IBM's Evolution: Journey from Mainframes to Artificial Intelligence and Quantum Computing Technologies
The International Business Machines Corporation (IBM) has maintained its position as a leading force in the technology industry, with a focus on innovation and integration of multiple IT technologies.
IBM's modernized AI system, WatsonX, has been adopted by several major companies including Dell, Vodafone, Lockheed Martin, Fiserv, and others. These companies are leveraging WatsonX to train their own AI using proprietary data.
One of IBM's key advancements is in the field of neuromorphic chips, or Neural Network Processors (NNPs). IBM is leading the way in this area, developing more powerful and several orders of magnitude less energy-intensive alternatives to GPUs.
IBM's financial performance has been strong and consistent, with a sustainable revenue growth of 5% or more. This growth is driven by a 10% increase in software sales and even stronger growth in consulting. IBM's stock has rallied strongly since 2023, up more than 100% in the past 5 years.
In 2024, IBM generated $63B in revenues, of which $12.7B was free cash flow. The company's quantum computing sales reached $1B in early 2025, indicating that the field is entering the early stages of commercialization.
IBM's mainframes continue to be important, with 45 of the top 50 banks, 4 of the top 5 airlines, 7 of the top 10 global retailers, and 67 of the Fortune 100 companies using the mainframe as their core platform.
IBM's acquisition of Red Hat, the independent provider of Red Hat Enterprise Linux, in 2018 for $34B, has further solidified its position in the IT sector. The company currently employs over 300,000 people and operates 19 research facilities on 6 continents.
IBM's business in generative AI, which includes Large Language Models (LLMs), image and video generation, among others, has been growing quickly, reaching $5B by the end of 2024.
IBM's research and development efforts are focused on AI, neuromorphic, quantum, and photonics technologies. The company's silicon photonics technology could speed data center training by as much as 5x and reduce energy consumption by more than 80% compared with electrical connections.
IBM's first electronic computer, the 701, was about 25x-50x faster than its predecessors. The IBM System/360, introduced in 1964, was the first modern mainframe. Today, IBM operates as an umbrella corporation for many interconnected divisions, all focused on integrating multiple IT technologies together.
IBM's hybrid cloud product and solution are used by no less than 93% of Fortune 500 companies. The company has deployed 75+ quantum computing systems since 2016, with clients like Wells Fargo, Bosch, Moderna, Boeing, and HSBC.
In conclusion, IBM's continued dominance in the IT sector is due to its focus on innovation, integration of multiple IT technologies, and its commitment to research and development in areas such as AI, neuromorphic, quantum, and photonics technologies. The company's financial performance, strong stock performance, and wide range of clients further solidify its position as a leader in the technology industry.
