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Information Technology (IT) Industry Analysis


The International Business Machines Corporation (IBM) is one of the oldest companies operating in the industry of computer and information technologies (IT). In spite of the fact that IBM still maintains top positions in the market, it is almost impossible to claim that this company is a leader in innovation. The problem is that the company needs to invest more in its competitive advantage to successfully compete in the modern IT industry. Nevertheless, IBM is still listed in the Fortune 500 among other IT and electronics companies pioneering in the industry (Griffith, 2015). The purpose of this paper is to describe the history of IBM, discuss its current state and position in the market, and evaluate its possible successes and failures in the area of innovation in the industry.

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How IBM Started in the IT Industry

In 1911, the Computing-Tabulating-Recording Company was established in the State of New York, and later it was renamed as International Business Machines (IBM). Initially, the company produced tabulators, and in the 1930s, it launched its first calculators. The first computer was developed in the 1940s in cooperation with the experts of Harvard University. In the 1950s, IBM became ready to enter the new market of computers with its own product: IBM 701 EDPM. Furthermore, in 1981, the company was ready to present its innovative personal computer (Cortada, 2018). From this perspective, it is possible to state that IBM not only started in the IT industry in the 1980s, but this company and its products actually gave a start for the progress of this industry.

The Current State of IBM

Currently, IBM specializes in producing computers, hardware, and different types of software. The problem is that, today, IBM’s computers are not popular among the public, and they are not actively promoted because they operate other systems than Windows. Additionally, the company preserves the leading positions in manufacturing certain models of minicomputers and mainframes. Consulting services are also provided for businesses as primary users of IBM products. Furthermore, much attention is paid to conducting research in the IT industry and developing patents (Cortada, 2018). Thus, from producing personal computers and competing with Apple, HP, Oracle, and Microsoft, IBM shifted to the areas of supporting businesses.

The Impact of IBM on Business and Business Operations

In the 20th century, IBM was a leader in the IT industry with a focus on its achievements in designing and manufacturing personal computers and promoting innovations. One should note that IBM changed the way how other businesses could organize their operations because of such inventions as the automated teller machine, the relational database, the SQL in programming, and others. The inventions and products of IBM became the example for other companies to promote the IT revolution in the 21st century (Gao, Liu, & Ma, 2019).

However, it is also necessary to state that the rapid development of the IT industry since the late part of the 20th century has changed tendencies (Brown, DeHayes, Slater, Martin, & Perkins, 2011). The impact of the industry’s progress on IBM has been significant, and now it mainly orients to businesses as its consumers rather than on individual buyers because this niche is considered to be more profitable for the company.

The Role of IT and Innovations

IT has always played a significant role for the industry where IBM operates. For example, in 2015, the company faced the necessity of transitioning the server business to cloud services, but it experienced some difficulties. Thus, cloud services, innovative types of software, the use of mobile technologies, applications, and databases are now the realities of this industry, and companies need to adapt to them (Kahn, 2018). In relation to IBM, the controversy is associated with the fact that this company was among the pioneers of developing and promoting these innovations, but then it could not compete successfully with other rivals in the market.

From this perspective, it is important to note that, in addition to the previously mentioned inventions, IBM also developed the hard disk drive, the magnetic stripe for credit cards, and the UPC barcode that changed businesses in many countries (Den Hartigh, Ortt, Van de Kaa, & Stolwijk, 2016). These inventions were successes, and they could not be copied because of their innovative nature. However, some personal computers developed by IBM were not successful enough in comparison to the products by competitors that made the company to shift to alternative markets.

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The history of IBM indicates that the company played a significant role in forming the modern variant of the computer industry. When focusing on the wider IT industry, it is important to assert that IBM succeeded in some spheres while serving as an example to follow for other businesses in this area. Still, in the history of the company, there are also cases of failures and losses associated with launching ineffective products or weaknesses in research and development. After shifting to the market of business computers, hardware, and consulting services, IBM received an opportunity to gain more profits because its competitive advantage in the area of producing and selling personal computers and software was not strong.


Brown, C. V., DeHayes, D. W., Slater, J., Martin, W. E., & Perkins, W. C. (2011). Managing information technology (7th ed.). New York, NY: Pearson.

Cortada, J. W. (2018). Change and continuity at IBM: Key themes in histories of IBM. Business History Review, 92(1), 117-148.

Den Hartigh, E., Ortt, J. R., Van de Kaa, G., & Stolwijk, C. C. (2016). Platform control during battles for market dominance: The case of Apple versus IBM in the early personal computer industry. Technovation, 48, 4-12.

Gao, Y., Liu, X., & Ma, X. (2019). How do firms meet the challenge of technological change by redesigning innovation ecosystem? A case study of IBM. International Journal of Technology Management, 80(3-4), 241-265.

Griffith, E. (2015). The top technology companies of the Fortune 500. Fortune. Web.

Kahn, K. B. (2018). Understanding innovation. Business Horizons, 61(3), 453-460.

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