Information Technology Reference
In-Depth Information
A declining stock market during 1970 and 1971 slowed the growth of com-
mercial software companies, but this accelerated the growths of internal software
groups within many companies as they acquired computers and began to automate
their business operations.
Major Companies Formed During the 1970s
Several important companies that used computers in new and interesting ways
were created or expanded rapidly during the 1970s, including FedEx, NASDAQ,
and Southwest Airlines.
FedEx
Federal Express was formed in 1971 by Frederick Smith and soon became a giant
of freight transportation due to developing the “hub-and-spoke” model of air trans-
portation centering on Memphis, Tennessee.
It is most efficient to move goods to a central facility (the hub) along a direct
route (a spoke). Goods are then moved from the hub to the final destination. At-
tempting to ship directly from destination to destination without a hub would lead
to impossible combinatorial complexity.
The FedEx computerized routing and tracking software became a model for
other companies involved with the distribution of goods. This was an excellent ex-
ample of operations research applied to optimizing the shipment of goods. FedEx
became one of the most cost-efficient cargo companies in history, and it continues
to use computers and software to fine-tune operations.
NASDAQ
The NASDAQ stock exchange was also created in this decade, and it became an
important stock exchange for computer and software companies when they de-
cided to issue an initial public offering (IPO). The name of this exchange is an ac-
ronym derived from
National Association of Securities Dealers Automated Quo-
tations
.
NASDAQ started operations on February 8, 1971. It was the first computerized
and automated stock exchange, so clearly software and computers were important
enabling technologies. At first, NASDAQ was a kind of bulletin board rather than
a true exchange. But as it grew and evolved, it became the first computerized on-
line stock trading exchange in 1987.
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