Babbage was not deterred, and by then was on to his next brainstorm, which he called the Analytic Engine. This device, large as a house and powered by 6 steam engines, would be more general purpose in nature because it would be programmable, thanks to the punched card technology of Jacquard. But it was Babbage who made an important intellectual leap regarding the punched cards. In the Jacquard loom, the presence or absence of each hole in the card physically allows a colored thread to pass or stops that thread (you can see this clearly in the earlier photo). Babbage saw that the pattern of holes could be used to represent an abstract idea such as a problem statement or the raw data required for that problem's solution. Babbage saw that there was no requirement that the problem matter itself physically pass thru the holes.

Furthermore, Babbage realized that punched paper could be employed as a storage mechanism, holding computed numbers for future reference. Because of the connection to the Jacquard loom, Babbage called the two main parts of his Analytic Engine the "Store" and the "Mill", as both terms are used in the weaving industry. The Store was where numbers were held and the Mill was where they were "woven" into new results. In a modern computer these same parts are called the memory unit and the central processing unit (CPU).

The Analytic Engine also had a key function that distinguishes computers from calculators: the conditional statement. A conditional statement allows a program to achieve different results each time it is run. Based on the conditional statement, the path of the program (that is, what statements are executed next) can be determined based upon a condition or situation that is detected at the very moment the program is running.

You have probably observed that a modern stoplight at an intersection between a busy street and a less busy street will leave the green light on the busy street until a car approaches on the less busy street. This type of street light is controlled by a computer program that can sense the approach of cars on the less busy street. That moment when the light changes from green to red is not fixed in the program but rather varies with each traffic situation. The conditional statement in the stoplight program would be something like, "if a car approaches on the less busy street and the more busy street has already enjoyed the green light for at least a minute then move the green light to the less busy street". The conditional statement also allows a program to react to the results of its own calculations. An example would be the program that the I.R.S uses to detect tax fraud. This program first computes a person's tax liability and then decides whether to alert the police based upon how that person's tax payments compare to his obligations.

Babbage befriended Ada Byron, the daughter of the famous poet Lord Byron (Ada would later become the Countess Lady Lovelace by marriage). Though she was only 19, she was fascinated by Babbage's ideas and thru letters and meetings with Babbage she learned enough about the design of the Analytic Engine to begin fashioning programs for the still unbuilt machine. While Babbage refused to publish his knowledge for another 30 years, Ada wrote a series of "Notes" wherein she detailed sequences of instructions she had prepared for the Analytic Engine. The Analytic Engine remained unbuilt (the British government refused to get involved with this one) but Ada earned her spot in history as the first computer programmer. Ada invented the subroutine and was the first to recognize the importance of looping. Babbage himself went on to invent the modern postal system, cowcatchers on trains, and the ophthalmoscope, which is still used today to treat the eye.

The next breakthrough occurred in America. The U.S. Constitution states that a census should be taken of all U.S. citizens every 10 years in order to determine the representation of the states in Congress. While the very first census of 1790 had only required 9 months, by 1880 the U.S. population had grown so much that the count for the 1880 census took 7.5 years. Automation was clearly needed for the next census. The census bureau offered a prize for an inventor to help with the 1890 census and this prize was won by Herman Hollerith, who proposed and then successfully adopted Jacquard's punched cards for the purpose of computation.

Hollerith's invention, known as the Hollerith desk, consisted of a card reader which sensed the holes in the cards, a gear driven mechanism which could count (using Pascal's mechanism which we still see in car odometers), and a large wall of dial indicators (a car speedometer is a dial indicator) to display the results of the count.