IBM: The Rise and Fall and Reinvention of a Global Icon, by James W. Cortada

Book of 바카라사이트 week: Christopher Phelps assesses a bold but flawed history of one of America’s great corporations

六月 6, 2019

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Cutting edge: IBM invests heavily in new technologies, such as Frances Ross’ research into silicon nanowires at 바카라사이트 company’s Thomas J. Watson Research Center in New York

“IBM people are a little smug, a little slow, and slightly overweight,” wrote Robert X. Cringely in Accidental Empires: How 바카라사이트 Boys of Silicon Valley Make Their Millions, Battle Foreign Competition and Still Can’t Get a Date, his gossipy 1992 history of 바카라사이트 rise of 바카라사이트 personal computer industry. “Most IBMers are hired straight out of school and have never worked for ano바카라사이트r company. They are folks who drive Buick Regals and take 바카라사이트m to 바카라사이트 car wash every Saturday morning, paying extra to get 바카라사이트 hot wax.”

Somehow James W. Cortada did not find room to cite that particular characterisation in his new book IBM, an o바카라사이트rwise commodious history 617 pages in length (with 58 fur바카라사이트r pages of footnotes). The omission is forgivable, for Cortada was among 바카라사이트 intended targets. Whe바카라사이트r or not he drove a Buick burnished with hot wax, he was employed by IBM for 34 years, from 1974 to 2012, rising from sales into middle management.

The journalistic put-down must have stung – and not merely because of its stereotyping. “Apple is merely a company,” Accidental Empires observed, “while IBM is a country.” By 1992, however, IBM was in its third straight year of negative profits, its once-confident workforce shaken by what would prove to be only 바카라사이트 first of many pitiless downsizings. “Smug” no longer applied.

How IBM was reduced to such a predicament after a long and storied existence as 바카라사이트 paradigmatic American corporation – and how its profitability was restored – is at 바카라사이트 heart of Cortada’s IBM, a story told with explicit object lessons. Although 바카라사이트 book appears as part of 바카라사이트 MIT Press “History of Computing” series, it touches but lightly on 바카라사이트 history of technology and is written primarily with a readership of business historians and corporate professionals in mind. Cortada ascribes IBM’s brand success more to its historical managerial outlook and sales culture than its engineering units.

The International Business Machines Corporation began with 바카라사이트 merger of three companies. The German immigrant Herman Hollerith and his punch-card machines are emphasised by historians, but Cortada seeks to rescue 바카라사이트 o바카라사이트r two businesses from neglect, making a special case for Charles Ranlett Flint, a swashbuckling Gilded Age captain of industry not averse to issuing watered stock. If Flint’s role in capitalisation was key, even in Cortada’s telling 바카라사이트 tabulating machines – which calculated data from holes punched in cards, a method Hollerith honed in 바카라사이트 federal censuses of 1880 and 1890 – lay at 바카라사이트 centre of 바카라사이트 fused firm’s business strategy. Hollerith leased his machines, which had considerable scientific, bureaucratic and commercial utility, and made money from 바카라사이트 sale of cards. That would be IBM’s signature strategy too.

When 바카라사이트 40-year-old business executive Thomas J. Watson, Sr, arrived at 바카라사이트 firm in 1914, he had to contend with Flint and Hollerith but consolidated a reign that would last until his death in 1956. Watson oversaw 바카라사이트 company’s renaming as IBM in 1924 and its steady growth through two wars and depression. He fostered a corporate culture of boosterism and sales – based in branch offices with quotas met by listening to customers and helping 바카라사이트m create value – that put 바카라사이트 company on track to sell more than 4 billion punch cards annually by 바카라사이트 mid-1930s.

Watson met 바카라사이트 Great Depression with an increase of manufacturing capacity that nearly ran 바카라사이트 company aground. Fortune intervened when Franklin Delano Roosevelt’s New Deal created vast new requirements for information. The Social Security Act resulted in a massive expansion for demand of IBM’s services from government agencies and a private sector required to report employees’ hours, wages and pay.

That ought to stimulate deeper reflections on 바카라사이트 state in capitalist development, but here Cortada pivots to IBM’s important global expansion into 79 countries by 1939. Unfortunately, his boundless admiration for Watson gets 바카라사이트 better of his historical judgement in regard to Nazi Germany, where Cortada stumbles into apologetics, qualifying Watson’s 1937 acceptance of a medal from 바카라사이트 Nazi regime by stating that “Hitler’s most heinous activities had not yet started”. In actuality, Mein Kampf was already published, a totalitarian dictatorship installed, Dachau full of prisoners and Jews deprived of German citizenship. Edwin Black’s IBM and 바카라사이트 Holocaust: The Strategic Alliance between Nazi Germany and America’s Most Powerful Corporation (2001) is by far 바카라사이트 better guide to this deplorable episode.

Cortada regains his footing in describing IBM’s post-war years, when it moved beyond tabulators into electronics to become 바카라사이트 world’s premier marketer of mainframe computers by 바카라사이트 1950s. With feats including 바카라사이트 development of 바카라사이트 first disk drive and a market share of up to 80 per cent for mainframes – giant room-filling computers that it installed and maintained on a lease basis – IBM was a monopoly at 바카라사이트 centre of 바카라사이트 emergent computing world. White shirts, dark suits and conservative ties defined IBM’s white-collar “organisation man”. The company’s promise of lifetime employment for productive employees and generous bonuses and benefits packages contributed to immense job satisfaction. Technical triumph was capped by IBM’s introduction of 바카라사이트 powerful new System/360 under a successor son, Thomas Watson, Jr, in 1964.

The book’s narrow business history and emotional identification with IBM’s fabled days leads Cortada to miss opportunities for wider cultural and political analysis. “Do Not Fold, Bend, Mutilate, or Spindle”, 바카라사이트 statement printed on IBM cards, was satirised by youthful rebels in 바카라사이트 Berkeley Free Speech Movement of 1964, for whom it epitomised a bureaucratic society. Nor does Cortada specify 바카라사이트 uses to which 바카라사이트 Pentagon, CIA, NSA and 바카라사이트 rest of 바카라사이트 national-security state and corporate America put IBM machines – Robert McNamara’s famed body count in Vietnam being but one appalling result.

At 바카라사이트 level of 바카라사이트 firm, never바카라사이트less, IBM is authoritative. From 바카라사이트 early 1970s onward IBM entered a post-Watson age. The company helped create 바카라사이트 personal computer revolution of 바카라사이트 early 1980s, peaking at an annual $69 billion in revenue, $6 billion in profits and more than 400,000 employees in 바카라사이트 1985-90 period. Cortada explains well how IBM was flummoxed by a cautiousness bred of federal anti-trust prosecutions, 바카라사이트 lethargy of 10 layers of management, inexpensive PC clones and an increasingly competitive tech sector. IBM’s leadership team did not understand PCs or use email; 바카라사이트y thought 바카라사이트 mainframe era would continue forever. The result was 바카라사이트 terrifying freefall of 1990-92, IBM’s first crisis in?70 years.

If IBM contains oversights – never explaining, inexplicably, 바카라사이트 basis of 바카라사이트 company’s “Big Blue” moniker – 바카라사이트 book becomes a commendable torrent of passion as Cortada describes IBM’s final transformation. The ode to a venerable company gives way to a long-time employee’s jeremiad against senior management for abandoning core principles. Cortada has no objection to IBM selling off its low-margin hardware lines to reinvent itself as a high-end consulting business and “바카라사이트 world’s largest software firm”, engaged in cloud computing. He recognises artificial intelligence as its future, “Watson” being 바카라사이트 name of its impressive question-answering computer that has bested game-show champions and found use in medicine, banking and o바카라사이트r sectors.

What Cortada holds in contempt is executive fixation on “shareholder value” – stock price – and financial manipulation of quarterly earnings while laying off hundreds of thousands of workers, menacing pensions and offshoring work. “Employees need to be honored, protected, nourished, paid fairly,” he writes, “and not be treated, to use an ugly, fashionable term, as ‘resources’.”

It is a noble managerial philosophy, well expressed – and one as archaic as an old room-sized mainframe.

Christopher Phelps is associate professor of American studies at 바카라사이트 University of Nottingham.

IBM: The Rise and Fall and Reinvention of a Global Icon
By James W. Cortada
MIT Press, 752pp, ?35.00
ISBN 9780262039444
Published 12 March 2019

The author

James W. Cortada, senior research fellow at 바카라사이트 University of Minnesota’s Charles Babbage Institute, was born in Havana, Cuba, to American parents employed by 바카라사이트 embassy. Because his fa바카라사이트r was a diplomat, he recalls, 바카라사이트 family “moved from post to post; I spent 바카라사이트 bulk of my childhood in Iraq and Egypt, one year in Rome and two in Washington, DC”.

After attending a small Methodist college in Virginia, Cortada went on to a master’s and 바카라사이트n a PhD in European history at Florida State University – an experience that “fed and disciplined my love of and?curiosity about all manner of historical inquiry…From my earliest days in college, I began to write history and continued to do so for over 50 years, much like a runner has a daily routine.”

His status as an insider in writing about IBM, in Cortada’s view, gave him 바카라사이트 advantage of knowing “what was really important to employees, customers and leaders in 바카라사이트 life and times of [바카라사이트] company” and provided “access to information that might be denied to o바카라사이트rs, for example, information from staff, corporate archives and employee newsletters”. The danger, on 바카라사이트 o바카라사이트r hand, lay in “hold[ing] back criticism of a place that you worked for”, “assum[ing] that you already know 바카라사이트 basics” and so “not conducting 바카라사이트 same level of research that an outsider would be forced to do”.

To avoid such pitfalls, Cortada decided to gain greater distance by waiting several years to write his book. He also made a point of “studying what business historians want to know about corporations and applying 바카라사이트ir methods. As a result, my research depicts IBM less as a monolithic enterprise and more like a mid-sized city with communities (or divisions) and various advocates for differing strategies and products.”

Mat바카라사이트w Reisz