This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

How Can a Company Innovate for 100 Years?

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Kevin Maney

NEW YORK ( TheStreet) -- IBM (IBM - Get Report) turns 100 this June. For the centennial, the company asked me to research 100 years of computing history and IBM's role in it. (A decade ago, I wrote a biography of Thomas Watson Sr., who built IBM -- so I knew my way around the corporate archives.)


Remarkably, IBM has contributed major innovations at every stage of computing. It created the first disk drive, the first widely-used computer language (FORTRAN), and the first relational database. It drove development of the bar code and airline reservation systems. Recently, it built a computer that could beat champions on a televised round of Jeopardy!.

IBM hasn't been on top of every development -- it came late to the personal computer and the Web, for instance. But the company is vibrant and relevant today because it has always stayed in the mix, creating new technologies time and again.

So, what can be learned from this? I looked at the historical sweep of IBM and computing, and picked out five key lessons that might help any company that wants to be enduringly innovative.

1. Really (gulp!) cannibalize.

By the end of World War II, IBM was getting one-third of its profits from making and selling punched cards. The rectangular cards had been the way companies had stored data for nearly 60 years, and they were a significant part of IBM's culture. But as data processing became more important to business, companies got overrun by cards. They set aside whole floors of buildings to store cards. Pressure built to find a solution.

At the time, magnetic tape was a new, untested technology. Bing Crosby had broken ground by using it to record his radio show. IBM thought it could be adapted for data, but this was truly a radical idea. It threatened IBM's cherished card business. It also meant asking corporations to put critical data on an electronic medium -- for the first time, a customer wouldn't be able to hold the medium in his hand and see the information (the punched holes!) in front of him.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
IBM $161.94 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs