO from 1985 to 1993 Photo courtesy of IBM Corporate Archives Figure 15.2 A representation of the chart used in the 1982 sales meeting that forecast revenue growth to $100 billion by 1990 Figure 15.3 John Opel was the CEO who expanded IBM’s factories and number of employees in the belief that the company would grow massively in the 1980s Photo courtesy of IBM Corporate Archives Figure 16.1 James E Burke, member of the IBM board of directors, who negotiated the resignation of John Akers and recruited IBM’s next CEO, Louis V Gerstner Jr Photo courtesy of IBM Corporate Archives Figure 17.1 Louis V Gerstner Jr., while CEO and chairman of the board of IBM in the 1990s Photo courtesy of IBM Corporate Archives Figure 17.2 Jerome York, a leading architect of IBM’s recovery in the 1990s Photo courtesy of IBM Corporate Archives Figure 18.1 IBM’s revenue by segment, 1980–2015 Courtesy of James Spohr Figure 18.2 Dennie Welsh, IBM’s services leader during IBM’s transformation into a services firm Photo courtesy of IBM Corporate Archives Figure 18.3 “Sam” Palmisano, IBM’s CEO after “Lou” Gerstner, led IBM deeply into the IT services industry Photo courtesy of IBM Corporate Archives Figure 19.1 Virginia Marie “Ginni” Rometty served as IBM’s chairman, president, and CEO beginning in 2012, during a difficult period in IBM’s history Photo courtesy of IBM Archives Figure 20.1 Figure 20.2 Figure 20.3 Figure 20.4 IBM service personnel rode these vehicles in large urban centers, quickly delivering parts This British example from the 1920s symbolized IBM’s commitment to customer service Photo courtesy of IBM Corporate Archives Figure 20.5 IBM’s culture was also flexible At a time when drinking alcohol was forbidden by IBM, here we see a group of Brazilian IBMers cheering on their 100 Percent Club achievement with mugs of beer Photo courtesy of IBM Corporate Archives List of Tables Table 2.1 C-T-R/IBM revenue, net earnings, and number of employees, 1914–1924, select years (revenue and earnings in millions of dollars) Table 3.1 IBM’s revenue, earnings, and employee population, 1914–1940, select years (revenue and earnings in millions of dollars) Table 3.2 Tabulating technology evolution, 1920s–1930s Table 4.1 Chronology of IBM’s global expansion, 1930s Table 4.2 IBM’s growth, 1914–1940, select years (revenue in millions of dollars) Table 10.1 IBM net earnings, 1984–1990 (in billions of dollars) Table 11.1 World Trade net income, select years, 1949–1990 (in millions or billions of dollars) Table 12.1 Chronology of antitrust lawsuits filed against IBM, 1969–1975 Table 13.1 Technical specifications of early RYAD and IBM 360 series computers Table 13.2 Chronology of IBM-Soviet activities, 1949–1995 Table 15.1 IBM’s good years: Financials and number of employees, 1980–1985, select years (revenues and earnings in Piore, Emanuel R., 174 Pirated clones, 355 PL/1 (programming language), 364 Plug boards, 75 Poland, 358, 365 Poughkeepsie (New York) and compatibility, 209 and electronics, 155–157 engineering culture of, 170, 174 and IBM’s turn to computing, 198 and layoffs, 567 and rivalry with Endicott, 208, 210 and SAGE, 168 and wartime manufacturing, 124, 132–133 Powell, Walter W., 500 PowerPC microprocessor, 405 Powers, James See also Powers Accounting Machine Corporation and antitrust cases, 104 death of, 60 and Herman Hollerith, 21, 26, 37 and punch card technology, 595 and Thomas J Watson Sr., 23, 57 Powers Accounting Machine Corporation, 67, 69, 70, 88, 104, 113–114, 139 See also Powers, James Powers-Samas, 289 Prentice-Hall, 268 PriceWaterhouseCoopers Global Management Consulting and Technology Services (PwC), 513–514, 526– 527, 586 Pricing, 304–305, 307, 308–309 Prime, 264 Printer-lister, 43–44 Processors and bundling, 198 and compatibility, 211–212, 262 desktop, 265, 436–437 distributed, 299 and emulation, 643n23 and System 360, 215, 221, 227 and System 370, 261 Process redesign, 446, 488, 490 Product development process, 52, 64, 79, 81, 575 Productivity and automation, 488 and billable hours, 584 customer desire for, 73, 438 Louis V Gerstner Jr on, 507 during Great Depression, 6, 95 and hiring of Thomas J Watson Sr., 54–55, 87 IBM decline in, 585 IBM effect on, 581 IBM reputation for, 434 and labor, 323, 444, 454, 464 and manufacturing, 95, 602 Sam Palmisano on, 532, 535 and quality, 193 and Roadmap 2015, 551 Ginni Rometty on, 554 and System 360, 203 and World Trade, 284 Product Planning, 164 Profits See also financial performance versus benefits, 570 and card sales, 68 under Louis Gerstner, 506–507 and government contracts, 102 at IBM, 1914–1940, 66t and IBM’s recovery plan, 481 and optimism, 588 and outsourcing deals, 511 and PC business, 527 and product development, 647n12 and Roadmap 2015, 533 under Ginni Rometty, 547 Programmers, 229 Programming, 153–154 Programming languages, 175, 364, 398 Project Stretch, 171–172, 173–174, 638n52 Propublica, 570 Protected groups, 250–251 Protestant values, 11 Public policies, 97, 103–104 Pugh, Emerson, 5, 169, 197, 223, 269 Punch cards, 18–20, 106, 119, 142, 164 QDOS (“quick and dirty operating system”), 388, 390 Quaker Oil, 116 Quality Control Department, 221 Quarter Century Club, 37, 53 Quota system, 48–52, 134–135, 242–243, 245, 247–248, 590 R&D of advanced electronics, 152 at C-T-R, 41–42, 44 funding for, 159 as goal of Thomas J Watson Sr., 70 and IBM growth in the 1920s and 1930s, 68 IBM investment in, 430 in Poughkeepsie, 157 U.S government funding of, 154 RAMAC See IBM 305 RAMAC RAND Corporation, 162, 169, 271 Randle, Yvonne, 499 Raytheon, 168 RCA, 198, 225–226, 227, 262, 343 Reagan, Ronald, 344, 373 Reagan administration, 251, 344, 346, 352, 399, 563 Recessions of the 1970s and 1980s, 231 of 1920–1922, 44 during Richard Nixon’s presidency, 230 and personnel practices, 254–255 of the twenty-first century, 538 Redundancies, 490 Reengineering the Corporation (Champy and Hammer), 271 Regional Office Europe Central and East (ROECE), 369 Relational database management software, 154 Remington Rand and antitrust cases, 105, 106 and computing customers, 161, 162 consolidation of, 10 and ERA, 228 during Great Depression, 97 as IBM competitor, 82, 87 and patent cross-licensing, 104 and postwar computing R&D, 154 and James Powers, 37 and Powers Accounting Machine Corporation, 67 and punch card business, 77 and SAGE, 168, 170 and Sperry Rand, 626n11 Type 400-2 calculator, 165 and UNIVAC, 173 Remington Typewriter Company, 30 Reorganizations, 69, 449–452, 453, 464–465, 541 Republicans, 103 Research Division, 174, 587–588 Resistor, 497 Resource actions (RAs) See layoffs Retirement, early or voluntary, 254–255, 274, 401–402, 421, 659n24 Retroengineering, 261, 361–362 Revenue and acquisitions, 673n8 under John Akers’s restructuring, 453 under Frank T Cary, 307 and CEOs, 625–626n4 at C-T-R/IBM, 1914–1924, 57t and evolving technologies, 598f from first-year PC sales, 392 from Fortune 1000 enterprises, 536 under Louis Gerstner, 484–485, 487–488, 506–507 and global performance, 287–288 during Great Depression, 101, 119 growth of, 1946–1960s, 201–202 growth of, 1960s–1970, 229 growth of, under Thomas J Watson Jr., 230f growth of, under Thomas J Watson Sr., 184f and growth strategy, 432f, 605 at IBM, 1914–1940, 66t and IBM growing pains, 190 and IBM’s long survival, 579 and investors, 559 and mainframes, 484 versus net earnings, 273 under John Opel, 434–435 and optimism, 588 and personnel practices, 249–250 from punch cards, 20 ranking in early 1990s, 440 and Roadmap 2015, 533 under Ginni Rometty, 547, 564, 566 from RS/6000, 404–405 by segment, 1980–2015, 509f from services, 513 trends in, 1980–2015, 508–510 during World War II, 125 Reverse engineering, 42 RISC architecture, 403, 404, 458, 468, 575 Ritty, James, 10–11 Rizzo, Paul, 338, 437, 463, 479 Rizzo, Paul J., 453 RJR Nabisco, 477–478, 479, 481 Roadmap 2010, 533, 551–552, 583 Roadmap 2015, 533, 551, 553–566, 567, 570, 583, 611 Rockefeller, John D., 7, 9, 183 Rodgers, “Buck,” 244, 268, 312, 338, 434 Rogers, Joseph, 41–42 Rogers, William, 224 Rohrer, Heinrich, 588 Rojot, Jacques, 613 Rometty, Virginia M “Ginni,” 556f and author, 620 blogs about, 461, 558 and board of directors, 611 business strategy of, 408, 570–577 career at IBM of, 251, 554–556 compensation of, 542, 609 and employees, 549, 610, 669n1, 670n24 and financial engineering, 561 and financial performance, 625–626n4 financial record of, 544, 547, 582, 585 and growth strategy, 560 on IBM CEO duties, 467 and IBM’s aspirations, 606 on IBM’s purpose, 579, 581 and layoffs, 589, 605, 664n46 and personnel practices, 539 and PwC consulting acquisition, 513–514 and reboot strategy, 546 and Roadmap 2015, 553, 557, 559, 562 and sales culture, 590–591 Roosevelt, Franklin D., 97–99, 103–104, 119, 124, 469–470 Rosen, Ben, 478 Roy, William G., 441 Royal, 87 RPG (programming tool), 175, 364 Russia, 358, 374–375 RYAD computers, 362–365, 364t SABRE airline reservation system, 170, 267 SAGE (Semi-Automatic Ground Environment), 169–171, 198–199 Sales force and antitrust cases, 186–187 and bureaucracy, 280 career at IBM of, 640n32 and commercial computing, 161 and compatible computers, 212 and customers, 199–200 declining productivity of, 585 and electric typewriters, 87 and engineering team, 76 and government contracts, 159 during Great Depression, 96 at ITR, 14 and legal department, 349 and 100 Percent Club, 51 opposition to computer R&D within, 160 and PC technologies, 416–417 and process design, 67 and resistance to computers, 163, 176 strategies of, 243–249 and System 360, 217 training of, 51 and value proposition, 45 and Thomas J Watson Sr., 36, 37, 43, 57 Sales practices and IBM computer business, 197 and IBM’s early expansion, 45–55 of NCR, 37–38 and John Patterson, 11, 30–31 under Ginni Rometty, 590–591 of Thomas J Watson Sr., 28–29, 34, 36 and Thomas J Watson Sr., 64 and World War I, 42 Sales School, 37–38, 50–51, 54, 134, 186, 244, 431 Sams, Jack, 386–387 Sandorfi, Julius, 369 San Jose (California), 170–172, 263, 280, 354–355 SAP (software competitor), 519 Scalability, 208 Schein, Edgar H., 537 Schroeter, Martin, 547, 561–562, 592, 593 Science Research Associates (SRA), 276–277 Scientific applications, 83, 85, 127, 199, 215 Scientific calculators, 153 Scientific computing, 159–160 Scientific practices, 7 Scranton, Philip, 58, 59 Sculley, John, 478 SDS, 227 SEA (competitor in France), 196 Seagate Technology, 263 Sears, Roebuck and Company, 513 Seeber, Robert R “Rex,” 153 SEI (competitor in West Germany), 196 Selected International Accounts (SIA), 247–248 Selected National Accounts (SNA), 247–248 September 11, 2001, 528–531 Service Bureau Corporation (SBC), 333–334 Service bureaus, 68–69, 226 Services, 504–505, 506, 508–517, 533, 566–567, 583–584 700 class computers See IBM 700 series Severance payments, 567 Shapiro, Irving, 465 SHARE, 179–181, 208, 229 Sherman Antitrust Act, 32, 104, 188, 329, 330–331, 341 Shugart, Alan F., 263 Shugart Associates, 263 Siemens, 196 Siemens-Halske, 139 Silicon Graphics, 375–376 Simmons, William W., 177 Skunk works, 393, 404, 485 Slogans, 47 Sobel, Robert, 5, 12, 15, 23, 43, 195 Social networking, 570, 571 Social Security, 67, 97, 99–102, 100f, 110, 119 Social Security Administration, 78, 199 SoftLayer, 571 Software and antitrust cases, 351 bundled with hardware, 215 and bundling, 198, 259 for Cape Cod System, 168 and cloud computing, 583 and Ted Codd, 154 and compatibility, 211 development of in Hursley, England, 288 and Electronic Data Processing Machines, 162 under Louis Gerstner, 506 for IBM 1401, 175 and IBM business model, 409 IBM’s dabbling in, 265–266 IBM’s growing focus on after 1993, 516–527 and IBM users, 229 and layoffs, 566–567 maturing market for, 405–406 Microsoft domination of, 457 and networking, 383–384, 398 at odds with hardware, 309 under Sam Palmisano, 533 and PC development, 388, 390, 399 and PC Jr., 395 and PC market, 413 relative bugginess of, 406 revenue from, 1980–2015, 510 and RISC architecture, 403 for SAGE, 169 and Soviet computers, 365–366 and Soviet computing, 359–360 and System 360, 219, 220–221, 223–224 and U.S v IBM (1969–1982), 345 Software Group, 521 Solid Logic Technology (SLT), 210, 220–221, 259 Solid-state technologies, 173 Sorkin, Andrew Ross, 563–564 South Africa, 321 Soviet Union, 356–368, 375t, 376 See also Communist Europe Space flight systems, 266 Spain, 116 Sperry Rand, 208, 225–227, 262, 271, 339, 626n11 SPREAD (Systems Programming, Research, Engineering, and Development), 211, 213 Spreadsheets, 383–384 Sputnik (Soviet satellite), 167 SSEC (Selective Sequence Electronic Calculator), 153 SS Race and Settlement Office, 142 Stafford, Ralph R., 369 Stagflation, 231, 295 Stalin, Josef, 116, 353 Standard Oil, 116 Standards, 414, 487, 505, 665n27 Stephenson, Robert “Bob,” 505 Stevens Institute of Technology, 76 Stevenson, Betsey, 570 Stimpson Computing Scale Company, 15 Stock buybacks, 554, 560, 565–566, 585, 670n27 Stockholders See also Wall Street and John Akers, 465 and business, 1998–2011, 545 and corporate failure, 422 as corporate priority, 9–10 and Louis V Gerstner Jr., 483 IBM emphasis on, 588 IBM executives as, 94–95 IBM obsession with, 604–605 and IBM’s decline, 425–426, 455 and IBM’s Golden Age, 273–275 patience of, 592 and personnel practices, 249–250 and product transition, 152–153 and Ginni Rometty, 547 Stockman, David A., 563–564 Stock value drop in, 1987–1993, 464 drop in, 2014, 563 and layoffs, 543 rise in, 2010, 533 Storage Technology Corporation, 263 Strategic planning, 160 Subsidiaries, 70 Sun, 404, 519 Systems Application Architecture (SAA), 398 Systems engineers (SEs), 223, 244–245, 259 Systems Research Institute (SRI), 267 Tabulating Machine Company, 15–23, 41, 43–44, 61, 68, 74 Tabulating machines, 16f, 191 Tabulating Machine Services Bureau, 68 Taft, William Howard, 29 Tandy, 383, 397, 414 Tax policies, 503, 560, 661n20 Teamwork, 47–48, 448 Technical standards, 268 Technological evolutions, 594–597 Technology cycle, 460, 599–601, 600t Technology ecosystems, 360 Technology Products, 451 Technology services, 409 Tedlow, Richard S., 135, 183, 328, 348–349 Telecommunications, 398 Telephony, 126 Telex, 226, 270, 278, 280, 334–336, 342 THINK (IBM slogan), 72, 76, 89, 118, 589 Think magazine, 98, 184, 185, 255, 434 Thinkpad, 409 Thoman, G Richard “Rick,” 506 Thomas, David M., 505 Thomas J Watson Astronomical Computing Bureau, 85 Thompson, John, 506 Thompson, John M., 518–519 Time Inc., 182 Time magazine, 200, 394 Time Recording Division, 75 Time sharing, 226, 365, 512 Tivoli Systems, 520, 521, 523 Tone, Andrea, 53 Total quality management (TQM), 445, 601 Trademarks, 10, 332 Transistors, 162 Trempé, Roland, 441 Truman, Harry S., 160 Trusts, 7, 9, 15 Turner, Mary Lee, 482 Tymeshare, 226 Unbundling, 331–332, 351 Underwood, 87 Underwood Elliott Fisher, 67 Unions, 71, 253–254, 539, 540–541, 541 United States of America v International Business Machines Corporation (1956), 185–189 United States Rubber Company, 10 United Technologies, 513 UNIVAC and antitrust cases, 335 customers of, 182 developers of, 130, 154–155 and J Presper Eckert, 339 as IBM competitor, 157–158, 161, 173, 177, 595 and manufacturing, 626n13 and Sperry Rand, 226–227, 626n11 and U.S Census Bureau, 557 University of Pennsylvania, 130, 154–155 UNIX, 403 U.S Air Force, 168, 266 U.S Army Signal Corps, 126 U.S Atomic Energy Commission, 159–160, 173 U.S census of 1880, 17 of 1890, 18, 20 of 1920, 67 U.S Census Bureau, 18, 21, 155, 157, 625n23, 625n26 U.S Department of Defense, 168, 291 U.S Department of Justice and antitrust cases, 104–105, 106 and Frank T Cary, 325–326 and consent decree of 1956, 185–189 and cost of antitrust cases, 351 and IBM competitors, 306 and IBM’s dealings with Microsoft, 399 and U.S v IBM, 329 and U.S v IBM (1969–1982), 352 Üsdiken, Behlül, 326 User groups, 179–181 U.S government and antitrust cases, 327, 348 and Cold War–era computing, 369, 658n29 and enforcement of antitrust laws, 331–332 and Federal Systems Division, 491–492 and import/export laws, 374–376 and Moore School computing meeting, summer 1946, 155 and postwar computing R&D, 154 and Poughkeepsie plant modernization, 132–133 during World War II, 123, 124–125 U.S Government Printing Office (GPO), 105 U.S military and cryptanalysis, 132 and IBM employees, 122 and IBM R&D, 167–168 and Dennie Welsh, 515–516 U.S Navy, 159, 162, 168, 266 Usselman, Steven W on antitrust cases, 331, 350 on Endicott and Poughkeepsie, 198 on IBM CEOs, 615 on IBM’s entry into computers, 151, 178 on IBM’s humility, 199 on IBM’s return to customer service, 505 on personalities of business leaders, 183–184 on product compatibility, 209 on System 360, 226 on technology and bureaucracy, 175–176 US Steel, 326 U.S Supreme Court, 106 U.S Treasury Department, 119 U.S v IBM (1969–1982), 325–326, 338–348, 653n10 U.S Weather Bureau, 162 Vacuum tube circuits, 128, 155, 162 Value proposition, 627n26 VAX systems, 368 Vertical integration, 279, 300, 309, 486, 490–491 VisiCalc, 383 Von Neumann, John, 155 Von Simson, Ernest, 308, 312, 468–469 Wall Street, 425–426, 459–460, 483 See also stockholders Wall Street Journal on John F Akers’s restructuring, 452 calls for IBM layoffs by, 459 on C-T-R/IBM name change (1924), 62 on Louis V Gerstner Jr., 480 on IBM incorporation, 61 on IBM’s financial performance, 447 and IBM’s Golden Age, 270–271 on David Kalis, 482 on rumored Saudi acquisition of IBM, 580 Wang, 264, 311, 396, 415 Ward, Stephen M Jr., 409 Wartime manufacturing, 132–133 Washington Post, 498 Waterhouse, Buzz, 246 Waterman, Robert Jr., 244, 434 Watson (artificial intelligence), 517, 549, 571–577, 588, 606, 665n23 Watson, Arthur K “Dick,” 137f, 287f career decline of, 222–223 and competition, 286–287 and Marcial Digat, 295 and family disputes, 12–13, 133–134 on IBM dominance in Europe, 271–272 and Latin America, 296 and Mobile Machine Records Units (MRUs), 126 and nepotism, 283 resignation of, 302 roles held at IBM by, 136 and System 360, 220, 221 and World Trade, 189, 190–191, 193, 195–196 and World Trade’s rapid growth, 285 as World War II veteran, 138 Watson, Helene, 133 Watson, Jane, 133 Watson, Jeanette M Kittredge, 32, 53, 54, 117–118, 129 Watson, Olive Cowley, 135 Watson, Thomas J Jr and adaptation, 579 adventurous nature of, 626n8 and John Akers, 422 and antitrust cases, 185–189, 329, 337, 350 and author, 620 and Basic Beliefs, 236 and James Birkenstock, 145, 164 and board of directors, 611 on Frank T Cary, 308 and chain of command, 630n17 and collegiality, 458 and computing, 127, 185 on corporate culture, 233–234 customers’ influence on, 182 death of, 527 and destruction of CDC case studies, 334 early IBM experiences of, 134–135 on ENIAC, 130 and family disputes, 12–13, 133–134, 625n30 family life of, 133 and fear of plateauing, 208–209 and Louis V Gerstner Jr., 481 on global performance, 282, 283 and government contracts, 158–160 growth of IBM under, 230f, 276 on IBM 604, 131 and IBM 650 Magnetic Drum Calculator, 165 on IBM computing, 163 and IBM reorganization, 39, 190–194 on IBM’s dominance of computing, 172 and IBM’s turn to computing, 156 on IBM transition to computer business, 197 as imperial leader, 467 and Nikita Khrushchev, 354–355 and T Vincent Learson, 162 management style of, 192 and personnel practices, 250 and Project Stretch, 173–174 resignation of, 302 retirement of, 229–231 and SAGE, 168 and sales culture, 626n11 and sales reports, 199–200 and System 360, 627n24 on technology versus sales and distribution, 177 and UNIVAC, 155 as U.S ambassador, 368, 371–372 and U.S v IBM (1969–1982), 338, 347–348 and Arthur K Watson, 220, 222–223 Watson, Thomas J Sr., 22f and adaptation, 579 and antitrust cases, 105, 106–107, 187–188, 329 and James Birkenstock, 145–146 and board of directors, 611 and business strategy, 58–59, 69–70, 73–74, 588 celebrity status of, 115, 118, 119–120 and chronology, 4 on computer equipment, 149 and computing, 127–128 and consent decree of 1956, 189 and corporate culture, 3, 236–237 and Crash of October 1929, 94–95 and C-T-R, 40, 42–44 on C-T-R/IBM name change (1924), 61–62 and C-T-R/IBM sales culture, 45–55 and data processing ecosystem, 89 and Dehomag, 114 and European expansion, 111 and family disputes, 12–13, 133–134, 625n30 family life of, 133–134 on German IBMers, 113 and global performance, 282–283 during Great Depression, 91–92, 96, 97–98, 102 hiring of, 26 and Adolf Hitler, 116 and Herman Hollerith, 5, 20–23 and IBM 700 series computers, 161 and IBM Day, 108–110 and IBM growth in the 1920s and 1930s, 66–67 on IBM influence, 84 and IBM policies, 71 and IBM’s aspirations, 605–606 on IBM’s purpose, 602 as IBM’s third founder, 30 and IBM ties with Columbia, 85 and IBM values, 37–38 and “IBM Way,” 267 as imperial leader, 467 legacy of, 182–185 managerial practices of, 28–29 and marketing, 87, 88 and Mark I, 129–130 and Nazi Germany, 140–141 and NCR, 31–32 and nepotism, 195 original C-T-R contract terms of, 36 and patents, 81–82 and John Patterson, 11, 31–33 performance tracking by, 35 and postwar demand generation, 152–153 as professional manager, 6 and Franklin D Roosevelt, 103–104 and sales culture, 626n11 and sales strategies, 243–244 and SPREAD, 213 on stakeholder value, 585 and support of Allies, 124 temperament of, 33–34 and UNIVAC, 155 Watson Business Machine Company, 143 Watson Health, 672n72 Watson Scholarship, 250 Watson Scientific Computing Laboratory, 154 Weather forecasting, 160 Welch, Jack, 457, 478 Welfare capitalism, 53 WellPoint, 576 Welsh, Dennie M., 505, 515–517, 521, 522f, 527 Wernerfelt, Birger, 151 West Germany See Germany W F Simpson Company, 15 W H Bundy Time Card Printing Company, 13 Wheeler, Earl, 398, 399, 412, 415 Whirlwind project, 168–169 Wild ducks, 628n30 Wilkins, Mira, 63, 97 Williams, Albert L “Al,” 159, 191, 192, 213, 222 Williamsburg reorganization (1956), 191–194, 197–198 Wilson, Woodrow, 32 Windows, 397, 402, 406 Wired Society, The (Martin), 268 Withington, Frederic G., 339 Wladawsky-Berger, Irving, 506 Word processors, 383–384 Wordstar, 383–384 Workforce rebalancing See personnel practices World’s Fair (New York City, 1939–1940), 107–109, 108f World Trade and Asian business practices, 292–294 and biculturalism, 319 and business strategy, 1949–1990, 320–324 and Frank T Cary, 304 in Central Europe and Russia, 357, 369, 374–375 and Cold War–era computing, 357 and computer industry, 194–197 and concern over competition, 300 and corporate colonialism, 238 and customers, 302 divisions of, 285 and European expansion, 286–292 growth of, 1965–1980, 266 and headcount, 273–274 and India, 314–318 and Gilbert E Jones, 338 and Latin America, 294–298 and Legal, 349 and Ed Lucente, 464 and Jacques Maisonrouge, 253 and management centralization, 450 net income, 1949–1990, 321t revenue from, 1964, 201 and U.S anticorruption laws, 331 and Arthur K Watson, 136, 191, 193, 282, 608 and Watson family, 222–223, 284 and Thomas J Watson Sr., 283 World War I, 121 World War II and demand for data processing, 89 and employees, 238 first year of, 110 and Holocaust recordkeeping, 141–142 IBM growth during, 121–122 and IBM subsidiaries under Axis control, 138–139 and new uses for IBM equipment, 125–126 and political economy, 143–144 Thomas Watson Jr.’s experience of, 135 Arthur Watson’s experience of, 136–137 Wozniak, Stephen, 382–383 Y2K (year 2000 date problem), 507–508 Yale University, 136 Yang Yuanquing, 409 York, Jerome B “Jerry,” 453, 481, 488, 489f, 490–491, 493, 498, 506 Yost, Jeffrey, 197 Young, John A., 478 Zaporski, Janusz, 369 Zeitlin, Jonathan, 58 Zimmerman, Edwin M., 340–341 Zolman, Steven, 558 Zunz, Olivier, 7 Zuse, 196 Zysman, John, 385 ... Printed and bound in the United States of America Library of Congress Cataloging-in-Publication Data Names: Cortada, James W., author Title: IBM : the rise and fall and reinvention of a global icon / James W... Cortada, IBM: The Rise and Fall and Reinvention of a Global Icon Thomas Haigh, Mark Priestley, and Crispin Rope, ENIAC in Action: Making and Remaking the Modern Computer John Hendry, Innovating for Failure: Government Policy and the Early British Computer Industry... so globalized that only its senior leaders are U.S citizens? What are the implications for Russia, China, Germany, the United States, the Netherlands, Saudi Arabia, Taiwan, Australia, and so many other countries?