1 T171 Online Module 1 section 5 Dr. Abdulhameed Al-Elaiwi

2 T171 Online Lecture 3 section 5 TMA1 Due on Nov, 25 Quiz will be Tue December 13 th

3 Topics Topics :  IBM and the PC market.  The Independent Business Unit.  The open standard.  IBM and Microsoft.

4 IBM and the PC market  IBM was founded in 1924 by Tom Watson. They were selling punch card electromechanical tabulating machines.  In mid-1960s, IBM launched mainframe computers known as 360s. (successful products) this was the reason that other computer companies looked at IBM as the leader in the industry.  In the early of 1980’s, IBM tried to enter the PC industry.  They formed what is known as the independent business unit.

5 The independent business unit  IBM was a huge company  long time to take a decision.  IBM constructed a team of employees to work outside usual framework of IBM. It was called Independent Business unit ( IBU ). To produce an IBM microcomputer (PC) within a year.  The leader of IBU was Bill Lowe and it was based in a small US city called Boca Raton.  The IBU model was a success and an IBM Microcomputer was produced within a year.  As a result, IBU method became a widely used method in PC industry ( Microsoft and Macintosh had applied this model in their companies).

6 IBU advantages  Speeds up the process  Reduces the complexity  Avoids errors  Ensures better quality

7 The open standard المفتوحة المعايير  why we need a standard ?  Generally speaking, to enable various components and different devices for a certain industry to work together, they need a set of rules (or standards) that they all could agree on.  Ex: International Telecommunication Union (ITU).  IBU adopted the open architecture for producing the IBM microcomputer. (components bought from others, available design)  This set the standard for the PC industry and enabled many companies to produce similar PCs in structure to IBM PC..  IBM kept the BIOS without sharing with other.  Most companies in PC Industry use the IBM architecture and pay IBM for the BIOS.( this lead to mass production of PCs).  Other companies like Macintosh chose to have their own design different from IBM.

8 Advantages of The open standard  Advantages for other companies – Benefit from IBM design, reputation and experience; hence gain more! – Never reinvent the wheel – The design is available, simply follow it! – Advantages for the PC market – Lower prices – Mass production of PCs  Advantages for IBM – Flexibility, saving time and effort – No need to bother about manufacturing the components, they are available outside! – The microprocessor was made by Intel – Slot-in cards, monitor, keyboard and operating system were available to other manufacturers – IBM PC could be produced by companies other than IBM – IBM-Compatible PCs

9 The de facto standard  It is a standard, which users accept and the market effectively decides – No official governing body  IBM PC is a clear example – Covers all aspects of the PC Physical dimensions of the slot-in cards Means of transmitting data over busses The operation of the CPU  DOS and Windows are also de facto standards

10 The Closed Standard  The components of the PC, the software and design are owned by the PC manufacturing and developing company itself  Example: Apple – owns components and design of their machines – Owns the operating system and other software – Allows few companies to produce Mac-compatible machines, stopped in late 1997 – Mac is a proprietary design, where everything is a property of Apple themselves – Except the microprocessor, made by Motorola

11 Why standards are useful?  Standards are useful for manufacturers – Make their products based on the market specifications and needs – Confident that their products will reach the majority of the market – No place for chance or luck, in order to gain  Standards are useful for customers – Can buy any component from any supplier – Ensure that they will work with most of the available software and hardware

12 IBM and Microsoft (1)  IBM looked to other companies to supply the IBM pc with the operating system. ( like microprocessor from INTEL).  IBM tried to contact Kildall to develop a CP/M version for the new Pc, but they never met.  IBM agreed to a proposal from Bill Gates to supply the new pc with an operating system called MS-DOS.  MS-DOS was similar to CP/M.  IBM and Microsoft partnership was a successful one. Their cooperation continued until the early 1990.

13 IBM and Microsoft (2)  There were many differences between them. These differences highlight the differences between Mainframe and the PC industry, and terminated the partnership. Some of these differences are the following: – Number of customers: the number of customers in the pc industry is much larger than that of Mainframe ones. – Sales and Profits: The profit margin in a PC is very small while the profit of selling one Mainframe could be hundreds of thousands of dollars. – Customer relation: the relation between a Mainframe customer and the dealers continues for a very long time. Some companies still own Mainframes that are 20 years old. On the other hand, the relation between a PC dealer and a customer is very short. – Employee’s type: Employees from IBM were very formal and tended to do things in a very professional, but sometimes in slow manner. On the other hand, Microsoft employees were young college graduates who worked in a smart but often unstructured ways.

14 Small exercise  Make a survey of many magazines and publications that are concerned with computer issues. Then write a list of four most important computer issues that are discussed in these publications.

15 T171 Online Lecture 3 section 6

16 Topics  IBM clones : Introduction.  Reverse Engineering.  The Clones.  What makes technology successful?  IBM after the PC.

17 IBM clones  When IBM launched its PC, there were many different microcomputers available.  These computers were produced by companies such as Tandy and Hewlett-Packard.  These computers have their software compatible with the IBM PC, but their hardware wasn’t.  Computers which are identical to the IBM PC in every important respect are called “ clones”.

18 Reverse Engineering 1  The BIOS was the property of IBM.  However, those companies went other option of trying to copy the BIOS of IBM without breaking any copyright laws.  reverse engineering leads to achieving the same functionality without breaking copyright laws that exist for that other function.

19 Engineering  Engineering is the process of turning a specification into a product for performing to it. – Start with functional specification for human consumption top level" description – Develop An abstracted structural description (for example source code or circuit diagrams). – A detailed structural description – The product

20 Reverse engineering 2  Analysis of the product  Generation of an intermediate level product description  Human analysis of the product description to produce a specification  Generation of a new product using the specification. With reverse engineering the starting point is the completed piece of technology, in this case IBM’s BIOS. A distinction is made between what it does, and how it does it.

21 Reverse engineering 3  So, other companies used reverse engineering by observing how the IBM BIOS behaved in all different cases to determine its functionality, then specifications for a new BIOS could be written and implemented.  The first company succeed in reverse engineering process to the IBM PC was Compaq. Later, Phoenix technologies achieved the same process. However, unlike Compaq, Phoenix did not use the BIOS to make their own PC clone, but instead sold their own BIOS as a ROM chip to other manufacturer.

22 Reverse engineering 4  This process is good for the customer – Greater choice – Cheaper products  Other companies want the PC to be a commodity – Microsoft: a computer on every desk, in every home – Apple: computer usage should be as easy as an electrical blender  The main manufacturer loses control over the market – The PC was no longer IBM’s PC, but Intel/Microsoft PC

23 The clones 1  Compaq and other clones kept up with the advancing technology of microprocessor.  when Intel came up with microprocessor, Compaq released its Deskpro 286 PC which was more powerful and cheaper than its competitor’s the PC-AT released by IBM.  Later, Intel came up with the chip which was much more powerful than  IBM tried to produce a PC based on that chip but decided to delay it. On the other hand, Compaq released its Deskpro 386 in  At that point IBM lost its market leadership and began to lose its PC market share.

24 The clones 2  Other reasons that caused IBM to lose market were: – a- The decision to allow Microsoft to sell DOS to other supplies, instead of owning it exclusively. – b- The surprising success of reverse engineering. – c- The speed with which clones appeared. – d- The delay in releasing an based computer. – e- The advantage that small, lean companies possess in a highly competitive industry.

25 What makes Technology Successful 1.Technological superiority 2.Legacy: compatible with the older products. 3. Market leader: the leader of an industry always has an advantage producing products for that industry over its competitors. 4.Society acceptance: sometimes good technological products never make it because at the time they were developed, people either were not used to such a product or the price of that product was too high. 5.Product decisions: decisions made when the product is developed may affect the success of the product. 6.Marketing: in the PC industry, the marketing campaign alone can make or break the product.

26 IBM after the PC  Even though IBM did not benefit greatly from it, the IBM PC architecture was a huge success.  There were two main companies that benefited much from it : Microsoft ( by using MS-DOS operating system Technology) and Intel ( by using 8088 microprocessor technology).

27 IBM after the PC  After lost its share in the PC market, IBM lost around 5 billion dollars in  Many people predicted the fall of IBM ( like BILL Gates : IBM will fall within seven years).  However, IBM recovered and partially changed the way it does business. As a result, they posted profits of 3 billion $ in 1994 and 6.1 billion $ in 1997.

28 IBM after the PC  Some key factors that help IBM to make the turnaround are: – their adoption of the internet with their promotion of integrated business solutions. – IBM bought Lotus Domino development in – IBM provide the server hardware such as AS/400 on which Domino can run.