By Grace Chng
Senior Correspondent
chngkeg@sph.com.sg

 

June 16 is the 100th birthday of IBM.

My first close experience with IBM is through the Selectric typewriter which was used in The Straits Times in the mid-80s. There was no ribbon unlike the manual typewriter. Instead there was a golf ball-like device that rotated and pivoted to the correct position before the letter hits the paper.

Although the Selectric typewriter was very popular, it was IBM’s work in computers and computing research that turned it into a global giant. Ranked the 18th largest firm this year in the United States (US) by business magazine Fortune, it is also a rich company worth nearly US$200 billion (S$123.4 billion). More than 250,000 IBMers are found in over 200 countries.

Headquartered in New York, IBM opened an office here in 1953. But Singapore’s first computers – read IBM - arrived in the 1960s when only two government agencies had them: the Central Provident Fund (CPF) and the Finance Ministry. In those days, computing was known as data processing. One of the earliest computers was an IBM 1401 with 4000 bytes of memory, tiny compared to a PC today which has on average 4GB of memory. My old friend, the late Robert Iau, who was the data processing manager of CPF, had bought it for the company. The computer was so big that the CPF had to cut a hole in the wall to haul the computer into the office.

IBM has been synonymous with mainframes and by the time Singapore’s computerisation began in the mid-80s, it was already a well-known IT company with a good training programme and research division. Who better to turn to for manpower training and to develop computing research capabilities than IBM.

So it was that the National University of Singapore (NUS) partnered with IBM to start the Institute of Systems Science (ISS) which opened in August 1984. It had a nice plot of land on a hillock on the Pasir Panjang side of the NUS campus where it built a building. When I visited Robert, who had become the ISS’ chairman then, I could see the Port of Singapore Authority container yards. Robert’s office had a nice view and I am sure, good feng shui too. I have good memories of the ISS, having spent many hours there, learning about computer technology from the numerous IBM executives based here or visited Singapore. The ISS turned out many graduates some of whom are now chief information officers at public sector agencies including James Kang, the chief information officer of the Infocomm Development Authority.

IBM however, did not open a factory here to make computers or related products. Its competitor Hewlett-Packard did - and provided thousands of jobs for people here. In that sense, IBM had always had less publicity than HP, one that quietly irked it (IBM) although it was never discussed publicly.

In the 100 years, IBM did falter a few times. When PCs began to move into offices at the start of the 1980s, IBM was still in mainframes, quite out of sync with the industry. IBM created a special team, located them in Florida, away from its New York headquarters. In the space of months, it came out with the IBM PC in August 1981 which became the industry standard. Its initial dominance of the PC market was soon eroded when nimbler companies such as Dell and others from Taiwan and China came out with cheaper models. The PC became a commodity item where profit margins were low and competition cutthroat. IBM decided that it was better off, selling business solutions to governments and large companies. In 2005, it sold its PC business to China company Lenovo.

In the 1990s, it had a near-death experience when the company was almost split into smaller ones. The prevailing wisdom then was that its core mainframe business was heading the way of dinosaurs. Then came Lou Gerstner in 1993. He was a former McKinsey consultant and was chairman and chief executive officer of RJR Nabisco - an American conglomerate which is now owned by Kraft Foods – when he was hired by IBM as its chief executive officer in 1993. He laid off 100,000 IBMers, re-focussed it on IT services and embraced the Internet, pushing IBM into e-commerce. He retired in 2002 leaving IBM in a much healthier position that when he first joined it.

What of the future? Today’s IT world revolves around smartphones and tablets, and yet unknown gadgets. Will IBM, with its strong focus on business, survive for another 100 years?

I think it will. One key reason is its strength in research. It has thousands of scientists located in the US, Europe, India and China. One of my visits to IBM was to the famous Thomas Watson Research Centre located about an hour out of New York in Yorktown Heights in 2005 and in Almaden in Silicon Valley earlier this year. On some walls of the centres, IBM celebrates its scientists by citing their innovations and work. Some have won major technology prizes or who are IBM Fellows, researchers who are at the pinnacle of their research areas. At the Thomas Watson Research Centre, I found the list of IBMers who won Nobel Prizes. Leo Esaki won a Nobel Prize for Physics in 1973 for his invention of the electron tunnelling effect in semiconductors. In 1987, J. Georg Bednorz and K. Alex Muller shared a Nobel Prize for their discovery of high-temperature superconductivity. Their technological discoveries have led to new or improved manufacturing processes or understanding of how they can be used to improve businesses.

From this research, IBM is bringing its expertise to its customers. In Singapore, IBM is a major contractor for the government and is collaborating on projects to turn Singapore into a smart city using wireless technologies such as sensors.

Innovation is its lifeline and IBM will not see its 200th birthday if it is unable to commercialise its expertise from its labs. I do not expect sexy smartphones and tablets from IBM but I do expect cool technology to emerge which can be used for the improvement of society. Technologies which automatically tell doctors that a patient is going to have a heart attack in 30 minutes or remotely “tell” cars to divert to another route because of an accident on the highway.

Some US-based companies cannot look beyond their quarterly reporting of financial figures as mandated by stock exchange regulations there. IBM would be short-sighted if it is to tailor its growth so as to report good quarterly figures. It cannot afford to play this game. Instead it must leverage its huge strength in its research labs. At a time, when IT companies are trimming their costs including research budgets, IBM is piling more money into research. This is why I believe IBM has a chance of surviving the next 100 years.

Happy Birthday, IBM.