56 Part I • Information Technology
software firms. Many of the smaller firms tend to rise and
fall rapidly based on the success or failure of a single prod-
uct, and often the most promising of these small firms are
purchased by the major vendors (Software Top 100, 2010).
Most of the large software vendors have grown both
by increased sales of products developed internally andby
the purchase of other software firms, sometimes large firms.
Three of the major software firms purchased business intel-
ligence software vendors in 2007 to bolster their presence in
this market: IBM bought Canada’s Cognos for $5 billion,
Oracle bought Hyperion Solutions for $3.3 billion, and SAP
bought France’s BusinessObjects for $7 billion. Microsoft
bought aQuantive, Inc., a major player in online advertising,
for $6 billion in 2007 to help it compete with Google and
Yahoo. Oracle has been particularly busy in the acquisition
business, with 55 purchases of software companies for more
than $30 billion since 2005. The 2010 purchase of Sun
Microsystems is Oracle’s first venture into hardware, which
accounts for 80 percent of Sun’s revenues. Whether this
purchase will be as successful as its software company
purchases remains to be seen, as Oracle enters the highly
competitive server market where “IBM, HP, and Dell all
rank far ahead of Sun in a business where scale matters”
(Hamm, 2009a).Summary
There is a lot more to IT than the digital computer, but
there is no doubt that the computer was the key technolog-
ical development of the twentieth century. The computer
has had an astounding impact on organizations and on our
lives, and it has captured our imaginations like no other
recent development.
To summarize, all computer systems are made up of
some combination of six basic building blocks: input, out-
put, memory, arithmetic/logical unit, files, and control unit.
All of these components are controlled by a stored program
that resides in memory and is brought into the control unit
one instruction at a time, interpreted, and executed. The
basic model has been extended in several directions over the
years, such as by adding a variety of file storage devices and
employing multiple processors in a single computer system.
Whatever the machine configuration, the computer system
is still controlled by stored programs, or software.
Figuratively speaking, software comes in a variety of
shapes and sizes. Applications software consists of all
programs written to accomplish particular tasks for comput-
er users; support software establishes a relatively easy-
to-use computing environment, translates programs into
machine language, and ensures that the hardware and
software resources are used efficiently. The most important
piece of support software is the operating system that
controls the operation of the hardware and coordinates all of
the other software. Other support software includes
language translators, communications interface software,
database management systems, and utility programs.
Applications software is often developed within the
organization using 3 GLs, 4 GLs, and OOP languages.
Nearly all the internal software development used to be
carried out by computer professionals in the information
systems organization, but more recently some of the devel-
opment has been done by end users (including managers),
using 4 GLs and DBMS query languages. The trend that
affects managers even more is the growing availability and
use of personal productivity software such as spreadsheets
and database management systems. Almost all of an orga-
nization’s support software and an increasing proportion of
its applications software are purchased from hardware
manufacturers and software houses.
Hopefully, this chapter has provided you with suffi-
cient knowledge of computer systems to begin to appreci-
ate the present and potential impact of computers on your
organization and your job.Review Questions
1.Distinguish between microcomputers, midrange systems,
mainframes, and supercomputers. Give approximate speeds
(millions of floating point operations per second, or
MFLOPS) and costs.
2.List the six building blocks that make up digital computers,
and describe the flows of data that occur among these
blocks.
3.What are the advantages and disadvantages of using direct
access files versus using sequential access files? Why do
organizations bother to use sequential access files today?4.Explain in your own words the importance of the stored-
program concept. Include the role of the control unit in your
explanation.
5.What is a blade server, and why have blade servers become
important in the last few years?
6.Four categories of computer systems were considered in this
chapter: microcomputers, midrange systems, mainframes,
and supercomputers. Provide the name of at least one promi-
nent vendor in each of these categories (and you can only use
IBM once!).