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STARS-Proposal:Computer Services Industry

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1949 Automatic Payrolls, Inc., formed; years later it was renamed Automatic Data Processing (ADP)
1954 First computer consulting companies are formed
1955 First computer programming services firms are formed—Computer Usage and C-E-I-R
1956 System Development Corporation spun off from RAND—pioneered systems integration
1956 Consent decree forces IBM to spin-off Service Bureau Corporation as an arms-length subsidiary
1959 Computer Science Corporation founded 1961
1959 Association of Data Processing Services Association (ADAPSO) formed for service bureaus
1962 Electronic Data Systems is founded by H. Ross Perot; it pioneered facilities management
1966 Tymshare, Inc. formed to become the largest independent time-sharing service provider
1969 IBM unbundles most of its software products and most of its professional services
1989 IBM manages Eastman Kodak’s data center—enters computer services market
1989 Andersen Business Consulting splits from Arthur Andersen and is later renamed Accenture
1998 Google is formed and becomes dominant in web search
2004 Social networking giant Facebook is launched
2007 Cloud services broadly extend computer services from organizations to individuals


Computer Services (also now referred to as IT Services) is a more than $790 billion (2010) global industry. This article tracks the evolution of the industry from its beginnings in 1954 to 2012. Computer services were essential to facilitating the organizational adoption of computers from the mid-1950s forward, and have continually extended the range, effectiveness, and efficiency of computer applications within government, business, and other organizations. This article discusses and analyzes the emerging segments of computer services including consulting services, programming services, systems integration, service bureaus, facilities management, time-sharing services, and cloud-based services (Software as a Service or SaaS, and Software as a Platform, or SaaP). It profiles the emergence of a number of key firms that launched these different segments and businesses, and conveys how the boundaries of the computer services industry have changed fundamentally over the past half-century. Among the companies profiled are Arthur Andersen, Diebold, C-E-I-R, Computer Usage, Computer Sciences Corporation, Automatic Data Processing, Electronic Data Systems, General Electric, Tymshare, Inc., Gentry, Inc., IBM, Hewlett-Packard, Tata Consultancy, Infosys, Wipro, Google, and Facebook. The article also explores and analyzes the role of ADAPSO and other trade associations in shaping the industry, and the battle between different trade associations to create environments conducive to the growth and success of different industry segments. The U.S. has always been the leader of the computer services industry, but over the past two decades overseas based firms have played an increasingly important role, including Japanese-based Fujitsu, and India-based firms Tata Consultancy, Wipro, and Infosys. The article analyzes the technological and business factors in the global computer services industry’s geography. Finally, it will examine the emergence of cloud-based services and how these have extended the industry beyond just institutional/organizational customers to the general public and how this has influenced the social, cultural, and economic landscape of information technology.


References of Historical Significance

References for Further Reading

About the Author(s)

Jeffrey R. Yost has a B.A. from Macalester College, M.B.A. from University of Minnesota, and M.A. and Ph.D. from Case Western Reserve University (History of Technology and Science). He is Associate Director of the Charles Babbage Institute, a faculty member (History of Science, Technology and Medicine) at the University of Minnesota and has served as Editor-in-Chief of IEEE Annals of the History of Computing (2008 through 2011). He has authored three books and dozens of articles on computer/software history. His most recent book is The IBM Century, and he is completing one on the history of the computer services industry.