International Business Machines (IBM) rose past old competitor Microsoft Corp. in market capitalization for the first time since April 1996, marking the latest milestone in the hardware and software giant’s recent surge.
IBM, which raised its 2011 earnings guidance in April, has been getting strong demand for its software and services recently.
The multinational technology company ruled the computer world for decades until it hired the small, unknown Microsoft in the early 1980s to provide an operating system for its upcoming personal computers, the IBM PC.
While “Big Blue” paid a one-time fee of $50,000 for the operating system, Microsoft’s Bill Gates did not transfer the copyright to IBM.
As the operating system spread to other hardware vendors, Gates broke through into industry dominance, while IBM became relegated to a hardware manufacturer that could not keep up with the software technology revolution.
By the end of 1999, Microsoft’s market value was three times that of IBM’s.
However, since 2000, investors have looked beyond Microsoft’s operating system and Office suite and began eyeing younger competitors such as Google Inc. and Facebook, which have been taking full advantage of the rapid rise of the Internet and cloud computing.
Along with many PC users converting to Apple products, Microsoft’s stock has suffered in the past decade.
Meanwhile, IBM sold off its PC group and ThinkPad brand to Chinese manufacturer Lenovo, and has since rebranded itself as a specialist in business software, servers, and consulting in areas ranging from mainframe computers to nanotechnology, making a resurgence after decades of running in the shadow of Microsoft.
IBM had a market value of $203.5 billion at the end of the day Monday, compared to Microsoft’s $201.1 billion, according to Reuters. Neither companies comes close to Apple’s market value at $308.3 billion.
IBM, which raised its 2011 earnings guidance in April, has been getting strong demand for its software and services recently.
The multinational technology company ruled the computer world for decades until it hired the small, unknown Microsoft in the early 1980s to provide an operating system for its upcoming personal computers, the IBM PC.
While “Big Blue” paid a one-time fee of $50,000 for the operating system, Microsoft’s Bill Gates did not transfer the copyright to IBM.
As the operating system spread to other hardware vendors, Gates broke through into industry dominance, while IBM became relegated to a hardware manufacturer that could not keep up with the software technology revolution.
By the end of 1999, Microsoft’s market value was three times that of IBM’s.
However, since 2000, investors have looked beyond Microsoft’s operating system and Office suite and began eyeing younger competitors such as Google Inc. and Facebook, which have been taking full advantage of the rapid rise of the Internet and cloud computing.
Along with many PC users converting to Apple products, Microsoft’s stock has suffered in the past decade.
Meanwhile, IBM sold off its PC group and ThinkPad brand to Chinese manufacturer Lenovo, and has since rebranded itself as a specialist in business software, servers, and consulting in areas ranging from mainframe computers to nanotechnology, making a resurgence after decades of running in the shadow of Microsoft.
IBM had a market value of $203.5 billion at the end of the day Monday, compared to Microsoft’s $201.1 billion, according to Reuters. Neither companies comes close to Apple’s market value at $308.3 billion.
