1. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net1 Module 1 Section 5: IBM and the PC In this section we will cover the following : – How IBM got into the PC market – Independent Business Unit – Open standards and how IBM adopted this – standard in manufacturing its PC. – The relation between IBM and Microsoft.

2. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net2 5.1 IBM and the PC - introduction IBM - International Business Machines also referred to as 'Big Blue' because its corporate color is blue) was founded in 1924 by Tom Watson Sr. It first became successful through selling punch card electromechanical tabulating machines

3. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net3 5.1 IBM and the PC - introduction In 1950 it began to sell large computers to companies. In the mid-1960s IBM launched its range of mainframe computers, known as 360s. –These were hugely successful, to the point that IBM had the vast majority of the computing market - indeed, its dominance led to investigations by the US Justice Department and a number of 'anti-trust' cases from competitors

4. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net4 5.1 IBM and the PC - introduction basic claim from these investigations was that IBM had used its dominant market position to squeeze out opposition unfairly There are several ways in which a company could do this –when a competitor releases a new product (such as a computer) the dominant market leader can announce they will soon be releasing something bette

5. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net5 5.1 IBM and the PC - introduction Customers are then reluctant to buy the competitor's product A better product from the market leader may not actually exist, or be near completion but by the time this is realised the competitor has lost a great deal of the market

6. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net6 5.1 IBM and the PC - introduction It is difficult to overestimate the size and dominance of IBM in 1980. Its name was virtually synonymous with computing, and it was widely regarded as: – having excellent quality of service, – products and –management

7. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net7 5.1 IBM and the PC - introduction constrained, however, by the bureaucracy that is inherent in any large organization. This was not a problem with the mainframe industry –where computers were sold for millions and thus were unlikely to change very often a problem in the microcomputer industry, which, being underpinned by Moore's Law, involves rapid change and development.

8. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net8 5.2 The Independent Business Unit The first attempts for IBM to produce a microcomputer Failed! –Example: a computer called ‘Datamaster’ Very late in production Inadequate power Irrelevant software

9. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net9 5.2 The Independent Business Unit These failures increased IBM challenge and ambition to produce PCs The production of PC in IBM Took one year Don Estridge: project leader (manager) Bill Lowe: the analyst and designer (proposed the project) Frank Cary: IBM chairman

10. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net10 5.2 The Independent Business Unit One year wasn’t enough to establish a big and critical task in a large organization like IBM Needs very structured method of working Decisions are carefully analyzed and discussed Strict procedures for implementation, development and maintenance Hence long timescale was required!!

11. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net11 5.2 The Independent Business Unit Quick actions should be taken before other smaller companies dominate the microcomputer market  IBU was set up IBU formal definition A small development team within a larger structure Based in Boca Raton Small group Employed the best technologists Inherited some of the features of the other successful new computer companies, like Apple

12. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net12 5.2 The Independent Business Unit Freed from the conventional organizational constraints Independent group Didn’t have to conform to IBM routines Was in control of its own budget It could buy its components or services from any company it chose  not beholden to use those supplied by the main company

13. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net13 5.2 The Independent Business Unit IBU became popular method in software business Beyond a certain size  software development teams become less effective Followed by Apple and Microsoft, before IBM –Example: Microsoft strategy Five separate units having different responsibilities Development of office applications –Marketing –Researches –Etc.

14. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net14 5.2 The Independent Business Unit Each unit is subdivided into project teams Employees in every team not exceeding 50 Several teams might be involved in one large project (Windows XP)

15. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net15 5.2 The Independent Business Unit The Importance of IBU Software production is a very complicated process The designer should put in his account What is possible to be done What the customer likes How long every feature will take to be implemented How long the whole product will take to be completed What will happen if it is late The previous factors are difficult to quantify New piece of software is rarely released on the scheduled day Compare with the car industry Based on the previous discussion, Having large number of people working on any software project have the following disadvantages: –Increasing the chance of errors –Take long time to be found and corrected

16. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net16 5.2 The Independent Business Unit Increasing the amount of communication and documentation time To keep the project organized and under control Adding more complexity and loads Hence, the importance of IBU raised up from here! Having a relatively small group who understand the project in detail Speeds up the process Reduces the complexity Avoids errors Ensures better quality

17. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net17 5.3 The open standard Why do we need standards? When you send an email The message is translated into bits Transferred to the modem The modem converts the digital signals into sound pulses Sent over the telephone network The message will be routed via a collection of computers and networks Reconverted to digital signals Converted back to sound to walk through the telephone lines Reaches the modem of the destination, which converts it back into email message

18. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net18 5.3 The open standard To achieve this chain of event, all the included components must conform to standards Standards must cover Physical factors The modem structure, plugs and socket designs Procedural factors Message must be translated into sound signals –Example: –If two modems operate differently, the two computers can’t send and receive messages –Translation is required to achieve comprehension

19. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net19 5.3 The open standard There are two types of standards Official standards for products Decreed by official organizations ITU (International Telecommunications Union): decides the standards of modems Accommodate existing products Influenced by the best interests of the industry Possible future developments are also considered

20. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net20 5.3 The open standard The de facto standard It is a standard, which users accept and the market effectively decides No official governing body

21. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net21 5.3 The open standard 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 All manufacturers are encouraged to produce standard products to have better market and ensure better revenue Otherwise, they must insure that the benefit of the non- standard product beats the inconvenience of not fitting the standard. Apple Macintosh is an example of a non-standard microcomputer

22. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net22 5.3 The open standard 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, inorder to gain Standards are useful for customers Can by any computer or any component Ensure that they will work with most of the available software and hardware

23. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net23 5.3 The open standard The Closed Standard The closed standard means 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

24. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net24 5.3 The open standard The Open Standard Boca Raton IBM group decided An open architecture Led to an open standard Made the PC the de facto standard for microcomputers Open standard means The components that made up the PC bought from outside suppliers (not the manufacturer company itself) Their design was freely available to anyone else

25. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net25 5.3 The open standard In IBM PC –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 Advantages for IBM –Flexibility, saving time and effort No need to bother about manufacturing the components, they are available outside!

26. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net26 5.3 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 –Mass production of PCs Only the BIOS was implemented fully by IBM The BIOS controls the hardware

27. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net27 5.4 IBM and Microsoft Most of IBM PC components were purchased from other suppliers IBM looked to other companies to supply its PC with the operating system They first chose CP/M –Produced by Digital Research Company (Gary Kildall). –It was the most reliable operating system at that time IBM tried to contact Kildall to develop a CP/M version for the new PC –But they never me

28. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net28 5.4 IBM and Microsoft IBM contacted Microsoft –Was a small company at that time –This deal laid the foundation of Microsoft multi- billion dollar empire 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 –It was text-based –Came after CP/M –In fact, it was obtained from another company, not Microsoft!

29. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net29 5.4 IBM and Microsoft IBM and Microsoft partnership was successful –Their cooperation continued until the early 1990 IBM failed to keep up with the PC development –It had a mainframe mentality

30. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net30 5.4 IBM and Microsoft There were many differences between IBM and Microsoft, these differences –Differences between Mainframe and the PC industry Number of customers –The number of customers in the pc industry is much larger than that of Mainframe ones Sales and Profits –The profit in selling a PC is very small (hundreds or a thousand dollars) –while the profit of selling one Mainframe could be hundreds of thousands of dollars (some times very close to million)

31. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net31 5.4 IBM and Microsoft 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 The relation between a PC dealer and a customer is very short Employee’s type –Employees from IBM were very experienced and formal tended to do things in a very professional, but sometimes slow, manner –Programmers write many, commented lines of code –Choose meaningful identifier names –Documentation is a must Microsoft employees were young and fresh college graduates –worked in a smart but often unstructured ways –Programmers write few, uncommented lines of code –Choose funny identifier names –Documentation is a waste of time!

32. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net32 5.3 The open standard Size of the company –Microsoft had only few hundred employees Easy to control them Programmers were highly proficient IBM had thousand of employees –Hard to control them –Many developers were not programmers! They were transferred from other divisions  no proficiency

33. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net33 5.3 The open standard Theses differences terminated their partnership The whole IBM culture –Management –Sales forces –Development –Researches

34. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net34 5.3 The open standard Didn’t match the requirement of the PC industry  it was focusing on mainframes only!!

35. T171-Module1- Sec5- by Dr.Omar Brak, KSA- 2004-2005 www.Q82.net35 5.5 Exercise - current literature 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