International Business Machines (IBM) is a global IT hardware manufacturer and service provider headquartered in the United States. IBM became a leader in computing hardware with the rise of early computers in the 1950s and 60s, but not keeping up with the shift to personal computers in the 1980s resulted in significant losses for the company.

Today, IBM’s portfolio consists mostly of enterprise-level technology hardware and hosting and consulting services.

History of IBM

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. Soon after being named president, Watson oversaw the shift of the company’s primary product offering to large-scale business computing equipment and changed the name to IBM. To catalyze technological innovation, IBM opened the Watson Scientific Computing Laboratory at Columbia University in 1945.

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 (specifically the System/360 and 370 families) 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; the company attempted to restructure, but it wasn’t able to keep up with the demand for PCs and, as a result, IBM lost billions in revenue. As vendors like Compaq, Dell, and HP took over the PC and PC compatible market, IBM shifted toward integrated business solutions, consulting, and research.

Although IBM has never fully recovered from its business losses due to its approach to IT, it is still a leader in the IT industry today. It holds approximately 5% of the global cloud market share and earned $57.35 billion in revenue in 2021. IBM is home to the largest industrial research facilities in the world; it is still a powerhouse of large-scale business hardware offerings, specifically mainframe computers, servers, and infrastructure. IBM also offers hosting and consulting services, including platform as a service (PaaS), managed security services (MSS), and Internet of Things (IoT) consulting.

An IBM timeline

  • 1935: The U.S. government uses IBM’s punch card equipment to create and maintain employment records for the entire population of American workers in concordance with the Social Security Act.
  • 1957: IBM researchers invent the hard disk drive.
  • 1969: The magnetic stripe card is developed by IBM and put in production to create debit cards and ID badges for banks, insurance companies, hospitals, government offices, etc.
  • 1971: IBM develops the first commercial floppy disk.
  • 1972: IBM presents a proposal for the first Universal Product Code (UPC), which would later be adopted by retailers around the world.
  • 1973: IBM researchers Donald D. Chamberlain and Raymond F. Boyce write the SQL programming language.
  • 1991: Lexmark, a printer, typewriter, and keyboard company, is spun out of an IBM manufacturing division.
  • 2006: Frances Allen, an IBM Research Fellow, becomes the first woman to receive the Turing Award.
  • 2011: Watson, a cognitive computing platform, defeats “Jeopardy” champions Brad Rutter and Ken Jennings.
  • 2014: Lenovo purchases IBM’s server division.
  • 2019: IBM acquires Red Hat, an open source software company.
  • 2022: IBM acquires Sentaca, a consulting firm that focuses on cloud-native automation technology for telecommunication.


IBM’s specialties include mainframe computers, servers, storage solutions, AI, and cloud software.

Computers and servers

IBM still sells mainframe solutions, which are now designed for hybrid cloud computing. Its Z series of mainframes and related software include privacy and security features, which are critical for enterprise computing operations. One of the recent mainframe solutions, the z15, allows data encryption, policy controls, and trusted execution environments (TEEs).

IBM’s enterprise servers allow businesses to deploy workloads on premises or in a cloud environment. IBM servers include the Power System family. 

IBM InfoSphere

InfoSphere is a data integration platform. According to IBM, it provides cleansing and transformation for enterprise data so that businesses are drawing insights from accurate and relevant data. InfoSphere:

  • Analyzes and assesses data quality
  • Classifies unstructured data
  • Connects with multiple storage solutions and applications 
  • Integrates with IBM Watson Knowledge Catalog, a repository that prepares data for AI and deep learning processes 

IBM Cloud Paks

IBM Cloud Paks are hybrid cloud software platforms powered by artificial intelligence, designed to integrate multiple cloud environments and move workloads between them when needed. This increases the flexibility that enterprises have to run their applications in the most efficient environment. Each Cloud Pak is built on Red Hat OpenShift, an open source containerization platform. Cloud Pak is available for:

  • Data
  • Security
  • Integration
  • Business automation
  • Watson AIOps
  • Network automation

IBM Watson

IBM Watson is a program for data analytics that uses natural language processing and is designed for businesses to receive answers to data that other AI applications might not be able to give. Watson recognizes human language and speech patterns that permit it to analyze data that heavily involves language; Watson can also analyze large volumes of unstructured enterprise data

Read more: IBM Watson: A cheat sheet 

Storage solutions

Some IBM storage platforms include:

  • Spectrum, a software-defined storage suite that offers per-terabyte payment by capacity, infrastructure monitoring, and cloud object storage
  • FlashSystem, an all-flash solution that allows storage admins to manage arrays as a pool and includes data recovery features
  • Elastic Storage System, which offers scalability for artificial intelligence and big data applications


Competitors include:

Recent coverage

IBM and the Semantics of Cloud (eWEEK)

The IBM Kyndryl Spin-Off: When Separation Makes Sense (Datamation)

IBM Z: Helping Enterprises Adapt to Cloud Modernization (eWEEK)

How IBM is using AI to deliver insights and stats to US Open fans


This article was updated February 2022 by Jenna Phipps.

Webopedia Staff
Webopedia Staff
Since 1995, more than 100 tech experts and researchers have kept Webopedia’s definitions, articles, and study guides up to date. For more information on current editorial staff, please visit our About page.
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