IBM learns lessons of its past

London - Tricky things for technology companies, milestone birthdays. For corporations on the cutting edge of technology, whose business is all about the very latest piece of kit or new IT service, getting older is not necessarily something to celebrate.

And for IBM, which is navigating the 100th anniversary of its foundation this month, there could easily be the temptation to melancholy. This, after all, is a company that so dominated the technological development of the computer age that its supporters in the Sixties dubbed it Snow White to its rivals' Seven Dwarfs, and its detractors harried it for alleged monopolistic practices throughout the the Seventies. IBM's pre-eminence had begun eroding before Facebook's Mark Zuckerberg was even born.

But “it's not just about what you create, it's also about what you choose to leave behind,” the company says, in an essay on its anniversary. “Leadership often requires shedding emotional attachment to that heritage. Consider the IBM Personal Computer. It was a product that spawned a whole new sector of our industry. But several years ago it became clear that the PC was not central to our future - or the future of computing. So we got out.”

And that is why the anniversary is a genuine cause for celebration. While IBM may no longer be making products that the average consumer comes across, it is still a technology goliath worth $200bn. That puts it behind only Apple ($300bn) and level-pegging with Microsoft. With more than half its $100bn annual revenues coming from selling services to corporate and government customers - things like integrating, implementing and advising on their complex IT systems - it is leader in a market it largely created, and rivals such as Dell, Oracle and Hewlett-Packard are racing to copy its mix of hardware, software and services capabilities.

Sunit Gogia, an analyst at Morningstar, says Big Blue can look to the future with confidence. “What their history gets them is trust - they have long-term relationships with clients, and they have come to be seen as a trusted vendor - but ultimately their future comes down to answering their clients' question: can you solve the problems of today?”

1914 Flint hires Thomas J Watson, a cash register salesman whose activities had landed him in trouble (he was sentenced to a year in jail for cornering the second-hand register market, but successfully appealed), but whose business nous was unquestionable. He was made general manager, then president.

1915 Annual income of the company reaches $4m as the use of punch card accounting machines spreads.

1924 Changes name to International Business Machines, after a marketing pamphlet published by the company’s Canadian subsidiary.

1928 IBM redesigns the punch card to hold 80 columns, doubling the previous capacity.

1933 Goes into the electronic typewriters business.

1937 Thomas Watson Snr awarded the Order of the German Eagle medal from the Nazi regime. He returned it after the outbreak of war.

1944 The Automatic Sequence Controlled Calculator, below, later called Mark 1, is presented to Harvard University. It is more than 50ft long, 8ft high and weighs five tons.

1953 The IBM 650 is launched, known as the Model T Ford of computers because it was the first machine to be mass produced.

1956 Thomas Watson Snr dies, aged 82, and passes the CEO job to his eldest son, Thomas Watson Jnr.

First monopoly settlement with nervous US competition authorities.

IBM was required to sell, rather than just lease, its machines and to make parts available to other vendors. Arthur Samuel of IBM's Poughkeepsie laboratory programs an IBM 704 to play draughts

1964 IBM introduces the System/360 family of computers. Business customers can now link together and upgrade their computers.

1967 IBM’s dominates the mainframe computer market, with about 70 per cent of sales and the rest divided among seven much smaller competitors. The situation is dubbed Snow White and the Seven Dwarfs.

1969 The company unbundles billing for hardware, software and services. The decision is credited with opening up separate markets for each, but triggers a 13-year monopoly investigation.

1971 IBM’s magnetic stripe technology is adopted as a global standard. It is still used today on credit cards.

Thomas Watson Jnr retires after a heart attack, ending 56 years of family leadership. IBM invents the floppy disk, below.

1981 The company introduces the IBM PC – but in a fateful decision it outsources several important aspects to newer firms with innovations that will turn out to revolutionise the IT industry. The IBM PC microchip comes from Intel and the operating system is supplied by a little firm founded in Seattle by Harvard dropout Bill Gates.

1982 The US Justice Department finally drops anti-trust investigation.

1991 Sells a group of low-margin businesses, including electronic typewriters and printers. These days that group is called Lexmark.

1992 Introduces the ThinkPad line of laptop computers. The name comes from one of the Watson Snr-era corporate slogans, “THINK!” IBM’s $8.1bn loss is the largest loss in corporate history. Corporate clients have switched from mainframes to a system of desktop computers linked to central servers.

1993 With the company in crisis, IBM hires a chief executive from outside its ranks for the first time. It chooses Louis Gerstner, a management consultant who had run the food giant RJR Nabisco, and he sets about cutting costs and bulking up IBM’s software and services side.

1995 Buys the developer of the Lotus Notes email system, the most important in a string of software company acquisitions.

IBM scientists complete the largest single numerical calculation in the history of computing, to define the properties of an elementary particle called a glueball. It had taken two years.

1997 Deep Blue defeats the world chess champion Gary Kasparov.

2001 Edwin Black’s book IBM and the Holocaust, below, examines the use of IBM’s machines by the Nazi regime. The book triggers lawsuits in the US. They are dropped, but IBM’s German subsidiary pays $3m into a fund for Holocaust victims.

2002 IBM buys the consulting arm of PricewaterhouseCoopers for $3.5bn. Samuel Palmisano is elevated to CEO when Louis Gerstner retires.

2005 The personal computer division, which includes ThinkPads and desktop computers, is sold to the Chinese manufacturer Lenovo.

2011 An IBM computer called Watson appears on the US game show Jeopardy, below, and wins – an achievement that pushes the boundaries of linguistic analysis by computers, and heralds a new era of artificial intelligence. - The Independent