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back to article Can Big Blue survive another century?

Big Blue, which more than any other company defined the modern IT industry, turns 100 today. Such longevity is an accomplishment that most corporations can only aspire to, and there is no guarantee, as IBM's near-death experience in the early 1990s aptly demonstrated, that it will be relevant, much less viable, for the next …

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Happy

Great!

My first job was "tape monkeying" on IBM mainframes, graveyard shift in a data processing centre. Shift would finsih around 1am and I would then sneak around to the R&D dept and sit there until around 4:30am just reading the manuals and books, playing on the top notch ( for the time ) IBM PCs, learning stuff like Oracle, Lotus 123, Ingres, etc, even learned how to connect to BBS's from that job! ( Shows my age! )

We used to call IBM engineers at midnight and they'd be there within 45 mins to fix broken kit, these were real engineers mind. The sort with 20+ years of mainframe work, they could strip down a mainframe like a mechanic can strip down a car engine.

Great days, a little sad nostalgia.

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Great service

For large customer offices with a serious problem they would have a container stuffed with diagnostic equipment which they would drive round to the car park, plug into the customer network and deal with the problem. Costly, but for mission critical support, pretty unbeatable.

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R&D

May be IBM "plays it safe" according to Wall Street creed, but they also have spent greats amounts of money on research, and sometimes that research is well beyond pure business.

This research have allowed IBM to get a lot of patents, that may be what helps them to go through another 100 years.

R

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Anonymous Coward

The world is a lot more complicated now....

Whilst I too wish that IBM thought bigger and achieved more that was visible to the man on the street I do think you're being a bit disingenuous about its recent contribution.

They have contributed considerably to Linux, Java and open source in general.

They still make the important bits for the important hardware in their machines with Power in AIX and AS/400 and variations for all major games consoles.

They still invest significantly in pure research (even if the motive is for monetizing the patent

portfolio).

IBM had their Google moment with S/360 and have now matured. Let's see how Google do in 100 years.

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Anonymous Coward

IBM != IBM?

The problem with IBM, like may large corporates, is that it is not one company. It's lots of companies; some of them are great and do make massive contributions to Open Source and build interesting and weird hardware just for the hell of it (such as the IBM San Volume Controller - built on a whim at Hursley research centre on commoditity x86 hardware - now an integral part of the DS8k/shark SANs).

Others are not so great and are run by accountants and exist in a universe where 'everyone is a salesman'. Space sickness is a common complaint in these regions.

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Big blue is the enterprise Apple

It's one of the few firms that does a lot of things well. Application software, OS software, hardware, consultancy, out-sourcing. Big Blue understands that enterprise customers are different from retail consumers, and much less likely to fall for an 'if you build it they will come' proposition.

When your customers purchasing decisions are made over years it behoves you not to get too far ahead of them.

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Remember

No one ever got fired for buying IBM.

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Mushroom

Lest we forget

The Third Reich's bid to exterminate a significant proportion of Europe's population would never have got off the ground without IBM tabulating machines - they were really handy for counting people and their attributes. I don't see how an honest account of IBMs first 100 years can fail to mention this - it's not like they didn't get paid for them

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Headmaster

@ Madeye

And while we are blaming IBM for the holocaust, let's go after James Watt for inventing the steam engine!! There never would have been all those cattle cars to Auschwitz and Treblinka without those steam-powered locomotives!!!

Any invention can be turned to evil use. Heck, I bet a skilled torturer can find all kinds of ways to make your life miserable using a paperclip or a knitting needle. Unless you can find some internal IBM memos stating that "Hey, the Krauts need some tabulating gear to count those nasty Jews before they are shipped off to the ovens! Tom, can you approve some special pricing for them!", then I think you are barking up the wrong tree.

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Pirate

One of the quickest Godwins I've ever seen....

....and I've seen a few.

Happy birthday, Big Blue. Somehow, it wouldn't have been the same without you.

GJC

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Bit different

Boeing didn't actively court al Qaeda, they didn't set up aircraft production plants, training and maintenance facilities with the organisation. IBM under Thomas Watson was an active and willing supplier of equipment to the Reich long after the persecution of the Jews turned into outright extermination. They even tried to continue operating in the Reich after Germany declared war on America. Watson was a close friend of the Nazi chiefs and was one of the very few foreigners ever to receive a medal from Hitler.

'IBM and the Holocaust' is a devastating and authoritative book on the subject.

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Stop

Just because you haven't read about it before, doesn't make it a lie...

...it is a well established and acknowledged fact that IBM Germany (est. 1921, aka DeHoMAG) was tasked and paid by the Nazi Government to design and operate people records in concentration and extermination camps.

For this, IBM like BASF (IG Farben), GM, Ford and other multinationals whose subsidiaries milked both sides of WW2 did pay into the holocaust reparation fund set up by the German government and industry.

This is not unique to IBM, but all the same, denying it doesn't do big blue any service either.

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Anonymous Coward

err...

Didn't Hitler annex the part of IBM that supplied the equipment?

Like Prudential Europe was annexed from UK, yet they still get blamed for what happened in their name during the war.

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legal stuff

... it appears that IBM never as such claimed responsibility of dehomag's actions during the Nazi era, and despite IBM Germany's contribution to the holocaust fund continues to reject direct responsibility, which may or may not be correct, but it is certainly understandable. If anything, I salute IBM for contributing to the fund - guilty or not.

If Hitler annexed dehomag is probably open to interpretation, they were nationalised for a period and re-integrated into the IBM following the war, rather than wound down and replaced by a separate new IBM Deutschland organisation.

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FAIL

ORLY??!?!

Back in the 1940s IBM had a truly unique product and they went to great lengths in the courts and elsewhere to ensure it remained so. So, unlike Ford et al, the Nazis really couldn't have done it without them. Perhaps I am an idiot for still giving a damn (it was a long time ago, after all) but at least I am contributing to the debate.

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FAIL

Bugger that

I will never forgive them for Lotus Notes

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Mushroom

War For Fun And Profit

So how is big bile different from so many other companies such as Bechtel, Blackwater and Halliburton, or even Huawei Technologies that refurbished Saddam's air-defence systems between the Iraq Wars?

in his book "War Is a Racket" (1935), General Smedley Butler describes how companies benefit from warfare. In the book Butler describes war as in international business where profits are counted in dollars and losses in lives.

The quote usually taken from the book is:-

"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."

Butler recons that WW1 cost the USA $52B, that’s $39B in actual materials and $16B in profits!!!!

Who do you think benefits most when Bush/Clinton/Bush/Obama decide to pop off a few tomahawks into Iraq/Libya at 1M$ a go?

Anyone remember Matrix Churchill?

Icon for obvious reasons

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Flame

Lest we remember...

It wasn't IBM who colluded to bring America into WW1 after Germany offered peace in 1916, causing the unnecessary death of tens of millions of combatants, just to obtain a piece of paper called the Balfour declaration.

It wasn't IBM who formed the majority of the plotters behind the Bolshevik revolution producing the death, dispossession or enslavement of millions of Russians (did they use IBM machines to run their Gulags?).

It wasn't IBM who in 1933 enacted a worldwide boycott of German made goods to starve dependent Germany into submission, having sold out Germany in WW1.

It wasn't IBM who directed genocide against the Palestinian people, wiping established communities off the map and forcing the survivors into poverty and despair.

It wasn't IBM who pressured European governments to enact laws denying historians the freedom to critically enquire into the official account of one particular event in history.

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Meh

titles are for whimps

Sam and the rest of the IBM board only seem to be interested in ensuring they get their bonuses by buying back shares to increase the EPS. Trying to get any investment internally is nigh on impossible. I know I've been trying for ages. With a mentality like that IBM are just going to continue being the huge oil tanker they are, and will eventually find itself still being an oil tanker when everyone else has switched to Hydrogen fuel cells. On the other hand 50% of revenue comes form the Business Services side now.

As for IBM being 100, I'll sit back and read the book they're going to send me, about how good IBM is. It looks like the only thing IBMers will get to celebrate the '100 years of Service' (as it's being sold internally).

AC for obvious reasons

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Thumb Down

Book value

Did you also read in the announcement mail that the book will cost you $30 and you have to buy it from Amazon?

Not kidding - wish I was. Love IBM, love the products, people and history. Hate the penny-pinching emotionless cold-hearted in-the-box-thinking spreadsheet-oriented metrics-driven sociopaths whose phenomenal diligence and dedication to $$$ enables them to uncover without fail the cloud in every special moment's silver lining.

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Anonymous Coward

Oops

Just reread my invite - apparently the book is free to IBMers and $30 to everyone else.

Still hate beancounters with a passion though.

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Anonymous Coward

Interesting...

IBM was founded today in 1911... Oracle was founded today in 1977.

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Windows

IBM is not HAL

IBM used to be a wonderfully strange place to work until around the 90's when the psychopathic megalomaniacs still in control today took over the boardroom.

No everything is sacrificed to make room for fat undeserved bonus money on top of even more undeserved and grotesque pay packages.

Have a good quarter, layoff the people who do anything and pay the the execs bonuses.

Have a bad quarter, same, except for bigger bonuses for the execs.

I hope it is around in some form for a bicentennial but doubt IBM will be if things do not change at the top.

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Flame

"...by remaining true to our core values..."

This is a big fat lie, as alluded to by a previous post. It was the early 90s when I discovered that "respect for the employee" was no longer in fashion, after having it drummed into me from the first day 20 years earlier. The result was my quitting my job (for a better one in the finance industry). But by then I was just another disillusioned throw-away employee.

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Anonymous Coward

Wee historical tidbit on "International"

They opened a branch in Vancouver so they could add "International".

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tpm
(Written by Reg staff)

Re: Wee historical tidbit on "International"

They actually had a factory in Toronto as well, which was closer to Endicott and Binghampton in a lot of ways other than geography.

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Anonymous Coward

Re: Wee historical tidbit on "International"

"They opened a branch in Vancouver so they could add "International""

And a damn good idea it was too.

International Business Machines is a fantastic name for a company, especially in the 20's with all the optimism for progress and the future that decade held.

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Happy

the IBM Personal Computer

> The IBM that many of us respect set the standard .. on the desktop with the Personal Computer, despite its own best efforts to not acknowledge there was a place in the world for personal computing ..

IBM did try - and fail - to claw the market back with OS/2 and MicroChannel Architecture (MCA). There were other desktop machines on the market at the time. What Big Blue had going for it was the letters I.B.M ..

http://en.wikipedia.org/wiki/Personal_computer

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Happy

How Tom Watson was 'fired'

I heard a story a few years back from a relative of Tom Watson Jr. about Tom Senior's departure from NCR.

Apparently, he and John Patterson (NCR's President) disagreed about sales strategy and JP took umbrage.

Watson came back to Dayton by train from a trip East, and couldn't find the customary NCR limousine to take him to the office. He packed his wife and shopping into a taxi and took a cab to NCR headquarters to find out what was going on. As he drove into the driveway, which was quite long, he saw a cloud of smoke. When he reached the door, he found the contents of his office burning on the lawn.

I believe that is the origin of the expression 'getting fired'.

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Happy

@Jim O'Reilly

"John Patterson "

I think he was once asked for his views regarding competition. "The best way to kill a dog is to cut it's head off."

What I like to think of as the Bill Gates management style.

Incidentally Watson was also one of the first corporate executives to do jail time under what was then newly introduced anti-trust legislation.

I do hope he was not the last.

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IBM's current corporate culture...

If you are interested in a somewhat self-serving rendition of the 1990s changes, read "Who says Elephants can't dance". Gerstner is the listed author (I think that he had help).

I recall the 1980s when IBM would 'boil the oceans' to pursue goals that it could no longer attain. I think that 'Impervious IBM' just needed to be re-aimed. Gestner's predecessor (Akers) is widely thought to have wasted IBM's market position to produce 'hollow' and unsustainable profits. Akers probably left IBM in a disorganized position with too many staff doing things that no-longer made money.

I think that a young person might consider IBM a good first springboard job. I am not sure that IBM is in a position to establish long-term career-paths, like it used to. In other blogs here, I am interested to see how IBM's Enterprise Linux strategies unfold. With the right 'breaks', they could find themselves with a decade+ of exceptional hardware offerings. I don't really see them in position for exceptional software offerings (not to denigrate dozens of very-nice, but not exceptional, offerings).

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Unhappy

100 more years of IBM?

I joined IBM UK in early 1990, as part of the then new AIX Support Centre to support the then unreleased RISC System/6000 (to give it it's full title).

It was very interesting that in order to skill up this centre so that it would be creditable, they recruited people from AT&T, ICL, BULL, OSF, the education sector and their own business partners, as well as moving people from their general Software Centre. One of the claims was that in 1990, the launch year, the UK AIX support centre had over 100 man years of UNIX experience (although I contributed over 10 of those!)

We were one of the few departments in the early '90s that got investment, and there was a serious headcount reduction program going on around us, but I never got the feeling that IBM was anything close to going bust. IIRC, there was a terrible set of figures published for the 1991 business year, but this was because IBM lumped all of the business restructuring costs into that year, like the provision of the money for the redundancy packages that actually spilled over into following years. This accounting trick was an open secret in IBM, so all of the managers I talked to were quite relaxed about the situation.

I left IBM in 1996, having decided that there were few real places in the developing IBM UK for an out-and-out techie, and since then, I have seen the company completely change. They used to value their people, but no longer.

Because of what I do, it is inevitable that I come across people I knew/know who are still in IBM, so I hear quite a lot about what is happening.

It is now all about the bottom line. They treat their people with almost open contempt, making pay rises and promotions almost unachievable. They discourage their more experienced people so that they would want to leave, to be replaced by cheaper, less experienced people. They make impossible promises to their graduate recruits, to get the maximum work and enthusiasm from them before disillusionment sets in. There is almost no internal investment or training. IBMers are encouraged to work as often as possible from customer sites, so IBM locations can be closed through apparent under-use. Expenses are frequently knocked back. Tricks are played with the pension plans to encourage older people to leave.

And to cap it all, at the end of last quarter, there was a request to try to squeeze in as much customer-chargeable work as possible before the quarter close, to boost the quarter! Whilst there was nothing to say to create extra work, the implication was there.

I can't see IBM being around in another 100 years. The top management and large shareholders will have extracted as much value as possible out of the company, ruining it down in the process by continual cost-cutting to the point that customers will loose confidence and look elsewhere for hardware and services. Then the shareholders will bail out, driving the share price down, and the execs will leave to do the same somewhere else.

I guess it's just indicative of modern business practices. It'll get all large companies eventually.

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Pint

IBM can live if.........

IBM will survive if they stop selling off their IP.

I still think selling off their thinkpads was a very wrong move.

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Ugh!

"A demon of the ancient world. This foe is beyond any of you. Run!"

I used IBM systems in the 1970s and 1980s, and they were absolutely horrible. Job control language was arcane and complicated and reflected a totally wrong model of files and processes. They had a hideous time sharing system which MIT helped them design, basically consisted of typing virtual card decks of JCL and then submitting them as batch jobs. Early versions of UNIX came with a "TSO Shell" that mocked it. Next time someone tells you MIT invented timesharing, bonk them on the head with a printout of Dartmouth BASIC (which actually did have a positive impact on early timesharing technology).

IBM was innovative in the 1950s, but small inventive companies like CDC surpassed them in the 1960s. Then came DEC and mini computers, then workstations based on single-board systems like SUN, and finally the PC. It's lucky for us that IBM's PC was designed with off-the-shelf parts that anyone else could build. And of course they blew it by letting Microsoft own the OS, which they sold nonexclusively to everyone. IBM hates Microsoft with a captain-ahab passion even today.

And let's not fool ourselves about IBM supporting open source. They are an enemy of Microsoft, and like every other organization that cannot write an operating system themselves, they ported UNIX. *gulf clap* But don't hold your breath waiting to see the source code to DB2.

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@Don, cannot write an operating system?

> They are an enemy of Microsoft, and like every other organization that cannot write an operating system themselves, they ported UNIX.

I'm afraid you're showing your limited background there. IBM wrote, from scratch, rather a lot of operating systems back when operating systems were terra incognita (and their purpose and functions still being defined) and it gave them away up to 1980 or so, in source code (assembler), under the rubric of "Systems Control Programs (SCP) -- necessary to make the hardware work", since they were a hardware company.

I agree it's unfortunate that the one that had legs was OS/360 VS2 (which morphed into MVS or whatever it's called nowadays) -- VM/370 CMS was much more fun and was the first "Personal Computing" experience for many employees of large organisations (at least, of large organisations that weren't engineering firms).

G.

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Happy

@Rippy

OS400 was pretty good. systematic command names. Object orientated (but they never made a big fuss of this) with security down to command/object level

Dull boxes to administer. Really only good for running companies *without* drama.

Hence no way for sysadmins to perform "heroic" feats like those reputedly needed on large farms of certain other OS suppliers.

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Go

All Hail Big Blur!

@ Don Mitchell: Agreement here- I'm forced to use AIX on a small handful of Power boxen here (and the two RS/6000's that preceded them), and it's Not Fun. the OS and software is a bit of a turd, but the hardware has always been very solid, if pricey.

I will also admit that the SurePOS systems are bloody tanks; We've have practically everything under the sun done to the two different rev 500 series systems we had (including having a staffer put his fist through the touch panel!), and aside from the usual wear and tear (power bricks, hard drives) they were reliable as all get out. The only reason we dumped most of them was because IBM stopped offering support on the older 5x2 systems, and we didn't want to drop upwards of 2.5K each on their replacements. (the irony that the POS division still contains a lot of people poached from NCR is not lost on me either.)

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Go

And, for a great Birthday present, dig this...

Ironically, in the week that Big Blue turns 100, it has slipped unnoticed past it's arch-enemy Microsoft in one metric - Market Capitalization.

That must delight the folks at IBM quite a lot.

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Facepalm

didn't look it up .. however

in the late 90's - early '00s , did not IBM have something like 3 to 4 times the market cap of MS ?

thought the Big Blue Dragon would eat up the Beast of Redmond back then .. certainly not to be now ..

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Big Brother

23456

I recently visited Mauthausen Concentration Camp in what is now Austria. It's a nasty camp but largely intact and with its own gas chamber. It was not primarily a Jewish death camp, dealing more with children and political prisoners. One of the exhibits there is some punch tape used to track the inmates (haftlings) and it was IBM's system.

I'm not trying to slam IBM (though I don't think writing such a period out of their history helps) but it remains true that large international corporations will assist whomever is in power. So don't ever think that the likes of IBM are American or BMW German ... they'll assist ANYONE who gives them money or power.

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And another thing

One of IBM's great strength in the 360 era was forming relationships high in a customer company's hierarchy. The was a claim "nobody was ever sacked for buying IBM" but if it suited them, they would bypass the IT manager - even stabbing him in the back on the way to the CEO.

IBM engineers were good but also cheap. When I set out to buy a mainframe, the deicding price factor was IBM maintenance costs at <5% of price versus 10% or more elsewhere.

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WTF?

"Time clocks"??

As opposed to what type of clocks, exactly?

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Facepalm

Duh!

Maybe I'm showing my age, but I used card punch time clocks (which normally are referred to as "time clocks") in one of my early jobs.

Might I suggest that you watch the Warner Brothers cartoons of Ralph E. Wolf and Sam Sheepdog. They always clock in at the beginning of the cartoon, and out at the end. That's a time clock.

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Mushroom

During WW II, IBM Helped kill millions

Have a read of "IBM And the Holocaust" which is a non-fiction investigation covering T.J. Watson's involvement with Hitler's regime. The very shocking part of IBM's history they try their damnedest to hide is that IBM's punch card systems were used to categorise, register, and (ultimately unfortunately) lead to the mass extermination of millions in Eastern Europe.

I'm not making this up, it's real, and available for purchase from a number of booksellers.

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Unhappy

@s.pam

"try their damnedest to hide is that IBM's punch card systems were used to categorise, register, and (ultimately unfortunately) lead to the mass extermination of millions in Eastern Europe."

Actually East Europe was just where they were shipped to. They were taken wherever the 3rd Reich occupied a bit of country.

It also resulted in a subversion of one of their ad campaigns into "IBM, the (final) solutions company."

Most interesting was IBM Germany's work to *enhance* their tabulator hardware to make it more flexible. The original hardware simply wasn't letting the Nazi's pick and kill people fast enough.

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Anonymous Coward

Service company

As a service company, I hope the fail miserably.

They treat the Manpower "temps" very poorly.

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FAIL

As somebody who's been outsourced...

Sorry, TUPE'd and forcibly butt raped by an IBM Alliance partner, I sincerely hope not.

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Devil

Agree 100%

Hey I worked for IBM for a while and I seriously hope they don't last another 10 years.

I worked with some fantastic people while I was there, but IBM management is rotten from top to bottom.

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