1. 1 Section 6 IBM Clones

2. 2 6.1 IBM clones Computers which are identical to the IBM PC in every important respect are called ' clones ’.

3. 3 6.2 Reverse engineering The architecture could be copied by any other manufacturer because: – IBM had bought in all of the components from other companies – and had made the architecture open and publicly known. –The operating system was MS-DOS, which Microsoft was willing to sell to any other company. The BIOS was the only important owned component of the IBM PC.

4. 4 Reverse engineering is a very famous concept in computer technology. Its goal is to try to build a function that does exactly the same thing as another function without breaking any copyright laws that exist for that other function. in the case of IBM BIOS, other companies tried to have their own BIOS that is exactly the same as IBM’s without copying the actual code of the BIOS. This was done 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 reverse engineering process is complicated, very lengthy, and could have many errors. Reverse engineering

5. 5 Reverse engineering for BIOS and its effects The first company to successfully reverse engineer the IBM PC was Compaq. Other companies shortly followed. Now the “copied” IBM BIOS was available and could be purchased fairly cheap by any one. From the consumer side, this meant a great variety and much more affordable computers. From IBM’s side that was bad news because it couldn’t compete with the smaller companies that could operate much more efficiently. So, IBM lost its advantage when the BIOS was reverse engineered. From Intel’s and Microsoft’s side, that was great news for them because a lot of PC manufacturers bought Intel chips and almost every manufacturer installed MS-DOS in their PCs.

6. 6 IBM PC started losing market share Compaq and other clones kept up with the advancing technology of microprocessors. So, when Intel came up with its 80286 microprocessor, Compaq released its Deskpro 286 PC. This PC competed with the IBM PC- AT. It was more powerful and cheaper than the AT. Less than two years after Deskpro 286, Intel came up with the 80386 Chip which was much more powerful (again Moore’s law at work). IBM tried to produce a PC based on that chip but decided to delay it because they were concerned that such a PC would compete with their own mini computers market. At that point, IBM lost its market leadership and began to lose its PC market share. Reverse Engineering is often good for the customer since it means: – greater choice and –cheaper products. –The main manufacturer, however, loses their control over the market. This is what happened with the PC - it was no longer IBM's PC, but just the PC.

7. 7 6.3 Microsoft &Intel Benefited from IBM PC industry IBM PC architecture was a huge success. There were two main companies that benefited from it: Microsoft and Intel. The corresponding two technologies are: MS-DOS: was very similar to the CP/M operating system. Many people argue that CP/M was a much better operating system. Intel’s 8088 microprocessor: The 8088 microprocessor was not the best chip in the market when the IBM PC was developed. Intel had the 8086 which was a better processor and other companies had more powerful processors like the Motorlla 68000 processor. IBM chose the 8088 and that lead to the dominance of Intel in the microprocessor market.

8. 8 6.4 reasons for the success of a product So, it could be argued that it is not always the case that the best technology is always the winner. The IBM PC itself might not have been the best out there, but everybody rushed to copy it because of the name of IBM. There are many reason for the success of a product. Some of which are: Technological superiority: not always the case, but still the product with the best technology has a very good chance of success. Legacy: In most cases for products to be successful, they need to be compatible with the older products. Market Leader: The Leader of an industry always has an advantage producing products for that industry over its competitors. 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. Example, Xerox Alto. It had a GUI interface, which became very popular, but at that time, the price of an Alto would have been around $25000. Production decisions: Decisions made when the product is developed may significantly affect the success of the product. Marketing: In the PC industry, like almost any other industries, sometimes the marketing campaign alone can make or break the product. A lot of products have a significant part of their budget left for advertising.

9. 9 Where is IBM Today? So what happened to IBM after its loss of the PC market? In 1992, it lost around 5 billion dollars, which was a record loss. Many people were quick to predict the fall of IBM. However, IBM recovered and partially changed the way it does business. It adapted to the new changes. Now, IBM is still strong and its budget is as big as many countries. It continued to be the market leader in mainframes.

10. 10 Commoditization Commoditization: is the process whereby a product becomes a commodity, no longer associated with any one manufacturer, and is viewed as just the product. –ُExample: The washing machine is a commodity; there are some differences between manufacturers, but you view it essentially as a washing machine. The profit margins and the degree of technological control in a commodity market are limited, and certainly different from what IBM was accustomed to in the mainframe business

11. 11 Commoditization John Akers, the IBM chairman in 1986, said that IBM would get out of the PC business if it became a commodity industry. In contrast, Microsoft had said from the beginning that it wanted a 'computer on every desk, in every home', which is certainly seeing the computer as a commodity. Similarly, Apple viewed the computer as something which should be as ubiquitous and as easy to use as an electric blender, which again places the microcomputer firmly in the commodity market.

12. 12 6.5 IBM after the PC The main reason for the 'decline of IBM' talk is that in 1992 IBM announced record losses of $5 billion This figure is the net loss indicated in the IBM Annual Report, and is in 'American' billions, i.e. 1 billion = 1,000 million). Then in 1993 the loss was some $8.1 billion. This had a tremendous effect on the industry.

13. 13 6.5 IBM after the PC Suddenly IBM, the largest, most successful computer company in the world was in trouble. With Microsoft posting large profits it seemed an indication that the mainframe was dead and the PC was king. This has some truth - the PC has changed the computer market and by 1992 IBM were not competing effectively in the PC market.

14. 14 6.5 IBM after the PC However, this only tells part of the story. What these losses indicated was: a change in the culture of working practices in the computer industry. –IBM had a huge workforce, and a job at IBM traditionally meant a job for life. –IBM had around 300,000 employees; –Microsoft had around 5,600 in 1992. –The computer industry had become very fast moving, meaning: there wasn't time for large structures of committees to consider numerous plans of action, and to retrain existing staff to perform new tasks.

15. 15 6.5 IBM after the PC Workstation computers were becoming increasingly powerful, –and were now as powerful as a small mainframe, but –considerably less expensive. –Moore's Law meant that the microprocessor- based computers were catching up with the more static mainframes. IBM had to change if it wanted to compete successfully in this new market.

16. 16 6.5 IBM after the PC Since 1993 IBM has undergone something of a change in its products, marketing strategy and image. This has been under the leadership of the CEO appointed in 1993 to turn around their fortunes, Lou Gerstner. They posted profits of $3 billion in 1994 and $6.1 billion in 1997. Despite the rise of the PC, there is still a need for large central computers for some tasks, and IBM still sell their 390 mainframe system successfully (this is now microprocessor based). Similarly their RS/6000s and AS/400 mini-computers are used for many large-scale computational tasks, such as payroll systems

17. 17 6.5 IBM after the PC IBM bought Lotus Development in 1995. This has been a key element in IBM's turnaround. They have successfully focused on selling Internet solutions to companies. These use Lotus Domino software which runs on the server computer so people can access it as a web site and perform a number of database actions, such as ordering products.

18. 18 6.5 IBM after the PC IBM also provide the server hardware such as an AS/400 on which Domino can run, and the Lotus Notes Groupware program for people in a company to work collaboratively. This integrated approach and shift away from selling and servicing mainframe computers means that Bill Gates's prediction is unlikely to come true.

19. 19 Section 7 Apple and the Mac

20. 20 Apple and the Mac- introduction Apple II was produced in 1977 ( before IBM PC) and was a best seller of its time. The production of the IBM PC and its clones significantly slowed the sales of the Apple II. Apple III, successor of Apple II had some initial flaws which had gave the computer a bad name). Its sales was very weak compared to Apple II. Apple’s philosophy Make computer accessible to every one and make it very easy to use. Apple decided to use GUI concept ( developed by Xerox) in its new PCs to achieve its philosophy. That led to the production of the Lisa computer (1983) which used the GUI interface.

21. 21 2. The Lisa The Lisa computer was the result of the Apple’s Manager visit, “ Steven Jobs“, to Xerox PARC where they realized that GUI was the key to making microcomputer accessible to everyone. Lisa was based on Powerful Motorola 68000 CPU ( instead of Intel, PC). It required 1 MB RAM and a hard disk ( unusual at that time). These factors made it very expensive as a PC (~ 10,000 $). Lisa computer used the GUI interface and a new expression ( metaphor) which is desktop. In this metaphor, the screen resembles the top of a desk, with various files on it and even a waste basket. If you want to move a file, you simply grab its icon with the cursor and drag it where you want it, as you move real items around your desk. Although it was very expansive, the Lisa computer was very slow compared to the IBM PC. For these reasons, the Lisa didn’t sell well and Apple depended on the success of the project which had run in parallel to Lisa which was led by Steve Jobs, the Macintosh.

22. 22 3- Developing the Macintosh The Macintosh team have worked very hard ( 100 hours per week) to make it ready. They used the best technology available for all of its components to produce a very significant PC. With all of this hard work, Macintosh was late for 2 years ( supposed 1982, but released 1984). Its price was 2500 $ ( target price was 1000 $). Although a group of people were convinced with its easy of use, still its sales was not that great. Macintosh was missing the application which was the Desktop publishing.

23. 23 Macintosh A company called Aldus have produced the desktop publishing software, the Page Maker. With desk publishing software, people were able to produce magazines and newspapers using the computer much easier and faster than manual production. The Macintosh was very suitable for the desktop publishing software that required a GUI which was only available at the Macintosh at that time. This have increased the sales of Macintosh. However, the Macintosh did not sell to big corporations, which at that time resisted the idea of easy computing. They stayed with IBM or its clones.

24. 24 4. Empowerment: Apple was successful in introducing GUI and desktop concept to general public. It helped making computing easier and accessible which had affect ed and improved people’s life. Some of these improvements are: –The ease of using and accessing information like using accounting software to check their finances and the Internet to get lots of information. –The PC provides a tool to help people be more creative like using drawing software to do their own drawings. –To be able to have your own business anywhere in the world through using the Internet.

25. 25 5. Desktop Publishing: Computers needed applications to gain widespread popularity. First, Lotus 1-2-3 was the main spreadsheet application used for Apple II and the IBM PC. After that came the Microsoft Excel which used the Macintosh GUI to provide a good user interface but it didn’t offer much over Lotus 1-2-3. The product that had influenced greatly Macintosh and pushed it in the Market was the PageMaker which was produced by a company called Aldus, founded by Paul Brainerd. With the benefits of PageMaker, the Macintosh began to appear in the publishing department of institutions. This had increased the sales of Macintosh. However, it never overtook the IBM PC as the dominant microcomputer.

26. 26 After the Mac After producing the Macintosh, Apple still was losing market share. IBM PCs and compatibles still dominated the market. In 1996, Apple reported a loss of 1 $ billion dollars. There were many reasons for the decline of Apple. Some of these reasons are: –The decision not to make the Macintosh an open industry standard in the same way as that IBM did with its PC. Having an open standard for the Macintosh might not guarantee its success but it would at least make its design very popular. –The leadership of Apple which had many leaders come and go. – The prices of Apple computers were always higher than an equivalent PC.

27. 27 After the Mac Steve jobs returned to Apple in 1997. since then, its performance has improved. In 1998, Apple produced the IMac under leadership of jobs. This machine used the powerful Motorola G3 microprocessor so that it can run PC applications. This product had increased the net earnings of Apple in 1999 to 601 $ million. Other products from Apple were the PowerBook, iBook and a new Unix-like OS.

28. 28 The personality of companies Generally, computer companies have their own personalities formed by the personalities of their founders. These people have an enormous influence on the early years of a company’s development. Examples: Tom Watson ( founded IBM.in1924) Bill Gates and Paul Allan ( founded Microsoft in 1975). Steve jobs and Steve Wozniak ( founded Apple in 1977).

29. 29 Section 8 Windows, OS/2 And Networking

30. 30 Windows, OS/2 and Networking introduction After the success of GUI in the Apple Macintosh PC, there was a big need for a better operating system for IBM PC and its compatibles. Microsoft and IBM took on a joint development project to develop OS/2, a new GUI operating system which would be owned by IBM. The OS/2 was released around 1990. Many people predicted that OS/2 would be the operating system for the future. OS/2 had failed and almost dead now. Some of the reasons for its failure were marketing and the need for a relatively powerful PC to run on At the same time of developing the OS/2, Microsoft was developing its own operating system called windows 3.0. It was a GUI interface for DOS. Windows 3.0 released in 1990 and was a great success, even though OS/2 was technically superior. It was compatible with earlier software running on Dos. There were many software packages running on windows 3.0 available shortly. This was one of the main reasons for the success of windows.

31. 31 2. Legacy problem To give a software product a good chance of success, it has to be compatible with older versions of the same product. This is known as backward compatibility. Backward compatibility is part of the general problem called Legacy problem which is a very famous term in computer industry. It means that there is a history relevant to a certain product that has to be considered. The legacy problem is not restricted to software. It is also present in hardware especially in mainframes where you could have a mainframe that has parts from 1990 and other parts from 1970.

32. 32 millennium Bug There is a huge amount of programs written. It is very hard and expansive to change these programs or stop their use. This leads to the famous Year 2000 problem or the. Many programs written in the 70s and 80s used two digits instead of 4 digits when referring to years. For example, instead of writing 1975, they wrote 75. The programmers who wrote those programs never thought that they would still be used in the year 2000. As an example, if you write 01 as a year it meant 1901 instead of 2001. So, when the year 2000 arrives, all dates in those programs will be wrong. To solve this problem, millions of code in programs had to be inspected and some of them needed to be changed. The cost of fixing this problem was estimated to be around 500 billion dollars.

33. 33 Network Operating System: The earlier operating systems for PCs dealt with the PC as a separate unit that controls and has access only to its resources. So, there was a need for a new type of operating system that will allow the PC to interact with other computers. Such type of operating systems is called Network Operating System (NOS). Network operating system needs to perform the same functions of a regular operating system plus some additional features. The main additional features of a network operating system are: –Multi-user: the system needs to allow more than one user to access the computer resources at one time without interfering with each other. –Multi-task: with multi-tasking, the CPU time is divided among more than one program so that the system allow more than one task (or program) to run at the same time. –Portable: this allows NOS to work across different types of computers with different architectures. –Secure: because more than one user can access the system, the system should provide its users with security features so that everybody can access only his own things. –compatible: the system should communicate with other operating systems on the network. –Safe: the system should be protected against accidental damage (like a computer virus).