The company now reckons it has the complete suit to keep all its business customers happy and is these days content to leave the likes of Microsoft to fight prolonged anti-trust investigations.Yesterday it was left to Mr Palmisano to provide the sign-off to his predecessor’s restructuring. It was time to break up IBM into its constituent parts, put an end to its global scale and succumb to fragmentation.If there was a brilliant insight to Mr Gerstner’s time at IBM, it was to see that the company’s sheer size was its saving grace. As technology suppliers multiplied, Mr Gerstner and his team correctly predicted that companies would want experts to offer them solutions to integrate all this new kit that somehow connected together but came from a plethora of suppliers. IBM relied on its large mainframes for 90 per cent of profits but sales were collapsing. In just four months in 1993, mainframe sales fell a staggering 42 per cent as losses mounted to $800m in the same period.The answer seemed obvious.

This had been based on selling business customers all their computing needs in one go, from one integrated supplier. The simultaneous development of open operating platforms, such as Unix, meant this proprietary, closed approach to systems was being threatened with a rapid extinction.John Akers, Mr Gerstner’s predecessor, tried to change IBM’s culture by running it as a loose confederation of “Baby Blues” to reflect the fact that traditional vertical integration in computing was at an end.Microsoft and Intel were stealing IBM’s core business with their new vision of “client” PCs connected to servers. Such constant scrutiny left the IBM culture in a soup of paranoia that stunted growth and innovation, just as the computer industry was about to embark on one of its periodic lurches forward.The advent of the PC, which IBM handled so badly, meant Microsoft and Intel could lead the charge in breaking up its dominant position. The Brontosaurus moved deeper into the swamps when the mammals took over the forests, but one day it ran out of swamps.”During the entire 1970s IBM had also been labouring under an anti-trust lawsuit filed by the US Department of Justice which was dropped in 1982. Bill Gates, the software tycoon whom everybody loves to hate, denies having said in an unguarded moment that IBM ‘will fold in seven years’ But Gates may be right. IBM is now an also-ran in almost every major computer technology introduced since 1980. Traditional big computers are not going to disappear overnight, but they are old technology, and the realm in which they hold sway is steadily shrinking.

The situation when Mr Gerstner took over in 1993 was dire and every expert around was predicting worse to come.Just as he was getting used to his new office at IBM’s Armonk headquarters in New York State, Charles Morris and Charles Ferguson were writing in their book, Computer Wars: “There is a serious possibility that IBM is finished as a force in the industry. However, while IBM was flailing around in PCs, bigger problems brewed with its core business of mainframe computers.The clich?s that nobody ever got sacked for buying IBM, but you could certainly get very poor buying IBM shares. We had never developed a sustained leadership position in distribution, vacillating between company-owned stores at one time, to dealers, to distributors to telephone sales systems. Finally we couldn’t manufacture PCs in a world-class manner in respect to cost and speed to market.”His successor, Mr Palmisano, has finally cut IBM’s losses although it will retain an 18.9 per cent stake in Lenovo, and IBM’s brand, principally Think Pad, will continue in the PC market, albeit under Chinese control.Mr Gerstner reckons IBM missed out on the chance to build the “most powerful computer franchise in the world”, something Bill Gates jumped on with relish. The manufacturing baton was long ago handed from the US to the Far East.