How Did IBM Go from Boring Business Machines to AI Champions?

IBM's Evolution from Self-Playing Pianos to AI Champions

How Did IBM Go from Boring Business Machines to AI Champions?

When was the last time you thought about IBM? Probably quite a while ago, right? It’s easy to forget about them since IBM has this reputation of being super boring. I mean, what do they do? Make business machines. Yawn. But hold on, IBM is more interesting than you think. Did you know IBM is older than sliced bread? Yep, and Band-Aids and even Arizona as a state.

Here’s a fun tidbit: you know those self-playing pianos from old Western movies? The ones with the paper rolls spitting out tunes? Those piano rolls are kinda what gave birth to IBM. Sounds weird, but let’s rewind to the 1890s. Back then, everything was done on pen and paper, making government tasks unbearably slow. The US Census Bureau, which had to count the population every ten years, took over seven years just to complete the 1880 census. It was a total mess, but one guy, Herman Hollerith, saw an opportunity.

Hollerith worked at the Census Bureau and was so fed up with the slow process that he spent ten years inventing a machine to speed things up. He created the tabulator, the first electromechanical counting machine. Initially, he thought about using paper rolls like those pianos, but they were too fragile. So, he switched to punch cards. These might look old-fashioned now, but punch cards were the go-to for data storage until the 1970s.

In 1896, Hollerith started his own company, which made him pretty rich, especially for those days. By 1911, he sold his business for over 2.3 million dollars. Enter Charles Flint, who bought Hollerith’s company and merged it with others. This was the beginning of IBM, though it wasn’t called IBM until 1924. With technology advancing, IBM went from tabulators to a variety of products, even making rifles for the US military during World War 2.

Post-war, IBM dived into creating real computers, the ones that took up entire rooms. In the 60s, they teamed up with NASA for the Apollo missions. But the big challenge came in the 80s during the PC revolution. IBM was late to the party, but they launched the IBM Personal Computer in 1981. It was a hit because IBM supported third-party developers, a big shift from the secretive practices of that time. Soon, they were selling a PC a minute.

So why don’t we see IBM PCs nowadays? They made a crucial mistake by using components from other companies like Microsoft and Intel. This opened the door for competitors, flooding the market with cheaper clones and sidelining IBM. Despite this setback, IBM didn’t vanish. They bounced back by focusing on mainframes, big computers essential for businesses, which small PCs couldn’t replace.

The dot-com crash in 2000 worked in IBM’s favor, wiping out many competitors. The internet let them sell not just mainframes but also complete software and services packages. IBM became the go-to IT guy for businesses. Actually, many people still use IBM PCs, but they’re branded as Lenovo since IBM sold their PC division in 2005. Learning from their past, IBM stayed ahead in tech developments.

Take AI, for example. In 1997, IBM’s Deep Blue beat world chess champ Garry Kasparov, and in 2011, their Watson AI won a million dollars on Jeopardy! Now, they’re facing new challenges with cloud computing. Imagine renting a giant network of computing resources—servers, processors, storage—without having to maintain it. It’s a game-changer and a threat to IBM’s main business. Rivals like Amazon, Microsoft, and Google add to the difficulty.

So, will IBM survive the cloud computing era? It’s hard to say, but they have the resources to keep evolving. They’ve learned the hard way about staying at the tech forefront. Only time will tell if they’ll come out on top again.