According to The History of Computing Project, the prototype of the first microcomputer was introduced by the aptly named Micro Computer Inc., Los Angeles, in 1968. ARPANET, a defense contractors' information exchange and the precursor of the Internet, was born a year later. Commercial microcomputers (Apple, Commodore, Tandy, Sinclair, and Texas Instruments) appeared in 1977. Apple Computer introduced the first graphical interface with the Macintosh; Microsoft followed with the first version of Windows in 1985. The Internet evolved from ARPANET over a period of 18 years and, by 1987, it was a world-wide network. By 1990 it was beginning to appear in small businesses, usually in text mode. The first well-known microcomputer software applications were the VisiCalc spreadsheet and the word processors Applewriter and WordStar, all dating to the 1978—1979 period.
A few small businesses used computers before the micros appeared, but primarily in professional applications rather than as business tools. Minicomputers like the Honeywell (used in engineering) and the Wang (a dedicated word processor much used by law-firms and here and there by a successful author) were in the small business price range. Since then the three related strands of computing—hardware, software, and networks—have produced something of an avalanche of change in business administration and communications, every year bringing changes. Not surprisingly, four months before 2006 began, PC Magazine published a forecast entitled "2006: The Year Everything Changes." More or less the same theme has been sounded every year since 1980. But changes in computing and related software applications have shifted toward cell-phone-sized devices. In the traditional areas of office computing, the emerging issues of the mid-2000s are 1) centralization and decentralization: should the information technology (IT) staff have more or less control; 2) renewal or adaptation: should aging applications be brought up to date or should the business intelligently integrate old and new and save money; and 3) Web-related expansion and exploitation.
Small business has taken an active part both in the use and provision of computer applications. Once computers became affordable, they have been widely deployed in small business and, whether stand-alone or networked, have provided much the same administrative support service they do in larger enterprises. Small businesses have also participated actively in providing computer services, the production of custom software, the writing of such software for their own operations, in consulting with clients and systems integration, and in Web-consulting and Web-page design and development. By the very nature of the small business environment, small operations have found it easy to adapt and to respond rapidly to change in what was a dynamic environment.
All computers run under the control of operating system software (OS) designed for the hard-ware platform. The OS provides the basic environment in which everything takes place. Windows is the most widely-used OS on small computers followed by the Apple's Mac OS; only a small minority of small computers run on Unix, developed in 1969 at Bell Laboratories, or its derivates, e.g., LINUX. The choice of operating systems in small businesses is often driven by the type of work done and/or the operating systems used by clients. Many operations based on the graphic arts use Macintosh computers; in other cases the need easily to exchange data with clients may dictate choice of the OS. All else being equal, small businesses will tend to use the most cost-effective system in-house, typically a Windows-based or a Macintosh system.
Word processing for written communications, spreadsheets for analysis, databases for inventory control, bookkeeping software for accounting, and software for tax preparation have become reasonably priced for even small businesses that have only one computer. Payroll software has now emerged for smaller operations too, sometimes free-standing and sometimes as extensions of popular bookkeeping packages. In the mid-2000s, most small businesses were computerized and, in addition, enjoyed data management at levels of sophistication unimaginable in the mid-1990s.
Computer-assisted software development, design, and manufacturing systems (CAS, CAD, and CAM) are perhaps the best-known examples of professional software. Such systems, however, are also available for just about any professional activity that is based on symbol manipulation, data storage, and data processing. The Apple Macintosh, an early entrant into the graphical environment, continues to dominate graphic arts operations. Computer-based page design and typesetting packages have become affordable and are widely used in the small organization. Virtually all medical practices use computer-based patient scheduling and billing systems; the goal of completely automated and digitalized patient record-keeping, however, is still in the future; systems are being installed here and there but are not yet widely used.
The introduction of computer faxes and especially e-mail systems has revolutionized the way that businesses communicate with one another and employees interact within the company. Long-distance telephone costs and postage costs are saved in the process, and faster communications also speed up decision-making. Of greatest importance, perhaps, for the small business is its ability to communicate with potential customers through its own Web-site. Web-based marketing is very widespread.
Many small business owners have embraced computers as tools in doing business—and have done so early enough so that at present, in many places, hardware and applications both are becoming old. Amanda Kooser, writing in Entrepreneur, summed up the situation as follows: "A recent report by the Business Performance Management Forum took a look at this neglected issue [obsolete programs]. They surveyed a cross section of businesses and found more than 70 percent of respondents were convinced there were redundant, deficient or obsolete applications being maintained and supported on their networks. Forty percent estimated unwanted programs consumed more than 10 percent of their IT budgets. That can add up to a lot of unnecessary costs." IT in this context stands for Information Technology. Kooser recommends that companies conduct disciplined IT audits followed by systematic culling of old technology and its replacement with more modern software.
Another view is taken by Joe Tedesco, writing in Database. Tedesco's title signals the strategy: "Out With The Old? Not So Fast." Tedesco asks: "Is it time, simply, to buy new stuff? Again?" He goes on to spell out the downside: "Investing anew in software is not an especially appealing option, for a variety of reasons. How can [companies] leverage proven tools for new challenges such as increased functionality, heightened security and better data and subject-matter management? More and more companies are finding new value in the software already in use in their organizations."
These two views—replace the old or rationalize the old—have a counterpart in movements to centralize systems that have grown up throughout the company without coordination (on the one hand) and creating order by networking or rearranging existing systems to fit a more orderly situation easier for computer staffs to oversee and to maintain (on the other).
These kinds of arguments, common in the trade press, may signal that computer use is beginning to mature in organizations and that, at least in the immediate future, much more attention will be paid to cost-effective management of existing resources and cautious acquisition of the new.
Despite conflicting views, peer pressure and anxiety often influence buyers, not least small business buyers. In an article for Fortune, Joel Dreyfuss wrote as follows: "If you don't have the latest and (always) greatest software and hardware on your business computers, your vendors and employees can make you feel that you're just one step away from quill pens and parchment. The truth is that most small businesses, and consumers for that matter, get cajoled into upgrades that give them more headaches than benefits."
Dreyfuss suggested that small business owners have employees figure out the cost of installation, debugging, and training associated with new computer equipment before consenting to a purchase. He also mentioned that Usenet discussion groups and technical bulletin boards on the Internet can provide valuable analysis of new products. "Seeing the comments about installation problems, upgrade issues, and reported incompatibilities with other products can cool the ardor of any technology fanatic," he noted.
Another factor for small business owners to keep in mind is that a variety of computer applications are available online over the Internet. A number of companies have established small business portals on the Internet to give companies access to software and services—such as payroll processing, legal services, online banking, or assistance in building a Web site for E-commerce. In addition, application service providers (ASPs) offer companies the opportunity to test and use software over the Internet without having to purchase it. These options may eventually reduce the cost and improve the accessibility of computer applications for small businesses.
Cohen, Alan. "Within Striking Distance: Small Business Web Portals Struggle to Attract Customers with the Right Mix of Content and Services." FSB. 1 April 2001.
Cullen, Cheryl Dangel. "Software for Designers: What Do They Want? What Are They Getting?" Digital Output. August 2005.
Dreyfuss, Joel. "The Latest and Greatest Disease: Even Big Companies, with Pricey Evaluation Staffs, Find It Hard to Resist the Allure of the Bigger and Better Hardware and Software Products. But Do You Need All Those Newfangled Features?" Fortune. 16 October 2000.
Kooser, Amanda C. "Spring cleaning: Old Software Draining Your IT Budget? Here's How to Clean Up." Entrepreneur. May 2005.
Loehr, Mark. "Right Size IT." Database. May 2005.
Miller, Michael J. "2006: The Year Everything Changes." PC Magazine. 9 August 2005.
Tedesco, Joe. "Out With The Old? Not So Fast." Database. May 2005.
The History of Computing Project. Available from http://www.thocp.net. Retrieved on 26 January 2006.