WEBVTT - The History of IBM: Part 1 0:00:00.280 --> 0:00:02.840 Brought to you by the reinvented two thousand twelve camera. 0:00:03.160 --> 0:00:08.920 It's ready. Are you get in touch with technology? With 0:00:09.039 --> 0:00:17.960 tech Stuff from how stuff works dot com. Hello again, everyone, 0:00:18.000 --> 0:00:20.480 Welcome to tech Stuff. My name is Chris Poulette and 0:00:20.480 --> 0:00:22.560 I am an editor at how stuff works dot com. 0:00:22.560 --> 0:00:25.560 Sitting across from me as always a senior writer, Jonathan Strickland. 0:00:25.640 --> 0:00:29.480 They took the credit for your second Symphony Rewritten by machine, 0:00:29.720 --> 0:00:33.720 a new technology. I feel like I've heard that somewhere before. Yeah, 0:00:33.840 --> 0:00:36.280 probably in a recent podcast, because we quoted that song 0:00:36.360 --> 0:00:39.319 not long ago. Yes, it buggles the mind. It does 0:00:39.360 --> 0:00:44.760 buggle the man. Uh. Today though, we're talking about, uh, 0:00:44.760 --> 0:00:48.000 something entirely well, not something entirely different, but something a 0:00:48.040 --> 0:00:52.360 little uh, I don't know. We are gonna we're concentrating. 0:00:52.360 --> 0:00:56.040 We're concentrated today on a particular company. And this is 0:00:56.080 --> 0:00:59.920 going to be a multi part podcast because the come 0:01:00.000 --> 0:01:02.560 and he has such a long history that we can't 0:01:02.680 --> 0:01:05.240 sum it up in one episode. It's just it's too 0:01:05.319 --> 0:01:08.120 much information, um, and it would just mean that if 0:01:08.160 --> 0:01:10.680 we were to try and push it all into thirty minutes, 0:01:10.720 --> 0:01:13.320 you really wouldn't learn anything. Right. As a matter of fact, 0:01:13.400 --> 0:01:15.839 we had we had a request for this at one point, 0:01:15.840 --> 0:01:17.600 I believe, Yeah, I think so. We've had a few 0:01:17.600 --> 0:01:21.040 people ask us about this. I don't have any specifics 0:01:21.080 --> 0:01:23.360 to point to, because we've received quite a few over 0:01:23.400 --> 0:01:26.399 the history of our podcast. So we are going to 0:01:26.480 --> 0:01:32.680 talk today about IBM. Yes, Big Blue International Business Machines. Yes, 0:01:32.720 --> 0:01:36.319 and it's it's got an incredibly long history. Let me 0:01:36.400 --> 0:01:40.160 just ask you, Chris, just curious just when when you 0:01:40.200 --> 0:01:44.520 hear the the letters IBM, what's the first thing you 0:01:44.560 --> 0:01:51.440 think of? Um, Well, I probably think of the current computers, 0:01:51.960 --> 0:01:55.920 mainly because well, just to be honest, um, those of 0:01:56.000 --> 0:01:58.880 us in the editorial department at how stuff Works dot com, 0:01:59.120 --> 0:02:02.840 a lot of us still have IBM laptops, which are 0:02:02.880 --> 0:02:06.480 the machines that they gave us. And specifically, which is 0:02:06.520 --> 0:02:10.800 kind of funny because this actually comes after, uh, the 0:02:10.880 --> 0:02:14.720 company made an agreement with the Chinese computer manufacturer Lenovo, 0:02:15.200 --> 0:02:18.639 so their IBM branded but they're actually Lenovo machines. But yeah, 0:02:18.680 --> 0:02:21.280 I mean, that's probably just because it's there every day. 0:02:21.280 --> 0:02:23.600 I think of that, but I also think of, um 0:02:23.760 --> 0:02:27.200 a number of things, main frames. I think of the 0:02:27.240 --> 0:02:30.200 IBM S electric typewriter that I can't wait to talk 0:02:30.240 --> 0:02:34.640 about that. Um So, yeah, I mean, for me, it's 0:02:34.960 --> 0:02:38.280 the first thing I think of, is, uh, the IBM 0:02:38.320 --> 0:02:41.000 two eighties six that my family had when I was 0:02:41.040 --> 0:02:43.680 a kid. We started off with other computers, which I've 0:02:43.680 --> 0:02:45.920 talked about in the past, but the computer that my 0:02:46.040 --> 0:02:49.600 dad got that ended up being the workhorse was an 0:02:49.600 --> 0:02:52.400 IBM two eighties six. We did eventually upgrade to a 0:02:52.440 --> 0:02:54.800 three eight six and for eighty six further down the line, 0:02:54.840 --> 0:02:57.080 but that two eight six kind of was what I 0:02:57.120 --> 0:03:00.560 cut my teeth on once I got on the Apple 0:03:00.600 --> 0:03:02.600 two e No, no, no, no, you're not supposed to 0:03:02.680 --> 0:03:04.920 chew on them. Well, I realized that, But I was 0:03:04.960 --> 0:03:09.760 a late bloomer anyway. Where the personal computer age is 0:03:10.320 --> 0:03:13.799 very late in IBM's history because the company is very, 0:03:13.919 --> 0:03:17.360 very old. Yeah, it sort of depends on whom you 0:03:17.480 --> 0:03:22.440 ask how old it is, because IBM actually sort of 0:03:23.240 --> 0:03:26.040 gives their their age tracks or age back a little 0:03:26.080 --> 0:03:29.240 differently than other people might write. UM. And I found 0:03:29.240 --> 0:03:31.400 that out. Actually checked out a book from the library 0:03:31.440 --> 0:03:34.640 called Building IBM, Shaping an Industry and its Technology by 0:03:34.639 --> 0:03:40.480 Emerson W. Pu Um, and he actually tracks uh, the 0:03:40.600 --> 0:03:44.760 founding of IBM past where IBM does. He goes back 0:03:44.800 --> 0:03:49.000 to an inventor named Herman Hollowrath. Yes, yes, Herman Hollowrath. 0:03:49.080 --> 0:03:52.520 He created a tabulating machine, didn't he. Yes, he did. Um. 0:03:52.560 --> 0:03:55.720 He actually got his his first patent application in on 0:03:55.880 --> 0:03:59.600 in September four. That's not that when he started the company, 0:03:59.640 --> 0:04:02.000 but that's when he started working on tabulating machines. Now 0:04:02.520 --> 0:04:06.000 there are other people who were doing other related work too, 0:04:06.040 --> 0:04:12.920 because IBM actually was founded by the combination of three companies. Yeah, 0:04:13.120 --> 0:04:17.040 technically kind of a fourth company. Uh. The three companies 0:04:17.320 --> 0:04:21.680 specifically were, UM, let's see, it was the the Tabulating 0:04:21.720 --> 0:04:26.279 Machine Company, which was incorporated in eighteen ninety six, So 0:04:26.320 --> 0:04:29.200 you've got that one. You've got the Computing Scale Company, 0:04:29.240 --> 0:04:32.960 which was incorporated in eighteen nine one, and the International 0:04:33.040 --> 0:04:37.280 Time Recording Company organized in nineteen hundred. And then there 0:04:37.360 --> 0:04:40.719 was also the Bundy Manufacturing Company, which was incorporated in 0:04:40.760 --> 0:04:43.599 eighteen eighty nine. Now a lot of the Bundy UH 0:04:43.760 --> 0:04:48.080 properties had been incorporated into International Time Recording Company already, 0:04:48.160 --> 0:04:50.799 so you're already talking about companies have been undergoing mergers 0:04:50.800 --> 0:04:54.640 and acquisitions. Um. You had people like Julius E. Petrot 0:04:54.760 --> 0:04:57.440 who in five security patent for a device that he 0:04:57.520 --> 0:05:00.880 called a computing scale. That was what created the foundation 0:05:00.920 --> 0:05:04.719 for the Computing Scale company. UH. You had Herman Hollerwrath 0:05:04.760 --> 0:05:08.240 who had the tabulation and punch card machines that he created. 0:05:09.120 --> 0:05:11.560 William L. Bundy, who was of course the founder of 0:05:11.560 --> 0:05:14.880 the Bundy Manufacturing Company, came up with a time recording device. 0:05:15.240 --> 0:05:17.800 He was actually a jeweler, and this guy came up 0:05:17.800 --> 0:05:20.200 with a time recording device that allowed employees to track 0:05:20.279 --> 0:05:22.960 their time based upon using special keys. That would put 0:05:22.960 --> 0:05:25.800 a special key into this machine. Turned the key, it 0:05:25.839 --> 0:05:29.040 would stamp the time that they clocked in, and then 0:05:29.080 --> 0:05:30.320 they would turn the key. At the end of the day, 0:05:30.320 --> 0:05:32.240 it would stamp the time they clocked out, and it 0:05:32.320 --> 0:05:35.120 helped keep track of how many hours they worked. Then 0:05:35.120 --> 0:05:38.520 you also had Dr Alexander day d e Y and 0:05:38.560 --> 0:05:41.640 he created a similar time time keeping device, but it 0:05:41.640 --> 0:05:44.120 didn't use keys. Instead, you put the names of the 0:05:44.160 --> 0:05:47.400 employees on this machine and there was a mechanical pointer. 0:05:47.880 --> 0:05:50.479 You had aimed the pointer at the employee's name. You 0:05:50.520 --> 0:05:52.240 put a punch card in, push a button and it 0:05:52.240 --> 0:05:56.680 would then stamp the employee's sheet which was inside the machine. UH. 0:05:56.720 --> 0:05:58.840 With the time that they clocked in and clocked out. 0:05:59.120 --> 0:06:00.960 So you had all these differ in companies. And remember 0:06:01.000 --> 0:06:03.320 this is this is the age where we're really starting 0:06:03.320 --> 0:06:08.080 to get into mechanical devices. So most of these devices 0:06:08.120 --> 0:06:11.440 are mechanical in nature. There are actual physical gears and 0:06:11.480 --> 0:06:15.040 pistons things like that that are making stuff happen inside 0:06:15.040 --> 0:06:19.080 these machines. But it's not it's I'm sorry, no, go ahead, 0:06:19.240 --> 0:06:21.400 I was gonna say it's it's actually, in a way, 0:06:21.800 --> 0:06:27.680 not any of these guys who created IBM. No, it 0:06:27.760 --> 0:06:32.200 took someone from outside this group to really form it together. 0:06:32.680 --> 0:06:34.680 Which the fun and the funny part is we've got 0:06:34.760 --> 0:06:37.880 all these inventors, but we're really talking about, or at 0:06:37.920 --> 0:06:42.440 least I am talking about a businessman, yes, who saw 0:06:42.480 --> 0:06:47.200 an opportunity to combine the companies and make some money by, 0:06:47.279 --> 0:06:50.520 you know, making a building a merger between them. And 0:06:50.600 --> 0:06:53.320 his name was Charles R. Flint. Yes, So here we 0:06:53.400 --> 0:06:56.760 got a guy who looks at these companies, these individual 0:06:56.760 --> 0:07:00.120 companies that are all making various kinds of mechanical devices, 0:07:00.640 --> 0:07:03.359 and he says, hey, hang on a second, we could 0:07:03.360 --> 0:07:06.880 combine these because a lot of these are are creating 0:07:06.920 --> 0:07:11.480 devices specifically geared toward businesses. And if we were to 0:07:11.480 --> 0:07:15.480 combine these, we could combine the manufacturing power and the 0:07:15.520 --> 0:07:18.600 business power of these and and market it toward businesses. 0:07:18.640 --> 0:07:22.160 We could create an enormous corporation. Now, I just have 0:07:22.280 --> 0:07:24.320 to convince the guys that this is a good idea. 0:07:24.480 --> 0:07:26.360 So he starts going to all these different companies and 0:07:26.400 --> 0:07:32.120 he submits merger proposals, and eventually the companies agreed to this, 0:07:32.200 --> 0:07:37.120 and they formed the Computing Tabulating Recording Corporation or CTR 0:07:37.280 --> 0:07:42.640 on June six, nineteen eleven. I gotta say, these guys 0:07:42.720 --> 0:07:47.200 have a flare for an innovative name. Yes, the Computing 0:07:47.480 --> 0:07:50.800 Tabulating Recording Corporation. It was called computing because of the 0:07:50.800 --> 0:07:53.200 computer scale we were talking about, which was not a 0:07:53.240 --> 0:07:57.360 computer computer. It was a scale that could very accurately 0:07:57.480 --> 0:08:01.880 measure weights computing scale. Yes. And then the tabulating being 0:08:01.880 --> 0:08:04.600 the tabulating from Holly Erath, and the recording being the 0:08:04.640 --> 0:08:07.480 time recording devices that we talked about earlier. Yes, pews 0:08:07.480 --> 0:08:09.880 Book actually said that the scale that they had come 0:08:09.960 --> 0:08:13.560 up with would give you the information up front, so 0:08:13.600 --> 0:08:15.320 you didn't really have to do as much work with it, 0:08:15.360 --> 0:08:18.440 so it would actually do the calculating for you will 0:08:18.440 --> 0:08:20.160 give you an idea of what was going on, which was, 0:08:20.320 --> 0:08:22.640 you know at the time, was was pretty innovative. Yes, 0:08:23.040 --> 0:08:26.800 so we've got this major corporation forming in nineteen eleven. 0:08:26.880 --> 0:08:30.960 But here's a problem. Who heads up this new corporation. Now, 0:08:31.600 --> 0:08:35.719 Flint was pretty savvy, as was the board of directors 0:08:35.920 --> 0:08:39.440 for CTR. They knew that they could not necessarily just 0:08:39.559 --> 0:08:42.599 hire or promote someone from within one of those companies 0:08:42.800 --> 0:08:45.360 to be the head of the new corporation, because if 0:08:45.400 --> 0:08:48.880 they did, there's the danger that that person would favor 0:08:49.000 --> 0:08:51.760 one division over all the others. So if you were 0:08:51.800 --> 0:08:55.240 to promote someone up from the tabulating machine company, for example, 0:08:55.600 --> 0:08:59.679 that person might concentrate on that division of the new 0:09:00.040 --> 0:09:04.080 mega company and ignore the others, and then your business 0:09:04.120 --> 0:09:07.720 venture fails. So they had to find someone from outside 0:09:07.840 --> 0:09:11.480 this this merger to head up the new company. I 0:09:11.520 --> 0:09:14.160 know who you're gonna say, but I I would also 0:09:14.200 --> 0:09:15.880 like to add before we go on to this person, 0:09:16.640 --> 0:09:21.520 um that apparently, from what I understand, not everyone was 0:09:22.080 --> 0:09:25.600 thrilled with the way the merger was working out. Apparently 0:09:25.640 --> 0:09:29.240 hollerth Uh and Flint didn't necessarily get along all that well, 0:09:30.080 --> 0:09:32.439 as a matter of fact, apparently Hollowrath was you know, 0:09:32.520 --> 0:09:37.400 one of the rare business people where he was very egalitarian. Um. 0:09:37.600 --> 0:09:40.880 He when he sold you know, the interest in his 0:09:40.920 --> 0:09:44.800 company to Flint, he insisted that everyone get a fair 0:09:44.840 --> 0:09:48.360 share of the money and apparently was very well liked 0:09:48.440 --> 0:09:52.240 within his own company before uh he did that. And apparently, 0:09:52.960 --> 0:09:56.040 um And I imagine that that would be something to 0:09:56.040 --> 0:09:59.400 to take into account when you are trying to make 0:09:59.400 --> 0:10:01.679 this decision on who you want to run the company, 0:10:01.720 --> 0:10:06.800 because you know, if you've got people who are already 0:10:07.200 --> 0:10:11.040 having you know, personality problems personality conflicts with the people 0:10:11.080 --> 0:10:13.240 at the top, then you're you're certainly going to be 0:10:13.320 --> 0:10:16.160 aware of that and and and try to avoid that 0:10:16.240 --> 0:10:19.120 conflict because otherwise you could scuttle the company. But I 0:10:19.120 --> 0:10:22.160 think you're talking about the person you wanted to mention 0:10:22.160 --> 0:10:26.640 next with someone who was brought in as a general manager. Yes, yes, 0:10:26.720 --> 0:10:31.800 from from the National Cash Register Corporation and CR. Yeah. 0:10:32.000 --> 0:10:36.400 That person was Thomas J. Watson, Sr. And he was 0:10:36.600 --> 0:10:40.640 hired on May fourth, nineteen fourteen, And that is the 0:10:40.720 --> 0:10:45.960 date that IBM uses as its founding. It considers Watson's 0:10:46.080 --> 0:10:49.000 arrival at at the company and remember it's not called 0:10:49.000 --> 0:10:52.880 IBM yet, it's still CTR, but it considers his arrival 0:10:52.960 --> 0:10:55.320 to be the birth of IBM. And part of that 0:10:55.360 --> 0:10:59.040 reason is because Watson really instilled in the company an 0:10:59.240 --> 0:11:05.480 entire array of marketing UM principles and philosophies that he 0:11:05.480 --> 0:11:09.080 he had developed over the years, and that became IBM 0:11:09.120 --> 0:11:11.760 sort of foundation for the way that they do business. Now, 0:11:12.000 --> 0:11:14.800 let's give a little background on Watson. Watson was a 0:11:14.840 --> 0:11:16.800 bit of a character too. In fact, he had he 0:11:16.840 --> 0:11:21.400 was not exactly spotless in his history. UM Watson when 0:11:21.400 --> 0:11:24.120 he graduated college, originally he wanted to be a teacher, 0:11:24.360 --> 0:11:27.640 but reportedly that job lasted all of one day before 0:11:27.640 --> 0:11:31.040 he quit. He then concentrated on becoming a salesman, and 0:11:31.040 --> 0:11:34.319 in fact was a traveling salesman selling. As I recall 0:11:34.440 --> 0:11:38.520 pianos and organs to people in rural areas, it made 0:11:38.559 --> 0:11:41.120 me think of the music man. It was. Essentially Watson 0:11:41.240 --> 0:11:45.560 was was Professor Harold Hill. He was actually selling stuff 0:11:45.559 --> 0:11:49.160 instead of trying trying to and then getting out well 0:11:49.200 --> 0:11:51.600 technically Hill was selling stuff too, He just was making 0:11:51.640 --> 0:11:55.040 promises that people could use it when he didn't intend 0:11:55.120 --> 0:11:56.679 to do it. He wanted to skip town as soon 0:11:56.679 --> 0:12:00.360 as the stuff came in. Spoiler alert for ayone who 0:12:00.360 --> 0:12:02.440 has not seen a musing that I almost got you 0:12:02.480 --> 0:12:06.080 to split water too. That was great. So Watson then 0:12:06.120 --> 0:12:08.560 went on to UH. He started he opened up a 0:12:08.559 --> 0:12:11.240 butcher's shop. He ended up eventually selling the butcher's shop, 0:12:11.320 --> 0:12:13.080 but one thing he had to do was he had 0:12:13.120 --> 0:12:16.760 an NCR cash register in that butcher's shop that was 0:12:16.760 --> 0:12:18.400 not completely paid for, so he had to kind of 0:12:18.400 --> 0:12:21.080 act as a liaison between the new owner of the 0:12:21.120 --> 0:12:24.400 butcher shop and NCR to kind of settle these payments. 0:12:24.960 --> 0:12:28.000 He started to bug the people at NCR for a job, 0:12:28.760 --> 0:12:31.640 and eventually they broke down and and apprenticed him to 0:12:31.960 --> 0:12:35.680 someone at NCR as a salesman, and over time Watson 0:12:35.800 --> 0:12:37.720 was able to make a name for himself as a 0:12:37.760 --> 0:12:40.480 salesman and later as a manager. He actually became known 0:12:40.960 --> 0:12:45.760 for running competitors out of business in certain markets. He 0:12:45.760 --> 0:12:48.480 would go into a market and find out ways to 0:12:48.480 --> 0:12:51.800 to be able to UH to beat any competitor who 0:12:51.840 --> 0:12:55.440 that was also selling a mechanical cash register machine. So, 0:12:55.559 --> 0:12:59.080 for example, he would go into a market and undercut 0:12:59.320 --> 0:13:02.360 all the compere editors and sell cash registers at a 0:13:02.400 --> 0:13:06.600 loss just to bankrupt his uh, his competitors so that 0:13:06.640 --> 0:13:09.480 he could have a monopoly on the market. This eventually 0:13:09.559 --> 0:13:15.760 led to an antitrust lawsuit against him because he was monopolizing. Well, 0:13:16.480 --> 0:13:19.880 the first trial ended with a guilty verdict and a 0:13:19.960 --> 0:13:23.920 five thousand dollar fine and I think two years since 0:13:24.000 --> 0:13:25.960 in jail something like that. Anyway, it was, it was 0:13:26.120 --> 0:13:28.520 it was unusual for a jail sentence to go along 0:13:28.559 --> 0:13:32.800 with this kind of a charge, but Watson ended up 0:13:32.840 --> 0:13:37.120 getting one. He appealed that and during the appeals process, 0:13:37.160 --> 0:13:40.040 the government decided he won the right to appeal. The 0:13:40.080 --> 0:13:42.400 government decided that it was not worth the time and 0:13:42.440 --> 0:13:47.560 money to pursue a second trial, so he the charges 0:13:47.600 --> 0:13:50.720 were dismissed. But yeah, so Watson was he was kind 0:13:50.720 --> 0:13:54.880 of a cutthroat businessman as well. So during his days 0:13:54.880 --> 0:13:57.240 at NCR he did something that ended up being very 0:13:57.280 --> 0:14:01.120 important to ibm s philosophy. It was in a meeting 0:14:01.160 --> 0:14:03.679 in December in nineteen eleven. Do you know where I'm 0:14:03.679 --> 0:14:08.640 going with this? All right? It's a motto that IBM uses. Yeah, 0:14:08.720 --> 0:14:11.480 So there's Watson in this meeting with n c R 0:14:11.600 --> 0:14:14.679 and he says, this is a quote. The trouble with 0:14:14.800 --> 0:14:17.480 every one of us is that we don't think enough. 0:14:17.600 --> 0:14:19.960 We don't get paid for working with our feet, we 0:14:20.000 --> 0:14:22.920 get paid for working with our heads. Thought has been 0:14:22.960 --> 0:14:26.520 the father of every advance since time began. I didn't 0:14:26.640 --> 0:14:30.240 think has cost the world millions of dollars. And then 0:14:30.240 --> 0:14:33.360 he wrote the word think in all capital letters in 0:14:33.400 --> 0:14:39.800 blue crayon on an easel Blue Think Big Things for IBM, 0:14:39.920 --> 0:14:42.560 as it turns out. Yeah, so it's kind of funny 0:14:42.560 --> 0:14:45.480 that IBM can trace one of its central mottos to 0:14:45.720 --> 0:14:49.080 another company because this was before Watson came over. So 0:14:49.120 --> 0:14:51.560 then Watson does come over to the company and begins 0:14:51.600 --> 0:14:55.360 to lead it. He joined in nineteen fourteen, and the 0:14:55.440 --> 0:14:57.600 company really starts to take off. You know, You've got 0:14:57.640 --> 0:15:03.040 all these different divisions that are concentrating on specific elements 0:15:03.080 --> 0:15:06.240 of their business, and uh, they just start really cranking 0:15:06.240 --> 0:15:09.960 out some interesting products, all for businesses, by the way, 0:15:10.160 --> 0:15:12.960 right right, Well, let's put this, let's put it in perspective. 0:15:13.000 --> 0:15:18.440 So in nineteen according to IBM, when Thomas J. Watson Sr. 0:15:18.520 --> 0:15:21.640 Joined the company, it had one thousand, three hundred forty 0:15:21.720 --> 0:15:26.000 six employees and nine million dollars in revenue. Um, the 0:15:26.080 --> 0:15:30.040 gross income from sales, service and rentals was about four 0:15:30.080 --> 0:15:33.080 million dollars. Uh. And as a matter of fact, one 0:15:33.160 --> 0:15:37.160 hundred years of CTR stock UH would set you back 0:15:37.160 --> 0:15:39.760 about three thousand dollars. Yes, so they would make four 0:15:39.800 --> 0:15:42.240 million dollars in a year. But out of that their 0:15:42.280 --> 0:15:45.440 earnings were around a million. Right, So so you make 0:15:45.480 --> 0:15:48.640 four million and after costs you you ranke in a 0:15:48.680 --> 0:15:52.640 million dollars. Um. Yeah, I said, Actually it said nine. 0:15:53.120 --> 0:15:55.440 Well I'm looking at two different IBM documents. One is 0:15:55.680 --> 0:15:58.680 nine million in revenues and the other says, uh, four 0:15:58.720 --> 0:16:01.160 million from gross in come. Yeah, that's what I had, 0:16:01.200 --> 0:16:04.680 the four million engrossing had so um. You know, yeah, 0:16:04.760 --> 0:16:06.840 it sounds like a little today, keeping in mind that 0:16:06.920 --> 0:16:10.680 it's that's quite substantial. Yeah, nine fourteen. Come on, And 0:16:10.880 --> 0:16:14.040 if it sounds weird to say rentals, hollow if actually 0:16:14.040 --> 0:16:17.680 when he did his tabulating machine, would actually rent the 0:16:17.680 --> 0:16:21.840 equipment out. Um, So he did not sell people machines. 0:16:22.600 --> 0:16:25.120 So at the time, you know this kind of equipment, uh, 0:16:25.200 --> 0:16:29.480 the sophisticated mechanical computer equipment. Actually, he was one of 0:16:29.520 --> 0:16:34.240 the first people to use electrical um tabulating devices. Yeah, 0:16:34.480 --> 0:16:37.840 we're getting into the electro mechanical era here. So yeah, 0:16:37.840 --> 0:16:39.960 but I mean you didn't you didn't buy that necessarily, 0:16:39.960 --> 0:16:42.440 you would rent that from someone. And we're actually you 0:16:42.520 --> 0:16:45.000 might wonder what these tabulating devices were used for. Well, 0:16:45.000 --> 0:16:46.840 they were often I mean they were used to classify 0:16:46.920 --> 0:16:49.920 information in a way that could be sorted and categorized 0:16:49.920 --> 0:16:53.000 in various ways relatively quickly, you know, much more quickly 0:16:53.000 --> 0:16:55.520 than humans could. In fact, it was originally used for 0:16:55.520 --> 0:16:58.400 the Census. He worked for hollow Reth worked for the 0:16:58.440 --> 0:17:02.200 Census in eighteen eight I believe, and he actually his 0:17:02.280 --> 0:17:04.400 boss was saying, it would be really nice we could 0:17:04.400 --> 0:17:05.840 come up with a machine to cut down on all 0:17:05.880 --> 0:17:07.360 this work, because this is a real pain in the neck. 0:17:07.840 --> 0:17:10.520 So we did. Yeah, and this this invention plays a 0:17:10.600 --> 0:17:13.000 much darker role in a few years, and we'll touch 0:17:13.040 --> 0:17:15.760 on that because it is an important element of IBM's history. 0:17:16.080 --> 0:17:18.040 But I think that's why Pugh started with Hollywrith was 0:17:18.080 --> 0:17:21.879 because that is the most computer alike of all the things, 0:17:22.000 --> 0:17:26.760 of all the the original businesses that CTR was involved with. Yeah. So, 0:17:27.119 --> 0:17:30.480 so just a couple of highlights in the early years 0:17:30.520 --> 0:17:35.239 of Watson's uh um, what am I gonna call it? 0:17:35.280 --> 0:17:38.440 Watson being the president general manager of of ctr U. 0:17:40.160 --> 0:17:44.280 They have the company's implementation of electric synchronization for the 0:17:44.320 --> 0:17:49.240 control and regulation of complete time and programming systems. Yep, 0:17:49.560 --> 0:17:52.640 and that's that's true, um, now that you pointed out, 0:17:52.640 --> 0:17:56.840 I mean, they introduced the first electric synchronized time clock 0:17:56.880 --> 0:18:00.520 system UM, which again is very computer like, just a 0:18:00.800 --> 0:18:04.040 component that's part of that. And I'd just like to 0:18:04.080 --> 0:18:07.920 add one sort of foreshadowing date. A couple of years 0:18:07.960 --> 0:18:12.480 before that, in nineteen seventeen, UH, CTR decided to enter Canada, 0:18:13.200 --> 0:18:15.560 UH and decided instead of using CTR they would use 0:18:15.600 --> 0:18:19.240 a different name. They decided to call themselves International Business Machines. Yeah, 0:18:19.280 --> 0:18:21.879 so in nineteen seventeen and nineteen eighteen they registered that 0:18:22.000 --> 0:18:23.960 name in New York, but did not use it at 0:18:23.960 --> 0:18:27.320 that time. So uh yeah. And in nineteen twenty they 0:18:27.359 --> 0:18:32.480 introduced the lock Autograph Recorder, which was the first complete 0:18:32.520 --> 0:18:37.680 school time control system. They also launched the electric accounting machines, 0:18:37.720 --> 0:18:40.920 so that's kind of a predecessor to the calculator. Ah. 0:18:41.520 --> 0:18:45.280 And they acquired a company called the ticket O Graph 0:18:45.400 --> 0:18:48.120 Company of Chicago in nineteen twenty one, and they also 0:18:48.160 --> 0:18:51.920 started buying up more patents IBM to this day has 0:18:51.960 --> 0:18:56.080 more than a thousand patents. They had more than a 0:18:56.119 --> 0:18:59.480 thousand in the seventies, but yes, far more than a thousand, so, 0:18:59.560 --> 0:19:01.720 and some of those were developed in house and some 0:19:01.760 --> 0:19:05.520 of them they've purchased. So in those early years, we 0:19:05.560 --> 0:19:09.280 get up to February fourteenth, Valentine's Day, nineteen twenty four. 0:19:09.800 --> 0:19:15.320 Watson has an idea. Yes, he decides that this IBM 0:19:15.440 --> 0:19:17.760 name that they're using in Canada as a good name, 0:19:18.000 --> 0:19:20.720 and that it should it really reflects the business more 0:19:20.760 --> 0:19:25.320 than CTR does. UM. The business at this point is international. 0:19:25.359 --> 0:19:29.080 They have offices elsewhere besides the United States, and so 0:19:29.560 --> 0:19:32.520 they think, well, we're gonna rebrand ourselves. We're gonna be 0:19:32.520 --> 0:19:36.640 called International Business Machines or IBM UM. And by now, 0:19:36.960 --> 0:19:39.439 so this is ten years after he's he's taken the reins. 0:19:39.960 --> 0:19:43.960 The the gross income for the company is that remember 0:19:44.000 --> 0:19:46.760 it was at four million before, it's at eleven million 0:19:46.840 --> 0:19:49.320 now with the net earnings of around two million. And 0:19:49.680 --> 0:19:52.600 there there's more than three thousand employees, so they've essentially 0:19:52.640 --> 0:19:55.600 doubled the size of the number of employees that that 0:19:55.600 --> 0:20:00.119 that they hired. Yes, now, UM, going back to for 0:20:00.160 --> 0:20:02.960 a second, to holler his his tabu lighting machines used 0:20:02.960 --> 0:20:05.960 punched cards, which we've talked about in the past. Um. 0:20:06.240 --> 0:20:09.760 In nine they introduced the first electric key punch. Now 0:20:10.119 --> 0:20:12.560 to record information on these punch cards, you have to 0:20:12.560 --> 0:20:17.600 have something that pops out. The little chats um actually 0:20:17.760 --> 0:20:20.600 just punches a hole in the right spot. Right. Originally 0:20:20.640 --> 0:20:22.920 they did use a circular punch like you would see 0:20:22.920 --> 0:20:25.680 in you know, a traditional hole punch. UM, but they 0:20:25.680 --> 0:20:29.320 were they were becoming more sophisticated, adding this functionality along 0:20:29.359 --> 0:20:33.680 as they went. UM and Uh. The punched card could 0:20:33.680 --> 0:20:37.760 now hold as much as eighty columns worth of information UM, 0:20:37.760 --> 0:20:42.120 which also helped out significantly with what they could do. UM. 0:20:42.160 --> 0:20:43.760 And then of course we're getting close to the Great 0:20:43.760 --> 0:20:47.359 Depression in ninety. Yeah, here's an interesting thing. So in 0:20:47.440 --> 0:20:50.359 nineteen thirty you get the Great Depression, but IBM still 0:20:50.440 --> 0:20:53.480 does pretty well. Right, they're not they're not hurting as 0:20:53.480 --> 0:20:56.000 badly as other companies. In fact, at that point their 0:20:56.040 --> 0:20:59.720 gross income was nineteen million dollars and their net earnings 0:20:59.800 --> 0:21:03.760 seven million dollars with sixty three hundred employees. So IBM 0:21:03.840 --> 0:21:06.280 is actually employing people at the same time the other 0:21:06.440 --> 0:21:09.440 folks are finding themselves out of work. So IBM was 0:21:09.480 --> 0:21:11.919 actually doing quite well well. Of course, you know at 0:21:11.960 --> 0:21:15.280 that time people were laying people off because they couldn't 0:21:15.280 --> 0:21:18.760 afford we're going out of business entirely. Um. Meanwhile, this 0:21:18.800 --> 0:21:21.480 would these machines would help people streamline their business efforts. 0:21:21.520 --> 0:21:24.399 They wouldn't have to hire as many humans to do 0:21:24.440 --> 0:21:27.240 the works well, and I mean they kept on developing 0:21:27.240 --> 0:21:30.200 other things. They developed a public address and signaling system 0:21:30.240 --> 0:21:36.080 for schools. They called it the schoolmaster's joke. That just sounds. 0:21:36.119 --> 0:21:39.320 That just sounds so I don't know, sinister anyway. So 0:21:40.880 --> 0:21:44.080 now we're two decades out from when Watson took control. 0:21:44.200 --> 0:21:47.320 They remember they're grossing around nineteen million and earning around 0:21:47.359 --> 0:21:49.600 seven millions. That's a much more than the four million 0:21:49.600 --> 0:21:52.600 and one million from two decades before. And they're employing 0:21:52.640 --> 0:21:57.560 seven thousand, six hundred thirteen people. So yeah, the company, 0:21:57.680 --> 0:22:00.639 the company is really doing well and the development is 0:22:00.640 --> 0:22:03.439 really just gonna explode over the next few decades, like 0:22:03.480 --> 0:22:06.000 to the point where it's it's almost impossible to believe 0:22:06.600 --> 0:22:10.720 how big it got. I had my first snicker moment 0:22:11.320 --> 0:22:17.439 U because it apparently they decided to divest themselves of 0:22:17.520 --> 0:22:23.040 the Scale division. So they sold it to Hobart, which 0:22:23.560 --> 0:22:25.639 if you if you're thinking back and going, I know, 0:22:25.720 --> 0:22:28.840 I know that name, it's because they're still in business 0:22:29.680 --> 0:22:32.879 and it's apparently from from want to understand, Mr Watson 0:22:32.920 --> 0:22:36.360 was a little concerned because, as it turns out, immediately 0:22:36.880 --> 0:22:39.680 that business took off after the after they got rid 0:22:39.680 --> 0:22:43.800 of it. So well there you go at. They can't 0:22:43.800 --> 0:22:46.800 always do everything well all the time, right, well, you know, 0:22:47.560 --> 0:22:49.400 they made it a decision based on what they thought 0:22:49.440 --> 0:22:56.120 would happen, and in five IBM introduced the International Proof Machine, 0:22:56.440 --> 0:23:00.439 which synchronized twenty four adding machines together, and it was 0:23:00.520 --> 0:23:04.159 meant to process checks in banks as meant as a 0:23:04.200 --> 0:23:07.680 processing system behind the scenes, but eventually people found other 0:23:07.800 --> 0:23:09.840 uses for it and you could think of it as 0:23:09.840 --> 0:23:13.600 a precursor to the computer. Um it could only do. 0:23:14.359 --> 0:23:16.480 It had a limited number of operations that could do 0:23:16.760 --> 0:23:19.320