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The Big Shift. IBM's success in office automation was built on machines of cogs and gears; its swift tabulating machine was basically only a mechanical improvement on the first one built by Blaise Pascal in 1640, which in turn was an improvement on the ancient Chinese abacus. But in the last few years there has been a profound change in the business. The mechanical cogs and gears have given way to electronic circuits, cathode-ray tubes and transistors. For IBM the change could not have come at a better time. Tom Watson Sr.. who had improved his machines close to their mechanical limits, was ready to step up from president to chairman. His son, who took over the president's chair in 1952. was quick to see the new electronic age adawning. Almost singlehanded, he fought his ideas through, persuaded everyone that IBM had to learn to make electronic circuits do the work of old-fashioned cogs and wheels.
As it was, Remington Rand hit the electronic computer market first, with its $1,125,000 UNIVAC in 1951. cleaned up the early contracts. Today Remington Rand has 26 big UNIVACs in various models around the U.S., orders for eleven more. But spurred by President Watson, IBM now has orders for 129 giant electronic calculators; 109 of the orders are for the new 704 and 705, which are bigger and faster than the current Model 702. The big computers will cost IBM more than $1,000,000 each to build, but they will bring the company a whopping income of nearly $50 million each year in rental fees from U.S. industry.
Cash & Collars. IBM was created by Thomas John Watson Sr., who built it into the 37th ranking U.S. manufacturing corporation, and in so doing, carved out an American business legend for himself. Watson, who believes that "nobody really gets started until he's 40." worked for Dayton's National Cash Register Co. until 1914. Then at 41, he suddenly pulled up stakes. Going East to Manhattan, he went to work for the Computing-Tabulaing-Recording-Co., which in 1911 had begun making new kinds of time clocks, butcher's scales and accounting machines.
With his kindly, canny Scots face and fluent speech.Watson was his own best salesman. Carefully he designed new machines to fit each customer's needs, and within a year he was president of CTR: Two years later, the company paid out its first $3 dividend and Watson was on his way. He conjured up so many new ideas that he still holds in his own name more than a dozen patents for machines. Wherever he went, he drove his staff to do more, learn more—above all, to THINK more.
By 1924 C-T-R had three plants in the, U.S., had expanded abroad with branches in France, Great Britain, Canada and Germany, "developing Europe," as Watson called it. He changed the company's name to International Business Machines, expanded still more. His high, stiff collars, his aversion to smoking and drinking, his vast store of aphorisms became trademarks of IBM to the outside world. Inside his company, he operated like a benign patriarch. IBM's workers were among the best paid in industry, had other benefits that few companies had. At company banquets, Watson liked to lead his employees in singing company songs such as his Hail to IBM* anthem. Every executive, both big and little, became a polished speechmaker, and all dressed like Watson. He wanted them to look neat.