By 1948, the invention of the transistor greatly changed the computer's development. The transistor replaced the large, cumbersome vacuum tube in televisions, radios and computers. As a result, the size of electronic machinery has been shrinking ever since.

The transistor was at work in the computer by 1956. Coupled with early advances in magnetic-core memory, transistors led to second generation computers that were smaller, faster, more reliable and more energy-efficient than their predecessors. Second generation computers replaced machine language with assembly language, allowing abbreviated programming codes to replace long, difficult binary codes.

It was the stored program and programming language that gave computers the flexibility to finally be cost effective and productive for business use. The stored program concept meant that instructions to run a computer for a specific function (known as a program) were held inside the computer's memory, and could quickly be replaced by a different set of instructions for a different function.