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Business and the economy in the United States

Computers

ENIAC computer

FORTRAN

Transistors

UNIVAC computer

The 1950s in America

International Business Machines Corporation

by Sheri P. Woodburn

Identification American information-processing company

International Business Machines Corporation (IBM) became synonymous with “computer” during the 1950’s, when it also joined the list of America’s largest industrial corporations with sales of more than one billion dollars.

During World War II, scientists developed a more precise and faster way of calculating the data used to design and operate new weapons and decipher code: the digital electronic computer. By the mid-1950’s, IBM had begun its revolution in computer technology and had amassed sixty thousand employees in two hundred offices throughout the world, fifteen hundred patents, and six thousand different models of business machinery. The company’s mainstays were the punch card, sorter, and tabulator machines. These machines automated business accounting systems and scientific calculations.

Products, Research, and Development

Made from thousands of vacuum tubes in addition to a variety of IBM’s electromechanical data-processing machines and punch cards, the first digital computers were mammoth, weighed a great deal, and occupied several rooms. In 1951, IBM’s major competitor Remington Rand introduced the first of these computers for commercial use, the Universal Automatic UNIVAC computer. Nearly two years later, IBM countered with its IBM 701 data processor. Made up of a collection of refrigerator-sized cabinets, the 701 was IBM’s first computer with internal, addressable memory. The IBM 702 followed a year later and used magnetic tape memory storage. In 1956, IBM was first to ship a computer hard drive, the IBM 305 Random Access Memory Accounting Machine (RAMAC). The size of two large refrigerators, the IBM 305 RAMAC had a 5-megabyte hard drive costing $10,000 per megabyte.

During the Cold War, the U.S. government pumped money into computer research. The Semi-Automatic Ground Environment (SAGE) was a massive air defense system unveiled in 1956. When fully deployed in 1963, the system consisted of twenty-one centers throughout North America, each with an IBM computer system containing more than 50,000 vacuum tubes, weighing 250 tons, and occupying one acre of floor space. The SAGE was the first large computer network to provide human-machine interaction in “real time.” IBM’s involvement with SAGE was an important factor leading to its domination of the computer industry.

Other notable achievements for IBM in research and development during this time included the IBM 608, the first all-transistor commercial calculator, in 1957; the development of FORTRAN (FORmula TRANslation), the most widely used scientific programming language, also in 1957; and the first fully automated production line for transistors, in 1959.

Corporate Culture and Monopoly

The persona of IBM’s founder, Thomas J. Watson , Sr., defined IBM’s culture. Watson was famous for his speeches to employees, and his employees sang songs to IBM’s greatness. Watson’s admonition to “THINK” hung in every hallway of the company. Very early in his career, Watson promoted women to executive-level positions, and in 1953, he published the company’s first equal-opportunity-policy letter. In 1952, Watson survived a 1952 antitrust lawsuit filed by the Justice Department. In 1956, IBM settled the case by signing a consent decree, requiring it to sell machines (as opposed to renting exclusively), to allow competitors into the punch card manufacturing business, and to make its patents available. Whether IBM was monopolist was a topic scrutinized by the U.S. government throughout IBM’s history and into the 1980’s. Watson transferred the title of president to his son Thomas J. Watson, Jr., in 1952, and his son became executive officer of the company in 1956.

Impact

When the decade began, IBM had 30,261 employees and $266 million in revenue. By 1959, IBM had grown to 94,912 employees, had $1.3 billion in sales, and ranked thirty-second in Fortune magazine’s “Directory of the 500 Largest Industrial Corporations,” published in 1960. The company’s role in large government and military projects, its highly publicized computer designs, and its overall computer sales made IBM the undisputed leader in the electrical and mechanical industry of the 1950’s.

Further Reading

1 

Maney, Kevin. The Maverick and His Machine: Thomas Watson, Sr., and the Making of IBM. New York: J. Wiley & Sons, 2003. Explores the role of Watson in creating IBM and transforming the business world.

2 

Tedlow, Richard S. The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM’s Founding Father and Son. New York: HarperBusiness, 2003. Examines IBM and the role of its founders during the tenure of the Watson family between 1914 and 1971.

Citation Types

Type
Format
MLA 9th
Woodburn, Sheri P. "International Business Machines Corporation." The 1950s in America, edited by John C. Super, Salem Press, 2005. Salem Online, online.salempress.com/articleDetails.do?articleName=1950_392.
APA 7th
Woodburn, S. P. (2005). International Business Machines Corporation. In J. C. Super (Ed.), The 1950s in America. Salem Press. online.salempress.com.
CMOS 17th
Woodburn, Sheri P. "International Business Machines Corporation." Edited by John C. Super. The 1950s in America. Hackensack: Salem Press, 2005. Accessed December 14, 2025. online.salempress.com.