By James Lomuscio
From meat scales, time clocks and punch cards to Watson, an artificial intelligence super power that reads a million books a week, Westporter Mark Loughridge, IBM’s chief financial officer (CFO), tonight choreographed 100 years of his company at the Westport Public Library.
Westporter Mark Loughbridge, chief financial officer of IBM, traced the company’s 100-year history in a library presentation tonight. (CLICK TO ENLARGE) Phyllis Groner for WestportNow.com
Before a packed audience in the McManus Reading Room, Loughridge described Thomas Watson Sr., for whom the eponymous supercomputer is named, as IBM’s original visionary.
“He knew that this was an international and global company from the beginning, using technology to solve customer problems,” Loughridge said.
To that end, Watson Sr. changed the name of the Computing-Tabulating-Recording-Company founded in 1911 to International Business Machines, IBM, in 1924.
Loughridge was speaking as as part of the library’s free lecture, “IBM Celebrates 100 Years of Business: Smart Libraries are Good Business.”
His talk was followed by panel discussion on the evolution of community libraries in the wake of technology and its effect on books, media, events and people.
The panel included Library Director Maxine Bleiweis, as well as IBM executives Jim Corgel and Nancy DeViney, and retired IBM executives Lucy Baney and William O. Grabe, a managing director of General Atlantic LLC, a private equity firm that provides capital for global growth companies.
Retired IBM executive Irving Wladawsky-Berger, a Westporter who serve on the library’s Advisory Council, moderated the discussion.
Loughridge said that as Watson Sr. grew the company, he grew customer service along with the emerging technology, a commitment that remains today.
He called the punch card, “the first storage device.” Primitive by todays’ standards, it would take a stack of punch cards 20 feet high, Loughridge said, to equal the technology found in an MP3 player.
Punch cards were used by the Union Pacific railroad in 1911, Loughridge said. Today the railroad uses IBM real time tracking sensors.
Watson Sr. ran the company through 1950 when he retired, turning over its reins to his son Thomas Watson Jr. By then IBM had evolved into a multi-billion-dollar computer company.
Watson Jr., Loughridge said, took a $5 billion gamble on a computer system called System 360.
“He discontinued existing product lines,” Loughridge said, adding that System 360 allowed companies to have “upgradeable product lines as well as peripheral lines,” as opposed to buying new systems.
It was a success, and during his tenure through 1972, IBM’s share price grew 66 times.
The period from 1973 to 1993 was a roller coaster ride for IBM, he said, as it went from favorable reviews in Fortune magazine to being considered a dinosaur in the wake of competition from “Baby Bues,” new Silicon Valley computer companies.
“It is harder to keep a business great than to build it,” Loughridge quoted Watson Sr., adding that a company in trouble “must be prepared to change everything about itself, except its beliefs.”
What followed under new president Sam J. Palmisano was a company streamlining.
“New management felt that they joined a ship that was listing in the night,” said Loughridge, recalling that when he moved to Westport in 1992, he rented for three years out of fear that he would not have a job to support owning a home.
But Palmisano pushed them forward.
“It was invigorating to remake a company icon,” Loughridge said, recalling all-nighter weekends, “separating the hardware business from the software business, separating technology out of hardware.”
The company also divested a number of its lagging businesses, made 125 software company acquisitions and relocated all of its overseas accountants to the United States.
“We pulled the company back from the brink,” he said. “Under Sam’s leadership, we’ve grown to dominate the industry.”
At the beginning of his talk, Loughridge asked how much the audience thought 100 shares of the company costing $5,000 a century ago would be worth today.
The answer at the end of his talk left many stunned: $200 million, plus $45 million in dividends.
