International Business Machines Corporation (IBM) | The Canadian Encyclopedia


International Business Machines Corporation (IBM)

The oldest of the Canadian software labs - situated in Toronto - is the only facility in North America to house development for all five major software brands for IBM.

International Business Machines Corporation (IBM)

  International Business Machines Corporation (IBM) is a global computer company with expertise in recording, processing, communicating, storing and retrieving information. IBM has maintained a strong presence in Canada since 1917. IBM Canada houses the largest team of software professionals outside the US, with software development labs in Markham, London, Ottawa, Montréal, Edmonton, Vancouver and Victoria. These sites are collectively known as the IBM Canada Lab. Additionally, IBM Canada's Bromont, Québec manufacturing plant (inaugurated in 1972) is the company's largest semiconductor packaging and test facility, and employs almost 2800 people. The plant also packages chips used in home gaming consoles and represents one of Canada's leading exporters.

The oldest of the Canadian software labs - situated in Toronto - is the only facility in North America to house development for all five major software brands for IBM. Since its opening in 1967, the Toronto lab has grown to over 2500 employees, making it the largest IBM software lab in Canada and IBM's third largest worldwide.

Company History

 The origins of IBM trace back to the end of the 19th century, in its predecessor, the Computing-Tabulating-Recording Company (CTR), which was composed of three merged companies. CTR sold items ranging from deli slicers and commercial scales, to tabulators and punch cards. The company was incorporated in 1911 by Charles R. Flint and was based out of New York City, with 1300 employees and several branch plants across the US. CTR opened its Toronto branch plant in 1917 under the name of International Business Machines Co, Ltd, the first time the new name was used.

 In 1914, Thomas J. Watson joined the company as general manager. Shortly thereafter, Watson implemented new business tactics that have defined the company since - a positive outlook, good customer service and the slogan "THINK." By 1915, Watson was made president and the company's revenues more than doubled within four years. CTR was expanded to Europe, South America, Asia and Australia.

Expansion and a Name Change

 The First World War offered new opportunities for the company to expand into autograph recorders and electric accounting machines. By 1924, CTR had expanded significantly, with the acquisition of patents and properties of former competitors. On 14 February 1924, CTR's name was officially changed to International Business Machines Corporation, and the global brand IBM was formed.

Throughout the Depression, IBM grew as a business by keeping workers busy in Canada and the US producing new machines despite a downturn in demand. This put IBM in a suitable position in the US to win a landmark government contract following the enactment of the 1935 Social Security Act. IBM was tasked to maintain employment records for 26 million people and was considered the largest accounting operation of all time. The success of this contract ensured IBM much future work with the US government.

Foray into Computers

 At the onset of the Second World War, all IBM facilities were used by the US government, including branch plants in Canada, to build machinery to support the war effort. The company's product line expanded to include bombsights, rifles and engine parts. Wartime also marked IBM's initial foray into computers, with the Automatic Sequence Controlled Calculator - or Mark I - created in 1944. Mark I could solve an addition problem in less than a second, six seconds for multiplication and about 12 seconds for division. The machine was over 50 feet long, eight feet high and weighed almost five tons.

IBM introduced the first large-scale digital calculating machine (Selective Sequence Electronic Calculator) and the Electronic Calculating Punch in 1948 and the Card-Programmed Electronic Calculator in 1949. By the mid-1950s, IBM was building computers with transistors, which greatly increased the speed at which calculations were made. The IBM 7090 could perform 229 000 calculations per second and was used by the US Air Force to run its Ballistic Missile Early Warning System. In 1957, IBM introduced a new direction for data processing with its 305 Random Access Method of Accounting and Control (RAMAC) - the first computer disk storage system. RAMAC could retrieve data stored on any one of 50 disks in less than one second. Also in 1957, IBM introduced FORTRAN, a computer language based on algebra, grammar and syntax rules that became one of the most widely used computer languages.

In 1952, Thomas J. Watson handed the reins of the company to his son, Watson Jr, who believed computers would play a major role in the future of business. Innovations under Watson Jr led IBM to become a computer industry leader. Public awareness of the possibilities of computers surged, and during Canada's EXPO 67, IBM's exhibit featured an impressive bright red System/360 room-sized computer, which incidentally had about 0.1% of the processing power of a modern personal computer. Also in 1967, the IBM Canada Software Lab opened with 55 employees in Markham, Ontario.

Watson Jr also changed the way IBM marketed its products in 1969 by unbundling hardware, service and software packages and offering individual components to customers. This gave birth to the multibillion-dollar software and services industries that exist today.

The 1970s saw the end of the Watson family leadership as Watson Jr stepped down in 1971 - the same year as the introduction of the floppy disk. In 1973, IBM introduced supermarket checkout stations that used glass prisms, lenses and a laser to read product prices. In 1973, an early form of today's Automatic Teller Machines was introduced as the IBM 3614 Consumer Transaction Facility.

The IBM Personal Computer

 A new era in computing began in 1981 - the personal computer, or IBM PC. IBM began to enter homes, schools and small businesses in the form of 16 kilobytes of user memory, one or two floppy disks and an optional colour monitor. During the design of the IBM PC, the company contracted non-IBM companies to produce its components - the processor chip was designed by Intel and the operating system (DOS - Disk Operating System) was created by Microsoft, then a 32-person company.

The 1980s saw IBM streamline its operations and resources. Investments in research produced four NOBEL PRIZE winners in the 80s and laid the foundation for network computing. But the early 1990s proved difficult for IBM as the "PC revolution" placed computers directly in the hands of consumers - which meant business purchasing decisions were put in the hands of individuals. IBM's expertise in business applications was being replaced by a focus on desktop and personal productivity - by 1993, the company had accumulated a net loss of USD$8 billion. In the following few years, IBM was stabilized by focusing on integrated solutions through a rebuilding of the IBM product line. By the dawn of the Internet, IBM was back in a position to succeed as interconnectivity became the dominant need for businesses - the integrated solution offered by IBM had revived the company's fortunes.

In May 1997, IBM shocked the world with its demonstration of the power of computing when its 32-node IBM RS/6000 SP "Deep Blue" defeated world chess champion Garry Kasparov. By 2000, IBM had re-established itself as a leader in information technology.

IBM's Cultural Impact

The cultural impact of IBM initiatives has been significant, affecting all aspects of life, including commerce, education, health care and travel. As an example of the latter, in 2002, Air Canada began a trial program using wireless mobile IBM self-service kiosks to expedite passenger check-in at Toronto's Lester B. Pearson Airport. The mobile kiosks represented the first jointly developed solution resulting from the strategic relationship between IBM and Air Canada. The kiosks are a familiar part of air travel today.

Additionally, IBM's Green + Innovation initiative and Green IBM Community are designed to promote environmentally responsible corporate platforms. The Canadian leader of this international program - Jean-Francois Barsoum - was one of only a handful of Canadians to be trained by Nobel Peace Prize winner Al Gore to present materials from An Inconvenient Truth to worldwide audiences.

In 2011, the company's centennial year, IBM's Watson computer system delighted international audiences when it competed on the game show Jeopardy!, defeating the show's two most successful contestants. Watson is essentially a cluster of Power 750 servers, operating at more than 80 Teraflops, and runs software called Deep QA, which can "understand" and respond to questions posed in natural language and was developed by IBM software developers around the world.

Corporate Citizenship

IBM is a leader in corporate citizenship, and contributes technology and talent to non-profit agencies and educational institutions through programs such as its IGNITE (Igniting Interest in Technology & Engineering) camps for Aboriginal youth and the IBM Corporate Service Corps. The company sponsors several grant programs in the areas of education, arts and culture, communities and the environment. Additionally, IBM promotes employees' philanthropic endeavours by contributing to organizations in employees' communities and supporting employees who volunteer in their communities. The company supports more than 70 000 hours of employee volunteerism and makes donations (cash, technology, service) valued at roughly $6 million annually.