Concepts Chapter 3 – Computers: Faster, Cheaper, Everywhere

We know computing hardware is getting faster and cheaper, creating all sorts of exciting and disruptive opportunities for the savvy manager. But what’s really going on inside the box? It’s software that makes the magic of computing happen. Without software, your PC would be a heap of silicon wrapped in wires encased in plastic and metal. But it’s the instructions—the software code—that enable a computer to do something wonderful, driving the limitless possibilities of information technology.

Software is everywhere. An inexpensive cell phone has about one million lines of code, while the average car contains nearly one hundred million (Charette, 2005). In this chapter we’ll take a peek inside the chips to understand what software is. A lot of terms are associated with software: operating systems, applications, enterprise software, distributed systems, and more. We’ll define these terms up front, and put them in a managerial context. Changes in business trends are creating an environment radically different from the software industry that existed in prior decades—confronting managers with a whole new set of opportunities and challenges.

Managers who understand software can better understand the possibilities and impact of technology. They can make better decisions regarding the strategic value of IT and the potential for technology-driven savings. They can appreciate the challenges, costs, security vulnerabilities, legal and compliance issues, and limitations involved in developing and deploying technology solutions. In the next sub-chapters we will closely examine the software industry and discuss trends, developments and economics—all of which influence decisions managers make about products to select, firms to partner with, and firms to invest in.

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