Written by John Lounsbury
In February we posted an article from Statista which listed the ten largest (by number of employees) tech companies. The list was restricted to companies headquartered in the U.S. which means that some very large companies from the rest of the world did not make the list. For example Foxconn Technology (Taiwan) with 803k, Samsung (S. Korea) with 321k, Huawei Technologies (China) with 188k, and SAP (Germany) with 96k employees are among those not included.
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But it was most surprising to me that IBM, an iconic American company with a global reach and the sixth largest enterprise in America (Top 10 Largest Employers in the USA) was not where it seems it should belong, in second place on the Statista list (below).
The IBM website does not identify the company specifically as a technology company, but does “dance” around that definition. Here are some excerpted statements:
IBMers believe in progress – that the application of intelligence, reason and science can improve business, society and the human condition
IBM’s greatest invention is the IBMer. We believe that progress is made through progressive thinking, progressive leadership, progressive policy and progressive action. For that reason, we manage the brand to be highly esteemed and valued by forward-thinking clients, employees, communities, investors and the general public worldwide.
Our scientists are pioneering the future of artificial intelligence, creating breakthroughs like quantum computing that will allow us to process information in entirely new ways, defining how blockchain will reshape the enterprise, and so much more. We are driven to discover.
IBM Q is an industry first initiative to build universal quantum computers for business and science. Our cross-disciplinary team is developing scalable quantum systems, and potential applications for the technology we make available today.
At IBM Research, we invent things that matter to the world. Today, we are pioneering the most promising and disruptive technologies that will transform industries and society, including the future of AI, blockchainand quantum computing. We are driven to discover. With more than 3,000 researchers in 12 labs located across six continents, IBM Research is one of the world’s largest and most influential corporate research labs.
From IBM’s LinkedIn page:
We’re using technologies like AI, cloud, blockchain and IoT to help our clients transform their industries.
Segment results from the latest quarterly earnings report:
- Cloud & Cognitive Software (includes cloud and data platforms, cognitive applications and transaction processing platforms) — revenues of $5.0 billion, down 2 percent (up 2 percent adjusting for currency), led by cognitive applications, up 2 percent (up 4 percent adjusting for currency), and by cloud and data platforms, down 2 percent (up 2 percent adjusting for currency).
- Global Business Services (includes consulting, application management and global process services) — revenues of $4.1 billion, flat year to year (up 4 percent adjusting for currency), with growth in consulting and global process services. Gross profit margin increased 280 basis points.
- Global Technology Services (includes infrastructure and cloud services and technology support services) — revenues of $6.9 billion, down 7 percent (down 3 percent adjusting for currency), with growth in hybrid cloud revenue. Gross profit margin increased 110 basis points.
- Systems (includes systems hardware and operating systems software) — revenues of $1.3 billion, down 11 percent (down 9 percent adjusting for currency), with growth in Power, offset by the impact of the IBM Z product cycle dynamics and weakness in Storage.
- Global Financing (includes financing and used equipment sales) — revenues of $406 million, flat year to year (up 4 percent adjusting for currency).
More than 70% of revenue ($13.2 billion out of 18.7 billion) was from activity that can not be classified anything other than technology. If any of the $4.1 billion business services could properly be classfied as technology is an open question, but some might be so characterized. And the 2% of revenue from financing clearly includes financing of technology sales. So, at most, I suggest that IBM receives about 25% (or possibly less) of its revenue from sources that are are not directly and specifically technology.
And, of course, from Wikipedia:
International Business Machines Corporation (IBM) is an American multinational information technologycompany headquartered in Armonk, New York, with operations in over 170 countries. The company began in 1911, founded in Endicott, New York, as the Computing-Tabulating-Recording Company (CTR) and was renamed “International Business Machines” in 1924.
IBM produces and sells computer hardware, middleware and software, and provides hosting and consulting services in areas ranging from mainframe computers to nanotechnology. IBM is also a major research organization, holding the record for most U.S. patents generated by a business (as of 2019) for 26 consecutive years.[5]
I will rest my case: Statista missed at least one technology company when they formulated their list.
IBM is clearly still one of the world’s largest technology companies.
Disclosure: The author was employed by IBM from 1958 to 1992, working in both technology development and corporate technology management.
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