The Socio-economics of the Information Technology Industries.
As we saw in week two the Information technology has a history of it's own. Much of that history revolves around technological developments but these developments only take place within the context of an industry with it's own peculiar structure of economic relationships.
Since the birth of the microprocessor in the 70's a handful of US based trans national corporations have dominated the industry even though at that time the industry's image was akin to the Internet's now. Small groups of hippy friends did indeed gather and were responsible for some of the most important developments. The GUI the mouse the WIMP environment were all conceived at Xerox park research Institution in the late seventies but these creative products are manufactured and marketed to you by TNCs. As Matt Groenig (of Simpsons fame) said of Ben & Jerry's ice cream "It's conceived by two gentle vegan Hippies but manufactured and marketed to you by a ruthless multi-national corporation".
Whilst we should not underestimate the market importance of large mainframe machines and servers the primary area of interest here is in the development of the Desktop or Personal Computer. Only five corporations have had a significant and continuing influence on the development of the Personal Computer Apple, IBM, Intel, Microsoft and Motorola. As I am sure you are all already aware in the early days of personal computing the market for such machines was restricted to hobbyists and amateur programmers, much akin to the very early days of radio and, later, television. The PCs of the 70's were kit built and self programmed in relatively low level programming languages. As Glen Stanford makes clear the pioneer of personal computing for business and home use was Apple "Steven Wozniak and Steven Jobs had been friends in high school. They had both been interested in electronics, and both had been perceived as outsiders. They kept in touch after graduation, and both ended up dropping out of school and getting jobs working for companies in Silicon Valley. (Woz for Hewlett-Packard, Jobs for Atari)
Wozniak had been dabbling in computer-design for some time when, in 1976, he designed what would become the Apple I. Jobs, who had an eye for the future, insisted that he and Wozniak try to sell the machine, and on April 1, 1976, Apple Computer was born.
Hobbyists did not take the Apple I very seriously, and Apple did not begin to take off until 1977, when the Apple II debuted at a local computer trade show. The first personal computer to come in a plastic case and include colour graphics, the Apple II was an impressive machine. Orders for Apple machines were multiplied by several times after its introduction. And with the introduction in early '78 of the Apple Disk II, the most inexpensive, easy to use floppy drive ever (at the time), Apple sales further increased.
With the increase in sales, however, came an increase in company size, and by 1980, when the Apple III was released, Apple had several thousand employees, and was beginning to sell computers abroad. Apple had taken on a number of more experienced mid-level managers and, more importantly, several new investors, who opted to take seats on the board of directors. Older, more conservative men, the new directors made sure that Apple became a "real company," much to the dismay of many of its original employees." (Glen Sanford 1996-9)
The market for such machines was saturated primarily because the business community did not perceive the functionality to their businesses of such equipment. It was only in 1981 with the entry of IBM into the PC market that this situation changed. Of key importance to the contemporary structure of the industry is IBM's choice of company for the production of an operating system for their original machines.
William Gates had purchased the rights to a version of the Control Programme for Microcomputers (CPM) which rather than being "hardwired" (explain) was loaded the internal hard disk or from floppy disk. The advantages of this are obvious (explain) IBM bought the product for the budding Microsoft company for it's desk top boxes. Crucially Microsoft retained the rights to MS/DOS 1 outside North America. As personal computers became a world wide phenomena, IBM licensed its designs to other manufacturers and Intel began to dominate the production of chips in the US and elsewhere, Microsoft were to supply the operating systems for every IBM compatible computer in the world. Despite being technically inferior to the Macintosh (launched in 1984) IBM, Intel and Microsoft began to build a virtual cartel on hardware and software sales.
MSDOS was a text based operating system of low quality and complexity to use the Macintosh used a GUI and even then ran faster that an IBM or clone of equal price.
Microsoft began to develop a GUI of their own -Windows 1.0 and soon Apple and Microsoft were heading to court. The then chairman of Apple John Scully accepted an out of court settlement with Gates in 1985. Gates finally agreed to sign a statement to the effect that Microsoft would not use Mac technology in Windows 1.0--it said nothing of future versions of Windows, and Gates' lawyers made sure it was airtight. Apple had effectively lost exclusive rights to its interface design. This would prove to be an important document in future lawsuits between Apple and Microsoft, involving the Windows interface.
These two fatal errors by IBM and Apple have lead to today's position where even the US Government has been forced to drag MS to court accusing the corporation, with the collusion of Intel of exploiting it's near monopoly position in the industry to restrict consumer choice and stifle innovation. Even when found guilty MS has avoided any real punishmment and remains a monolithic organisation, with little attention paid to the needs of its customers.
More on the OS wars is available online. (search here with Jeeves)
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