SILICON VALLEY (03.05.2013)
.docSILICON VALLEY
It was not called “Silicon Valley” when I was growing up there in the 1940s and 50’s. It was simply the Santa Clara Valley, a previously agricultural area of apricot and cherry orchards rapidly filling with suburban housing. Industrial “parks” also appeared as the postwar boom in electronics took hold in California. Blessed with a temperate climate, the valley stretches beside San Francisco Bay from the college town of Palo Alto to what was once the sleepy city of San Jose.
Today this is the nation’s ninth largest manufacturing center, with the fastest-growing and wealthiest economy in the United States. In the last 10 years, San Jose has grown by over a third, jumping from 29th to 17th largest city in the United States. In the same period, the median family income in the valley went from $18,000 a year to an estimated $27,000. There are 6000 Ph.D.s living here – one of every six doctorates in California – they are a hard-working lot. Many engineers put in 15-hour days and seven-day work weeks, and talk about achieving success in 10 years. The rewards they seek are apt to be the more material badges of success, such as cars and real estate. Porches and Mercedes abound, and one local Ferrari dealership is second in size only to the one in Beverly Hills. A Monopoly-like board game developed locally is almost a satire on this success/failure frenzy. Called “Silicon Valley: In the Chips”, it has very little to do with silicon chips and computers. Rather, the object of the game is “to negotiate your way through the valley and make your wealth through proper management of your income in home purchases and business investments”.
As one who has watched not a few cow pastures become parking lot, I regard all this change with a great deal of ambivalence. How did such a concentration of high-tech industry come about?
One name often mentioned as being pivotal is Frederick Terman. In the 1940s, Stanford University, located near Palo Alto, was a respectable regional university, but not yet the world-class institution of higher learning it is today. For development of its scientific and technical side, a great deal of credit must go to Terman, who in 1946 became dean of the School of Engineering. On one hand, Terman urged former students with last names like Hewlett and Packard and Varian to establish their electronic business locally. On the other hand, he wholeheartedly encouraged Stanford to join the effort of establishing the region as a center of advanced technology. He encouraged engineering faculty to go out and consult. He offered training to industry engineers. He sat on the boards of small businesses. He helped persuade the university administration and trustees to lease Stanford land to local electronics companies, thus beginning the Stanford Industrial Park, the nucleus of commercial high technology in the region.
Today the 660-acre park has some 70 advanced-technology business located there. Hewlett-Packard Co., Varian Associates, and other early tenants were followed into the valley in the 1950s by such large firms as Lockheed, General Electric, Ford, and GTE. The US government established research facilities at Moffett Naval Air Station and nearby Berkeley and Livermore.
It has been said there would be no “Silicon Valley”, however, if William Shockley’s mother had not lived in Palo Alto. One of the inventors of the transistor (for which he won a Nobel Prize) while he was at Bell Laboratories in New Jersey, Shockley returned to the town where he was raised and in 1956 set up Shockley Transistor Co. Two years later, several of his associates left and set up Fairchild Semiconductors Co., which many observers believe represents the true beginning of the semiconductor industry. The 1960s became a turbulent time as many others left Fairchild to start companies with now well-known names such as National Semiconductor, Intel, and Advanced Micro Devices. Among computer manufacturers, IBM was the first to arrive in the valley, but one of its executives, Gene Amdahl, resigned in 1970 and started his own company. Tandem Computers, Inc., was founded in 1974 by several former Hewlett-Packard employees. Peripheral equipment manufacturers – makers of storage devices and media and related equipment – also sprang up. Ampex, started in 1944 and a pioneer in magnetic recording systems, was followed by companies such as Memorex, started in 1961. Electronic games began when Atari, Inc., created “Pong” in 1972. The company now makes personal computers, but it was not prepared to enter into that market when one of its employees, a young college drop-out named Steve Jobs, first urged it to do so. Jobs joined forces with Steve Wozniak of Hewlett-Packars and founded Apple Computer, one of the valley’s huge success stories.
Today, the Santa Clara Valley seems to an old-time resident to be strangling on its own success. Housing is among the most expensive in the country: former $25,000 homes sell for $ 300,000 and up. The pace and intensity of work leads to job burnout, and the divorce rate is higher than the rate for the state as a whole. Traffic chokes the eight-lane freeways. Local zoning boards and city council are resisting further growth.
However, Silicon Valley is no longer a single region. It is a way of life. “Silicon Valley” has moved beyond Santa Clara County to the so-called 128 Belt of Boston; to the “Sci/Com” area along Route 270 outside of Washington, D.C.; to Colorado; to Oregon – and to many places overseas.
THE EVOLUTION OF DATA COMMUNICATIONS
Mail, telephone, TV and radio, books, and periodicals these are the principal ways we send and receive information. They have not changed appreciably in a generation. However, data communications systems – computer systems that transmit data over communication lines such as telephone lines or coaxial cables – have been gradually evolving through the past two decades. Let us take a look at how they came about.
In the early days, computers were often found in several departments of large companies. Any department within an organization that could justify the expenditure acquired its own computer. There could be, for example, different computers to support engineering, accounting, and manufacturing. However, because department managers generally did not know enough about computers to use them efficiently, these expenditures were often wasteful. The response to this problem was to centralize computer operations.
Centralization produced better control, and the consolidation of equipment led to economies of scale; that it, hardware and supplies could be purchased in bulk at cheaper cost. Centralized data processing placed everything in one central company location: all processing, hardware, software, and storage. Computer manufacturers responded to this trend by building large, general-purpose computers so that all departments within an organization could be served efficiently. IBM’s contribution was the IBM/360 computer, so called because it provided the full spectrum “360 degrees” of service.
Eventually, however, total centralization proved inconvenient. All input data had to be physically transported to be the computer and all processed material picked up and delivered to the users. Insisting on centralized data processing was like insisting that conversations between people be face to face. Clearly, the next logical step was to connect users via telephone lines and terminals to the central computer. Thus, in the 1960s, the centralized system was made more flexible by the introduction of time-sharing through teleprocessing system terminals connected to the central computer via communication lines. This permitted users to have remote access to the central computer from other buildings and even other cities.