The test of time
Which of today’s technology giants might still be standing tall a century after their founding?
Jun 9th 2011 | from the print edition
IT IS not, by any means, the world’s oldest company. There are Japanese hotels dating back to the 8th century, German breweries that hail from the 11th and an Italian bank with roots in the 15th. What is unusual about IBM, which celebrates its 100th birthday next week, is that it has been so successful for so long in the fast-moving field of technology. How has it done it?
IBM’s secret is that it is built around an idea that transcends any particular product or technology. Its strategy is to package technology for use by businesses. At first this meant making punch-card tabulators, but IBM moved on to magnetic-tape systems, mainframes, PCs, and most recently services and consulting. Building a company around an idea, rather than a specific technology, makes it easier to adapt when industry “platform shifts” occur (see article).
True, IBM’s longevity is also due, in part, to dumb luck. It almost came unstuck early on because its bosses were hesitant to abandon punch cards. And it had a near-death experience in 1993 before Lou Gerstner realised that the best way to package technology for use by businesses was to focus on services. An elegant organising idea is no use if a company cannot come up with good products or services, or if it has clueless bosses. But on the basis of this simple formula—that a company should focus on an idea, rather than a technology—which of today’s young tech giants look best placed to live to 100?