Big bang for Big Blue

Long before there was a Philippine computer industry to speak of, IBM was already in the country, sowing the first seeds of technology.

Big Blue’s presence in the Philippines could be traced back to 1925 when H.E. Heacock started selling IBM products here, which included butcher weighing scales and time clocks. IBM only officially set foot in the country 12 years later – July 20, 1937 to be exact – carrying the name Watson Business Machines Corp., a subsidiary of the IBM World Trade Corp. in the Philippines.

An Irish man, Thomas Kevin Mallen of H.E. Heacock, served as the company’s first general manager and, along with two employees, held office in the old Philippine National Bank building in Escolta, Manila.

By today’s standards, there’s nothing high-tech about what Watson mainly peddled then: electric accounting machines, electromagnetic typewriters, and time-recording systems. These products have long been museum pieces. However, at least one of them stood the test of time: the three-sided clock tower at the Manila City Hall, which was among IBM’s first installations in the country.

Agencies such as the Bureau of Census, Government Service Insurance System (GSIS) and then government-controlled Manila Electric Co. (Meralco) were also among the first clients of IBM. Sixty-five years later, these organizations continue to be among IBM’s biggest clients in the country.

By 1941, the company had 21 employees and had to move to a bigger office at the Wilson building in Binondo, Manila. But even the outbreak of World War II in the Pacific and the ensuing Japanese occupation did not stop the company from operating. Albeit the tough times and compromises – Mallen had to register Watson Business Machines as an Irish company with the Japanese Imperial Army – the company survived the war and resumed full operations in 1945. A year later, the company changed its name to "International Business Machines Corp. of the Philippines" with offices at Regina building in Escolta. Eight years would pass before the company started assuming its present name – IBM Phils. Inc.

The Making Of A Giant

IBM has a lot to show for why it is among the industry’s giants. At a time when even IT companies that had made a name in this industry were being bought out, IBM remained unchallenged in size and depth of products until HP and Compaq recently morphed into one. Instead, IBM acquired companies like Lotus and Informix and recently, PriceWaterhouse Consulting, making its size simply too large for anyone to afford.

In its 65 years in the Philippines, IBM brought to the country the latest technologies coming out from its research and manufacturing facilities abroad. Some of these technologies first found their way in the following user sites:

• The first-generation computer, IBM 650, installed at the Bureau of Lands in 1960.

• The second-generation computer, IBM 1410, installed at the Philamlife Insurance Co. in 1962.

• The first disk-based computer, IBM 1440, installed at the Central Azucarera de Tarlac in 1964.

• The first general-purpose computer incorporating transistors, System/360, installed at the Bureau of Lands in 1966.

• The System/370 installed at Caltex Phils. in 1973.

But what created the most impact in the development of the local IT industry was the entry of the IBM personal computer (PC) in 1985. Immediately, IBM PCs were being installed in large organizations like the Ayala Corp. and Asian Development Bank.

Three years later, IBM announced a new family of personal computers called the Personal System/2 or PS/2 as the successor of the IBM PC. At the same time, IBM entered the midrange server market by launching the AS/400, which was first installed at Phimco Industries.

The late 1980s saw the introduction of even larger systems like the System/390 mainframe, and in 1990, IBM’s first open system platform, the RS/6000. From large systems, IBM also went after the burgeoning market for notebook PCs by introducing the ThinkPad in 1993.

During those years, IBM was also developing its service and distribution business here. Its growth warranted the appointment in 1987 of Systems Standards Inc. as IBM’s first enterprise systems remarketer. In 1990, IBM formed a joint venture with Comfac Inc. called the Center for Information Technology Exponents Inc. (CITE), which offered computer site preparation, networking and structured cabling services. CITE became a wholly owned subsidiary of IBM Phils. in 1999.

In 1992, the local IBM, together with Ayala Systems Technologies Inc. and CSA Pte. Ltd. of Singapore, formed ACISystems Inc., a software solutions services firm. ACISystems became a wholly owned subsidiary of IBM Phils. in 2000.

As the country got wired to the Internet in 1994, IBM moved to offer a commercial Internet service provider (ISP) business by offering IBM.NET domain names to subscribers.

The latest addition to its service line of businesses is the IBM Solutions Delivery Inc., formed last year as a result of the integration of CITE Inc. and ACISystems Inc.

Home Of Leaders

In its 65 years in the Philippines, IBM takes pride in its roster of general managers. The illustrious list of its Filipino general managers includes Ramon del Rosario (1947), former Transportation and Communications Secretary Rainerio Reyes (1971), Roberto Romulo (1983), current Undersecretary and Presidential Adviser for IT Virgilio Peña (1989), Ramon Dimacali (1994) – and later as chairman of IBM Phils. (1996) – Ramon Jocson (1996), and Joaquin Quintos IV (2002).

During their respective stints at IBM, these general managers saw the company moving from one office to another. The first IBM office building was completed in 1956 along United Nations Avenue in Manila. Then in 1966, IBM finally moved to Makati, with its main offices at the Sikatuna building on Ayala Avenue.

On Feb. 8, 1969, IBM inaugurated its six-story building on Paseo de Roxas in Makati, which would be its home for more than 30 years. That building is now being torn down soon after IBM relocated last year to Eastwood City Cyberpark in Libis, Quezon City.

Social Responsibility

IBM’s history in the Philippines also includes its many ventures related to employee, community and educational programs.

Aside from establishing an IBM Education Center way back in 1958, the local subsidiary, in 1992, co-founded with ShoeMart (SM) Foundation the Asia Pacific College to address the demand for IT skills in the market. In the same year, both IBM and SM also co-founded with the Far Eastern University and Intelligent Wave the East Asia College of Information Technology.

During the IT industry’s infancy stage, IBM also pioneered the dissemination of information about itself and the industry at large through its monthly press briefings called "IBM Hour." Such was a rare practice then for an IT company compared to at present when IT vendors would regularly hold product launchings and press conferences.

In 1970, IBM Phils. became a founding member of the Philippine Business for Social Progress (PBSP). To encourage its employees to be active in community work, it launched the Fund for Community Service in 1986.

In 1986, IBM Phils. won the "Employer of the Year" award from the Personnel Management Association of the Philippines (PMAP). Last year, IBM was again awarded by PMAP the "Outstanding Personnel Program of the Year" for implementing a mobility and flexible benefits program, a first in the Philippines, for its more than 300 employees.

IBM was also recognized last year as a "Child Friendly Company" by the Employers’ Confederation of the Philippines (ECOP) for its daycare service and facilities for its employees’ children.

This year, IBM Phils. was awarded the Anvil Award of Excellence by the Public Relations Society of the Philippines and the Gold Quill Merit Award by the International Association of Business Communicators’ Philippine chapter for "Computer-Eyes," the first national computer workshop for blind students.