1875–1925: The origin of IBM

Tabulating Machine Corporation plant in 1893.

IBM's history dates back decades before the development of electronic computers. Of the companies merged to form what later became IBM, the oldest was the Tabulating Machine Company, founded in 1896 by Herman Hollerith, and specialized in the development of punched card data processing equipment. Hollerith's series of patents on tabulating machine technology, first applied for in 1884, drew on his work at the U.S. Census Bureau from 1879–82. Hollerith was initially trying to reduce the time and complexity needed to tabulate the 1890 Census. His transition to the use of punch cards in 1886 laid a foundation for generations of equipment and a core component of what would become IBM.

The company originally sold some machines to a railway company but quickly focused on the easy profits of the 1900 US Census. The census sustained the company for another 3 years, but as the census wound down it returned to targeting private businesses, including automatic punching, tabulating and sorting machines in 1908. By 1911 Hollerith was 51 and his health was failing and the business was sold to Charles Flint for $2.3 million (of which Hollerith got $1.2 million) to form the Computing Tabulating Recording (CTR) Corporation^[2]. This was incorporated on June 16, 1911 in Endicott, New York, U.S.A.

CTR was formed through a merger of four different companies: the Tabulating Machine Company, the International Time Recording Company (founded 1900 in Endicott), the Computing Scale Corporation (founded 1901 in Dayton, Ohio, USA), and the Bundy Manufacturing Company (founded in 1889)..^[3] Flint was the financier and key person behind the merger and remained a member of the board of CTR until his retirement in 1930.^[4]

The companies that merged to form CTR manufactured a wide range of products, including employee time-keeping systems, weighing scales, automatic meat slicers, and most importantly for the development of the computer, punched card equipment.

Thomas J. Watson Sr. became General Manager of CTR in 1914 and President in 1915. In 1917, CTR entered the Canadian market under the name of International Business Machines Co., Limited. On February 14, 1924, CTR changed its name to International Business Machines Corporation, or IBM. At the helm during this period, Watson played a central role in establishing what would become the IBM organization and culture.