Year: 1990 During the 1980s and early 1990s, IBM was thrown into turmoil by back-to-back revolutions. The PC revolution placed computers directly in the hands of millions of people. And then, the client/server revolution sought to link all of those PCs (the "clients") with larger computers that labored in the background (the "servers" that served data and applications to client machines). Both revolutions transformed the way customers viewed, used and bought technology. And both fundamentally rocked IBM. Businesses' purchasing decisions were put in the hands of individuals and departments - not the places where IBM had long-standing customer relationships. Piece-part technologies took precedence over integrated solutions. The focus was on the desktop and personal productivity, not on business applications across the enterprise. By 1993, the company's annual net losses reached a record $8 billion. Cost management and streamlining became a chief concern. And IBM considered splitting its divisions into separate independent businesses. Louis V. Gerstner, Jr. arrived as IBM's chairman and CEO on April 1, 1993. For the first time in the company's history IBM had found a leader from outside its ranks. Gerstner had been chairman and CEO of RJR Nabisco for four years, and had previously spent 11 years as a top executive at American Express. Gerstner brought with him a customer-oriented sensibility and the strategic-thinking expertise that he had honed through years as a management consultant at McKinsey & Co. Soon after he arrived, he had to take dramatic action to stabilize the company. These steps included rebuilding IBM's product line, continuing to shrink the workforce and making significant cost reductions. Despite mounting pressure to split IBM into separate, independent companies, Gerstner decided to keep the company together. He recognized that one of IBM's enduring strengths was its ability to provide integrated solutions for customers - someone to represent more than piece parts or components. Splitting the company would have destroyed a unique IBM advantage. With the rise of the Internet and network computing the company experienced another dramatic shift in the industry. But this time IBM was better prepared. All the hard work IBM had done to catch up in the client/server field served the company well in the network computing era. Once again, customers were focused on integrated business solutions - a key IBM strength that combined the company's expertise in solutions, services, products and technologies. In the fall of 1995, delivering the keynote address at the COMDEX computer industry trade show in Las Vegas, Gerstner articulated IBM's new vision - that network computing would drive the next phase of industry growth and would be the company's overarching strategy. That year, IBM acquired Lotus Development Corp., and the next year acquired Tivoli Systems Inc. Services became the fastest growing segment of the company, with growth at more than 20 percent per year. In May 1997, IBM dramatically demonstrated computing's potential with Deep Blue, a 32-node IBM RS/6000 SP computer programmed to play chess on a world class level. In a six-game match in New York, Deep Blue defeated World Chess Champion Garry Kasparov. It was the first time a computer had beaten a top-ranked chess player in tournament play, and it ignited a public debate on how close computers could come to approximating human intelligence. The scientists behind Deep Blue, however, preferred to stress more practical concerns. Deep Blue's calculating power - it could assess 200 million chess moves per second - had a wide range of applications in fields calling for the systematic exploration of a vast number of variables, among them forecasting weather, modeling financial data and developing new drug therapies. As the decade drew to a close, IBM stood on the threshold of the new century having reestablished itself as a leading information technology innovator. Its leadership helped create the e-business revolution. And it had successfully transformed itself, achieving an impressive business turnaround. As the new century opened, IBM moved confidently into a future it helped create, one that is linked to the ubiquitous and surging presence of the global networks that are connecting every computer, and soon perhaps, every electronic device in the world. --- IBM makes its most comprehensive product announcement in 25 years by introducing the System/390 family consisting of 18 Enterprise System/9000 processors ranging from midrange computers for office environments to the most powerful computers IBM has ever offered. IBM scientists discover how to move and position individual atoms on a metal surface, using a scanning tunneling microscope. The technique is demonstrated at IBM's Almaden Research Center in San Jose, California, where scientists created the world's first structure: the letters "I-B-M" - assembled one atom at a time. IBM Germany consolidates its marketing and service activities in the German Democratic Republic in a new subsidiary corporation, IBM Germany System and Service - East, with headquarters in Dresden. IBM announces the RISC System/6000, a family of nine workstations that are among the fastest and most powerful in the industry. The RISC System/6000 uses Reduced Instruction Set Computer technology, an innovative computer design pioneered by IBM that simplifies processing steps to speed the execution of commands. IBM also announces the Personal System/1 (PS/1) that is easy enough for the novice to use, yet powerful enough to do office work at home. Other IBM researchers fabricate transistors that operate at frequencies of up to 75 billion cycles a second, nearly double the current world record. IBM scientists also devise a technique for producing blue laser light that could significantly increase the capacity of optical data storage devices. The Institute of Electrical and Electronics Engineers, Inc., awards its 1990 Corporate Innovation Recognition to IBM for the development of the Multilayer Ceramic Thermal Conduction Module for high performance computers. IBM joins five other technology leaders in investing in ETEC, Inc., which will manufacture and sell tools and other equipment used in semiconductor manufacturing. Motorola, Inc. and IBM form ARDIS, a joint venture to offer the first commercial service in the United States for communicating with computers via radio waves. Diebold, Incorporated, and IBM form a joint venture named InterBold to provide automated teller machines and financial self-service systems worldwide. After two years of successful testing in selected U.S. cities, Prodigy - an information and home shopping service for PC users - becomes available throughout the United States in September. The service is offered by a partnership between IBM and Sears, Roebuck and Co. IBM announces a partnership agreement with The Association of Tennis Professionals (ATP), in which IBM is the title sponsor of the ATP Tour and will provide information processing systems to collect and manage a broad range of statistical information about the players and the tournaments. U.S. President George Bush presents the Malcolm Baldrige National Quality Award to IBM's Rochester, Minnesota, facility. IBM contributes in 1990 more than $148 million in cash, equipment and employee expertise in support of educational, social and cultural programs benefiting people around the world. IBM participates in job training centers in Argentina and the United Kingdom. In the United States, IBM sponsors 95 such centers, which have graduated more than 40,000 people since the initiative was undertaken in 1968. IBM announces plans to establish IBM Computer Competence and Development Centers at universities in Czechoslovakia, Hungary, Poland and other Central and Eastern European countries. IBM joins 14 other leading U.S. corporations in April to establish a worldwide program designed to achieve environmental, health and safety goals by continuously improving environmental management practices and performance. IBM has invested more than $1 billion since 1973 to provide environmental protection for the communities in which IBM facilities are located. IBM U.S. manufacturing sites in 1990 reduce CFC emissions 47 percent from 1989 levels, for a cumulative reduction of 76 percent since the company's CFC-elimination program began in 1987. Worldwide in 1990 IBM reduces its CFC emissions 43 percent from 1989 levels, for a total reduction of 63 percent since 1987. IBM Brazil helps to establish courses that train visually impaired persons to become computer programmers. IBM Mexico signs an agreement with the government to assist the estimated two million Mexicans with hearing and speech problems. IBM Japan employees and their families assist local organizations for the blind to translate books and periodicals into Braille using computers and software developed by a blind IBM Japan employee. Of the 3,500 new employees hired in the United States, about 31.3 percent are women and 26.8 percent are minorities. Women hold 20.8 percent of the company's management positions, while minorities hold 13 percent. Women hold 13 percent of the senior management positions while minorities hold almost 10 percent. The company also purchases more than $195 million in products and services from over 950 minority-owned firms, over $95 million from more than 1,050 firms owned primarily by women, and over $14 million from 59 companies employing primarily handicapped workers.