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The first computers, constructed during World War II, employed radio valves, which were switched on and off to represent binary digits. But soon thereafter, the semiconductor was invented; it used much less electricity and thus did not overheat so easily, and it was sturdier. (V. Ramamurti, an Indian scientist, believed that the semiconductor was invented because the Allies feared the loss to Japan of India, the Allies' prime source of mica, which was essential to the making of radio valves.) Technological development of computers and of their multifarious applications has since been driven by the progressive reduction in the size and cost of semiconductors.

The first computers in the 1940s were as big as a house; by the 1960s, however, miniaturization of semiconductors had made it possible to create computers that were no bigger than a small room. At that point, IBM began to make a series of standardized computers; its 1620 and 360 series of mainframe computers found users all over the world, including India. The Indian government imported a few computers from the Soviet Union, especially EVS EM, its IBM 360 clone; but they were not popular, even in the government establishments where they were installed. IBM computers dominated the market. They were used for calculation, accounting and data storage in large companies, and in research laboratories. Tata Consultancy Services, India's largest software producer, was established in 1968 to run the computers acquired by the Tata group and to develop uses for them.

By the 1980s, computer chips were becoming small enough to be embodied in almost portable minicomputers, and these were getting cheap enough to be used in small businesses. Manufacturers began to build into minicomputers a selection of programs that performed the most common operations, such as word processing, calculation, and accounting. Over the 1980s, the mini-computers shrank in size and weight and were transformed into personal computers (PCs). Indian agents who sold imported minicomputers and PCs also employed software engineers for sales assistance and service. Thus, in the latter half of 1980s, Indian software engineers were scattered. Some worked in CMC; others serviced the surviving IBM machines in companies, government establishments, and research facilities; and still others serviced minicomputers and PCs.