Monday, 2 May 2011

CASE 279 - IBM

International Business Machines (IBM) (NYSE: IBM) is an American multinational technology and consulting firm headquartered in Armonk, New York. IBM manufactures and sells computer hardware and software, and it 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 Corporation through a merger of four companies: the Tabulating Machine Company, the International Time Recording Company, the Computing Scale Corporation, and the Bundy Manufacturing Company. CTR adopted the name International Business Machines in 1924, using a name previously designated to CTR's subsidiary in Canada and later South America. Its distinctive culture and product branding has given it the nickname Big Blue.
In 2011, Fortune ranked IBM the 18th largest firm in the U.S., as well as the 7th most profitable. Globally, the company was ranked the 33rd largest firm by Forbes for 2010. Other rankings for 2010 include #1 company for leaders (Fortune), #2 best global brand (Interbrand), #3 green company (Newsweek), #15 most admired company (Fortune), and #18 most innovative company (Fast Company). IBM employs almost 400,000 employees (sometimes referred to as "IBMers") in over 200 countries, with occupations including scientists, engineers, consultants, and sales professionals.
IBM holds more patents than any other U.S.-based technology company and has nine research laboratories worldwide. Its employees have garnered five Nobel Prizes, four Turing Awards, nine National Medals of Technology, and five National Medals of Science. The company has undergone several organizational changes since its inception, acquiring companies like SPSS (2009) and PwC consulting (2002) and spinning off companies like Lexmark (1991).

In the 1940s, a number of IBM's subsidiaries assisted the Nazi government in implementing the logistics of the Holocaust, to some extent being entrepreneurs who originated some of the ideas that made the whole thing possible. For example, every serial number tattooed to a victim's arm corresponded to a punchcard manufactured and processed by IBM. The involvement is so well documented that even IBM doesn't deny it.

IBM Germany, known in those days as Deutsche Hollerith Maschinen Gesellschaft, or Dehomag, did not simply sell the Reich machines and then walk away. IBM's subsidiary, with the knowledge of its New York headquarters, enthusiastically custom-designed the complex devices and specialized applications as an official corporate undertaking. Dehomag's top management was comprised of openly rabid Nazis who were arrested after the war for their Party affiliation. IBM NY always understood-from the outset in 1933-that it was courting and doing business with the upper echelon of the Nazi Party. The company leveraged its Nazi Party connections to continuously enhance its business relationship with Hitler's Reich, in Germany and throughout Nazi-dominated Europe.

Dehomag and other IBM subsidiaries custom-designed the applications. Its technicians sent mock-ups of punch cards back and forth to Reich offices until the data columns were acceptable, much as any software designer would today. Punch cards could only be designed, printed, and purchased from one source: IBM. The machines were not sold, they were leased, and regularly maintained and upgraded by only one source: IBM. IBM subsidiaries trained the Nazi officers and their surrogates throughout Europe, set up branch offices and local dealerships throughout Nazi Europe staffed by a revolving door of IBM employees, and scoured paper mills to produce as many as 1.5 billion punch cards a year in Germany alone. Moreover, the fragile machines were serviced on site about once per month, even when that site was in or near a concentration camp. IBM Germany's headquarters in Berlin maintained duplicates of many code books, much as any IBM service bureau today would maintain data backups for computers.

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