International Business Machines (IBM)

International Business Machines Corporation (IBM) is an American information-technology company founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924. Headquartered in Armonk, New York, it has occupied the centre of enterprise IT for more than a century around mainframes, middleware, IT services, hybrid cloud (Red Hat), artificial intelligence (watsonx), and quantum computing.

Setting the standard, then losing the platform

Descended from Hollerith's punched-card tabulators, CTR was rebranded IBM by Thomas J. Watson Sr. in 1924 and grew into the world's leading supplier of office equipment on the back of US census and social-security contracts. With the IBM 701 (1952) it entered the electronic-computer business; with the System/360 of 1964 it set the de facto standard for mainframes by unifying operating system, peripherals, and applications under a single compatible architecture — a conceptual move whose lineage runs through PC clones and open standards.

In 1969 IBM "unbundled" hardware and software pricing, partly in response to an antitrust case; that decision is generally treated as the founding moment of the independent software industry. The 1981 IBM PC, built around an open architecture and an externally licensed OS (PC DOS, supplied by Microsoft and sold to everyone else as MS-DOS), seeded the Wintel ecosystem and at the same time cost IBM control of the PC platform itself. Worth correcting a familiar telling here: when IBM went looking for an operating system in 1980 its first stop was Microsoft, and it was Bill Gates who sent the team on to Digital Research and CP/M — not the other way round. By the early 1990s IBM was loss-making; Lou Gerstner became CEO in 1993 and steered the company into IT services (Global Services). From the 2000s onwards IBM sold its PC business to Lenovo (2005) and its x86 server business to Lenovo (2014), then acquired Red Hat for US$34 billion in 2019 to pivot toward hybrid cloud. Arvind Krishna became CEO in 2020; the Kyndryl spin-off (2021) of managed infrastructure, the watsonx rollout (2023-2025), and an accelerated quantum roadmap together built the four-pillar model of mainframe + hybrid cloud + AI + quantum.

The four segments, and what "book of business" counts

watsonx, launched in 2023, is the company's AI platform — watsonx.ai, watsonx.data, and watsonx.governance — aimed at enterprise generative AI. Reporting full-year 2025 results on 28 January 2026, IBM put its generative-AI book of business — inception-to-date signings and consumption, not recognised revenue — at more than US$12.5 billion. Red Hat OpenShift remains the heart of the hybrid-cloud strategy.

Key events

• 1969: Hardware-software unbundling, partly in response to the long-running antitrust suit (dropped 1982).
• 1981: IBM PC released. The open architecture admits compatible-machine makers and lets Intel and Microsoft scale to dominance.
• 1970: E. F. Codd's relational model is published from IBM's San Jose Research Lab.
• May 1997: Deep Blue beats the reigning world champion Garry Kasparov 3½–2½ in New York — the first time a computer won a match against a reigning world champion under standard tournament time controls. The 1996 Philadelphia match had gone to Kasparov 4–2.
• 2005: PC business sold to Lenovo (US$1.75 bn).
• 2011: Watson beats Ken Jennings and Brad Rutter on Jeopardy!.
• 2014: x86 server business sold to Lenovo (US$2.1 bn).
• July 2019: Acquisition of Red Hat closed at US$34 bn — IBM's largest acquisition ever.
• November 2021: Managed-infrastructure business spun off as Kyndryl.
• 2023: watsonx unveiled; enterprise generative AI strategy formalised. IBM Quantum System Two debuts on 4 December, running three 133-qubit Heron processors at Yorktown Heights.
• 2024: Heron R2 processor (156 qubits). The Granite 3 models are released with open weights under Apache 2.0.
• April 2025: IBM z17 announced (generally available 18 June), the first mainframe IBM describes as fully engineered for AI. The modular quantum roadmap introduces the Loon and Kookaburra chips; watsonx Code Assistant for Z commercialises COBOL-to-Java translation.

Key metrics

• Revenue (full year 2025): US$67.5 bn, up 8% (up 6% at constant currency) / Net income: US$10.6 bn
• Segment growth 2025: Software +11%, Consulting +2%, Infrastructure +12%
• Generative AI book of business: more than US$12.5 bn inception-to-date (28 January 2026) — signings and consumption, not recognised revenue
• Free cash flow 2025: US$14.7 bn
• Patents: led US patent grants for 29 consecutive years (over 10,000 per year), surrendering the top spot to Samsung in 2022.

The dinosaur years, Dehomag, and the facial-recognition letter

That IBM created the PC industry and then promptly lost it became one of the most cited business-school case studies of the 1990s. Equally singular was its recovery from a US$8.1 billion loss in 1993 — a record for a US company at the time, and the point at which commentators were writing the company off as a dinosaur — through the services pivot under Lou Gerstner, who arrived that April and died on 28 December 2025. The decision to outsource the operating system for the PC put MS-DOS rights into Microsoft's hands; the late-1980s OS/2 attempt to take them back failed, and matters were effectively settled by Windows 95.

A persistent critical thread, opened by Edwin Black's 2001 book, concerns the use of IBM-subsidiary Dehomag punched-card machinery for German census and Holocaust-related processing between 1933 and the 1940s. IBM has released some contemporary correspondence but has stopped short of an explicit legal or ethical acknowledgement. More recently, on 8 June 2020, after George Floyd's killing, Arvind Krishna wrote to five members of Congress — Senators Cory Booker and Kamala Harris and Representatives Karen Bass, Hakeem Jeffries and Jerrold Nadler, the sponsors of the Justice in Policing Act — saying IBM would exit general-purpose facial recognition. It was the first of the large US technology firms to move that week; the letter went to bill sponsors, not to the Speaker of the House.

On AI ethics IBM released its AI Fairness 360 toolkit in 2018 and has positioned itself as a large-enterprise leader on the EU AI Act. Less flatteringly, the company carried out repeated rounds of North American layoffs in 2020-2022, drawing several age-discrimination lawsuits. In 2024, citing geopolitical risk, IBM substantially scaled back its China R&D operations, reportedly cutting about 1,000 staff.