Through the early 1900s, ITR grew modestly and Computing Scale struggled. Flint, searching for a way to help the companies, realized that both were, at their core, about collecting, quantifying and analyzing information—a mission that would actually be the mainstay of the company through the next century.
He was also at the time becoming interested in another information-based company, Herman Hollerith’s Tabulating Machine Co., based in Washington, DC. Hollerith had built the tabulating machine to count the 1890 US Census. It sorted and counted information recorded by punching holes in cards, and Hollerith had begun selling the machines to governments, railroad companies and retailers.
In 1911, Flint bought out Hollerith, and then merged the Tabulating Machine Co. with Computing Scale, ITR and what remained of the Bundy Manufacturing Co. The new information-based entity was named the Computing-Tabulating-Recording Company, or C-T-R. Headquarters moved to New York, and the company operated factories in Endicott, NY, Dayton, Ohio and a few other cities.
Very quickly, Hollerith’s tabulator emerged as the most promising technology in C-T-R’s catalog. Before the merger, the machines had been used to conduct population censuses in a variety of countries, including Austria, Canada, Denmark and Russia. Not only could the machines count faster, but they could understand information in new ways. In a census, for instance, a single card, about three inches by seven inches, could be punched with holes that form an information portrait of a person—city of residence, age, nationality, job and more. Hollerith’s contraptions were able to sort through millions of cards and count how many teachers lived in Chicago, Illinois, or count any other subset of the population. Society could learn things it never knew it could learn, and at speeds no one thought possible.
Businesses quickly realized that the portraits on those cards didn’t have to be citizens, but of a product a company sells, or a freight car on a rail line, or an insurance customer. Early adopters of the electric tabulation method included the freight office of the New York Central Railroad and the Eastman Kodak Company, which used a tabulating machine to keep track of customers and salesmen.
Despite the progress the tabulating machine line was making, as a whole C-T-R stalled in its first years after the merger. So, in 1914, Flint hired Thomas Watson Sr. to run the company. It turned out to be an inspired move.
Over the following decade, Watson forged the disparate pieces of C-T-R into a unified company with a strong culture. He focused resources on the tabulating machine business, foreseeing that information technology had an ever-expanding future and literally creating the information industry.
Watson also began expanding overseas—beyond the UK, Canada and Germany where its products were already sold—taking tiny C-T-R global. By 1924, he renamed C-T-R with the more expansive name of International Business Machines.
The computing scale and time clock businesses fell away. IBM grew to become the most significant player in every stage of the evolution of information technology over the 100 years after it was first formed.