A GIS integrates five basic components - software, hardware, data, people, and methods. ArcGIS is a GIS software made up of different desktop, engine, and server products with increasing functionality. It uses a graphical user interface and allows for customization, programming, and extensions. ArcGIS is scalable across different applications from desktop to server to web. The document provides an overview of how ArcGIS works and its various components. It discusses the different data formats, analysis methods, and output options in a GIS and provides examples. It also outlines the history and scalability of ESRI's ArcGIS products. For homework, students are asked to read about ArcGIS and complete the first assignment.