PERSONAL COMPUTERS: WHERE DID THEY COME FROM AND WHERE ARE THEY GOING?
1.0 Personal computers: Where did they come from and where are they going?
1.1 Overview
NASA’s first computer, a typical UNIVAC, filled a room the size of a house (Tomayko 1987). Since that time computers have become smaller in size until finally, they have reached the size of micro-mini. The micro-sized computers are used in mobile devices as small as a cell phone. The personal computer appeared when computers became small enough to sit on a desktop. With the advent of the desktop PC, the computer market opened up to small businesses and home use consumers.
The development of the personal computer (PC) allowed business sectors including export, import selling, buying and production to take advantage of their calculating abilities and memories for information storage. Instead of rooms filled with file cabinets holding paper records, PCs have the capability to store customer data in a fraction of the area. If employees had not had PCs available over the past few decades for their desks, business would look very different now. PCs have become an integral part of all facets of business, internally and externally. Goods produced at a factory can be tracked along the supply chain. Investment tools that used to exist on paper are now bought and sold using e-mail sent over the Internet.
PCs can do anything that can be done with paper and pencil such as project management and accounting. In order to make an investment in computers worthwhile for a business though, computers need to be part of an information system that adds to the profit of the company. The need to know what is happening in specific markets and with competitors in real-time makes computers essential for business success. The efficiency of daily tasks can improve even when employees work from home on computers networked with the office system. The biggest challenge for businesses is making sure the information in computers is secure. One strategy used to lessen the risk, is only allowing employees with pre-approved permission, access to data. Software applications are available to protect systems, but hacking is still an obstacle preventing 100 percent guaranteed secure systems.
Business management and top leadership want work carried out as efficiently as possible. Personal computers can help meet that goal. The contemporary market demands businesses keep track of large amounts data. Businesses must use computers to reach profit goals and to stay ahead of the competition.
1.2 History
Computers filled whole rooms when the Universal Automatic Computer, known as ‘the UNIVAC,’ was introduced during the 1950s (Tomayko 1987). The UNIVAC was sold commercially in the United States (U.S.). The U.S. Census Bureau received the first UNIVAC on March 31 in 1951 (Johnson 2006: 32). The National Aeronautics and Space Administration (NASA) was established in 1958. NASA received another UNIVAC when they opened. The UNIVAC was huge and needed huge amounts of space to hold the computer. Buildings were constructed to hold computers at NASA and other organizations using it (Tomayko 1987). Each UNIVAC required teams of computer technicians to run it and make sure data was input correctly and that output was generated on time.
The development of the personal computer, along with the Internet and wireless communications, has changed the world and influenced daily lives locally with the global sharing of information. During the 1960s and 1970s, large mainframes were developed and used to compute larger amounts of data, even as the size was decreasing from the giant UNIVACs (Reimenschneider and Mykytyn Jr. 2000: 257). Computers have continued to become smaller since the 1950s. Microcomputers were developed and used in the 1970s and 1980s (Reimenschneider and Mykytyn Jr. 2000: 257). ). Before the PC, IBM had designed an IBM System/38 minicomputer selling for $90,000 and the IBM Portable Computer that weighed 50 pounds and sold for $9,000 (IBM 2005: par. 4). In 1981, the IBM Personal Computer went on sale, and the type of customers changed from only hobbyists to include white collar workers (IBM 2005: par. 1). The IBM PC was considered a revolution because computers became accessible to anyone and everyone for use in daily life (IBM 2005: par. 1).
Personal computers became common in the 1990s, because they were standalone computers, small enough to sit on an employee’s desk. Today, PCs have become components of networked systems with specially designed hardware and software applications available to meet the unique needs across the business sectors. Costs have decreased enough that small to large enterprises can afford to have computers (Reimenschneider and Mykytyn Jr. 2000: 257). Information Technology (IT) is the number one use of computers in all sizes of business; the departments that use the most computer power are accounting and finance (Reimenschneider and Mykytyn Jr. 2000: 258). After 24 years, in 2005, IBM the creator of the first PC sold its PC division to Lenovo in the People’s Republic of China (China) (IBM par. 2005: 16).
The smaller versions of a personal computer, a tablet and a laptop, have the advantage of mobility; they are lighter weight and easy to carry. All of them have the same elements that make them computers (a) they process information, (b) each has memory and (c) they have graphics applications (Nield 2013: par. 3). The PC has the advantages (over laptops and tablets) of higher power, so response time to demands is faster and tasks can be completed in a shorter amount of time. The greatest disadvantage to the mobile computers may be the need to recharge at regular intervals. The batteries for mobile computers only last from 4 or 5 hours to 10 hours with an extended use battery (Nield 2013: par 5).
Computing was the first wave of change during contemporary times of technology change. Business and consumer demand for computers continues to grow. (See fig. 1) Leng (2001: 1) proposed new “laws” to describe the changes: Moore’s Law demonstrating the doubling of computing power every 18 to 24 months; Disk Law demonstrating that every 12 months storage capacity doubles and Fiber Law demonstrating that every nine months communication interactions double. Sentient technology is the development of sensors that can detect environmental changes such as movement, sound and temperature.
Figure 1 Historical demand for computers from 1980s to future prediction
(Source: Leng 2005: 1)
2.0 PC Use
2.1 Work-at-home
Venkatesh and Vitalari (1992: 3) completed a research study of ‘supplemental work-at-home’ factors, when personal computers were first becoming popular in homes during the early 1990s. Supplemental work in the research was defined as work taken home from the office. The study showed that employees with computers at home spent more time on supplemental work than employees with no PC at home. The two major reasons for working at home were shown to be time flexibility and higher productivity (Venkatesh and Vitalari 1992: 18). The researchers found that the amount of time employees spent commuting was inversely related to the number of hours working at home on job-related work (Venkatesh and Vitalari 1992: 18). The researchers concluded that the study demonstrated a need for businesses to provide flexible working hours (Venkatesh and Vitalari 1992: 18).
2.2 Business example
Banking is only on example of a business sector that relies whole-heartedly on computer capacity; bank employees have PCs on their desks that are networked internally for communication and networked externally with the Internet. A banking information delivery system includes complex layers with a variety of dynamics. Some transactions are made at the bank, some face-to-face and some at the bank customers’ business location. Figure 2 depicts the elements of the delivery model. The next circle represents the “criteria that customize(s) information” such as wealth management, microfinance, and loan products (Martin, Laksmi and Venkatesan 2014: p. 143). The outside layer represents the delivery channels that must deliver the correct data or financial tools to the appropriate user. (See fig. 2)
Figure 2 Examples of uses of where computers, telephones and newsletters overlay
(Source: Martin, Laksmi and Venkatesan 2014: p. 142)
In horizontal the layers, the bank’s delivery system model can be described as firstly, the data layer and secondly, the “business data analysis” that provides evaluations in specially focused reports (Martin et al. 2014: 143). (See fig. 3) Data is chosen for the reports to fit the requested criteria based upon (a) the results wanted, (b) the necessary analysis and (c) the type of delivery channel (Martin et al. 2014: 143). The goal is for the correct data, evaluated appropriately, to reach the user who needs the customized information. Reporting data in usable form is the last step of BI analysis.
Figure 3 Detail of computations in the delivery system
(Source: Martin, Laksmi and Venkatesan 2014: p. 142)
3.0 Global competition
Aherns and Zhou (2013: 11) researched the Chinese company, Lenovo about trademark and national competitors; in the third quarter of FY2011Lenovo’s global market share was (13.50%), the second largest after Hewlett Packard (HP) (17.70%). That put Dell in third place (1.6%). In fact, Lenovo showed the most growth, 16.6 percent, compared to the others in the top five PC vendors in the world: (1) HP, (2) Dell, (3) Acer, (4) Toshiba, and (5) Lenovo. (Aherns and Zhou 2013: 12). On the global scene in 2010, Lenovo showed the largest market share, as expected in China, equal to 28.8 percent, whereas in Japan Lenovo was third with 5.6 percent market share compared to Dell with 10.70 percent and HP with 8.60 percent (Ahearn and Zhou 2013: 13). (See fig. 4) U.S. market shares in 2011 showed HP leading with a 25.90 percent market share, Dell second with a 22.60 percent market share, and Lenovo third with a 5.60 percent market share. The company is expanding in the U.S. and plans to move from about six percent to 10 percent market shares over a short period (measured in years) (Ahearn and Zhou 2013: 14). (See fig. 4)
Figure 4 Market share of PC trademarks in China, Japan and USA
(Source: Ahrens and Zhou 2013: 14 & 15)
The United States was the world’s leader in selling personal computers until the first quarter of FY2013 when China became the leader when they sold 69 million units compared to America’s 66 million units (“Personal” 2013: par. 1). (See fig. 5) Global sales of personal computers were reported as decreasing while at the same time smart phones and tablets started becoming more popular (“Personal” 2013: par. 1). Records on global sales have been kept since 1994; Q1 FY2013 the number of PCs purchased decreased by 13.9 percent (approximately 76.3 million units) (“Personal” 2013: par. 1). China consumers continue to buy PCs, the market share of increased sales is 50:50 between PCs and portable notebooks (“Personal” 2013: par. 1). Hewlett Packard and Acer Groups decreased in market share by two percent in Q1 FY2013. Meanwhile the Chinese-produced Lenovo has been increasing due to purchases Chinese users (See fig.) A prediction made by a research group, IDC predicts a slowdown in Chinese sales by three to four percent (“Personal” 2013: par. 1).
Figure 5 Global PC shipments for Q1 2013
(Source: The Economist.com/graphicdetail)
A recent factor that impacted personal computer sales has been the discontinuation of the 12 year old Windows XP word processing software (MS.com 2014). The security risk for users still computing with Windows XP has been higher since the loss of support in April 2014 (MS 2014). Windows XP is old in terms of software time, and Microsoft (MS) has offered the newer Windows 8 to replace it. XP had been offered in three editions, for home, 64-bit and professional use. (See Figure A-1) The 64-bit edition was a step-up from Windows 2003. (See Figure A-1)
The Wall Street Journal’s graphic of the change this caused in PC market was available at Statista (See fig. 6) Lenovo received a 4.9 percent bump-up from 11.64 to 12.91 million PC units shipped globally. (See fig. 6) HP received a 4.1 percent bump-up from 11.77 to 12. 25 million PC units shipped globally. (See fig. 6) These increases are especially interesting because of the global decrease in PC units sold overall. The decrease is evident from the 1.7 percent decline in total shipments from QI FY2013 (77.9 million PC units) to Q1 FY2014 (76.7 million PC units). (See fig. 6)
Figure 6 Lenovo on top of global sales after XP support discontinued
(Source: Statista.com 2014a)
Statisa also offered the market share percentage per fiscal quarter from Q1 FY2011 to Q4 FY2012, identified per vendor. (See table A-1) The data shows the rise of Lenovo from Q1 FY2011 with 10.4 percent market share (compared to HP’s high of 16.9 percent) to Lenovo’s highest market share of 18. 1 percent reached in Q4 2013. (See fig. 7) In the fourth quarter of 2013, HP’s market share was 16.4 percent and the other vendors had less, making Lenovo the winner of that quarter. (See table A-1 & fig. 7) Market share as a percentage for both Lenovo and HP paralleled the decreasing trend in Q1 FY2014 with Lenovo holding 16.9 percent market share and HP at 16 percent market share. (See table A-1 & fig. 7)
Figure 7 “Market share of PC vendors of PC shipments worldwide from 2011 to 2014”
(Source: Statista.com 2014b)
4.0 Business analytics
Business analytics have been used for years to find ways for improving profits. The advent of personal computers offered new opportunities for improved methods of understanding markets and customers. Computers are faster than using pen and pencil or handheld calculators. The continuous development of improved software has increased the capability to predict markets that can then be used for decision making. IBM researched the focus of chief marketing officers (CMOs) in 2011 and found that customer ‘relationships’ had become as important as ‘transactions’ with customers (IBM 2011: 2). The IBM survey results agreed with the concept that loyalty for gaining greater profits, and the tactic could potentially increase profits as high as 25 to 100 percent (Reichheld & Teale 2001: 53). Reichheld and Teale (2001: 52) pointed out the advantage of keeping the loyalty of 80 percent and more customers because the difference between 90 and 95 percent retention doubles the average customer tenure from ten to twenty years. (See fig. 8)
Figure 8 Importance of loyalty graphed as annual average customer tenure v. annual customer retention rate
(Source: Reichheld & Teale 2001: 53)
One software application available for linking product and customer analysis is the merging of IBM Cognos BI and the SPSS statistical package. Measuring performance is the purpose of business analytics (IBM 2011: 3). Revenue increase, customer retention, accurate forecasts, effective marketing and optimization of sales and market are the desired results (IBM 2011: 3). IBM Cognos Business Intelligence (BI) is an example of software that can compare the success of product sales and learn more about customer behavior. Products can be rated in separate categories, to determine those that are most purchased by customers. The software for PCs makes evaluating sales segments easy; for performance can be measured regionally, according to product or according to advertising. (See fig. 9) Analytics can evaluate what customers may buy in the future based on the current purchasing habits. Companies have a great deal of data on their customers and software applications can help sort out the pieces that are valuable for predictions.
Figure 9 Dashboard for product and customer analysis using sales segmentation into analysis of product and customer categories
(Source: Clear Insight 2014)
5.0 Security
Cloud computing can store, manage, and process a business’s data at a remote server on the Internet instead of in the hard drive of a PC. That strategy has the potential to make personal computers obsolete if businesses choose to use cloud computing over PCs. Tim Wilson addressed the issue of why businesses are not choosing to switch to the newer cloud computing, but instead businesses are hanging on to their personal computers. Personal computers have had malware protection coding developed over the past ten years, so security has improved, relieving pressure to move to the Cloud due to security issues (Intel 2013: par. 3). In fact, the key obstacle to adopting cloud computing is the fear of security risks (Wilson 2014: 5). The global director at Unisys, John Kunzier, clarified the hesitation as “fear of the unknown” (Wilson 2014: 5). In a survey of 350 IT Chief of information officers (CIO), security (70 percent), information governance (45 percent) and meeting their company’s standards (42 percent) were the three greatest barriers. Cloud computing offers businesses savings on costs and higher efficiency, so although they are hesitant; many CIOs are planning to implement cloud in the next year (Wilson 2014: 6). Another Unisys survey showed that of the respondents at businesses with 1000 or more employees; 26 percent use a private cloud environment, whereas six percent more plan to implement cloud within 18 months (Wilson 2014: 6).
6.0 Innovation
According to Paolo Cinelli, CIO of the Ikea Group, translating information technology into business growth is the biggest challenge for CIOs (Davis 2014: 5). Cinelli was responding to a 2013 Harvey Nash CIO Survey that asked 118 information management decision makers “What prevents IT from innovating at your company?” (Davis 2014: 5) (See fig. 10) The IT executives were all head of companies with one hundred or more employees. The number one barrier reported by 67 percent of the respondents was the amount of time spent focusing on day-to-day IT operations. Daily responsibilities prevented time for focusing on innovations (Davis 2014: 5). Lack of budget was reported by 55 percent of the contributors (Davis 2014: 5). Only 13 percent reported that at their business there were no barriers to IT innovation (Davis 2014: 5).
Figure 10 Barriers to Information Technology innovation from a Data Information Week 2013 survey
(Source: Davis 2014: 5)
On the other hand, the same 118 participants reported areas where IT innovation effectiveness was successful (Davis 2014: 12). The most highly effective areas reported were enabling employee collaboration (15 percent), increasing employee productivity (14 percent), and building customer ties (12 percent). (See fig. 11) The category of “effective” measured the highest compared to the categories that ranged from “highly ineffective” to “highly effective” (Davis 2014: 12). Lowering IT costs was claimed to be effective by 58 percent of the respondents. Both ‘enhancing employee collaboration’ and ‘employee productivity’ were reported to be effective by 53 percent (Davis 2014: 12). The sum of “effective” and highly effective” was larger in every type of innovation mentioned in the survey except for “helping the business market to customers” (Davis 2014: 12). (See fig. 11)
Figure 11Areas for innovation effectiveness
(Source: Davis 2014: 12)
6.1 PC Design Improvements
The desktop PC remains competitive by continually offering new designs that allow the PC to remain small enough for a desktop, but to still contain ever-larger amounts of memory for business or home uses. Ragaza and Westover (2014: par. 2) at the magazine PC reviewed the best desktops of 2014. The PC is designed to continue to attract people interested in using them for gaming, home theaters and business uses. They noted that the “standard desktop tower still reigns as the basic PC,” but at the same time, improvements have been made to all-in-one PC designs, so the tower does have competition (Ragaza and Westover 2014: par. 2).
The desktop tower is the fourth component of modern PCs included with a monitor, keyboard and mouse for complete set-up. The tower holds the power supply, motherboard, optical drive, and hard drive housed in tower-shaped casing. The user can count on the stationary power supply (as long as the computer remains connected to the electricity supply) unlike with the laptop that needs its battery recharged every few hours. The tower configuration allows users easy maintenance and upgrading of the system. The life of a PC can be lengthened by adding (random-access memory) RAM and the capability to replace out-of-date hard drives. Built in webcams at the top of screens are continually being improved to offer easier and higher quality video-conferencing.
The design of All-in-One PCs is a strategy to offer the same advantages of the tower while taking up less space on the desk. In a review of the HP EliteOne 800, Domingo (2014: par. 1) explained that the HP Elite800 did not have many of the same problem as earlier All-in-One designs and faster processing speeds. All-in-One computers are good when office space is limited. The touchscreens can be swiped and tapped. PC monitors are becoming thinner with large display area and higher resolutions.
The HP Elite800 is equipped with a near-field communications (NFC) sensor in the front panel (Domingo 2014: par. 5). The NFC application allows for no-contact data exchange or transactions when two devices are in proximity with each other. The back panel is designed for easy access by IT employees who need to switch the hard drive, optical drive or memory (Domingo 2014: par. 5). At the same time, the computer can be locked to prevent theft. The arm holding the monitor can be straight tilted or allow for pivoting or the monitor can be detached and mounted on the wall.
Lenovo has two of their computer models on PC’s list of the top 10 desktops of 2014, the Lenovo ThinkCentre M93P Tiny and the Lenovo ThinkStation E32 SFF. The Lenovo ThinkStation and HP EliteOne 800 are similar in several ways although HP900 offers the superficial differences 23 inch display monitor, an LED widescreen, and touch screen capabilities (Ragaza and Westover 2014). On the other hand, the ThinkStation and the HP 800 both offer 8GHz of RAM and the same optical driver (Ragaza and Westover 2014). The storage capacity of ThinkStation is much larger than the HP 300, 1000 GB to 256 GB (Ragaza and Westover 2014). The graphics capabilities are different and will attract customers with different needs. The processor in the HP 800 is the Intel Core i7-4770s while the Lenovo ThinkStation is produced with an Intel Xeon E3-1240 v3 (Ragaza and Westover 2014). The HP 800 has the handicap of a poor history for All-in-One PCs although it has been greatly improved. On the hand, the Lenovo ThinkStation has the advantage of costing less than $1200 yet still meeting the requirements and more for a business workstation (agaza and Westover 2014).
7.0 Conclusion
The age of computers has been a time of huge leaps in technological innovation from room filling UNIVAC to the first desktop personal computer by IBM in 1981 to the large capabilities of modern All-in-One PCs needing only small amounts of space. The business sector demands efficiency and computers that can enhance business efficiency and profits. Businesses and home computer users are also demanding security so that their data remains private. Now a transition from memories on hard drives to cloud computing is attempting to address the security concern.
Laptops and tablets offer some competition to the PC industry. PC producers have punched-up PC capabilities accompanied with size reduction so less space gives more power. Less space can now offer enough power to take care of complex interactions and transactions like in the banking industry. Banking information delivery system models have been designed to meet a banks needs based on the customers they serve, the types of needs the customers have and the needs of the banks. Banking has especially complex dynamics because of the need to meet the demands of customers, regulators, management, shareholders, investors and employees. Data and information delivery models are designed based on particular needs of banks and other businesses.
Computer systems become obsolete quickly compared to other consumer products. In April 2014, Microsoft discontinued customer support for the Windows Vista XP processing system because it is more than 12 years old, and editions of Windows 8 are available for sale. The Wall Street Journal suggested Microsoft caused a shift in global market shares. China’s Lenovo sold more than American computers. Lenovo gained almost 12 percent of market shares with other companies lagging behind at 4 percent or losing shares.
Computer manufacturers are in an intensely high pressure global competition for the most market shares. A change occurred during 2000 to 2013 a shift in the relationship between the five top PC vendors HP, Dell, Acer, Toshiba and Lenovo. Lenovo, a Chinese company, overtook the U.S. market in the first quarter of fiscal year 2013. Lenovo’s market shares continue to grow despite an overall decrease in computer purchases. HP is a strong contender for first-place in global market shares. New 2014 PC models such as the Lenovo ThinkCentre M93P the Lenovo ThinkStation E32 SFF and HP’s Elite 800 have similarities that reflect trying to reach the same consumer market, but at the same time offer unique features in order to differentiate their products. The All-in-One design of HP EliteOne 800 is vying for a similar consumer as the Lenovo ThinkCentre M93p Tiny and the Lenovo ThinkStation E32 SFF. It will be interesting to see which of the companies gains the most market shares based on these three computers at the end of 2014.
The personal computer still has the main advantage of more power than other smaller units such as laptops and tablets, but the future could change that situation. At the moment, PC designers and producers are continually improving their product, and consumers are responding positively. The most surprising outcome of this research was the move of Chinese company Lenovo with the purchase of the IBM personal computer unit. Lenovo is the leading company in terms of global PC market shares.
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