IBM Is America’s Worst Big Tech Company

By Douglas A. McIntyre Published Jul 25, 7:10AM EDT

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International Business Machines Corp. (NYSE: IBM | IBM Price Prediction) was once America’s premier tech public corporation.
Now it pales in comparison to Microsoft Corp. (NASDAQ: MSFT) and other mega tech leaders.
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International Business Machines Corp. (NYSE: IBM) is at the bottom of the barrel of big tech companies. It barely belongs there because of its relatively small revenue and modest market capitalization. Since it was once America’s premier tech public corporation, it gets a place on the list.

In the most recently reported quarter, IBM’s revenue rose 2% year over year to $15.8 billion. Net income was $1.83 billion, compared to $1.58 billion a year ago. Microsoft Corp. (NASDAQ: MSFT), for comparison, has yet to report second-quarter earnings. However, based on its quarterly revenue run rate, the figure will be about $60 billion, with a net income of $20 billion.

IBM’s market cap tells an even worse story. It is $169 billion, while Microsoft’s is $3.18 trillion. Microsoft’s share price has increased by 203% in the past five years, while IBM’s is 27% higher for the same period.

IBM continues to struggle with the latest technology. Microsoft is the market leader. IBM barely has a footprint in the sector.

In 1985, IBM ranked sixth on the Fortune 500 list. This year, it ranked 63rd. Microsoft, still in a start-up phase in 1985, ranks 13th today. Amazon and Apple rank second and third. Amazon was not founded until 1994, and Apple was started in 1976.

Compared to America’s mega tech companies, IBM may be the industry’s largest failure over the past several decades.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.