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Figure 1
PC installed base in U.S. businesses and government
(millions of units). SOURCE: Data from Intel
Corporation; Infocorp.

on the other hand, has had almost no regulation and little to no involvement with government. Those of us in the computer industry need to do our part in demonstrating to our policymakers that the information superhighway is already under construction. It is being built primarily on PC technology by private industry, driven by competitive market forces and with little, if any, need for government regulation.

There is a role for government, however; that is to recognize and embrace the personal computer. This can provide America with a foundation for the next century that will improve not only the quality of our lives but also the productivity of our society and the competitiveness of our industries. The government can do many things to move this along. It can facilitate access to computing in schools, libraries, and community centers. It can become one of the largest (maybe the largest) content provider of online information. It can encourage business to promote telecommuting. The most important thing the government can do is to recognize what is happening. However, we caution against interference with market forces. The market moved the personal computer industry forward at a phenomenal pace, and we encourage following this model rather than the heavily regulated telecommunications model, which has proven slow to evolve and respond.

The Personal Computer Industry

Its History

While today the primary use of personal computers is in business, it is interesting to note that they were originally conceived of as a consumer product. The first personal computers were designed either for hobbyists—the Altair—or for consumers—the Apple II. Even IBM broke with its tradition of providing business products (the B in IBM) when it introduced the PC in 1981. This machine, which is the ancestor of over 85 percent of the computers sold today, actually had a game port for joysticks and an audiocassette for storage. Industry leaders at the time, such as Ken Olsen, then CEO of Digital Equipment Corporation, openly referred to personal computers as "toys." Few realized that this toy would completely restructure the entire computer industry within 10 years.

The personal computer overtook the mainframe with its terminals as the information tool of business some time during the 1980s. It is interesting to note that although there are clear reasons for this success, the mainframe was not without its merits. As a centralized facility, a mainframe is easy to control. Each user has access to the same software, and support is easy. Another clear advantage of mainframes is that since they are a shared commodity, it is easy to manage capacity to match the average expected load. On the other hand, under peak usage, all users typically experience slower performance. Probably the main reason for the rapid decline of the mainframe, however, is the slow pace of progress in both hardware and software performance.

While there are many reasons for the success of the PC in business, the most important is its evolutionary nature. The "openness" of the PC allowed for rapid innovation. The open bus inspired hardware companies to add value to the basic PC. They experimented in the marketplace. Successful additions were then integrated into the main computer. It is hard to imagine that the first PC had a game port built in, while the printer port was optional. Application software could be created by small companies. Companies like Lotus and WordPerfect grew from one product, while Microsoft took an early lead in the operating system and Novell provided the next work environment. While this environment was, and still is, chaotic, it provided for rapid evolution. No industry

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