IBM in 2004: The Linux Option

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Case Details:

Case Code : BSTA110
Case Length : 11 Pages
Period : 1952 - 2004
Organization : IBM (International Business Machines)
Pub Date : 2005
Teaching Note :Not Available
Countries : USA
Industry : Information Technology

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"IBM is trying to drive the value out of the operating system. I don't think it's a direct attach on Microsoft - but we are definitely a fairly big casualty".

- Martin Taylor, General Manager, Microsoft.1


In 2004, the top managers of IBM, the world's largest computer manufacturer, were introspecting about the heavy commitment their company was making towards Linux, the open source software. IBM made various products including desktops, mainframes and servers, storage systems and peripherals.

The company's service arm was the largest in the world. IBM was also one of the largest providers of software and semiconductors. In recent times IBM had started projecting Linux as a serious alternative to Microsoft's ubiquitous Windows operating system. Only time would tell whether Big Blue's bet on Linux would pay off.


IBM was incorporated in the State of New York on June 16, 1911, as the Computing-Tabulating-Recording Co. (C-T-R), a consolidation of the Computing Scale Co. of America, the Tabulating Machine Co., and The International Time Recording Co. of New York. In 1914, National Cash Register's star salesman, Thomas Watson, left to rescue the flagging C-T-R. Watson aggressively marketed C-T-R's tabulators. The company became International Business Machines (IBM) in 1924 and soon began to dominate the global market for tabulators, time clocks, and electric typewriters. It became the largest office machine maker in the US by 1940...

Excerpts >>

1] Maiello, Michael and Kitchens, Susan. "Kill Bill,"Forbes, 7th June 2004, Vol. 173, Issue 12, pp.86-91.


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