{"id":53,"date":"2018-06-14T19:04:41","date_gmt":"2018-06-14T19:04:41","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch09\/"},"modified":"2026-02-17T15:34:49","modified_gmt":"2026-02-17T15:34:49","slug":"ch09","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch09\/","title":{"raw":"9.1 Introduction","rendered":"9.1 Introduction"},"content":{"raw":"
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Learning Objectives<\/span><\/p>\r\n\r\n<\/header>\r\n

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After studying this section you should be able to do the following:<\/p>\r\n\r\n

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  1. Recognize the importance of software and its implications for the firm and strategic decision making.<\/li>\r\n \t
  2. Understand that software is everywhere; not just in computers, but also cell phones, cars, cameras, and many other technologies.<\/li>\r\n \t
  3. Know what software is and be able to differentiate it from hardware.<\/li>\r\n \t
  4. List the major classifications of software and give examples of each.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    We know computing hardware is getting faster and cheaper, creating all sorts of exciting and disruptive opportunities for the savvy manager. But what\u2019s really going on inside the box? It\u2019s 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\u2019s the instructions\u2014the software code\u2014that enable a computer to do something wonderful, driving the limitless possibilities of information technology.<\/p>\r\n

    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\u2019ll 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\u2019ll define these terms up front, and put them in a managerial context. A follow-up chapter, Chapter 10 \u201cSoftware in Flux: Partly Cloudy and Sometimes Free\u201d<\/a>, will focus on changes impacting the software business, including open source software, software as a service (SaaS), and cloud computing. These changes are creating an environment radically different from the software industry that existed in prior decades\u2014confronting managers with a whole new set of opportunities and challenges.<\/p>\r\n

    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 two chapters we will closely examine the software industry and discuss trends, developments and economics\u2014all of which influence decisions managers make about products to select, firms to partner with, and firms to invest in.<\/p>\r\n\r\n

    \r\n\r\nWhat Is Software?\r\n

    When we refer to computer hardware (sometimes just hardware), we\u2019re talking about the physical components of information technology\u2014the equipment that you can physically touch, including computers, storage devices, networking equipment, and other peripherals.<\/p>\r\n

    Software refers to a computer program or collection of programs\u2014sets of instructions that tell the hardware what to do. Software gets your computer to behave like a Web browser or word processor, makes your iPod play music and video, and enables your bank\u2019s ATM to spit out cash.<\/p>\r\n

    It\u2019s when we start to talk about the categories of software that most people\u2019s eyes glaze over. To most folks, software is a big, incomprehensible alphabet soup of acronyms and geeky phrases: OS, VB, SAP, SQL, to name just a few.<\/p>\r\n

    Don\u2019t be intimidated. The basics are actually pretty easy to understand. But it\u2019s not soup; it\u2019s more of a layer cake. Think about computer hardware as being at the bottom of the layer cake. The next layer is the operating system, the collection of programs that control the hardware. Windows, Mac OS X, and Linux are operating systems. On top of that layer are applications\u2014these can range from end-user programs like those in Office, to the complex set of programs that manage a business\u2019s inventory, payroll, and accounting. At the top of the cake are users.<\/p>\r\n\r\n

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    Figure 9.1<\/span> The Hardware\/Software Layer Cake<\/p>\r\n

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    The flexibility of these layers gives computers the customization options that managers and businesses demand. Understanding how the layers relate to each other helps you make better decisions on what options are important to your unique business needs, can influence what you buy, and may have implications for everything from competitiveness to cost overruns to security breaches. What follows is a manager\u2019s guide to the main software categories with an emphasis on why each is important.<\/p>\r\n\r\n

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    Key Takeaways<\/span><\/h2>\r\n<\/header>\r\n
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