Management Information Systems Management Information Systems

MANAGING THE DIGITAL FIRM, 12TH EDITION CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

Learning Objectives

• Define IT infrastructure and describe its

components.
Chapter 5 • Identify and describe the stages and technology
drivers of IT infrastructure evolution.
IT INFRASTRUCTURE AND • Assess contemporary computer hardware platform
EMERGING TECHNOLOGIES trends.
VIDEO CASES • Assess contemporary software platform trends.
Case 1: Google and IBM Produce Cloud Computing
Case 2: IBM Blue Cloud is Ready‐to‐Use Computing • Evaluate the challenges of managing IT
Case 3: What the Hell is Cloud Computing?
Case 4: What is AJAX and How Does it Work?
infrastructure and management
g solutions.
Case 5: Yahoo's FireEagle Geolocation Service
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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

BART Speeds Up with a New IT Infrastructure IT Infrastructure

• Problem: Aging systems no longer able to provide • IT infrastructure:

information rapidly enough for timely decisions; too – Set of physical devices and software required to
unreliable for 24/7 operations p
operate enterprise
p
• Solutions: Replaced and upgraded hardware and software – Set of firmwide services including:
• Computing platforms providing computing services
andd used
d leading‐edge
l di d ttechnology
h l • Telecommunications services
– Grid computing • Data management services
– Virtualization • Application
l software
f services
• Physical facilities management services
– Blade servers • IT management, standards, education, research and development
services
• Demonstrates IT’s role in using resources more efficiently;
– “Service platform” perspective more accurate view
reducing computing energy usage,
usage modernizing services of value of investments
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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure
CONNECTION BETWEEN THE FIRM, IT INFRASTRUCTURE, AND BUSINESS CAPABILITIES
• Evolution of IT infrastructure
– General‐purpose mainframe & minicomputer era: 1959 to
p
present
• 1958 IBM first mainframes introduced
• 1965 Less expensive DEC minicomputers introduced
– Personal computer era: 1981 to present
• 1981 Introduction of IBM PC
• Proliferation
P lif ti iin 8080s, 90
90s resulted
lt d iin growth
th off personall software
ft
– Client/server era: 1983 to present
• Desktop clients net
networked
orked to ser
servers,
ers with
ith processing work
ork split
between clients and servers
FIGURE 5‐1 The services a firm is capable of providing to its customers, suppliers, and employees are a direct function
of its IT infrastructure. Ideally,
y, this infrastructure should support
pp the firm’s business and information • Network mayy be two‐tiered or multitiered ((N‐tiered))
systems strategy. New information technologies have a powerful impact on business and IT strategies, as
well as the services that can be provided to customers.
• Various types of servers (network, application, Web)
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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure

STAGES IN IT
INFRASTRUCTURE
• Evolution of IT infrastructure (cont.)
EVOLUTION
– Enterprise computing era: 1992 to present
Illustrated here are the typical
computing configurations • Move toward integrating disparate networks
networks,
characterizing each of the five
eras of IT infrastructure applications using Internet standards and enterprise
evolution.
pp
applications
FIGURE 5‐2
– Cloud Computing: 2000 to present
• Refers to a model of computing where firms and
individuals obtain computing power and software
pp
applications over the Internet or other network
• Fastest growing form of computing

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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure
A MULTITIERED CLIENT/SERVER NETWORK (N‐TIER)
STAGES IN IT
INFRASTRUCTURE
EVOLUTION (cont.)
Illustrated here are the typical
computing
p g configurations
g
characterizing each of the five
eras of IT infrastructure
evolution.

FIGURE 5‐2

FIGURE 5‐3 In a multitiered client/server network

network, client requests for service are handled by different levels of servers.
servers

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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure

MOORE’S LAW AND

• Technology drivers of infrastructure evolution MICROPROCESSOR
PERFORMANCE
– Moore’s law and microprocessing power Packing over 2 billion
transistors into a tinyy
• Computing
C ti power ddoubles
bl every 18 months
th microprocessor has
exponentially increased
• Nanotechnology: processing power. Processing
power has increased to over
500,000 MIPS (millions of
– Shrinks size of transistors to size comparable to size instructions per second).

of a virus FIGURE 5‐4

– Law of Mass Digital Storage

• The amount of data being stored each year
doubles

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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure

FALLING COST EXAMPLES OF

OF CHIPS NANOTUBES
Packing more transistors Nanotubes are tiny tubes
into less space has about 10,000 times thinner
driven down transistor than a human hair. They
cost dramatically as well
consist of rolled up sheets of
as the cost of the
carbon hexagons and have
products in which they
potential uses as minuscule
are used.
wires or in ultrasmall electronic
d
devices and
d are very powerful
f l
FIGURE 5‐5
conductors of electrical
current.

FIGURE 5‐6

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IT Infrastructure IT Infrastructure

THE COST OF
STORING DATA • Technology drivers of infrastructure evolution
DECLINES
EXPONENTIALLY
(cont.)
1950–2010 – Metcalfe’s Law and network economics
Since the first magnetic storage
device was used in 1955, the
cost of storing a kilobyte of • Value or power of a network grows
data has fallen exponentially,
doubling the amount of digital exponentially as a function of the number of
storage for each dollar
expended every 15 months, on network members
average.

FIGURE 5‐7
• As network members increase, more people
want to use it ((demand for network access
increases)

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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

IT Infrastructure IT Infrastructure
EXPONENTIAL DECLINES IN INTERNET COMMUNICATIONS COSTS
• Technology drivers of infrastructure evolution
(cont.)
– Declining communication costs and the Internet
• An estimated 1.5 billion people worldwide have
Internet access
• As communication costs fall toward a veryy small
number and approach 0, utilization of
p
communication and computing g facilities
explodes FIGURE 5‐8 One reason for the growth in the Internet population is the rapid decline in Internet connection and overall
communication costs. The cost per kilobit of Internet access has fallen exponentially since 1995. Digital
subscriber line (DSL) and cable modems now deliver a kilobit of communication for a retail price of around
2 cents.

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IT Infrastructure Infrastructure Components

• Technology drivers of infrastructure evolution • IT Infrastructure has 7 main components

(cont.) 1. Computer hardware platforms
– Standards and network effects 2
2. O
Operating
i system platforms
l f
• Technology standards: 3. Enterprise
p software applications
pp
– Specifications that establish the compatibility of
4. Data management and storage
products and the ability to communicate in a
network 5. Networking/telecommunications
ki / l i i platforms
l f
– Unleash ppowerful economies of scale and result in 6. Internet platforms
p
price declines as manufacturers focus on the 7. Consulting system integration services
products built to a single
p g standard

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IT Infrastructure Infrastructure Components

THE IT
INFRASTRUCTURE
• Computer hardware platforms
ECOSYSTEM
– Client machines
There are seven major
components that must be • Desktop PCs,
PCs mobile devices – PDAs,
PDAs laptops
coordinated to provide the firm
with a coherent IT
infrastructure. Listed here are
– Servers
major technologies and
suppliers for each component. • Blade
l d servers: ultrathin
l h computers stored
d in racks
k
FIGURE 5‐9 – Mainframes:
• IBM mainframe equivalent to thousands of blade
servers
– Top chip producers: AMD, Intel, IBM
– Top firms: IBM,
IBM HP,
HP Dell,
Dell Sun Microsystems
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Infrastructure Components Infrastructure Components

NEW TO THE TOUCH

• Operating system platforms Read the Interactive Session and discuss the following questions
– Operating systems • What problems does multitouch technology solve?
• Server level: 75% run Windows; 25% run Unix or Linux
• Client level: • What are the advantages and disadvantages of a multitouch
– 90% run Microsoft Windows (XP,
(XP 2000,
2000 CE
CE, etc.)
etc ) interface?
te ace? How
o use
useful
u iss it?
t? Explain.
pa .
– Handheld device OS’s (Android, iPhone OS) • Describe three business applications that would benefit
– Cloud computing OS’s (Google’s Chrome OS) f
from a multitouch
li h interface.
i f
• Enterprise software applications • What management, organization, and technology issues
– Enterprise application providers: SAP and Oracle must be addressed if you or your business was considering
– Middleware providers: BEA systems and computers with multitouch interfaces?

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Infrastructure Components Infrastructure Components

• Data management and storage • Networking/telecommunications platforms

– Database software: – Telecommunication services
• IBM (DB2)
(DB2), O
Oracle,
l Mi
Microsoftft (SQL SServer),
) • Telecommunications, cable, telephone
Sybase (Adaptive Server Enterprise), MySQL company charges for voice lines and Internet
access
– Physical data storage:
• AT&T, Verizon
• EMC Corp (large‐scale
(large scale systems), Seagate,
– Network
N k operatingi systems:
Maxtor, Western Digital
• Windows Server, Novell, Linux, Unix
– Storage area networks (SANs):
– Network hardware providers:
• Connect multiple storage devices on dedicated • Cisco,, Alcatel‐Lucent,, Nortel,, Juniper
p Networks
network
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Infrastructure Components Infrastructure Components

• Internet platforms • Consulting and system integration services

– Hardware, software, management services to – Even large firms do not have resources for a full
support company Web sites, sites (including Web range of support for new,
new complex infrastructure
hosting services) intranets, extranets – Software integration: ensuring new
– Internet hardware
h d server market:
k Dell,ll i f
infrastructure works
k with
i h llegacy systems
HP/Compaq, IBM – Legacy
g y systems:
y older TPS created for
– Web development tools/suites: Microsoft mainframes that would be too costly to replace
((FrontPage,
g , .NET)) IBM ((WebSphere)
p ) Sun ((Java),
), g
or redesign
independent software developers: Adobe, – Accenture, IBM Global Services, EDS, Infosys,
RealMedia Wipro
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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

Contemporary Hardware Platform Trends Contemporary Hardware Platform Trends

• The emerging mobile digital platform • Grid computing

– Cell phones, smartphones (BlackBerry, iPhone) – Connects geographically remote computers into a
g network to combine processing
single p g power
p and
• Have
H assumeddddatat ttransmission,
i i W
Web
b surfing,
fi create virtual supercomputer
e‐mail and IM duties
– Provides cost savings,
savings speed,
speed agility
– Netbooks:
• Small, low
low‐cost
cost lightweight notebooks • Virtualization
optimized for wireless communication and core – Allows single physical resource to act as multiple
computing tasks resources ((i.e.,, run multiple
p instances of OS))
– Tablets (iPad) – Reduces hardware and power expenditures
– Networked e‐readers (Kindle) – Facilitates
F ilit t hardware
h d centralization
t li ti
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Contemporary Hardware Platform Trends Contemporary Hardware Platform Trends

• Cloud computing • Green computing

– On‐demand (utility) computing services obtained – Practices and technologies for manufacturing, using,
over network disposing of computing and networking hardware
• Infrastructure as a service • Autonomic computing
• Platform as a service – Industry‐wide
y effort to develop
p systems
y that can configure,
g
heal themselves when broken, and protect themselves
• Software as a service from outside intruders
– Cl
Cloud
d can b
be public
bli or private
i t – Similar to self‐updating antivirus software; Apple and
– Allows companies to minimize IT investments Microsoft both use automatic updates
– Drawbacks: Concerns of security, reliability • High performance, power‐saving processors
– Multi‐core processors

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Contemporary Hardware Platform Trends Contemporary Software Platform Trends

IS GREEN COMPUTING GOOD FOR BUSINESS? • Linux and open‐source software

Read the Interactive Session and discuss the following questions
–OOpen‐source software:
f Produced
P d d by b community
i off
• What business and social problems does data programmers, free and modifiable by user
center power consumption cause? – Linux: Open‐source
Open source software OS
• Software for the Web
• What solutions are available for these problems?
– Java:
Which are environment‐friendly? • Object‐oriented programming language
• What are the business benefits and costs of these • Operating system, processor‐independent
solutions? – Ajax
• Asynchronous JavaScript and XML
• Should all firms move toward green computing? • Allows client and server to exchange small pieces of
Why or why not? data without requiring the page to be reloaded
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Contemporary Software Platform Trends Contemporary Software Platform Trends

• Web Services • SOA: Service‐oriented architecture

– Software components that exchange information using – Set of self‐contained services that communicate with
Web standards and languages
each other to create a workingg software application
pp
– XML: Extensible
ibl Markup
k Language
• More powerful and flexible than HTML – Software developers reuse these services in other
• Tagging allows computers to process data automatically combinations to assemble other applications as
– SOAP: Simple Object Access Protocol needed
• Rules for structuringg messages
g enablingg applications
pp to p
pass data • Example: an “invoice
invoice service”
service to serve whole firm for
and instructions
calculating and sending printed invoices
– WSDL: Web Services Description Language
• Framework for describing Web service and capabilities – Dollar Rent A Car
– UDDI: Universal Description, Discovery, and Integration • Uses Web services to link online booking system with
• Directory for locating Web services Southwest Airlines
Airlines’ Web site
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Contemporary Software Platform Trends Contemporary Software Platform Trends

HOW DOLLAR RENT A CAR USES WEB SERVICES
• Software outsourcing and cloud services
– Three external sources for software:
1. Software packages and enterprise software
1
2. Software outsourcing (domestic or offshore)
– Domestic:
» Primarily for middleware, integration services, software
support
– Offshore:
» Primarily for lower level maintenance,
maintenance data entry,
entry call
centers, although outsourcing for new‐program
FIGURE 5‐10 Dollar Rent A Car uses Web services to provide a standard intermediate layer of software to “talk” to other
development is increasing
companies’ information systems. Dollar Rent A Car can use this set of Web services to link to other
companies’ information systems without having to build a separate link to each firm’s systems.

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Contemporary Software Platform Trends Contemporary Software Platform Trends

CHANGING
• Three external sources for software (cont.) SOURCES OF FIRM
SOFTWARE
3. Cloud‐based software services
In 2010, U.S. firms will spend
• Software as a service (SaaS) over $265 billion on software
software.
About 40 percent of that ($106
• Accessed with Web browser over Internet billion) will originate outside
the firm, either from enterprise
• Ranges from free or low‐cost
low cost services for individuals to software vendors selling
firmwide applications or
business and enterprise software individual application service
providers leasing or selling
• Users pay on subscription or per‐transaction
per transaction software modules
modules. Another 10
percent ($10 billion) will be
• E.g. Salesforce.com provided by SaaS vendors as an
online cloud‐based service.

• Service
Ser ice Le
Level
el Agreements (SLAs)
(SLAs): formal agreement FIGURE 5‐11

with service providers

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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

Contemporary Software Platform Trends Management Issues

• Software outsourcing and cloud services (cont.) • Dealing with platform and infrastructure change
– Mashups – As firms shrink or grow, IT needs to be flexible and
• Combinations of two or more online applications
applications, such scalable
as combining mapping software (Google Maps) with – Scalability:
local content • Ability to expand to serve larger numbers of users
– Apps – For mobile computing and cloud computing
• Small pieces of software that run on the Internet,
Internet on • New
N policies
li i andd procedures
d ffor managing
i these
th new
your computer, or on your cell phone platforms
– iPhone, BlackBerry, Android
• Contractual agreements with firms running clouds and
• Generally delivered over the Internet distributing software required

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Management Issues Management Issues

• Management
g and governance
g • Making wise infrastructure investments
– Who controls IT infrastructure? – Amount to spend on IT is complex question
• Rent vs. buy,
y, outsourcingg
– How
H should
h ld IT department
d t t be
b organized?
i d?
– Total cost of ownership (TCO) model
• Centralized • Analyzes direct and indirect costs
– Central IT department makes decisions • Hardware, software account for only about 20% of TCO
• Decentralized • Other costs: Installation,, training,
g, support,
pp ,
– Business unit IT departments make own decisions maintenance, infrastructure, downtime, space and
– How are costs allocated between energy
• TCO can be reduced through use of cloud services,
divisions, departments? greater centralization and standardization of hardware
and soft
software
are reso
resources
rces
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CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES CHAPTER 5: IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES

Management Issues Management Issues

COMPETITIVE FORCES MODEL FOR IT INFRASTRUCTURE
• Competitive forces model for IT
infrastructure investment
1.
1 Market demand for firm’s services
2. Firm’s business strategy
3. Firm’s IT strategy, infrastructure, and cost
4
4. Information technology assessment
5. Competitor firm services
6. Competitor firm IT infrastructure investments
FIGURE 5‐12 There are six factors you can use to answer the question, “How much should our firm spend on IT
infrastructure?”

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