From its first month of existence in July of 1911 to its corporate peak in the late 1970s and early 1980s, International Business Machines Corporation developed to become one of the computer industry's powerhouses. Depending on the definition of the market, IBM once controlled between 40 percent (by their definition) and 70 percent (by the United States Government's definition) of the computer market. According to Scott McNealy, chairman and chief executive of Sun Microsystems, "monopoly sets in at about a 30 percent market share." By this definition, there is no question that IBM's monopolistic powers reached a point where government intervention was necessary.
In the early years, IBM concentrated on solving the census problem. After merging with Herman Hollerith, inventor and patent holder of three census machines, IBM was well on its way to becoming a force in the business industry. Their next endeavor was to hire creative engineers who could think beyond the present technology. Some of the technology developed were several accounting machines and the IBM Card, which was used for the US Census and commanded twice the information compared to previous methods for calculating the census. Internal competition led to increased morale and faster rates of production. In the 1940s, the government-funded ENIAC was a setback for powerful IBM. However, in 1946 and 1947, IBM came out with the industry's first products employing electronic digital computation; the IBM 603 Electronic Multiplier and the IBM 604 Electronic Calculating Punch provided speed and flexibility of operation unmatched by any calculator in the marketplace.
IBM's belief was that innovation, creativity, and hard work would lead to positive turnover. This motto definitely worked to IBM's advantage. Between 1914 and 1993, the worldwide gross revenue of IBM increased 15,000-fold from about $4 million per year to about $63 billion per year. Over that time period, IBM introduced many new technologies including the IBM 407 Accounting Machine in 1949, the Semi-Automatic Ground Environment (SAGE) in 1956, and the IBM Personal Computer in August of 1981. The impact of these and their other products was immense. The personal computer is arguably the most important piece of technology to come out of the late 1970s and early 1980s. However, partly because IBM had such a stronghold over the market, these machines cost the public up to $6500 for the CPU, monitor, and keyboard. The lack of competition led to IBM's complete control over prices as well as direction of technology. IBM's excessive powers made it that much more difficult for startup companies and even established companies in the computer industry to succeed. Essentially, a monopoly takes away a market as an option for other companies to pursue. It also leads to a totalitarian state of affairs. If IBM had continued their market hegemony through the present, the world market, which is increasingly dependent on technological products and services, would be at the hands of one organization.
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