A Special Company Is Born

Enthusiasm was needed during the start-up years.

A company name was created and conjoined by hyphens: Computing-Tabulating-Recording Company (C-T-R).

C-T-R was composed by a varied group of companies, some of them existing since the 19th Century.  The products they managed ranged from commercial balances, to machines that cut beef and dairy products, to industrial equipment that served as  time registers and perforated cards.  Among other issues that existed within the organization, the company’s revenue was in decline.  Despite that, Thomas L. Watson Sr., decided to join the company in 1914 as General Manager.

Watson had already established a trademark in the National Cash Register Co.; first as a salesman and then as Sales Manager.  However, he had been forced to resign as a result of a misunderstanding with John H. Patterson, NCR´s tempestuous president.  He offered the new company, a passion for selling and the vision of C-T-R becoming a key component in the industry’s future.

From the beginning, Watson worked to instill a sense of pride and dedication in the organization.  He would incessantly offer speeches and write-out editorial messages. ¨We have to transform the heart of this company and carry the company in our hearts¨ he once stated.  The company spirit was inculcated in the sporting events and family outings held periodically.

A band was created within the company.  Later came an orchestra and a group choir.  A symphony was also formed, directed by the Italian composer, Vittorio Giannini, with melodies such as "Ever Onward," which later became IBM´s theme song.

All efforts were developed to establish loyalty and moral within the company, which helped to align the business and its employees towards a common goal.

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"...We are in the best position to help serve the world¨ 
T.J.Watson Sr.

In 1920, articles in newspapers regarding the company indicated that product line expansion as well as international efficiency was occurring, attributable to the business initiatives taking place in Canada, Brazil and various European countries.

A new product, designed for more than just tallying-up the number of inhabitants, was about to be launched by a special laboratory established in New York City.  This machine, a printing calculator, was the beginning of modern data processing. 

The gross margin had more than tripled, from 4 million dollars to 14 million dollars.  The number of employees had increased to more than 3,000 and Watson continued exhorting employees.  He once said during an executive course: ¨We have three very important production lines and we are creating teams that allow us to save time, labor and money.  This is how we will distinguish ourselves before the world and be able to say: ´With our lines, we will be able to serve Retailers, Wholesalers, Manufacturers and Distributors, better than anyone else on Earth´. ¨

Atlantic City seemed like the ideal place for the first ¨100 Percent Club¨ meeting, which in 1924 paid tribute to the 54 salesmen who had achieved the sales quota.  This same year, the company decided to change its name from Computing-Tabulating-Recording Co., to International Business Machines Corporation.

A new generation of IBM leadership oversaw this period of rapid technological change. After nearly four decades as IBM's chief executive, Thomas J. Watson, Sr., passed the title of president on to his son, Thomas J. Watson, Jr., in 1952. He became chief executive officer just six weeks before his father's death on June 19, 1956 at age 82.

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IBM Corp. consisted in 6 largely autonomous divisions each one oriented to a specific part of the product line, in addition to the subsidiary IBM World Trade.

In the late 1950´s, there were a series of international initiatives.  There were new IBM Centers for data processing in London, Brussels, Zurich, as well as new R&D laboratories in Hursley, England and Service Offices in Athens and Geneva.  In the Far East and Latin America, IBM established offices in cities such as: Taipei, Tokyo and Sydney, in addition to Caracas, Lima and San Salvador. Japan even opened a new plant in Chidoricho.

By the end of the decade, IBM had 12 plants, 4 laboratories, 262 sales offices and more than 29.000 employees in 87 counties outside of the United States.

The operations had expanded successfully into the Central American market

In the blink of an eye, the transistor had left the vacuum tube in the past.  It was much faster, smaller, colder, stronger and safer.   It contributed so that the new machines were more efficient and versatile.  Soon after, the language codification also became an important factor since these simplified writing instructions made the computer aware of certain tasks being completed.

Since 1942, IBM had operations in Panama under the name "Máquinas Comerciales Internacional" (International Commercial Machines).  By the end of the decade, IBM had opened operations in El Salvador, Costa Rica, Guatemala, Honduras and Nicaragua.

At the beginning, the products offered were the well-known tabulating machines, such as the 405 Model, perforated cards, electric typewriters, wall clocks and time clocks that controlled employees´ attendance.

The clocks were displayed at the front of the office buildings for passerbys, others were installed inside the office buildings for internal purposes.

The first typewriting models were the A, B, and C.  The D model had significant changes. The Selectric typewriter, utilized a sphere where the writing symbols could be found.

The registry machines had an important effect on the history and development of the region.  In Guatemala, the 1950´s census was tabulated in one of these machines.  The first electronic National Elections in Costa Rica were held in 1948, thanks to this team.  In 1959, Honduras established a Service Bureau and carried out a census, retrieved statistics and implemented taxes in the Standard Fruit Company, Esso Standard and the Inter-American Insurance.

In  1943, Panama’s General Comptroller purchased the first registry machine with perforated cards sold in that country for approximately $1,000.  In the 1960´s, IBM’s products were becoming more and more attractive to the general public.

Within technology evolving, the time had come for computers to become more popular.   This accomplishment occurred during the 1960’s and was aided by the advances in television and satellite communication.

IBM engineers in Endicott, New York and La Gaude, France exchanged data via the Telstar satellite to demonstrate that they could transmit volumes of information throughout the world.   The exploration of space was a great platform to launch. The IBM programmers wrote millions of computer instructions for spaceflights.  However on April 7th, 1964, the concept of computers was transformed.

Three months before the company celebrated their 50th Anniversary, IBM did what Tom Watson had called ´the most important announcement in the history of the company, regarding a product´, they launched the 360 System, which represented a technological revolution for computers.

The 360 System was the first big ´family´ of computers in the world that utilized the same software and peripheral team.  The magic word was ´compatibility´ and for its users, it meant a new and alluring series of possibilities.   There were five different processers and a total of 19 different combinations of power, speed and memory.

It is important to mention the important clients who trusted and were supported by the 360 System which processed their company’s data:
In Honduras, the Tela Railroad Company and the Standard Fruit Company; in El Salvador, the Salvadorian Footwear ADOC; in Dominican Republic, Viccini House, the Agriculture Bank and the Santo Domingo Aqueduct; in Costa Rica, Matra, the Health Ministry, INCOP, the Municipality of San José, the Ministry of Finance, Standard Fruit Company, the Costa Rican Social Security (CCSS), the Costa Rican Electrical Institute (ICE), and the National Bank among others; en Guatemala, Guatel, the Industrial Bank, EEG; and in Panamá, the General Comptroller of the Republic, IDAAN, CSS, Chirriquí Land, Municipality of Panamá,  the National Treasury,  the National Brewery, the National Health Ministry, the Feduro Agency and Citibank.

During this time, the commercial operation was quite simple, it consisted of renting the systems to process the client’s information, which was sold in machine-time, in the IBM offices (Data Centers).  It offered payroll services, billing, accounting, and issuance of checks, among others.  It was not very common for clients to utilize their own resources.

The 60’s were a time of sudden growth for IBM worldwide. The company had become the leader in business machines and the employees’ attitudes had converted the business into a model company.

In 1963, IBM proposed to be part of the Dominican lifestyle, collaborate with its people, and contribute to its development and fight together for the noble ideals of progress for the country.  With this said, they opened a modest office en the heart of the Colonial City.  The opening was lead by IBM top management in Costa Rica who oversaw the Caribbean Area.

The IBM programmers had written more than 50 million computer instructions to support spaceflights and the US Defense Program.
On April 29th, 1971, Thomas J. Watson Jr. informed employees in a nationwide announcement that he would no longer serve as Chairman and Chief Executive Officer of IBM. After 15 years of leadership, Tom Watson Jr. retired.

T. Vincent Learson would be filling these two positions while Watson would remain as part of the Executive Committee.

Frank Cary was appointed Chairman and Chief Executive Officer in 1973 and remained in that position until 1980. He led the company through a tumultuous era, during which IBM faced over 20 antitrust lawsuits, even though all resulted positively for the company at the end of the day.

The 70’s were characterized as one of the most important times for the future of IBM.  It was during this decade that IBM shifted its business strategy and the future of the company towards information technology, which was when the company truly took off as one of the leading technology companies worldwide.

Historia IBMIBM’s prestigious and solid position in the business community was enviable. IBM teams had penetrated all the sectors.

IBM’s presence was a determining factor in commerce, industry, banking, education and government.

At an accelerated rhythm, IBM introduced the most modern technologies in the market.  As they continued to develop their R&D laboratories, System 32, System 34, System 36,  System 38, the 4300 and the 3033 were created.

The quality, flexibility and versatility of System 36 created a standard in the region with respect to medium range servers, and laid the foundation to hold a privileged position with IBM all the way up to the days of System AS/400.

This phenomenon also propitiated certain conditions for the creation of a local development industry for software applications in the Central American market.

IBM opened its offices and gained permanence as well as stability in the different countries, carrying out a fruitful effort.  They contributed to the diverse sectors in the economy, finance, education, and governmental institutions.  In addition, IBM contributed to the development through technology transfers in key sectors of the region.

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In September of 1964, President Lyndon B. Johnson, granted the Presidential Medal of Freedom to IBM’s President, Tom Watson Jr., the highest civil honor a U.S. President can bestow.   Técnicos de la División de máquinas de escribir, 1975. República Dominicana.   Introducción al mercado del Sistema 32 de IBM. Costa Rica.

New technologies, New strengths

IBM announces the IBM Personal Computer, the smallest and -- with a starting price of $1,565 -- the lowest-priced IBM computer to date. An immediate success, the IBM PC quickly becomes the industry standard, and was one of the reasons Time magazine chose the "personal computer" as its 1982 Man of the Year.

After the first model, others followed that paved the way for the introduction of the IBM Personal System/2, six years later.

The 1980’s were a demanding time, just like years past. The industry and the business environment could be classified as eternally new.  In 1983, the CEO, John Opel, began to align IBM´s goals.  These included growth comparable to the industry, leading products, efficiency and earnings.  This plan made the company not only more competitive but more flexible. New entities, also known as independent business units received freedom as well as responsibility and marketing efforts were focused more and more on concrete industries.

Development accelerated.  There was an extraordinary effort to detect errors early on with quality circles, quality assurance hotlines, and even with the formation of an IBM Quality Institute.

The company expanded its labor force from 274.108 to 405.535 employees and increased their earnings from 11 to 50.1 billion dollars.
In 1986, IBM’s 3090 was the computer that utilized the highest-density chips.  This occurred 2 years after IBM engineers in Burlington, Vermont, announced the experimental version of the chip.

In January 1987, IBM introduced new 3090 processors with 1 million bit memory chips, that were 2 times faster and occupied a third of the space of its predecessors.

A month later, IBM announced that an experimental chip could store more than 4 million bits of information.  In June 1989, IBM revealed that its 4 mega bits chip was being produced in their plants in Burlington, Vermont; Sildenfingen, Germany and Yasu, Japan.  In June, the company also announced that they had developed the fastest 1 mega bit memory chip in the world.

From this moment on and until this day, IBM offers its clients a complete line of end-to-end products and equipment.   This means that IBM offers products for all types of clients, including those that require large equipment with high capacity to those that need small solutions.
In 1985, John Akers becomes CEO.