CHAPTER
Section A Computer History
PARSONS/OJA
8
The
Computer
Industry
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Chapter
8
The Computer Industry
Chapter PREVIEW
 Outline the development of computer devices
 Describe the four generations of computers
 Describe the role of the computer and IT
industries
 Explain the life cycle of typical hardware and
software products
 Discuss the advantages and disadvantages of
various marketing channels
 Describe the job outlook, working conditions,
and salaries for computer professionals
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Development of computers
 The U.S. Census Bureau held a competition to find a way
to tabulate the 1890 census
 Herman Hollerith won the competition with a design for an
electronic punched card tabulating device
 Each card contained areas to represent fields, such as
“nationality.”
 Once punched, the cards were fed into a card reader that
used an array of metal rods to electronically read the data
from the cards and tabulate the results, Hollerith
Tabulating Machine
 Hollerith incorporated The Tabulating Machine better
known today as IBM
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Development of computers
 In 1943, a team of British developers created
COLOSSUS, an electronic device designed to
decode messages encrypted by the German
ENIGMA machine
 COLOSSUS successfully broke the codes and gave
the Allies a major advantage during World War II
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Development of computers
 In 1943, a team headed by John W. Mauchly and J.
Presper Eckert started work on ENIAC, a gigantic,
general-purpose electronic computer
 ENIAC (Electronic Numerical Integrator and
Computer) was designed to calculate trajectory
tables for the U.S. Army
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Development of computers
 A computer called the UNIVAC is considered by
most historians to be the first commercially
successful digital computer
 Eckert-Mauchly Computer Corp constructed it
 At fourteen and a half feet long, seven and a half
feet high, and nine feet wide, UNIVAC was
physically smaller than ENIAC, but more powerful
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How did computers progress from room-sized
behemoths to modern personal computers?
 Computer historians seem to generally agree that
computers have evolved through four distinct
generations, and in each generation, computers
became smaller, faster, more dependable, and
less expensive to operate
 First generation: vacuum tubes
 Second generation: transistors
 Third generation: integrated circuits
 Fourth generation: microprocessors
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What characterized the first generation
of computers?
 First-generation computers can be characterized
by its use of vacuum tubes
 A vacuum tube is an electronic device that
controls the flow of electrons in a vacuum
 They consumed a lot of power
 They also tended to burn out quickly
 First-generation computers were characterized by
custom application programs
 First-generation computers did not seem ready
for “prime time”
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What characterized the first generation
of computers?
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How did second-generation computers
differ from first-generation computers?
 Second-generation computers used transistors instead of
vacuum tubes
 Transistors performed functions similar to vacuum tubes,
but they were much smaller, cheaper, less power hungry,
and more reliable
 A number of successful transistorized computers were
manufactured by companies such as IBM, Burroughs,
Control Data, Honeywell, and Sperry Rand
 IBM developed operating systems that provided
standardized routines for input, output, memory
management, storage, and other resource management
activities.
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How did second-generation computers
differ from first-generation computers?
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How did second-generation computers
differ from first-generation computers?
 Second-generation computers also ran
programming language compilers that allowed
programmers to write instructions using Englishlike commands.
 High-level languages, such as COBOL (Common
Business-Oriented Language) and FORTRAN
(Formula Translator), were available for use on
second-generation computers
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What are the characteristics of thirdgeneration computers?
 Third-generation computers became possible in 1958, when
Jack Kilby at Texas Instruments and Robert Noyce at Fairchild
Semiconductor independently developed integrated circuits
 RCA Spectra 70, IBM 360
 In 1965, Digital Equipment Corp.(DEC) introduced the DEC
PDP-8, the first commercially successful minicomputer
 By 2000, the IBM AS/400 (renamed the iSeries 400) was one
of the few remaining devices that could be classified as a
minicomputer
 Today, demand for minicomputers is satisfied by high-end
personal computers and servers, and the term “minicomputer”
has generally fallen into disuse
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What are the characteristics of thirdgeneration computers?
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How did microprocessor technology
affect the computer industry?
 The technology for fourth-generation
computers appeared in 1971, when Ted Hoff
developed the first general-purpose
microprocessor
 Early industry leaders included Intel, Zilog,
Motorola, and Texas Instruments
 The Intel line, used in most Windows-compatible
computers, included the 8086, 8088, 80286,
80386, 80486, and the Pentium family of
microprocessors
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How did microprocessor technology
affect the computer industry?
 The Motorola line of microprocessors grew to
include 68000 series processors used in Apple
Macintosh computers, plus the PowerPC
processors developed in the early 1990s, and
used in current Macintosh computer systems
 Intel reigns as the world’s leading microprocessor
manufacturer, though microprocessors are also
produced by companies such as Hitachi, Texas
Instruments, Sun Microsystems, AMD, Toshiba,
and Motorola
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How did microprocessor technology
affect the computer industry?
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Personal Computers: Who invented the
personal computer? In the 1970s…
 One such system was the Mark-8 developed by
Jonathan A. Titus, who was featured in the July
1974 issue of Radio-Electronics
 In 1975, Ed Roberts and the MITS (Micro
Instrument and Telemetry Systems) company
announced the MITS Altair, which many
historians believe to be the first commercial
microcomputer
 In 1977, Steve Jobs and Steve Wozniak founded
Apple Computer Corporation and released the
Apple I, a kit containing a motherboard with 4K of
RAM that sold for $666.66
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Who invented the personal computer?
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How did personal computers become
so successful?
 In 1978, Apple introduced the Apple II computer
 The Apple II was a very successful computer.
One of the main reasons behind its success was
a commercial software program called VisiCalc
— the first electronic spreadsheet
 In 1981, IBM began marketing what it called a
“personal computer” or “PC,” based on the 8088
processor. The IBM PC quickly became the topselling personal computer
 IBM PC 5150
 IBM PC XT
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How did personal computers become
so successful?
 Within months, dozens of companies used these
parts to produce IBM-compatible computers
 These companies were also able to obtain
essentially the same operating system used by IBM
 The IBM PC used an operating system called
PC-DOS that was created by a young
programmer named Bill Gates
 Although hobbyists and the business community
had embraced computers, these machines were
still considered difficult for the average person to
use
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How did personal computers become
so successful?
 That perception began to change in 1983, when
Apple introduced a product called the Apple Lisa
 A key feature of the Lisa was its graphical user
interface — an idea borrowed from the Xerox
Alto computer
 In 1984, Apple released the first Apple
Macintosh
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How did personal computers become
so successful?
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Chapter
8
Section B The Computer and IT
Industries
Information technology industry
 Information technology industry (or IT
industry), is typically used to refer to the
companies that develop, produce, sell, or support
computers, software, and computer-related
products
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What kinds of companies are included
in the IT industry?
 Equipment manufacturers
 Chipmakers
 Software publishers
 Service companies
 Retailers
 Although some companies fit neatly into one of the
above categories, other companies operate in two
or more areas
 The IT industry also encompasses large
conglomerates with one or more divisions devoted
to computer hardware, software, or services
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Economic Factors: How has the IT
industry affected the economy?
 The IT industry has been described as “the most dynamic,
most prosperous, most economically beneficial industry the
world has ever known.”
 GDP is defined as the total value of a nation’s goods and
services produced within a specific time period
 In the U.S., for example, the IT industry accounted for
about 5 percent of the growth in the 1985 GDP.
 The Internet added more fuel to the fire, and by 2000, IT’s
total contribution to GDP growth was about 8.6 percent
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How has the IT industry affected the
economy?
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How has the IT industry affected the
economy?
 According to the U.S. Department of Commerce, the IT
industry accounted for one-third of the real economic
growth, and almost half of all productivity growth
between 1995 and 1999
 Remember Y2K
 The world IT market (hardware, software, and computer
services) grew at an annual rate of 10 percent between
1987 and 1995—nearly twice the rate of the world GDP
 In 2000, IT industry growth in the U.S. slowed as a result of
a shakeout in the “dot com” sector
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Product Development: What’s the reason for
the amazing number of new computer
products that appear each year?
 IT manufacturers and publishers introduce new
products for the same reasons as their
counterparts in the automotive industry. New
products, such as a computer with a faster
microprocessor, a DVD player, or an upgrade to
Windows, are designed to attract customers and
generate sales
 In contrast to the automotive industry, however,
the IT industry is not on an annual cycle
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What’s the reason for the amazing number of
new computer products that appear each year?
 The equipment-manufacturing segment of the IT
industry is relatively young, and technology,
rather than marketing, is the major force that
drives product development
 Companies cannot always predict when a new
technology will appear, or how it might be
incorporated into new products. As a result, the
life cycle of computer hardware and some
computer products is short, whereas other
products have a long life cycle
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What are the stages in the life cycle of
a typical hardware product?
 The life cycle of a new
computer model typically
includes five stages:
product development,
product announcement,
introduction,
maintenance, and
retirement
 May be a very short
period of time
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What are the stages in the life cycle of
a typical hardware product?
 Product Development - Product development
often takes place “under wraps.”
 Product Announcement - Sometime during the
development process, a company makes a
product announcement to declare its intention to
introduce a new product. Vaporware, are
announced, but never produced
 Introduction - When a new product becomes
available, it is usually added to the vendor’s
product line and featured prominently in
advertisements
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What are the stages in the life cycle of
a typical hardware product?
 Maintenance - As supply and demand for a
product reach an equilibrium, the price of the
product decreases slightly. This discounted price
is usually referred to as the street price
 Retirement - Gradually, a company’s oldest
products are discontinued as demand for them
declines
 Floppy disk drives
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What are the stages in the life cycle of
a typical hardware product?
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Is the life cycle of a software product
similar to that of a hardware product?
 Software begins with an idea that is shaped by a
design team and marketing experts
 Most software products undergo extensive testing
before they are released
 The first phase of testing, called an alpha test, is
carried out by the software publisher’s in-house
testing team
 Errors, or “bugs,” found during the alpha test phase
are fixed, and then the software enters a second
testing phase called a beta test
 A beta test is conducted by a team of off-site testers
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Is the life cycle of a software product
similar to that of a hardware product?
 A newly published software package can be an
entirely new product, a new version (also called a
“release”) with significant enhancements, or a
revision designed to add minor enhancements
and eliminate bugs found in the current version
 Unlike computer hardware products, older
versions of software typically do not remain in the
vendor’s product line
 Upgrade rebate
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Market Share: How do computer companies
stack up against each other?
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How do computer companies stack up
against each other?
 Market share is a company’s share, or
percentage, of the total market “pie”
 Competition is fierce in all segments of the
industry, and market share is one indicator of a
company’s ability to “steal” sales from its rivals
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Marketing Channels: Why are computer
equipment and software sold through so many
outlets?
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Why are computer equipment and
software sold through so many outlets?
 Hardware manufacturers and software publishers
try to reach consumers by making their products
available through a variety of sources
 Computer hardware and software are sold
through marketing outlets called marketing
channels
 These channels include computer retail stores,
mail-order/Internet outlets, value-added resellers,
and manufacturer direct
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Isn’t a computer retail store the best channel
for hardware and software products?
 A computer retail store purchases computer
products from a variety of manufacturers, and
then sells those products to consumers
 A computer retail store is often the best
shopping option for buyers who are likely to
need assistance after their purchases such as
beginning computer users, or those with plans
for complex computer networks
 Retail stores can be a fairly expensive channel
for hardware and software
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How does the mail-order channel
compare to retail?
 Mail order is a special instance of retailing in
which a vendor takes orders by telephone or from
an Internet site
 Mail-order suppliers generally offer low prices,
but might provide only limited service and support
 Experienced computer users who can install
components, set up software, and do their own
troubleshooting are often happy with mail-order
suppliers.
 Prefer a customized machine
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Don’t some manufacturers and
publishers sell direct?
Click to start
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Chapter
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Section C Careers for Computer
Professionals
What kinds of jobs are typically
available to computer professionals?
 A systems analyst investigates the requirements of a
business or organization, its employees, and its customers
in order to plan and implement new or improved computer
services
 Understand the business…
 A security specialist analyzes a computer system’s
vulnerability to threats from viruses, worms, unauthorized
access, and physical damage
 A computer programmer designs, codes, and tests
computer programs
 A quality assurance specialist participates in alpha and
beta test cycles of software
 A database administrator analyzes a company’s data to
determine the most effective way to collect and store it
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What kinds of jobs are typically
available to computer professionals?
 A network specialist/administrator plans, installs, and
maintains one or more local area networks
 A computer operator typically works with minicomputers,
mainframes, and supercomputers
 A computer engineer designs and tests new hardware
products, such as computer chips, circuit boards,
computers, and peripheral devices
 A technical support specialist provides phone or online
help to customers of computer companies and software
publishers
 Most of these jobs are in India
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What kinds of jobs are typically
available to computer professionals?
 A technical writer creates documentation for
large programming projects, and writes the online
or printed user manuals that accompany
computers, peripheral devices, and software
 A computer salesperson, or “sales rep,” sells
computers
 A Web site designer creates, tests, posts, and
modifies Web pages
 A manufacturing technician participates in the
fabrication of computer chips, circuit boards,
system units, or peripheral devices
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Section C Careers for Computer
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What’s the outlook for computer
careers?
 The U.S. Bureau of Labor Statistics (BLS) projects that the
number of jobs in the computer industry will
substantially increase between now and 2008
 In U.S. or in India???
 According to the BLS, the largest increases in available
jobs will be for database administrators, computer support
specialists, and computer engineers
 Over the next few years, economic trends may cause
significant changes in the job market
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What can I expect as a salary for an IT
industry job?
 Web sites, such as http://www.bls.gov, provide
salary data for various IT industry jobs
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Working Conditions: What are the advantages
of working in the computer industry?
 Many technology companies offer employeefriendly working conditions that include childcare,
flexible hours, and the opportunity to work from
home
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Section C Careers for Computer
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Are IT workers typically satisfied with
their jobs?
 One indication of job satisfaction is voluntary
turnover rate
 Some companies in the IT industry have
remarkably low turnover rates
 Database giant Oracle and network powerhouse
Cisco Systems have turnover rates that are less
than 6 percent
 Turnover rates at IBM and Microsoft are less than
10 percent, which seems to indicate higher-thanaverage employee satisfaction
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Can I work at an IT job from home?
 Workers in many industries are interested in
telecommuting — using available technology to
work from home or an off-site location, at least
part of the time
 The Internet and telecommunications
technologies have made an impact on the
availability of telecommuting opportunities for
workers
 It has become common for employees to
collaborate through electronic mail, fax,
groupware, and videoconferencing
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