Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

IBM @100 Years - Global Innovation Is About Silicon Valley Not IBM

Posted by Tom Foremski - June 16, 2011

SamPalmisano1.jpgCongratulations to IBM and its 100 years in business - from making cheese graters to supercomputers, and much, much more.

IBM is seen as very much an East Coast company yet its history shows a strong and long connection with the Silicon Valley area, way before it was even called Silicon Valley.

Innovation is key to the IBM brand yet it does very little to promote that connection and its continued large presence in Silicon Valley. IBM has employed as many as 25,000 workers here, larger than Google (until fairly recently).

This region has become the global icon for innovation, every week I meet companies that are moving their headquarters here from all parts of the country and world, because they want to be where the action is.

It seems strange that IBM doesn't associate itself more strongly with this important center of innovation. Is it a cultural artifact?

Sam Palmisano, IBM's CEO, was in San Francisco a few years ago. I saw him at SF MOMA. I can't remember what the event was about but I do remember the first thing Mr Palmisano said. He started off with a joke, about the dotcom bust that had devastated Silicon Valley, and that how there was more technology in one of IBM's cash registers than there was in one of Silicon Valley's startups. Needless to say that the joke was a lead balloon with the West Coast audience.

Mr Palmisano's comments, true or not, seemed to be a demonstration of how little regard IBM has for Silicon Valley in general. If so then IBM is making a mistake. The world looks to Silicon Valley for innovation and not to IBM.

If IBM wants its "I" to stand for "Innovative" then it should change its attitude towards Silicon Valley and reassociate itself with the region. It should revitalize and renew its connection, after all, it has a great story to tell.

The first IBM presence was established in 1943:

On August 22, 1943, 105 men, women and children, among them 43 IBM employees, alighted from a special train that carried them across the continent to establish new homes and the new IBM Card Manufacturing Plant Number 5 at 16th and St. John Streets.

At the time, Thomas J. Watson, Sr. (1874-1956), declared:

"Our decision to establish a plant on the Pacific coast is based not only on the large amount of business which we now have in the territory, but on our belief that after the war the Pacific coast will be a far greater industrial district than ever before."

It was 1952 when the San Jose Lab was formally announced and this is where IBM invented the hard drive.

Albert Hoagland, one of the original engineers that worked on the project recalls:

Larger than a refrigerator, it held a mere 5 megabytes (an amount that would be used up by three or four typical-sized digital pictures these days). Today, domino-sized drives can hold 10 gigabytes (or 10,000 megabytes). "Storage density has increased by a factor of 50 million in 50 years," explains Hoagland.

Some of the early work on relational databases also came out of the San Jose Labs.

IBM also grew and expanded its presence by building onto its San Jose Research Labs and then moving it to 650 acres in Almaden in the early 1980s. It was renamed the Almaden Research Center and you can read a history of this site here.

IBM also has its Silicon Valley Lab which was formerly known as Santa Teresa Lab, located in San Jose where it focuses on developing software technologies.


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