Chapter 6

Telecommunications
and Networks
James A. O'Brien, and George Marakas.
Management Information Systems with MISource
2007, 8th ed. Boston, MA: McGraw-Hill, Inc.,
2007. ISBN: 13 9780073323091
Learning Objectives
 Understand the concept of a network
 Apply Metcalfe’s law in understanding the value of a network
 Identify major developments and trends in the industries,
technologies, and business applications of telecommunications
and Internet technologies
 Provide examples of the business value of Internet, intranet, and
extranet applications
 Identify the basic components, functions, and types of
telecommunications networks used in business
 Explain the functions of major components of
telecommunications network hardware, software, media, and
services
 Explain the concept of client/server networking
 Understand the two forms of peer-to-peer networking
 Explain the difference between digital and analog signals
 Identify the various transmission media
Chapter 6 Telecommunications and Networks 2
Case 1 Wireless Mobile
Applications
 Best Buy’s Geek Squad remains connected via
a Pocket PC phone
 It connects wirelessly to Best Buy’s IT and
ordering system
 It also have Web browsing capabilities, for
access to Google and Yahoo maps
 Handwriting recognition software bypasses
small keyboard problem
 Voice recognition is being tested

Chapter 6 Telecommunications and Networks 3

Case 1 Wireless Mobile
Applications
 Biggest problems
 Lack of application software
 Reduced functionality of software that exists
 Requires middleware to synchronize data
between back-end systems and the devices
 Applications don’t always meet worker’s
needs

Chapter 6 Telecommunications and Networks 4

Case Study Questions
 What are the business advantages and limitations of
the Best Buy Geek Squad’s use of their wireless
Pocket PC mobile devices?
 How have they overcome the limitations?
 What are the software development challenges of
wireless mobile devices?
 How are MedStar Health and Unifi meeting
those challenges?
 Why don’t the companies in this case use some of the
thousands of software packages available for their
wireless mobile devices?
 What are the advantages and limitations of this
approach?
Chapter 6 Telecommunications and Networks 5
Network Concepts
 A network is an interconnected or interrelated
chain, group, or system
 The number of possible connections on a
network is N(N–1) or N2 –N
 N = number of nodes (points of connection)
 Example: 10 computers on a network =
10(10–1)
= 10x9 = 90 possible connections

Chapter 6 Telecommunications and Networks 6

Metcalfe’s Law
 The usefulness, or utility, of a network equals
the square of the number of users
 The more users on a network, the more useful

it becomes
 Until critical mass is reached, a change in
technology only affects the technology
 Once critical mass is attained, social, political,
and economic systems change
 Example: The Internet is growing
exponentially. We can expect more value, for
less cost, virtually every time we log on.
Chapter 6 Telecommunications and Networks 7
Telecommunication Trends

Chapter 6 Telecommunications and Networks 8

 Telecommunications-Based
Services

Chapter 6 Telecommunications and Networks 9

Internet Networking Technologies
 Internet networking technologies are being
used as technology platform
 Web browser suites
 HTML Web page editors
 Network management software
 Firewalls
 Being applied in Internet, intranet, and
extranet applications
 Reinforces previous move toward client/server
networks based on open-systems architecture

Chapter 6 Telecommunications and Networks 10

Open Systems
 Open systems use common standards for
hardware, software, applications, and networks
 Internet networking technologies are a
common standard for open systems
 Connectivity
 Open systems provide greater connectivity
and network interoperability
 Middleware may be needed to help diverse
systems work together

Chapter 6 Telecommunications and Networks 11

Middleware
 Middleware
 A general term for any programming that
mediates between two separate programs
 Allows a particular database to access other
databases without custom programming
 Commonly known as the “plumbing” of an
information system
 It routes data and information between back-
end data sources and end user applications
 An essential component of any IT
infrastructure
Chapter 6 Telecommunications and Networks 12
Digital Network Technologies
 Telecommunications are being revolutionized by
switch from analog to digital
 Analog: voice-oriented transmission
 Digital: discrete pulse transmission
 Benefits
 Higher transmission speeds
 Moves larger amounts of information
 Greater economy and much lower error rates
 Transmits multiple types of communications
(data, voice, video) on the same circuits

Chapter 6 Telecommunications and Networks 13

Wireless Technologies
 Fiber-optic
 Uses pulses of laser-generated light
 Reduced size and installation effort
 Vastly greater communication capacity
 Faster transmission speeds
 Freedom from electrical interference
 Satellite Transmission
 Can move massive quantities of data, audio,
and video over global networks
 Especially useful in isolated areas

Chapter 6 Telecommunications and Networks 14

Business Application Trends
 Telecommunications networks now play a vital
and pervasive role in Web-enabled…
 E-business processes
 Electronic commerce
 Enterprise collaboration
 Other applications that support operations,
management, and strategic objectives

Chapter 6 Telecommunications and Networks 15

Internet2
 Next generation of the Internet
 High-performance
 Different infrastructure than the current
Internet
 Will not replace the current Internet
 In use at over 200 universities, scientific
institutions, communications corporations
 May never become totally open
 Users are connected via Abilene, a backbone
that supports throughput of 10 Gbps
 Infinite bandwidth

Chapter 6 Telecommunications and Networks 16

Value of Telecommunications
Networks

Chapter 6 Telecommunications and Networks 17

The Internet Revolution
 The Internet has become a global information
superhighway
 Millions of smaller, private networks operating
independent of, or in harmony with, each
other
 10 servers in 1991 to over 46 million today
 Sustained growth in excess of 1 million
servers per month
 No central computer system
 No governing body
 Based on common standards

Chapter 6 Telecommunications and Networks 18

Internet Service Providers
 ISP
 A company that specializes in providing easy
access to the Internet
 For a monthly fee, provides software, user
name, password, and Internet access
 ISPs themselves are connected to one another
through network access points
 One ISP can easily connect to another to
obtain addresses of websites or user nodes

Chapter 6 Telecommunications and Networks 19

Internet Applications
 Most popular Internet applications and uses
 E-mail
 Instant messaging
 Browsing the Web
 Newsgroups
 Chat rooms
 Publish opinions, subject matter, creative work
 Buy and sell
 Downloading (data, software, reports, pictures,
music, videos)

Chapter 6 Telecommunications and Networks 20

Business Use of the Internet

Chapter 6 Telecommunications and Networks 21

Business Value of the Internet

Chapter 6 Telecommunications and Networks 22

The Role of Intranets
 Many companies have sophisticated and
widespread intranets, offering…
 Detailed data retrieval
 Collaboration
 Personalized customer profiles
 Links to the Internet
 Intranets use Internet technologies
 Web browsers and servers
 TCP/IP network protocols
 HTML publishing and databases

Chapter 6 Telecommunications and Networks 23

Intranets
 Intranets are protected by…
 Passwords
 Encryption
 Firewalls
 Customers, suppliers, and other business
partners can access an intranet via extranet
links

Chapter 6 Telecommunications and Networks 24

Business Value of Intranets
 Intranets support
 Communications and collaboration
 Business operations and management
 Web publishing
 Intranet portal management

Chapter 6 Telecommunications and Networks 25

Intranets as Information Portals

Chapter 6 Telecommunications and Networks 26

Extranets
 Network links that use Internet technologies to
connect the intranet of a business to the
intranets of another
 Virtual Private Networks
 Direct private network links, or private secure
Internet links between companies
 Unsecured Extranet
 Link between a company and others via the
Internet, relying on encryption of sensitive
data and firewall security systems

Chapter 6 Telecommunications and Networks 27

Extranet Connectivity

Chapter 6 Telecommunications and Networks 28

Business Value of Extranets
 Web browser technology makes customer and
supplier access to intranets easier and faster
 Another way to build and strengthen strategic
relationships
 Enables and improves collaboration between a
business, customers, and partners
 Facilitates online, interactive product development
and marketing

Chapter 6 Telecommunications and Networks 29

Telecommunications Network
Alternatives
 Telecommunications is a highly technical,
rapidly changing field
 Most business professionals don’t need
detailed technical knowledge
 However, understanding basic components
and their characteristics is necessary
 Can help you make informed decisions about
telecommunications alternatives

Chapter 6 Telecommunications and Networks 30

Case 2 Wireless Sensor Networks
 HP experimenting with wireless networked
sensors
 Reinventing how companies manage the flow
of goods
 Wireless sensor devices (motes) combine a
circuit board with networking and application
software
 Powered by a pair of AA batteries
 Mesh networking
 Each device wakes for a fraction of a second
to transmit information to its nearest neighbor
Chapter 6 Telecommunications and Networks 31
Case 2 Wireless Sensor Networks
 Other uses
 Ground-sensor networks can detect illegal
crossings of people or vehicles
 Monitoring of industrial plants and ships
 Remotely adjusting lighting and heat
 Testing soil for pollutants
 Detecting chemical storage leaks
 Monitoring vibration levels
 Analyzing traffic patterns

Chapter 6 Telecommunications and Networks 32

Case Study Questions
 What are some of the business benefits
associated with using wireless networks to collect
and transmit data?
 What are some of the challenges being faced in
this use of wireless technologies?
 What solutions can you offer?
 The use of wireless networking as described in
the case is both innovative and functional.
 What other business uses can you envision
for this approach?

Chapter 6 Telecommunications and Networks 33

Telecommunications Network Model
 A telecommunications network is any
arrangement where
 A sender transmits a message
 To a receiver
 Over a channel
 Consisting of some sort of medium

Chapter 6 Telecommunications and Networks 34

Telecommunications Network
Components
 Terminals
 Any input/output device that uses networks
to transmit or receive data
 Telecommunications processors
 Devices that support data transmission,
reception
 Telecommunications channels
 Media over which data are transmitted,
received
 Computers
 All sizes and types
Chapter 6 Telecommunications and Networks 35
Telecommunications Network
Components
 Telecommunications control software
 Controls telecommunications activities
 Manages the functions of telecommunications
networks
 Includes network management programs of all
kinds
 Telecommunications monitors (mainframes)
 Network operating systems (network servers)
 Web browsers (microcomputers)

Chapter 6 Telecommunications and Networks 36

Network Component Alternatives

Chapter 6 Telecommunications and Networks 37

Types of Communications
Networks
 Primary types of communications networks
 Wide Area
 Local Area
 Virtual Private
 Client/Server
 Peer-to-peer

Chapter 6 Telecommunications and Networks 38

Wide Area Network (WAN)
 Telecommunication network that covers a large
geographic area

Chapter 6 Telecommunications and Networks 39

Local Area Network (LAN)
 Connects
computers
within a limited
physical area,
such as an
office,
classroom, or
building

Chapter 6 Telecommunications and Networks 40

Virtual Private Networks (VPN)
 Used to establish secure intranets and extranets
 The Internet is the main backbone network
 Relies on network firewalls, encryption, and
other security features to build a “pipe”
through the Internet
 Creates a private network without the high
cost of a separate proprietary connection

Chapter 6 Telecommunications and Networks 41

Virtual Private Network

Chapter 6 Telecommunications and Networks 42

Client/Server Networks
 Clients
 End user personal computers or networked
computers
 Servers
 Used to manage the networks
 Processing
 Shared between the clients and servers
 Sometimes called a two-tier architecture
 Larger computer systems are being replaced with
multiple client/server networks

Chapter 6 Telecommunications and Networks 43

Client/Server Network

Chapter 6 Telecommunications and Networks 44

Network Computing
 Networks are the central computing resource of
the organization
 Thin clients provide a browser-based user
interface for processing applets
 Thin clients include
 Network computers
 Net PCs
 Other low-cost network devices or
information appliances

Chapter 6 Telecommunications and Networks 45

Network Computing
 Application and database servers provide
 The operating system
 Application software
 Applets
 Databases
 Database management software
 Sometimes called a three-tier client/server
model because it consists of
 Thin clients
 Application servers
 Database servers

Chapter 6 Telecommunications and Networks 46

Network Computing

Chapter 6 Telecommunications and Networks 47

Peer-to-Peer Networks
 Central Server Architecture
 P2P file-sharing software connects all PCs
to a central server
 When a PC requests a file, the server
searches
all active peers on the network
 The server sends the requesting PC a list of
links to all active peers who have the file
 Clicking a link connects the two PCs and
automatically transfers the file to the
requesting PC
Chapter 6 Telecommunications and Networks 48
Peer-to-Peer Networks
 Pure Peer-to-Peer Architecture
 No central directory or server
 File-sharing software connects one PC to
another online user
 When you request a file, the software
searches every online user and sends you a
list of active file names
 Clicking a link automatically transfers the file
from that user’s hard drive to yours

Chapter 6 Telecommunications and Networks 49

Central Server Peer-to-Peer
Networks
 Advantages
 Can better protect the integrity and security
of the content and users of the network
 Disadvantages
 Directory server can be slowed or
overwhelmed by too many users or technical
problems

Chapter 6 Telecommunications and Networks 50

Peer-to-Peer Network Diagrams

Chapter 6 Telecommunications and Networks 51

Digital and Analog Signals
 Analog or digital refers to the method used to
convert information into an electrical signal
 Analog: an electrical current is generated that

is proportional to the quantity being observed

 Digital: the quantity being observed is
expressed as a number
 Analog: if the temperature is 83 degrees, a

measuring device would generate 8.3 volts

 Digital: a measurement of 83 degrees

would be displayed as the number 83

Chapter 6 Telecommunications and Networks 52
Telecommunications Media
 Twisted-Pair Wire
 Ordinary telephone wire
 Copper wire is twisted
into pairs
 Coaxial Cable
 Sturdy copper or
aluminum wire wrapped
with spacers to insulate
and protect it
 Fiber-Optic Cable
 One or more hair-thin
filaments of glass
fiber wrapped in a
protective jacket
Chapter 6 Telecommunications and Networks 53
The Problem of “The Last Mile”
 Network providers use fiber optic cable as a
communications backbone
 Houses connected to the backbone are wired
with twisted pair
 Users don’t benefit from the faster, better
technology

Chapter 6 Telecommunications and Networks 54

Wireless Technologies
 Terrestrial Microwave
 Earthbound microwave systems transmit
high-speed radio signals
 Follows a line-of-sight path between relay systems
spaced about 30 miles apart
 Communications Satellites
 Serve as relay stations
 Use microwave radio signals
 Earth stations beam signals to the satellites
 Not suitable for interactive, real-time processing

Chapter 6 Telecommunications and Networks 55

Wireless Technologies
 Cellular and PCS Telephone and Pager Systems
 Geographic areas are divided into cells
 Each cell has a low-power transmitter or radio relay
antenna
 Computers and other communications processors
coordinate and control the transmissions to and from
mobile users
 Wireless LANS
 Uses wireless radio-wave technology to
connect PCs within an office or a building
 Can be high-frequency, similar to digital
cellular, or low frequency (spread spectrum)

Chapter 6 Telecommunications and Networks 56

Wireless Technologies
 Bluetooth
 Short-range wireless technology
 Connects PCs to devices, such as a printer
 Fairly low cost to implement
 Other Wireless Systems
 Cellular phones
 Mobile radio
 PDAs
 Telecommunications networks now play vital and
pervasive roles in
 Web-enabled e-business processes
 Electronic commerce
 Enterprise collaboration
 Other applications that support business operations,
management, and strategic objectives
Chapter 6 Telecommunications and Networks 57
The Wireless Web
 Wireless Internet access is growing as Web-
enabled information appliances proliferate
 Smart telephones, pagers, PDAs
 All are very thin clients in wireless networks

Chapter 6 Telecommunications and Networks 58

Telecommunications Processors
 Modems
 The most common type of communications
processor
 Converts a digital signal to an analog
frequency that can be transmitted over phone
lines, then back into a digital signal
 Modulation and demodulation

Chapter 6 Telecommunications and Networks 59

Comparing Technologies

Chapter 6 Telecommunications and Networks 60

Inter-Network Processors
 Switch… makes connections between
telecommunications circuits in a network
 Router… intelligent communications processor
that interconnects networks based on different
protocols
 Hub… a port-switching communications
processor
 Gateway… connects networks with different
communications architectures

Chapter 6 Telecommunications and Networks 61

Communications Processors

Chapter 6 Telecommunications and Networks 62

Communications Processors
 Multiplexer… allows a single communications
channel to carry simultaneous data
transmissions from many terminals
 In time division multiplexing (TDM), the
multiplexer divides the time each terminal can
use the high-speed into short time slots
 Multiplexers increase the number of
transmissions possible
 Does not increase the number of physical
data channels

Chapter 6 Telecommunications and Networks 63

Telecommunications Software
 May reside in PCs, servers, mainframes, and
communications processors
 Vital part of all telecommunications networks
 Used to manage network performance
 WANs often use telecommunications
monitors or teleprocessing monitors
 Other networks use operating system
software
 Middleware helps diverse networks
communicate with each other

Chapter 6 Telecommunications and Networks 64

Network Management Functions
 Traffic Management
 Manage network resources and traffic to
avoid congestion and optimize service levels
 Security
 Provide authentication, encryption, firewall, auditing,
and enforcement
 Network Monitoring
 Troubleshoot and watch over the network, alerting
administrators of potential problems
 Capacity Planning
 Survey network resources, traffic patterns, and users’
needs
 Determine the best way to accommodate the needs
of the network as it grows and changes
Chapter 6 Telecommunications and Networks 65
Network Topologies
 Topology - The structure of a network
 Star Network - Ties end user computers to a central
computer
 Ring Network - Ties local computer processors together
in a ring on a relatively equal basis
 Bus Network - Local processors share the same
communications channel
 Mesh Network - Uses direct communications lines to
connect some or all of the computers in the ring to
each other
 Switch - A message-switching computer that handles
data communication between autonomous
local computers
Chapter 6 Telecommunications and Networks 66
Network Topologies

Chapter 6 Telecommunications and Networks 67

Network Architectures and
Protocols
 Protocol
 A standard set of rules and procedures for the control of
communications in a network
 Handshaking
 The process of exchanging predetermined
signals and characters
 Establishes a telecommunications session between terminals
and computers
 Network Architecture
 Master plan of standard protocols, hardware, software, and
interfaces between end users
and computer systems
 Goal is to promote an open, simple, flexible,
and efficient telecommunications environment
Chapter 6 Telecommunications and Networks 68
OSI and TCP/IP Models
 Open Systems Interconnection (OSI) Model
 A seven-layer model that serves as a
standard model for network architectures
 Model for how messages should be
transmitted between two points in a network
 Each layer adds functions
 Transmission Control Protocol/Internet Protocol
(TCP/IP)
 A five-layer telecommunications protocol used
by the Internet

Chapter 6 Telecommunications and Networks 69

OSI and TCP/IP Models

Chapter 6 Telecommunications and Networks 70

Voice Over IP
 Internet Telephony
 Using an Internet connection to pass voice
data using IP instead of a telephone network
 Often referred to as voice over IP or VoIP
 Works like a regular phone, but skips long-
distance charges
 Runs over standard network infrastructure
 Requires a well-configured network to work
smoothly

Chapter 6 Telecommunications and Networks 71

Bandwidth
 Bandwidth
 The frequency range of a telecommunications
channel that determines the maximum
transmission rate
 Speed and capacity typically measured in bits

per second (bps)

 Sometimes call baud rate
 Transmission Rates
 Narrow-band = low speed
 Broadband = high speed

Chapter 6 Telecommunications and Networks 72

Transmission Speeds

Chapter 6 Telecommunications and Networks 73

Switching Alternatives
 Circuit Switching
 Switch opens a circuit to establish a link
between a sender and a receiver
 It remains open until the communication
session is completed
 Packet Switching
 Breaks messages into groups called packets
 Transmits packets separately

Chapter 6 Telecommunications and Networks 74

Network Interoperability
 Ensures that anyone anywhere on one network
can communicate with anyone anywhere on
another network
 From a telecommunications perspective, no
need to speak a common language
 Telecommunications would be possible without
 Complete accessibility
 Transparency
 Seamless interoperability across all networks

Chapter 6 Telecommunications and Networks 75

Case 3 Leading the Way for VoIP
 VoIP works by
 Digitizing a voice signal
 Chopping it into packets
 Sending them over a network or the Internet
 Reassembling them at the destination
 VoIP allowed the Minnesota Dept. of Labor
to cut its phone bill in half

Chapter 6 Telecommunications and Networks 76

Case Study Questions
 What are the main benefits that can be gained
by companies that switch to VoIP systems?
 What are some of the major cost factors that
may limit a positive rate of return from
investments in VoIP projects?
 Should more companies switch to VoIP
systems?

Chapter 6 Telecommunications and Networks 77

Case 4 Serving Citizens with
Wireless
 Earth Alert Emergency Management System in
Maryland provides
 Devices to communicate warnings to
individuals before a disaster
 Tools to collect timely information after a
disaster
 Aurora, Colorado
 Connects police and fire department vehicles
via wireless connections

Chapter 6 Telecommunications and Networks 78

Case Study Questions
 What is the business value of advanced mobile
technologies in Maryland’s emergency
management services?
 In what other government services could GPS
serve to provide business value?
 As there disadvantages or risks associated with
the deployment of GPS systems to monitor the
location of people?

Chapter 6 Telecommunications and Networks 79