The Computer Industry

1
The Computer Industry
Computer History
Section A
CHAPTER 8
PARSONS/OJA
Page 384
2
The Computer Industry
Chapter 8
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

Page 385
3
Computer History
Section A
Chapter 8
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

Page 388
4
Computer History
Section A
Chapter 8
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

Page 390
5
Computer History
Section A
Chapter 8
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

Page 390
6
Computer History
Section A
Chapter 8
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

Page 391
7
Computer History
Section A
Chapter 8
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

Page 391
8
Computer History
Section A
Chapter 8
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

Page 391-392
9
Computer History
Section A
Chapter 8
What characterized the first generation of
computers?
Page 391
10
Computer History
Section A
Chapter 8
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.

Page 392
11
Computer History
Section A
Chapter 8
How did second-generation computers differ from
first-generation computers?
Page 392
12
Computer History
Section A
Chapter 8
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 English-like commands.
• High-level languages, such as COBOL (Common
  Business-Oriented Language) and FORTRAN (Formula
  Translator), were available for use on
  second-generation computers

Page 393
13
Computer History
Section A
Chapter 8
What are the characteristics of
third-generation 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

Page 393
14
Computer History
Section A
Chapter 8
What are the characteristics of
third-generation computers?
Page 393
15
Computer History
Section A
Chapter 8
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

Page 394
16
Computer History
Section A
Chapter 8
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 worlds leading
  microprocessor manufacturer, though
  microprocessors are also produced by companies
  such as Hitachi, Texas Instruments, Sun
  Microsystems, AMD, Toshiba, and Motorola

Page 394
17
Computer History
Section A
Chapter 8
How did microprocessor technology affect the
computer industry?
Page 394
18
Computer History
Section A
Chapter 8
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

Page 394-395
19
Computer History
Section A
Chapter 8
Who invented the personal computer?
Page 395
20
Computer History
Section A
Chapter 8
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
  top-selling personal computer
• IBM PC 5150
• IBM PC XT

Page 395
21
Computer History
Section A
Chapter 8
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

Page 395
22
Computer History
Section A
Chapter 8
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

Page 395
23
Computer History
Section A
Chapter 8
How did personal computers become so successful?
Page 395
24
The Computer and IT Industries
Section B
Chapter 8
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

Page 397
25
The Computer and IT Industries
Section B
Chapter 8
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

Page 398
26
The Computer and IT Industries
Section B
Chapter 8
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 nations
  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, ITs total contribution to GDP growth was
  about 8.6 percent

Page 400
27
The Computer and IT Industries
Section B
Chapter 8
How has the IT industry affected the economy?
Page 400
28
The Computer and IT Industries
Section B
Chapter 8
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 1995nearly 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

Page 401
29
The Computer and IT Industries
Section B
Chapter 8
Product Development Whats 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

Page 402
30
The Computer and IT Industries
Section B
Chapter 8
Whats 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

Page 402
31
The Computer and IT Industries
Section B
Chapter 8
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

Page 402
32
The Computer and IT Industries
Section B
Chapter 8
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 vendors
  product line and featured prominently in
  advertisements

Page 403
33
The Computer and IT Industries
Section B
Chapter 8
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 companys oldest
  products are discontinued as demand for them
  declines
• Floppy disk drives

Page 403
34
The Computer and IT Industries
Section B
Chapter 8
What are the stages in the life cycle of a
typical hardware product?
Page 403
35
The Computer and IT Industries
Section B
Chapter 8
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 publishers
  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

Page 404
36
The Computer and IT Industries
Section B
Chapter 8
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
  vendors product line
• Upgrade rebate

Page 404
37
The Computer and IT Industries
Section B
Chapter 8
Market Share How do computer companies stack
up against each other?
Page 404
38
The Computer and IT Industries
Section B
Chapter 8
How do computer companies stack up against each
other?

• Market share is a companys 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
  companys ability to steal sales from its rivals

Page 404-405
39
The Computer and IT Industries
Section B
Chapter 8
Marketing Channels Why are computer equipment
and software sold through so many outlets?
Page 406
40
The Computer and IT Industries
Section B
Chapter 8
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

Page 406
41
The Computer and IT Industries
Section B
Chapter 8
Isnt 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

Page 406
42
The Computer and IT Industries
Section B
Chapter 8
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

Page 407
43
The Computer and IT Industries
Section B
Chapter 8
Dont some manufacturers and publishers sell
direct?
Click to start
Page 407
44
Careers for Computer Professionals
Section C
Chapter 8
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
  systems 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 companys
  data to determine the most effective way to
  collect and store it

Page 411
45
Careers for Computer Professionals
Section C
Chapter 8
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

Page 411
46
Careers for Computer Professionals
Section C
Chapter 8
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

Page 412
47
Careers for Computer Professionals
Section C
Chapter 8
Whats 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

Page 411-412
48
Careers for Computer Professionals
Section C
Chapter 8
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

Page 413
49
Careers for Computer Professionals
Section C
Chapter 8
Working Conditions What are the advantages of
working in the computer industry?

• Many technology companies offer employee-friendly
  working conditions that include childcare,
  flexible hours, and the opportunity to work from
  home

Page 413
50
Careers for Computer Professionals
Section C
Chapter 8
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-than-average employee satisfaction

Page 413
51
Careers for Computer Professionals
Section C
Chapter 8
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

Page 414