INTRODUCTION TO IBM

IBM, leading American computer manufacturer,

with a major share of the market both United states
and abroad. Its headquarters are in New York.

IBM is known for its hardware and software

products, including computers, servers, storage
systems and networking equipment. It also
provides consulting, technology and business
services, such as cloud computing, data analytics
and artificial intelligence (AI). IBM's research and
development efforts have contributed to numerous
technological innovations, including the
development of the first programmable computer,
the first hard drive and the first computer virus.

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IBM LOGO AND ITS MEANING

Current IBM logo was designed in 1972 by an

iconic American graphic designer Paul
Rand. He understood that a distinguishing mark
was essential to a company's success. Distinctive
company logotype is the principal mean of
distinguishing one product from that of another he
observed.

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IBM - Founders and Team

Charles Flint and Thomas Watson Sr. are

believed to be the founders of IBM.

The Computing-Tabulating-Recording Company,

the precursor to IBM, was founded on June 16,
1911. At its beginning, it was a merger of three
manufacturing businesses, a product of the times
orchestrated by the financier, Charles Flint.
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Arvind Krishna is Chief Executive Officer of IBM.

Arvind Krishna (born 1962) is an Indian-American business

executive. He has been the CEO of IBM since April 2020
predeceasing Gini Rometty . Krishna began his career at IBM
in 1990, at IBM's Thomas J. Watson Research Centre, and
was promoted to senior vice president in 2015. He has also
played a significant role in the development of innovative
IBM products and solutions based on these emerging
technologies. Over his 30-year career at IBM, Arvind led a
series of bold transformations and delivered proven business
results.

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IBM – History

In 1911, the company was incorporated as the

Computing-Tabulating-Recording Company (C-T-
R) and manufactured a variety of machinery
including industrial time recorders, commercial
scales, tabulators, and punch cards.

Three years later, Thomas J. Watson, Sr. joined the

company as general manager and set the company
on course to become IBM as it's known
today. Soon after being named president, Watson
oversaw the shift of the company's primary
product offering to large-scale business computing
equipment and transitioned the name to IBM. To
catalyse technological innovation, IBM opened the
Watson Scientific Computing Laboratory at
Columbia University in 1945.

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IBM launched 701, the company's first computer, in
1952 and spent the next two decades dominating the
field of mainframe and minicomputers. These
machines were capable of unprecedented levels of
computing power, so they were widely used by
businesses, universities, laboratories, and government
offices alike. The dawn of personal computers (PCs) in
the 1980s and 90s, however, created dramatic financial
losses for IBM. As vendors like Compaq, Dell, and HP
took over the PC and PC compatible market, IBM
shifted toward integrated business solutions,
consulting, and research.

IBM also faced the challenge of minicomputers, or

midrange systems, which were less expensive than
mainframes and were targeted toward smaller
businesses or departments within large enterprises.
Digital Equipment Corp. and its Programmed Data
Processor product line took off in the 1960s as well.

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IBM - Business Model

IBM is dedicated to innovate and develop in the

fields of mainframe, nanotechnology, personal
computers to digital data management,
virtualization and cloud services. The IBM
business model is based around providing software
that allows large corporations to connect their
disparate software systems and improve their IT
performance.

• Global Technology Services (GTS) - Most of

the amazing businesses which are pretty large
in the number have to make sure that there are
so many different financial services that are
present in the company along with some other
industries such as the retail,
telecommunication, healthcare, and some
other things as well.

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• The IBM Company is also using such services
such as strategic outsourcing, integrated
technology, support, Cloud, and other services
as well.
• Global Business Services (GBS) - There are
some amazing services which are provided in
the GBS and this is something that can be
considered as a pretty great advantage for sure.

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IBM - About and How it works?

IBM helps clients solve complex business and

technical issues by delivering deep business
process and industry expertise. This is enhanced
with advanced analytics, research capabilities,
comprehensive IT infrastructure knowledge and
the proven ability to implement enterprise
solutions to deliver bottom line value to businesses
and governments worldwide.

The challenges of the consulting industry that has left

IBM behind in the last decade

The shift, this time, was taking place less

effectively. The company was selling fewer and
fewer pieces of hardware each year while its
revenues from consulting services weren’t
increasing as fast. The company wasn’t investing

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as much in R&D, and it entered the new era of
computing with an extreme focus on financials.

How IBM overcame the challenges

The event that marked IBM’s transformation and sealed

its strategic pivot was Watson’s son, Tom, entering the
business.

Tom was a bright and ambitious young man who, with

the help of his father’s influence and a series of chance
events, became IBM’s Executive Vice President at the
age of 33.

Tom understood the emerging new technology, and so

he led that part of the business. On the other hand,
Watson didn’t understand how it worked, so he focused
on the more familiar, traditional and still revenue-
producing product lines. The two clashed regularly and
intensely on many issues. But it’s important to mention
that their arguments were never focused on whether

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IBM needed to transform and adopt advanced
electronics. They agreed on that part. They clashed only
on the cadence of the transformation and the policies
they put in place.

This distinction is crucial because it reveals that the

company wasn't divided at its core, the direction
everybody moved was the same. The clash between the
old and the new was extremely productive because:

• The company started building critical mass in

electronics by reinvesting earnings and rental cash
flow. It didn’t rely on government funding, but
rather it developed its capacity slowly and safely.
• In order to catch up with the industry’s velocity
with its bootstrapped approach, IBM’s advanced
electronics department had to do things differently.
As soon as the 1950s came, IBM entered the
electronic computing market and became a highly
competitive player. After that, it changed its
strategy, took on larger computer projects, and

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 became more dependent on federal funding to
offset the associated risk.

It continued to accumulate knowledge and expertise,

improving its processes and products.

IBM’s Golden Period: the strategy and tactics IBM

used to penetrate the computer industry

IBM went through the Great Depression and came out

of it stronger, wealthier, and healthier.

It also went through World War II, which gave the

company an explosive push that was hard to maintain
once the war ended. One thing is certain, among the
most important initiatives of Watson was the financial
support of every Amber family who went to join the
fight and the promise that once the war was over, they
would regain their job in the company.

As a result, once WWII ended, the company had more

than 25% increased workforce at its disposal while a

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huge part of its revenue-generating business vanished
nearly overnight: the military contracts.

Here’s how IBM faced these new challenges.

Global reach

IBM’s business strategy is focused on helping clients

leverage the power of the hybrid cloud and Artificial
Intelligence (AI) to resonate with clients who must
continually innovate and redefine their businesses with
technology.

Today, IBM has designed a business strategy for

accelerated growth while preparing the company for
future opportunities. Let’s look at the key elements of
IBM’s business strategy.

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Accelerating Digital Transformation
• Managing increased complexity, as large
enterprises use multiple heterogeneous IT
environments and clouds

• deriving value from an explosion of available

data, projected by analysts to grow up to three-
fold in the next three years,

• guaranteeing competitive operations in the

context of disruptive changes and worker
shortages,

• addressing the increase of malicious security

breaches and the rising cost of cybercrime, and
successfully meeting those challenges together
with a cohesive end-to-end sustainable
execution

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IBM Strengths

1.Strong brand reputation/ value

The brand name IBM attracts respect worldwide

because of the high-quality technologies the company
invents and provides.

It has earned several awards, including the most

admired company, green company worldwide, company
for leaders, and most respected company. These and
many other awards have collectively made IBM gain a
significant brand reputation.

2.Inter-related products

That is, services software management, and hardware

all integrate with each other, which allows IBM to
generate more profit by doing up-selling and cross-
selling.

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3.Commitment to employee training

IBM has established a learning culture that makes

employees gain new skills depending on market
demands. The sales staff learn about existing products
and better ways to market them, while technical teams
enhance their innovation through ongoing learning.

IBM spends more than US$574 million annually on its

internal training program, with a total number of 28.6
million hours of training registered.

4.Investment in research and development

IBM has made massive investments in research and

development, which is on average 12% of previous
year’s revenue. In doing so, the company gets to
understand changing dynamics of the tech industry and
better ways to approach emerging problems.

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IBM Weaknesses

1. Generic products

IBM suffers the weakness of the imitability of its

products, which means other technology companies
have a low barrier of entry to develop products that are
similar to IBM’s. For the moment IBM remains
profitable thanks to its large scale which allows the
operations to have minimized costs, but things might
get difficult if its competitors

2.Legal challenges

IBM has faced several lawsuits in the past that cut

across diverse issues. One of the most recent lawsuits
touches on the company firing as many as 100,000
employees in the last few years. The lawsuits claim that
IBM targeted older workers who have been
instrumental in re-inventing the firm.

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3. Expensive solutions

The solutions that IBM offers are too costly for most
businesses. Companies would need high investment for
them to consume some of these software solutions and
services. That locks out some key customers that would
have increased revenue collected.

4.Declining popularity

Even though IBM still rides on its strong brand

reputation, the company’s popularity has declined in
recent times. For instance, last year, they ranked 22nd in
brand value, while this year, they are at 18th.

The firm is losing brand value. If the company fails to

keep up with its market, it may eventually give in to the
competition

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IBM Opportunities

1. Expand software divisions

IBM has developed several solutions cutting across

cloud, security, and infrastructure. Even though its
initial focus was on hardware, the software has
gradually proven to be an area that would give it more
revenue and higher profitability.

2. Growing demand for cloud services

The cloud industry is growing rapidly. It is currently

worth $368.7 billion and is expected to grow at
around 15% CAGR for the next five years. The
company can make a major break in this area now that
most sectors are looking into investing in cloud services
and further strengthen its market leading position.

3. Accelerated digital transformation

Digital transformation has drastically accelerated due to

the global pandemic, although this process faces
multiple obstacles such as increased system complexity,
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extracting valuable information from huge datasets, and
defending against cybercrime.

IBM, with its cutting-edge technology such as hybrid

cloud and Artificial Intelligence and established scale,
is well-poised to lead this transformation and is
expected to greatly benefit from the secular growth.

IBM Threats

1. Failure of innovation

IBM has been actively expanding its business

into disruptive technology sectors such as hybrid cloud,
blockchain, and artificial intelligence. If IBM fails to
keep innovating cutting-edge technologies, it will fall
behind in the competition in these highly profitable yet
ever-shifting sectors.

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2. A market recession that reduces businesses’
investment in technology

IBM has constantly invested heavily in its research and

development to keep up with the competition.
A recession could harm the firm’s ability to do so by
reducing the availability of funds, which will put IBM
in a disadvantageous situation.

3. Predicting market trends and changeability

IBM invests heavily in key strategic areas to drive

market share gain and revenue growth; thus, the failure
of industry trend recognition and client adoption in
emerging businesses will unfavourably impact the
firm’s operations and profitability.

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IBM Today

The modern era of IBM arguably began in 1981 with

the Personal Computer 5150, or the “PC.” This was one
of the first computers intended for consumer use rather
than dedicated to business or the government. IBM
partnered with a relatively new company, to run MS-
DOS as the operating system on these machines.

In that same era, IBM invented the architecture for

“local area networks.” This would become first the
office networks that users came to rely on, then the
basis for the global networks that connect users on the
internet, and finally the home networks that most
households use today. It also created one of the modern
benchmarks for artificial intelligence with its Deep Blue
thinking system.

In 2005, Lenovo bought IBM’s personal computing

division, shifting its business model even more toward
business services and away from hardware. Yet while

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IBM does not have the cultural reputation for
innovation that it once did, it has continued to invest
heavily in this area. The company’s supercomputer
research arm continues to produce some of the most
powerful machines in the world, and IBM continues to
license new designs to businesses, government and the
military to this day.

Software Services
The company of IBM is also offering some of the
services to the people who need some software
assistance as well. The Middleware services that
are provided are software layers which will be able
to connect all the systems that are provided in the
company. These are some services which are
provided to the people in the business model of
IBM who might need it in the first place to have
their solutions for the software related problems.

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IBM infrastructure support and services

• IBM Expert Care - Optimize IT availability and

reduce costs through simplified, flexible services
and support tiers.
• Hardware and software maintenance - Leverage
IBM's flexible support solutions to maintain the
value of your IBM infra structure investment.
• Service extensions - Maintain support for your
IBM Power, IBM Z, IBM Linux ONE and IBM
Storage products while you plan for your next
upgrade with a service extension.
• IBM Z and Linux ONE - Find out more about
support and services for IBM Z and Linux ONE.
• IBM Power - Discover more about support and
services for IBM Power.
• IBM Storage - Explore support and services
offered for IBM Storage.

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Global Financing

When it comes to the financing options in the

best way, there is simply not a single speck of
doubt about the fact that the businesses model
of IBM is simply the best option for sure.

That is because the lease, instalment payment

options, as well as the loan financing options
are the ones that are handled in this front and
that too in the best way for sure.

That is one of the most important reasons why

people tend to have so much faith in the
business model of IBM. Three key services
offered by this segment are client financing,
commercial financing re-manufacturing and
re-marketing.

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IBM - Competitors

• IT Services: IBM's main competitors

are Accenture, Hewlett Packard, and
Wipro Technologies.
• Infrastructure Software: IBM's
biggest competitors are Microsoft,
Oracle, and Amazon.
• Hardware: IBM mainly competes
against Oracle, Dell, and HP.
• Global Financing: IBM competes with
numerous small players.

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IBM - Hires Based on Skills and not
College-Degree

As with so many other companies competing

for tech talent in a shrinking labour market,
IBM is looking for hands-on skill rather than
credentials. As more workers continue to
pursue self-guided learning, the skills-based
model will grow. Boot camp-style immersion
programs are gaining momentum across the
country.

Having a four-year college degree is generally

regarded as a necessity to score a job in tech.
But as the number of tech jobs has climbed,
far outpacing the number of applicants,
companies like IBM have turned to talent with
non-traditional educational backgrounds. With
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this drastic shortage of tech workers, the
company is now focusing on skills-based
hiring rather than credentials to fill these roles.
Many giant companies like gothic follows the
same procedure. In a USA Today column, the
company’s ex CEO Gini Rometty explained
that not all tech jobs require a college degree.
As industries transform, she says, “jobs are
being created that demand new skills – which
in turn requires new approaches to education,
training and recruiting.” These “new collar
jobs,” said Rometty, were becoming harder to
fill.

In the U.S. alone, there are more than 500,000

open jobs in tech- related sectors, according to
the U.S. Department of Labour. A recent

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study by Code.org reports that as many as 1
million programming jobs will be unfilled by
2022.

In June 2017, the company announced that it

would be partnering with community colleges
across the U.S. to better prepare more
Americans for “new collar career
opportunities.”

For those who don’t have a bachelor’s degree,

Daly says she likes to see hands-on experience
and that you’ve enrolled in vocational classes
that pertain to the industry you’re applying to.

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 INNOVATIONS

IBM is a top producer and manufacturer of

computer software and hardware. It is also
behind great innovations like:

• Automated Teller Machine (ATM)

• Floppy Disk
• Magnetic Strip Card
• Hard Disk Drive
• Relational Database
• UPC Barcode
• SQL Programming Language
• Dynamic Random-Access Memory (DRAM)

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BRAND AND REPUTATION

Since 1996, IBM has been the exclusive

technology partner for the Masters Tournament,
one of the four major championships in
professional golf, with IBM creating the first
Masters.org , the first course cam (1998), the
first iPhone app with live streaming (2009), and
first-ever live 4K Ultra High Definition feed in the
United States for a major sporting event (2016).
IBM is also a major sponsor in professional tennis,
with engagements at the U.S. Open, Wimbledon,
the Australian Open, and the French Open. The
company also sponsored the Olympic Games from
1960 to 2000, and the National Football
League from 2003 to 2012

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Why is IBM so successful?

IBM’s success over its long history can’t be

attributed to a single cause.

In each distinctive phase, IBM demonstrated the

qualities that enabled it to thrive and pioneer in
technological advancements. One consistent
quality that allowed IBM to stand the test of time
has been its decisive adaptability, the ability to
spot new trends and transform its business in time
to lead change.

Its corporate culture of respect and hard work has

been the cornerstone of every single one of its
achievements.

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Board and shareholders

The company's 15-member board of directors are

responsible for overall corporate management and
includes the current or former CEOs
of Anthem, Dow Chemical, Johnson and
Johnson, Royal Dutch Shell, UPS,
and Vanguard as well as the president of Cornell
University and a retired U.S. Navy admiral.

In 2011, IBM became the first technology

company Warren Buffett's holding
company Berkshire Hathaway invested in. Initially
he bought 64 million shares costing $10.5 billion.
Over the years, Buffett increased his IBM
holdings, but by the end of 2017 had reduced them
by 94.5% to 2.05 million shares; by May 2018, he
was completely out of IBM
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Research and development

Thomas J. Watson Jr., who succeeded his father as

IBM CEO in 1956, put the company on a research
and development track. Big Blue's research centre,
launched in 1961, encompasses research labs in
Yorktown Heights, N.Y., and Cambridge, Mass.,
as well as an industry solution lab in Hawthorne,
N.Y. Notable developments out of IBM's research
centre include the invention of dynamic RAM and
the Fortran language. More recent research
endeavours include blockchain, quantum
computing and cognitive technology.

But, while Big Blue conducts research on silicon,

the company exited the microelectronics
manufacturing business in 2015, selling that
operation to GlobalFoundries

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IBM - Future Plans

Arvind Krishna, the chief executive of IBM said that

their goal is accelerating their future and growth
strategy.

He further adds, " we are focused on accelerating our

growth strategy and seizing the $1 trillion hybrid cloud
opportunity. As we work toward this goal, two things
are becoming increasingly clear. First, we’re seeing a
tremendous increase in client demand for our
capabilities and expertise. Second, we’re noticing that
client buying needs for application and infrastructure
services are diverging. Because of this, we have decided
that the managed infrastructure services business of our
GTS segment will become an independent company,
which we’re initially referring to as “New Co.” We
expect the new company to be created sometime toward
the end of 2021. IBM will sharpen its focus on its open
hybrid cloud platform and AI capabilities. And the new
company will focus on delivering managed
infrastructure services."
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 IBM’s REVENUE GROWTH

IBM’s GROWTH OVER THE YEARS

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SUMMARY

IBM Corp., in full International Business Machines

Corporation, Leading U.S. computer manufacturer,
headquartered in Armonk, N.Y. It was incorporated in
1911 as the Computing-Tabulating-Recording Co., a
consolidation of three office-products companies. It
adopted its present name in 1924 under the leadership
of Thomas J. Watson, Sr., who built it into the major
U.S. manufacturer of punch card tabulators. IBM
bought an electric typewriter company in 1933 and soon
secured a large share of that market. In the early 1950s
it entered the computer industry, investing heavily in
development, and in the 1960s it produced 70% of the
world’s computers. Its initial specialty was mainframe
computers, but in 1981 it produced its first personal
computer, the IBM PC. IBM quickly became a leader in
this field, but fierce competition undermined its market
share and forced the company to retrench in the 1990s.

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CONCLUSION

IBM transitioned from a technology-based company to

a knowledge-based company.

IBM built a brand of trust and excellence that supported

their transition.

IBM leverages IT tools for increased communication ,

collaboration and knowledge sharing to once again
become the leader of the field.

REFERENCES

IBM's Success Story | Business Model | Revenue |

Company Profile| (startuptalky.com)

Conclusion - Conclusion International Business

Machines IBM specialize in Computer hardware
Computer software Consulting and IT Services. The |
Course Hero

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