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Software components are to software what integrated circuits (ICs) are to electronics: "black boxes" that encapsulate functionality and provide services based on a specification. Software reusability has long been a holy grail of software engineering and a major goal of object-oriented programming. Software components are designed to be reusable, even interchangeable.
In the "old days," people experimenting with radio had to spend a lot of time building chassis, winding inductors, and wiring together smaller components to create amplifiers, filters, and oscillators. Today, these components come packaged as integrated circuits with inputs, outputs, and specifications that tell how each component works. The specification is a sort of contract between the creator of the component and its user, explaining how the component will behave in various circumstances. Combine these components correctly, and, voila!, you have a radio. (Or, voila!, a heart rate monitor or microwave oven. You get the picture.) If the component doesn't perform to its specification, it is considered defective and can be replaced.
Software components give programmers the same benefits that the above components give to people building radios. They provide specific functionality that can be reused in different places. Any software component conforming to the same specification can be replaced with another that performs the same function -- without breaking the system. Programmers can then connect software components together to create different applications, just as an electrical engineer wires together components to create a new radio, heart rate monitor, or microwave oven.
Software components hide implementation, conform to interfaces, and encapsulate data, just like classes do in object-oriented languages. So how do components differ from classes? The answer: Almost all software components are also classes. What makes them components is their conformance to a software component specification. The JavaBeans Specification is the document that describes what a Java class must do to be considered a "Bean." Programmers (and, as importantly, integrated development environments [IDEs]) can depend on any class that advertises itself as a Bean to conform to the rules set out in the specification. If it doesn't conform, the contract has been broken and the Bean is defective.