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BMW or Bayerische Motoren Werke AG (Bavarian Motor Works) was originally founded as an aircraft company. The aircrafts manufactured were painted with the colors of the Bavarian flag, which is the color of BMW logo. Another explanation is that when the pilot used to sit in the plane he would see alternating segments of white and blue due to rotation the plane propeller (blue being the sky).
The major business of BMW was to supply planes to the German army during World War I. But after the war they were forced to change their business. It made railway brakes, before making motorized bicycle, motorcycles and cars.
The logo itself hasn’t changed a lot during the years, but now has a more stylish look due to the different gradients. The unchanged logo has made it easier for people to remember and has given the company more recognition.