History of the Computer Industry in America
America and the Computer Industry
Only once in a lifetime will a new invention come about to touch
every aspect of our lives. Such a device that changes the way we work,
live, and play is a special one, indeed. A machine that has done all
this and more now exists in nearly every business in the U.S. and one
out of every two households (Hall, 156). This incredible invention is
the computer. The electronic computer has been around for over a
half-century, but its ancestors have been around for 2000 years.
However, only in the last 40 years has it changed the American society.
>From the first wooden abacus to the latest high-speed microprocessor,
the computer has changed nearly every aspect of peopleOs lives for the
The very earliest existence of the modern day computerOs
ancestor is the abacus. These date back to almost 2000 years ago. It
is simply a wooden rack holding parallel wires on which beads are
strung. When these beads are moved along the wire according to
"programming" rules that the user must memorize, all ordinary arithmetic
operations can be performed (Soma, 14). The next innovation in
computers took place in 1694 when Blaise Pascal invented the first
Odigital calculating machineO. It could only add numbers and they had
to be entered by turning dials. It was designed to help PascalOs father
who was a tax collector (Soma, 32).
In the early 1800Os, a mathematics professor named Charles
Babbage designed an automatic calculation machine. It was steam powered
and could store up to 1000 50-digit numbers. Built in to his machine
were operations that included everything a modern general-purpose
computer would need. It was programmed by--and stored data on--cards
with holes punched in them, appropriately called OpunchcardsO. His
inventions were failures for the most part because of the lack of
precision machining techniques used at the time and the lack of demand
for such a device (Soma, 46).
After Babbage, people began to lose interest in computers.
However, between 1850 and 1900 there were great advances in mathematics
and physics that began to rekindle the interest (Osborne, 45). Many of
these new advances involved complex calculations and formulas that were
very time consuming for human calculation. The first major use for a
computer in the U.S. was during the 1890 census. Two men, Herman
Hollerith and James Powers, developed a new punched-card system that
could automatically read information on cards without human intervention
(Gulliver, 82). Since the population of the U.S. was increasing so
fast, the computer was an essential tool in tabulating the totals.
These advantages were noted by commercial industries and soon
led to the development of improved punch-card business-machine systems
by International Business Machines (IBM), Remington-Rand, Burroughs, and
other corporations. By modern standards the punched-card machines were
slow, typically processing from 50 to 250 cards per minute, with each
card holding up to 80 digits. At the time, however, punched cards were
an enormous step forward; they provided a means of input, output, and
memory storage on a massive scale. For more than 50 years following
their first use, punched-card machines did the bulk of the world's
business computing and a good portion of the computing work in science
By the late 1930s punched-card machine techniques had become so
well established and reliable that Howard Hathaway Aiken, in
collaboration with engineers at IBM, undertook construction of a large
automatic digital computer based on standard IBM electromechanical
parts. Aiken's machine, called the Harvard Mark I, handled 23-digit
numbers and could perform all four arithmetic operations. Also, it had
special built-in programs to handle logarithms and trigonometric
functions. The Mark I was controlled from prepunched paper tape.
Output was by card punch and electric typewriter. It was slow,
requiring 3 to 5 seconds for a multiplication, but it was fully
automatic and could complete long computations without human
intervention (Chposky, 103).
The outbreak of World War II produced a desperate need for
computing capability, especially for the military. New weapons systems
were produced which needed trajectory tables and other essential data.
In 1942, John P. Eckert, John W. Mauchley, and their associates at the
University of Pennsylvania decided to build a high-speed electronic
computer to do the job. This machine became known as ENIAC, for
"Electrical Numerical Integrator And Calculator". It could multiply two
numbers at the rate of 300 products per second, by finding the value of
each product from a multiplication table stored in its memory. ENIAC was
thus about 1,000 times faster than the previous generation of computers
ENIAC used 18,000 standard vacuum tubes, occupied 1800 square
feet of floor space, and used about 180,000 watts of electricity. It
used punched-card input and output. The ENIAC was very difficult to
program because one had to essentially re-wire it to perform whatever
task he wanted the computer to do. It was, however, efficient in
handling the particular programs for which it had been designed. ENIAC
is generally accepted as the first successful high-speed electronic
digital computer and was used in many applications from 1946 to 1955
Mathematician John von Neumann was very interested in the ENIAC.
In 1945 he undertook a theoretical study of computation that
demonstrated that a computer could have a very simple and yet be able to
execute any kind of computation effectively by means of proper
programmed control without the need for any changes in hardware. Von
Neumann came up with incredible ideas for methods of building and
organizing practical, fast computers. These ideas, which came to be
referred to as the stored-program technique, became fundamental for
future generations of high-speed digital computers and were universally
adopted (Hall, 73).
The first wave of modern programmed electronic computers to take
advantage of these improvements appeared in 1947. This group included
computers using random access memory (RAM), which is a memory designed
to give almost constant access to any particular piece of information
(Hall, 75). These machines had punched-card or punched-tape input and
output devices and RAMs of 1000-word capacity. Physically, they were
much more compact than ENIAC: some were about the size of a grand piano
and required 2500 small electron tubes. This was quite an improvement
over the earlier machines. The first-generation stored-program
computers required considerable maintenance, usually attained 70% to 80%
reliable operation, and were used for 8 to 12 years. Typically, they
were programmed directly in machine language, although by the mid-1950s
progress had been made in several aspects of advanced programming. This
group of machines included EDVAC and UNIVAC, the first commercially
available computers (Hazewindus, 102).
The UNIVAC was developed by John W. Mauchley and John Eckert,
Jr. in the 1950Os. Together they had formed the Mauchley-Eckert
Computer Corporation, AmericaOs first computer company in the 1940Os.
During the development of the UNIVAC, they began to run short on funds
and sold their company to the larger Remington-Rand Corporation.
Eventually they built a working UNIVAC computer. It was delivered to
the U.S. Census Bureau in 1951 where it was used to help tabulate the
U.S. population (Hazewindus, 124).
Early in the 1950s two important engineering discoveries changed
the electronic computer field. The first computers were made with
vacuum tubes, but by the late 1950Os computers were being made out of
transistors, which were smaller, less expensive, more reliable, and more
efficient (Shallis, 40). In 1959, Robert Noyce, a physicist at the
Fairchild Semiconductor Corporation, invented the integrated circuit, a
tiny chip of silicon that contained an entire electronic circuit. Gone
was the bulky, unreliable, but fast machine; now computers began to
become more compact, more reliable and have more capacity (Shallis, 49).
These new technical discoveries rapidly found their way into new
models of digital computers. Memory storage capacities increased 800%
in commercially available machines by the early 1960s and speeds
increased by an equally large margin. These machines were very
expensive to purchase or to rent and were especially expensive to
operate because of the cost of hiring programmers to perform the complex
operations the computers ran. Such computers were typically found in
large computer centers--operated by industry, government, and private
laboratories--staffed with many programmers and support personnel
(Rogers, 77). By 1956, 76 of IBMOs large computer mainframes were in
use, compared with only 46 UNIVACOs (Chposky, 125).
In the 1960s efforts to design and develop the fastest possible
computers with the greatest capacity reached a turning point with the
completion of the LARC machine for Livermore Radiation Laboratories by
the Sperry-Rand Corporation, and the Stretch computer by IBM. The LARC
had a core memory of 98,000 words and multiplied in 10 microseconds.
Stretch was provided with several ranks of memory having slower access
for the ranks of greater capacity, the fastest access time being less
than 1 microseconds and the total capacity in the vicinity of 100
million words (Chposky, 147).
During this time the major computer manufacturers began to offer
a range of computer capabilities, as well as various computer-related
equipment. These included input means such as consoles and card
feeders; output means such as page printers, cathode-ray-tube displays,
and graphing devices; and optional magnetic-tape and magnetic-disk file
storage. These found wide use in business for such applications as
accounting, payroll, inventory control, ordering supplies, and billing.
Central processing units (CPUs) for such purposes did not need to be
very fast arithmetically and were primarily used to access large amounts
of records on file. The greatest number of computer systems were
delivered for the larger applications, such as in hospitals for keeping
track of patient records, medications, and treatments given. They were
also used in automated library systems and in database systems such as
the Chemical Abstracts system, where computer records now on file cover
nearly all known chemical compounds (Rogers, 98).
The trend during the 1970s was, to some extent, away from
extremely powerful, centralized computational centers and toward a
broader range of applications for less-costly computer systems. Most
continuous-process manufacturing, such as petroleum refining and
electrical-power distribution systems, began using computers of
relatively modest capability for controlling and regulating their
activities. In the 1960s the programming of applications problems was
an obstacle to the self-sufficiency of moderate-sized on-site computer
installations, but great advances in applications programming languages
removed these obstacles. Applications languages became available for
controlling a great range of manufacturing processes, for computer
operation of machine tools, and for many other tasks (Osborne, 146). In
1971 Marcian E. Hoff, Jr., an engineer at the Intel Corporation,
invented the microprocessor and another stage in the deveopment of the
computer began (Shallis, 121).
A new revolution in computer hardware was now well under way,
involving miniaturization of computer-logic circuitry and of component
manufacture by what are called large-scale integration techniques. In
the 1950s it was realized that "scaling down" the size of electronic
digital computer circuits and parts would increase speed and efficiency
and improve performance. However, at that time the manufacturing
methods were not good enough to accomplish such a task. About 1960
photoprinting of conductive circuit boards to eliminate wiring became
highly developed. Then it became possible to build resistors and
capacitors into the circuitry by photographic means (Rogers, 142). In
the 1970s entire assemblies, such as adders, shifting registers, and
counters, became available on tiny chips of silicon. In the 1980s very
large scale integration (VLSI), in which hundreds of thousands of
transistors are placed on a single chip, became increasingly common.
Many companies, some new to the computer field, introduced in the 1970s
programmable minicomputers supplied with software packages. The
size-reduction trend continued with the introduction of personal
computers, which are programmable machines small enough and inexpensive
enough to be purchased and used by individuals (Rogers, 153).
One of the first of such machines was introduced in January
1975. Popular Electronics magazine provided plans that would allow any
electronics wizard to build his own small, programmable computer for
about $380 (Rose, 32). The computer was called the OAltair 8800O. Its
programming involved pushing buttons and flipping switches on the front
of the box. It didnOt include a monitor or keyboard, and its
applications were very limited (Jacobs, 53). Even though, many orders
came in for it and several famous owners of computer and software
manufacturing companies got their start in computing through the Altair.
For example, Steve Jobs and Steve Wozniak, founders of Apple Computer,
built a much cheaper, yet more productive version of the Altair and
turned their hobby into a business (Fluegelman, 16).
After the introduction of the Altair 8800, the personal computer
industry became a fierce battleground of competition. IBM had been the
computer industry standard for well over a half-century. They held
their position as the standard when they introduced their first personal
computer, the IBM Model 60 in 1975 (Chposky, 156). However, the newly
formed Apple Computer company was releasing its own personal computer,
the Apple II (The Apple I was the first computer designed by Jobs and
Wozniak in WozniakOs garage, which was not produced on a wide scale).
Software was needed to run the computers as well. Microsoft developed a
Disk Operating System (MS-DOS) for the IBM computer while Apple
developed its own software system (Rose, 37). Because Microsoft had now
set the software standard for IBMs, every software manufacturer had to
make their software compatible with MicrosoftOs. This would lead to
huge profits for Microsoft (Cringley, 163).
The main goal of the computer manufacturers was to make the
computer as affordable as possible while increasing speed, reliability,
and capacity. Nearly every computer manufacturer accomplished this and
computers popped up everywhere. Computers were in businesses keeping
track of inventories. Computers were in colleges aiding students in
research. Computers were in laboratories making complex calculations at
high speeds for scientists and physicists. The computer had made its
mark everywhere in society and built up a huge industry (Cringley, 174).
The future is promising for the computer industry and its
technology. The speed of processors is expected to double every year
and a half in the coming years. As manufacturing techniques are further
perfected the prices of computer systems are expected to steadily fall.
However, since the microprocessor technology will be increasing, itOs
higher costs will offset the drop in price of older processors. In other
words, the price of a new computer will stay about the same from year to
year, but technology will steadily increase (Zachary, 42)
Since the end of World War II, the computer industry has grown
from a standing start into one of the biggest and most profitable
industries in the United States. It now comprises thousands of
companies, making everything from multi-million dollar high-speed
supercomputers to printout paper and floppy disks. It employs millions
of people and generates tens of billions of dollars in sales each year
(Malone, 192). Surely, the computer has impacted every aspect of
peopleOs lives. It has affected the way people work and play. It has
made everyoneOs life easier by doing difficult work for people. The
computer truly is one of the most incredible inventions in history.
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Publishing, February, 1984 (Premire Issue).
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Government Press, 1981.
Hazewindus, Nico. The U.S. Microelectronics Industry. New York:
Pergamon Press, 1988.
Jacobs, Christopher W. OThe Altair 8800O, Popular Electronics. New
York: Popular Electronics Publishing, January 1975.
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City, NY: Doubleday & Co., 1985.
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