The major underlying factors that shaped the computer industry as it emerged, beginning in the mid-1940s, are the focus of this paper. Unlike many accounts that primarily discuss technological developments, this paper examines the interaction of three equally important elements: technology, customers and suppliers. The evolution of the computer industry is shown to have been driven initially by national-security customers, and later by cost-sensitive commercial customers. Technological advances made in response to these two customer types are identified, and the successes and failures of suppliers are analyzed in terms of changing customer requirements.
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