Evolution of information technology and its emergence in India
Vipan Kumar
Information technology (IT) is a term that encompasses
all forms of technology used to create, store, exchange,
and use information in its various forms (business data,
voice conversations, still images, motion pictures,
multimedia presentations, etc.). It is a convenient term for
including both telephony and computer technology in the
same word. It is the technology that is driving what has
often been called "the information revolution".
Information is a stimulus that has meaning in some
context for its receiver. When information is entered and
stored in a computer, it is generally referred to as data.
After processing, i.e. compacting, editing, deleting,
merging, etc., the output data can again be perceived as
information. When information is packaged or utilized for
understanding, it is known as knowledge [1].
History of information technology
Information technology or IT as it is commonly called,
dates back to 5000BC, when people started using
alphabets as a medium of communication. However, its
actual emergence started with the first ever use of the
computer. A simple device for performing arithmetic
calculations was the slide rule, an analogue computer
based on mechanical architecture was invented in early
1600s by William Oughtred. This was a breakthrough as
most of the modern computers later used the same basic
principle used by the slide rule. The Pascaline, an
advanced mechanical computer was invented by Blaise
Pascal in the mid 1600s. Gottfried Wilhelm von Leibniz,
a German mathematician and philosopher developed a
mechanical computer called Leibniz machine in late
1600s. The real modern mechanical computer was
conceived in 1822 by Charles Babbage, and English
mathematician. This essentially encompassed the modern
day concept of storage, a mill and a punch card. This
technique was also adopted in the textile industry by
Joseph Marie Jacquard in early 1800s, wherein he
essentially used punch cards, binary logic and real time
programming software.
Then came the electromechanical age in 1840s with
the discovery of different ways to harness electricity and
the information was converted into electric impulses. This
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led to the beginning of telecommunication and telegraphy
in late 1800s. The first electro-mechanical computer was
invented by Herman Hollerith in 1880 and they were
marketed under the logo of International Business
Machines (IBM). In 1942, Howard Aiken, a research
student at Harward University built the first generation
modern computer named ‘Mark I’. It was 8 feet tall, 51
feet long, 2 feet wide, weighed 5 tons and employed
750,000 components.
The emergence of electronic vacuum tubes in 1940s
saw the first high-speed, general–purpose computer,
called by the inventors as ‘Numerical Integrator and
Computer’ (ENIAC). During the same time Mauchly and
Eckert began the designing of the ‘Electronic Discreet
Variable Computer’ (EDVAC). By this time, the
Britishers also started catching up with the Americans and
Max Newman heated up the effort at Manchester
University where the ‘Manchester Mark I’ went into
operation in June 1948-becoming the first stored-program
computer. Maurice Wilkes, a British scientist at
Cambridge University, completed the designing of
EDSAC (Electronic Delay Storage Automatic Calculator)
in 1949. Thus, EDSAC became the first stored-program
computer in general use (i.e., not a prototype). The first
general-purpose computer for commercial use was
designed in the late 1940s by Eckert and Mauchly and
christened as UNIVAC (Universal Automatic Computer).
Before UNIVAC, however, a machine called LEO (Lyons
Electronic Office) had already gone commercial.
The next fifty years brought metaphors in the
computing technology. The period is divided into four
generations. The first generation of digital computing was
in the era of 1950s when the vacuum tubes were the main
logic elements and the data was stored externally as
punch cards and internally as rotating magnetic drums.
The programs were written in assembly language and
required compilers to transform them to the machine
language. That was the first time when the term
‘software’ was evolved. However, the revolution in the
computer technology came with the advent of solid state
electronics in the late 1950s. This was called ‘second
generation’ and was developed in the 1960s. In this era,
Nistads News, Vol.5, No.2, October 2003
the vacuum tubes were replaced by transistors. AT&T and
Bell labs pioneered this concept. In these devices
magnetic tapes and disks replaced the external storage
media. Magnetic cores with polarized faces strung on
wire within a computer became the first internal storage
device. This period also saw the development of high
level languages (High level languages are more user
friendly) like COBOL (COmmon Business Oriented
Language) and FORTRAN (FORmula TRANslation).
The ‘Third generation’ started in the mid 1960s and
went up to mid 1970s, during which the individual
transistors were replaced by Integrated circuits or ICs.
The metal oxide semiconductors (MOS), like integrated
circuits, became the core memory providers for the
computer. It was the first time when Operating System or
‘OS’ term was evolved. It was during this time that a
UNIX operating system came into existance.
The ‘Fourth generation’ or better the present
generation started in the mid 1970s when many integrated
circuits were bunched together into a small unit called
‘microprocessor’. These microchips contained memory,
logic and control circuit and the entire unit was called
central processing unit (CPU). The first desktop was
launched in 1977 by Apple Computers was called Apple
I. It had a random access memory of 16k and was priced
approximately $1200. The first IBM personal computer
was launched in 1981 with ‘Microsoft – Disk Operating
System’ (MS-DOS) as the operating system. Graphical
user interface (GUI) came in the late 1970s with UNIX
and DIGITAL VAX running their X WINDOWS. In the
personal computers (PCs), GUI was started by Apple
computers in 1984 with their MAC OS. First MS-
Windows operating system debuted in 1983 but was only
taken off as WINDOWS 3.1 in 1990. The revolutionary
technologies in the mid 1990s made computers powerful
and in the coming years, its commercial application was
exploited besides computations. Similar applications in
communication and information dissipation led to the
term ‘Internet’. By mid 1990s, the ‘Internet’ connected
millions of computers throughout the world. Many
commercial networks and data services also provided at
least indirect connections to Internet. The original
services of internet were electronic mail (e-mail), file
transfer protocol (ftp) and remote computer access
(telnet). The ‘world wide web’ (www) which enables
simple and intuitive navigation of Internet sites through a
graphical interface, expanded dramatically during the late
1990s to become the most popular component of the
Internet, thus providing a platform for the flow of a vast
Nistads News, Vol.5, No.2, October 2003
knowledge base. During this period the word ‘IT’ was
coined. Even though the history of IT dates back to 5000
B.C., now the word IT works more or less in concurrence
with the software running on the computers. In the early
days of computers, softwares were written in order to do
some complicated mathematical calculations, but now the
major segment of software sector is devoted to the
information technology.
Software sector comprises two basic sectors:
Information Technology (IT) sector and IT Enabled
Services – Business Process Outsourcing (ITES-BPO)
sector. The IT sector provides basically the root services,
i.e. networking, software installation, system integration
and operating system (OS) development. ITES-BPO
segment constitutes the supporting services such as
customer care, finance, human resource development,
engineering design, simulation, animation and research
and development activities. ITES-BPO segment thus has
a tremendous scope to grow further, in contrast to the IT
services sector, which has limitations in growth [2-8].
Indian perspective
In India, the software boom started somewhere in the late
1990s. Most of the Indian software companies at that
moment offered only limited software services such as the
banking and the engineering software. The business
software boom started with the emergence of Y2K
problem, when a large number of skilled personnel were
required to fulfill the mammoth database-correction
demand in order to cope up with the advent of the new
millennium. When the first generation of computers were
made, their memory was extremely small. To save on
space, the four-digit Gregorian year was abbreviated to
the last two digits. This was all right in the twentieth
centaury. Now with the advent of year 2000,
representation of the year in two digits would have caused
failures in arithmetic, incorrect softwares would have
assumed that the maximum value of a year field was “99”
and would roll systems over to “00” which could be
mistakenly interpreted as 1900 rather than 2000, resulting
in negative date calculations and thereby causing
worldwide catastrophic information collapse. Indian
software professionals got a golden chance to depict their
skills in solving Y2K problem, though it was not very
technical, but required a lot of data entry. It fetched a
good fortune in terms of ‘rupees’. The problem of Y2K
kept on fetching lucrative jobs for Indian software
professionals till almost the end of the year 2000 [9]. The
software industry after the Y2K problem saw many
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Indians losing their jobs. The condition worsened with the 50,000
terrorist attack in the US, which resulted in an inevitable 45,000
mass layoff of the professionals, especially from the 40,000
south-east Asian countries. About 70,000 Indian software
35,000
graduates were estimated to be on jobs in the United

Export, Rs. crore

States in the year 2000, but their number plummeted to 30,000
30,000 in 2002 following the terror attacks. These figures 25,000
are however slightly misleading as the Indian software 20,000
industry kept a slow but steady growth rate. The total
15,000
software export from India is growing steadily at a rate of
about 30% and is expected to rise further. The software 10,000

and services exports during April–December 2002 5,000

garnered to $ 6.9 b, up by 28% from $ 5.6 b during the 0
1999-00 2000-01 2001-02 2002-03
corresponding period in the previous year. For the full IT Services 14,750 24,250 29,400 35,800
fiscal year 2002-03, these exports are expected to ITES-BPO 2,400 4,100 7,100 11,700
Total 17,150 28,350 36,500 47,500
constitute a 20.4% of the total export revenue, the figure
was mere 4.9% in 1997. Sector-wise, there is a 20% Year
growth in IT services and 61% growth in ITES-BPO Figure 1 - Export growth in the information technology
sector. Onsite services (that is work done in the host sector (in crore Rs)
country) which brought in Rs 16,500 crore in 2001-02 are
expected to earn Rs 18,500 crore in 2002-03. Offshore
Because of these factors, 60,000-70,000 Indians were
activities (that is, in India itself) is expected to contribute
expected to find new US jobs by April 2003.
Rs 27,500 crore this fiscal year, as against Rs 18,500
Despite facing a competition from China, Russia and
crore last year. Sector-wise software industry growth
Vietnam, India's software exports are expected to jump
trend during the last four years is shown in Fig. 1. India
seven-fold to US$57 billion by 2008; at that time it is
exports softwares to over 102 countries around the globe
expected to deploy four million people and would account
and one out of every four global giants outsourced their
for 8% of GDP and 30% of foreign exchange earnings of
software requirements to India. Leading product
India. Though India faces a stiff competition from China,
companies such as Microsoft, Oracle, Cisco, SAP, Adobe,
which also has a large number of skilled workers and
etc. have set up development centres in India and over
enjoys better infrastructure facilities, Chinese costs are
185 of the Fortune 500 companies outsource from India.
marginally higher than ours. India plans to expand
India has more than 1000 domestic IT service providers
software exports to markets in Southeast Asia and Latin
and Software exports account for a substantial 10.5% of
America in the coming years because of the expected
India’s total exports. Indian Software and Service vendors
weak demand in the United States, which absorbs two-
are known the worldover for their strict quality standards
thirds of the exports of the country's top software
such as CMM, PCMM and ISO certifications. Half of the
companies.
SEI CMM Level 5 certification companies (32 out of 58
During the span of last five years the Indian IT
worldwide) in the world are based out of India. Software
Industry has recorded a compounded annual growth rate
exports to Europe, for the year 2000-01 was US$ 1.5
(CAGR) of more than 40.5% - a figure double than the
billion, registering a 68% increase over 1999-2000
corresponding value in many of the developed countries.
revenue of US$ 920 million. The current estimates
Also, India's CAGR of spending on telecom was around
indicate that India’s software and services exports to
19.6% [10]. This is a good indicator of the investments.
Europe may touch a level of US$ 2.1 billion
For IT to play even a greater role so as to make an impact
This extraordinary resilience shown by Indian
on businesses in India, this good start in reality. The
software industry can be attributed to some of the factors
software business scenario within the country has
unique to Indian system, which include availability of
gradually evolved and the credit goes to the government
cheap labour, favourable dollar to rupee exchange rate,
as well as the private sector. Business practices,
large scale availability of skilled, qualified and well
infrastructure, and knowledge base have all improved
trained manpower backed by organized software industry.

16 Nistads News, Vol.5, No.2, October 2003

tremendously during the last decade. The Internet has
wielded its magic not only as a great equalizer but also as
a weaver of distant places. It has brought India closer to
the rest of the world, thereby boosting its development
efforts.
The overall success of the IT industry in India has
shown spill over effects to other industries in the country.
The Indian economy has grown at an average rate of 6.0%
a year during the last five years [11]. In India, the success
of software industry can be attributed to the excellent
teamwork between the Government and the Industry. The
Government of India, considering the performance of the
Indian software industry, has extended all support,
including fiscal benefits, availability of high speed data
communications and infrastructure and has ensured
almost red-tape-free system. The fiscal benefits include
trade-free zones, Software Technology Park schemes,
zero import duty on softwares, and 100% exemption on
profits from software exports. Fortunately for India, the
phenomenon of, "reverse brain drain" is enriching its
workforce with people having diverse international
experience, knowledge of state-of-art technology,
management skills and much more. This has made it
easier for Multi National Companies (MNCs) to establish
their back up offices in India. The major sectors which are
witnessing a special thrust for adoption of IT are:
Government administration, Insurance, Banks, Energy,
Financial Institutions, Defence, Public Tax System, Ports,
Customs, Telecom, Education and Small Office/Home
Nistads News, Vol.5, No.2, October 2003
Office / Individuals. Large sectors with slow IT
penetration rate, such as textile industry and healthcare,
are being encouraged by the government and the private
sector to adopt IT. In all, information technology industry
is going to be one of the forerunners among all, who’d
take India into elite league of so called “developed”
countries.
References
1. Definition of IT, http://search390.techtarget.com/sDefinition
2. Laudon, Kenneth C.; Traver, Carol Guercio; Laudon, Jane P.;
Information Technology and Systems, Cambridge, MA: Course
Technology, 1996.
3. Augarten, Stan; BIT By BIT: An Illustrated History of Computers
(New York: Ticknor & Fields, 1984).
4. Moreau, R., The Computer Comes of Age: The People, the
Hardware, and the Software, translated by J. Howlett
(Cambridge: MIT Press, 1984).
5. Telephone History Web Site.
http://www.cybercomm.net/~chuck/phones.html
6. Microsoft Museum.
http://www.microsoft.com/mscorp/museum/home.asp
7. Meggs, Philip B., A History of Graphic Design, 2nd ed., New
York: Van Nostrand Reinhold, 1992.
8. Iyer, Vishwesh, Internet and Telecommunication, Readers Digest,
July 2001
9. Kochhar, R.K., The rise of the techno-baboo: IT is a brain sink.
Current Science, 76: 1531-1533, 1999
10. www.dotindia.com
11. www.indianembassy.org
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