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IBM

The International Business Machines Corporation (IBM) is an American multinational technology and consulting corporation, with headquarters in Armonk, New York. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology. The company was founded in 1911 as the Computing-Tabulating-Recording Company (CTR) through a merger of the Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company. CTR was changed to “International Business Machines” in 1924, using a name which had originated with CTR’s Canadian subsidiary. The initialism IBM followed. Securities analysts nicknamed the company Big Blue for its size and common use of the color in products, packaging, and logo. In 2012, Fortune ranked IBM the No. 2 largest U.S. firm in terms of number of employees (435,000 worldwide), the No. 4 largest in terms of market capitalization, the No. 9 most profitable, and the No. 19 largest firm in terms of revenue. Globally, the company was ranked the No. 31 largest in terms of revenue by Forbes for 2011. Other rankings for 2011/2012 include No. 1 company for leaders (Fortune), No. 1 green company in the U.S. (Newsweek), No. 2 best global brand (Interbrand), No. 2 most respected company (Barron’s), No. 5 most admired company (Fortune), and No. 18 most innovative company (Fast Company). IBM has 12 research laboratories worldwide, bundled into IBM Research. the company held the record for most patents generated by a business for 22 consecutive years. Its employees have garnered five Nobel Prizes, six Turing Awards, ten National Medals of Technology, and five National Medals of Science. Notable company inventions include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, the Fortran programming language, SABRE airline reservation system, DRAM, copper wiring in semiconductors, the silicon-on-insulator (SOI) semiconductor manufacturing process, and Watson artificial intelligence. IBM has constantly evolved since its inception. Over the past decade, it has steadily shifted its business mix by exiting commoditizing businesses such as PCs, hard disk drives and DRAMs and focusing on higher-value, more profitable businesses such as business intelligence, data analytics, business continuity, security, cloud computing, virtualization and green solutions, resulting in a higher quality revenue stream and higher profit margins. IBM’s operating margin expanded from 16.8% in 2004 to 24.3% in 2013, and net profit margins expanded from 9.0% in 2004 to 16.5% in 2013. It acquired Kenexa (2012) and SPSS (2009) and PwC’s consulting business (2002), spinning off companies like printer manufacturer Lexmark (1991), and selling off product lines like its personal computer and x86 server businesses to Lenovo (2005, 2014). In 2014 IBM announced that it would go “fabless” by offloading IBM Micro Electronics semiconductor manufacturing to GlobalFoundries, a leader in advanced technology manufacturing, citing that semiconductor manufacturing is a capital intensive business which is challenging to operate without scale. This transition is in progress as of early 2015.

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