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26.11.2014

The Tech Giants Shaping Our World Part 4: IBM

Few enterprises have been around as long as IBM has. When we think of modern tech giants, we only have to look back a few decades to trace their origins. IBM is different. Few know that the tech giant’s roots can be traced back to the Victorian Era – long before the advent of electronic computing.

Back in the 19th century, the effects of the Industrial Revolution led to more people working for large factories as opposed to running their own businesses. Overheads of labour, raw materials and logistical operations needed to be closely monitored and analysed to maximise an organisation’s profits. More emphasis was put upon punctuality and employees’ working hours were recorded in handwritten logs. Both time-consuming and prone to error, it soon became evident that accurate records of working hours were of paramount importance to running a successful operation.

As with any technology, invention was inspired by necessity. Between 1888 and 1894, three time-recording machines were invented. Willard Bundy’s Bundy Key Recorder, Dr Alexander Dey’s Dial Recorder, and Daniel M Cooper’s Rochester Recorder. All three used clocks to print a time on an employee time card, stating arrival and departure times.

By 1911, biplanes dotted the skies. The world was lighting up with the spark of light bulbs, and in a Belfast shipyard the largest passenger ship seen by man was being built – the Titanic. The booming economy was creating a new hunger for information, a new renaissance. Into the fray stepped Charles Flint, a financier that rubbed shoulders with the giants of politics and business. At the turn of the millennium, Flint had started building a number of trusts by merging several small companies, one of which was in time clocks. It was called the International Time Recording Company.

Time recording was not the only market that Flint had built trusts in, however. He had also merged several companies that made computing scales to form the Computing Scale Company of America. These two companies grew moderately in their respective industries, but they were only two pieces of Flint’s puzzle. Searching for a way to improve the fortunes of the companies, Flint realised that both were built on a shared foundation – data. At their core, ITR and Computing Scale were about collecting, quantifying and analysing information. In 1911, Flint found the final piece to the puzzle.

Back in 1887, the US had finished processing the results of its 1880 census, at which point were obsolete. Due to the growth of the US population in the 1880’s, it was estimated that the 1890 census would take thirteen years to complete. Since the US Constitution mandates a census every ten years to allocate taxes between states, this posed an enormous logistical problem. In the latter part of the decade, Herman Hollerith invented a tabulating machine that recorded data on a machine readable medium. It was used to process the results for the 1890 census. It took just 6 weeks to return the population statistics.

By 1896, Hollerith founded the Tabulating Machine Company. Its products were used by many major census bureaus around the world to record, quantify and analyse data. It was the perfect fit for Charles Flint, who saw the machine’s potential. The Tabulating Machine Company, Computing Scale, ITR and what was left of Bundy Manufacturing merged and in 1911, the Computing-Tabulating-Recording Company was born.

However, despite the progress the tabulation machine was making, as predicted by Flint, the diversified businesses of the company proved difficult to manage. CTR had stalled just five years after the headline merger. Flint needed a new general manager, and found one in a convicted criminal.

A year prior to becoming the general manager of CTR, Thomas J. Watson had been convicted of various antitrust violations for his role in a widespread National Cash Register scheme. After 11 months, the Appeals Court ordered a retrial. It never took place and Watson was promoted to the position of President at CTR. It turned out to be the most inspired move the company would ever make.

Watson’s changes brought a dawn of prosperity to the company, cultivating a thriving culture through investment in its employees and education. The company’s trajectory was on the rise, and on 14thFebruary 1924, CTR formerly changed its name to reflect the company’s mission. It became International Business Machines Corporation, or as we call it – IBM.

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