One of the main challenges in becoming an effective state machine designer is to develop a sense for which parts of the behavior should be captured as the "qualitative" aspects (the "state") and which elements are better left as the "quantitative" aspects (extended state variables). In general, you should actively look for opportunities to capture the event history (what happened) as the "state" of the system, instead of storing this information in extended state variables.

For example, the Visual Basic calculator uses an extended state variable DecimalFlag to remember that the user entered the decimal point to avoid entering multiple decimal points in the same number. However, a better solution is to observe that entering a decimal point really leads to a distinct state "entering_the_fractional_part_of_a_number," in which the calculator ignores decimal points.

This solution is superior for a number of reasons. The lesser reason is that it eliminates one extended state variable and the need to initialize and test it. The more important reason is that the state-based solution is more robust because the context information is used very locally (only in this particular state) and is discarded as soon as it becomes irrelevant. Once the number is correctly entered, it doesn't really matter for the subsequent operation of the calculator whether that number had a decimal point.

The state machine moves on to another state and automatically "forgets" the previous context. The DecimalFlag extended state variable, on the other hand, "lays around" well past the time the information becomes irrelevant (and perhaps outdated!). Worse, you must not forget to reset DecimalFlag before entering another number or the flag will incorrectly indicate that indeed the user once entered the decimal point, but perhaps this happened in the context of the previous number.

Capturing behavior as the quantitative "state" has its disadvantages and limitations, too. First, the state and transition topology in a state machine must be static and fixed at compile time, which can be too limiting and inflexible. Sure, you can easily devise "state machines" that would modify themselves at runtime (this is what often actually happens when you try to recode "spaghetti" as a state machine). However, this is like writing self-modifying code, which indeed was done in the early days of programming but was quickly dismissed as a generally bad idea. Consequently, "state" can capture only static aspects of the behavior that are known a priori and are unlikely to change in the future.

For example, it's fine to capture the entry of a decimal point in the calculator as a separate state "entering_the_fractional_part_of_a_number," because a number can have only one fractional part, which is both known a priori and is not likely to change in the future. However, implementing the "cheap keyboard" without extended state variables and guard conditions would be practically impossible. This example points to the main weakness of the quantitative "state," which simply cannot store too much information (such as the wide range of keystroke counts). Extended state variables and guards are thus a mechanism for adding extra runtime flexibility to state machines.

Events
In the most general terms, an event is an occurrence in time and space that has significance to the system. Strictly speaking, in the UML specification the term event refers to the type of occurrence rather than to any concrete instance of that occurrence [OMG 07]. For example, Keystroke is an event for the keyboard, but each press of a key is not an event but a concrete instance of the Keystroke event. Another event of interest for the keyboard might be Power-on, but turning the power on tomorrow at 10:05:36 will be just an instance of the Power-on event.

An event can have associated parameters, allowing the event instance to convey not only the occurrence of some interesting incident but also quantitative information regarding that occurrence. For example, the Keystroke event generated by pressing a key on a computer keyboard has associated parameters that convey the character scan code as well as the status of the Shift, Ctrl, and Alt keys.

An event instance outlives the instantaneous occurrence that generated it and might convey this occurrence to one or more state machines. Once generated, the event instance goes through a processing life cycle that can consist of up to three stages. First, the event instance is received when it is accepted and waiting for processing (e.g., it is placed on the event queue). Later, the event instance is dispatched to the state machine, at which point it becomes the current event. Finally, it is consumed when the state machine finishes processing the event instance. A consumed event instance is no longer available for processing.