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The Computer Revolution: IBM Grows Up

Article Overview: Watson now knew that not only did he want to run his own business, but that he could. As a result, he turned down several job offers, choosing instead to approach financier Charles Flint, who had recently joined three companies to create the Computing, Tabulating, and Recording Company. Flint made Watson CTR’s new president.

The Computer Revolution: IBM Grows Up

Watson now knew that not only did he want to run his own business, but that he could. As a result, he turned down several job offers, choosing instead to approach financier Charles Flint, who had recently joined three companies to create the Computing, Tabulating, and Recording Company. Flint made Watson CTR’s new president.

CTR dealt with business information devices, including punch-card tabulators and time clocks. Over the next decade, Watson maintained a low profile at the company. It wasn’t until the death of CTR’s chairman, George Fairchild that Watson decided to take charge.

CTR had a staff of over 400 workers, most of who were demoralized, poorly supervised and unproductive. Watson decided that he wanted to make CTR a good place to work. He began to put in place benefits and security measures for his staff, even paying for their education and providing them with country clubs. Watson also began to focus much of the company’s attention on research, betting that the demand for automation and information recording would only increase.

In 1924, Watson renamed the expanding CTR to International Business Machines. His revamped company would have its big break following the Great Depression. IBM not only survived the slump but it would go on to profit from the New Deal policies that were being put in place by the Roosevelt administration. With the nation’s new Social Security Fund, employers across the U.S. had to begin to keep track of their employees’ time worked. The only company that had the technology to support such an initiative was IBM.

Over the next few decades, Watson would expand IBM’s workforce to 22,000 people. He continued to put money towards research and was one of the leading forces in the budding computer age. In 1938, Watson provided financial backing to Howard Aiken, a scientist from Harvard who wanted to build a digital calculating machine, later the Mark I. During World War II, his company would also provide thousands of computation machines that would help the U.S. with its military logistics. It was during this time that Watson developed the doctrine that IBM would receive no more than one percent profit from any sales of its military equipment to the U.S. government.

Watson was no stranger to charity, having also provided land for Syracuse University.
In 1949, Watson was named chairman emeritus of IBM and he handed the reins of the company over to his eldest son, Thomas J. Watson Jr.

At the point of Watson Sr.’s departure, the company was growing at such an alarming rate it found itself in all too familiar territory for Watson – the subject of a civil antitrust lawsuit filed by the federal government. When it was filed in 1952, IBM was the owner of over 90% of all the tabulating machines in the country.

One month after putting his son in charge of the empire he had created, Watson Sr. died. But, that would not be the end for the company. Instead, Watson Jr. would carry on his father’s legacy and take the company to new heights of success.

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Article Tags: chairman george, computer age, computer revolution, country clubs, ctrs, deal policies, fairchild, great depression, howard aiken, information devices, international business machines, new president, new social security, punch card, roosevelt administration, security measures, social security fund, tabulators, time clocks, world war ii



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