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

  2. 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 Page 385

  3. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History What characterized the first generation of computers? Page 391

  10. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History How did second-generation computers differ from first-generation computers? Page 392

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

  15. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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 Page 394

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

  18. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History Who invented the personal computer? Page 395

  20. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History 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. Section A Chapter 8 Computer History How did personal computers become so successful? Page 395

  24. Section B Chapter 8 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 Page 397

  25. Section B Chapter 8 The Computer and IT Industries 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. Section B Chapter 8 The Computer and IT Industries 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 Page 400

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

  28. Section B Chapter 8 The Computer and IT Industries 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 Page 401

  29. Section B Chapter 8 The Computer and IT Industries 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 Page 402

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

  31. Section B Chapter 8 The Computer and IT Industries 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. Section B Chapter 8 The Computer and IT Industries 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 Page 403

  33. Section B Chapter 8 The Computer and IT Industries 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 Page 403

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

  35. Section B Chapter 8 The Computer and IT Industries 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 Page 404

  36. Section B Chapter 8 The Computer and IT Industries 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 Page 404

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

  38. Section B Chapter 8 The Computer and IT Industries How do computer companies stack up against each other? • Market shareis 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 Page 404-405

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

  40. Section B Chapter 8 The Computer and IT Industries 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. Section B Chapter 8 The Computer and IT Industries Isn’t a computer retail store the best channel for hardware and software products? • A computer retail storepurchases 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. Section B Chapter 8 The Computer and IT Industries How does the mail-order channel compare to retail? • Mail orderis 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. Section B Chapter 8 The Computer and IT Industries Don’t some manufacturers and publishers sell direct? Click to start Page 407

  44. Section C Chapter 8 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 Page 411

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

  48. Section C Chapter 8 Careers for Computer Professionals 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. Section C Chapter 8 Careers for Computer Professionals 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. Section C Chapter 8 Careers for Computer Professionals 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