Based on the application or the purpose, computers are often classified as general-purpose computers and special-purpose or dedicated computers. General-purpose computers are comparatively more flexible and thus can be used to work on a large variety of problems including business and scientific problems. For instance, banking applications such as financial accounting, payroll processing, etc., at the head-office level would require the services of a general-purpose computer. The size and capacity of a general-purpose computer could of course vary, depending upon the quantum of data and the complexity of data processing to be done. Special-purpose computers, on the other hand, are designed for a dedicated application. These computers perform a certain predecided and fixed sequence of operations. Typical applications include the computers used for weather forecasting, aircraft control systems, missile and other weapon guidance systems, etc.

Based on the technology used, the computers are classified as analogue computers, digital computers, and hybrid computers. In analogue computers, the input data comprise continuously changing electrical or non-electrical (temperature, pressure, speed, volume, etc.) information. There are numerous examples of analogue computational devices. One such device is the speedometer of an automobile. The input data to this device or machine are the continuously varying rotational speed of its driveshaft. The rotational motion is converted into a linear movement of a needle pointer that indicates the speed in km/h. A tachometer used to measure the rotational speed is another device of the same type. The input data in the case of a digital computer are discrete in nature. They are represented by a binary notation in the form of 0s and 1s. A hybrid computer is a mixture of the two. It attempts to combine the good points of both analogue and digital computers. In a typical hybrid computer, the measuring functions are performed the analogue way while the control and logic functions are digital in nature.

Based on their size and capacity, computers are classified as mainframe computers, minicomputers, microcomputers, and supercomputers. A mainframe computer is the largest, fastest and perhaps one of the most expensive computer systems of general use. Before the advent of minicomputers and microcomputers respectively in the third and fourth-generation periods, all data processing was done on mainframe systems only. Thousands of such machines are still in use in medium and large-size business houses, universities, hospitals, etc. These machines have a very large primary storage capability and have a very high processing speed. Because of their size and speed, mainframe systems must be placed on special platforms that allow wiring and cooling systems. These machines are useful not only because they have an enormous storage capacity but also because of their capability to support a large number of terminals. Modern-day mainframe computers are defined by their high-quality internal engineering, reliability, technical support, and security features along with their performance qualities. Their applications include the processing of a huge amount of different kinds of data such as census, industry/consumer statistics, financial transaction processing, etc., in large private and public enterprises, government agencies, etc.