Chapter 7

IT Infrastructure
Evolution

6.1 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

OBJECTIVES

• Define IT infrastructure and describe the

components and levels of IT infrastructure

• Identify and describe the stages of IT

infrastructure evolution

• Identify and describe the technology drivers of IT

infrastructure evolution

6.2 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

OBJECTIVES (Continued)

• Assess contemporary computer hardware

platform trends

• Assess contemporary software platform trends

6.3 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

The Connection between the Firm, IT Infrastructure, and

Business Capabilities

6.4 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Levels of IT Infrastructure

Three major levels of infrastructure:

• Public
• Entails public infrastructure such as
internet, national back bones e.g. Uganda’s
NBI
• Enterprise
• Enterprise wide infrastructure
• Business unit
6.5 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Levels of IT Infrastructure

6.6 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Evolution of IT Infrastructure: 1950–2005

• Electronic accounting machine era: (1930–1950)

• General-purpose mainframe and minicomputer

era: (1959 to present)

• Personal computer era: (1981 to present)

• Client/server era: (1983 to present)

• Enterprise internet computing era: (1992 to

present)
6.7 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Eras in IT Infrastructure Evolution

6.8 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

A Multitiered Client/Server Network (N-tier)

6.9 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Technology Drivers of Infrastructure Evolution

• Moore’s law and microprocessing power
• Moore's law is the observation that, over the
history of computing hardware, the number of
transistors on integrated circuits doubles
approximately every two years

• The law of mass digital storage

• The amount of digital information is roughly
doubling every year: the amount of digital
information is roughly doubling every year and the
cost of information storage is approximately
halving
6.10 © 2006 by Prentice Hall
 • Metcalfe’s law and network economics
• A network’s value to participants grows exponentially as the network
takes on more members. As the number of members in a network grows
linearly, the value of the entire system grows exponentially and
theoretically continues to grow forever as members increase.

• Declining communications costs and the Internet

• Rapid decline in costs of communication and the exponential growth in
the size of the Internet is a driving force that affects the IT infrastructure.
As communication costs fall toward a very small number and approach
zero, utilization of communication and computing facilities explodes.
• Standards and network effects
• Growing agreement in the technology industry to use computing and
communication standards. Technology standards unleash powerful
economies of scale and result in price declines as manufacturers focus
on the products built to a single standard. Without economies of scale,
computing of any sort would be far more expensive than is currently the
case.

6.11 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Moore’s Law and Microprocessor Performance

6.12 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Falling Cost of Chips

6.13 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

The Capacity of Hard Disk Drives Grows Exponentially,

1980–2004

Source: Authors.

6.14 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

IT INFRASTRUCTURE

Exponential Declines in Internet Communications Costs

Source: Authors.

6.15 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Computer Hardware Platforms

• $110 billion annually spent in the United States

• Dominance of Intel, AMD, and IBM 32-bit

processor chips at the client level

• Server market increasingly dominated by

inexpensive generic processors from the same
manufacturers

6.16 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Computer Hardware Platforms (Continued)

• Strong server market growth for 64 bit generic

processors from AMD, Intel and IBM

• Blade servers replace box servers

• Mainframes continue as a presence working as

very large servers

6.17 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Operating System Platforms

• $100 billion annually spent in the United States

• Continued dominance of Microsoft OS in the

client (95%) and handheld market (45%)

• Growing dominance of Linux (UNIX) in the

corporate server market (85%)

• Windows 2002 and 2003 Server remains strong in

smaller enterprises and workgroup networks

6.18 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Enterprise Software Applications

• $165 billion annually spent in the United States

for basic enterprise software infrastructure

• SAP, Oracle, PeopleSoft (now Oracle), and Siebel

dominate this market.

• Middleware firms like BEA and JD Edwards serve

smaller firms, and work also in the Web services
space.

6.19 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Enterprise Software Applications

(Continued)

• The enterprise market is consolidating around a

few huge firms that have gained significant
market share such as SAP and Oracle.

• Microsoft is expanding into smaller firm

enterprise systems where it can build on its
Windows server-installed base.

6.20 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Data Management and Storage

• $70 billion annually spent in the United States.

• Oracle and IBM continue to dominate the

database software market.

• Microsoft (SQL Server) and Sybase tend to serve

smaller firms.

• Open source Linux MySQL now supported by HP

and most consulting firms as an inexpensive,
powerful database used mostly in small to mid-
size firms.
6.21 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Data Management and Storage (Continued)

• $35 billion annually spent in the United States for

physical hard disk storage

• The hard disk market is consolidating around a

few huge firms like EMC and smaller PC hard disk
firms like Seagate, Maxtor, and Western Digital

6.22 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Networking/Telecommunications Platforms

• $150 billion annually spent on networking and

telecommunications hardware

• $700 billion annually spent on telecommunications

services, e.g. phone and Internet connectivity

• Local area networking still dominated by

Microsoft Server (about 75%) but strong growth
of Linux challenges this dominance

6.23 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Internet Platforms

• $32 billion annually spent on Internet

infrastructure in the United States

• Internet hardware server market concentrated in

Dell, HP, and IBM

• Prices falling rapidly by up to 50% in a single year

for low-power servers

6.24 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

INFRASTRUCTURE COMPONENTS

Internet Platforms (Continued)

• Open-source Apache remains the dominant Web

server software, followed by Microsoft’s IIS
server.

• Sun’s Java grows as the most widely used tool

for interactive Web applications.

• Microsoft and Sun settle a long-standing law suit

and agree to support a common Java.

6.25 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

The four major themes in contemporary software

platform evolution:

• Linux and open-source software

• Java

• Web services and service-oriented architecture

• Software outsourcing

6.26 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

The Rise of Linux and Open-Source Software

• Open-source software is free and can be modified
by users.

• Developed and maintained by a worldwide

network of programmers and designers under the
management of user communities

6.27 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Java Is Everywhere
Java:
• An operating system—Independent, processor-
independent, object-oriented programming
language

• Applications written in Java can run on any

hardware for which a Java virtual machine has
been defined.

• Java is embedded in PDAs, cell phones, and

browsers.

• Java is a leading interactive programming

environment for the Web.
6.28 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Software for Enterprise Integration:

• One of the most important software trends of the
last decade is the growth of “enterprise in a box”
or the purchase of enterprise-wide software
systems by firms.

• Rather than build all their own software on a

custom basis, large firms increasingly purchase
enterprise applications prewritten by specialized
software firms like SAP, Oracle, PeopleSoft, and
others.
6.29 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Software for Enterprise Integration: (Continued)

• The goal is to achieve an integrated firm-wide
information environment, reduce cost, increase
reliability, and to adopt business best practices
which are captured by the software.

• Enterprise software firms achieve economies of scale

by selling the same software to hundreds of firms.

• Today's enterprise systems are capable of

integrating older legacy applications with newer
Web-based applications.
6.30 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Enterprise Application Integration (EAI) Software Versus

Traditional Integration

EAI software (a) creates a common platform through which all applications can freely communicate with each other. EAI
requires much less programming than traditional point-to-point integration (b).

6.31 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Web Services and Service-Oriented Architecture

Web Services:
• An alternative to enterprise systems is to use new
Web-based standards to create a communication
platform allowing older applications to
communicate with newer applications.

• Web services refers to a set of loosely coupled

software components that exchange information
with each other using Web communication
standards and languages.

6.32 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Web Services and Service-Oriented Architecture

(Continued)
• Web services permit computer programs to
communicate with one another and share
information without rewriting applications, or
disturbing older legacy systems.

6.33 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

How Dollar Rent a Car Uses Web Services

6.34 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Software Outsourcing
• Today large and small firms purchase most of
their software from outside vendors.

Three kinds of outsourcing:

• Purchase of software packages

• Using application service providers

• Custom outsourcing

6.35 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Purchase of Software Packages and Enterprise Software

Enterprise software packages: prewritten off-the-shelf
software
Application Service Providers:

• A business that delivers and manages

applications and computer services from remote
computer centers to multiple users using the
Internet or a private network

6.36 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Purchase of Software Packages and Enterprise Software

(Continued)
Application Service Providers:
• Rather than purchase hardware and software, firms can
go onto the Internet and find providers who offer the
same functionality over the entertainment, and charge
on a per-user or license basis.

• Example: Salesforce.com provides customer

relationship management and sales force management
services to firms
6.37 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY SOFTWARE PLATFORM TRENDS

Software Outsourcing of Custom Applications

• A firm contracts custom software development or

maintenance of existing legacy programs to
outside firms, often in low-wage countries.

• Example: Dow Chemical hired IBM for $1.1 billion

to create an integrated communication system for
50,000 Dow employees in 63 countries.

• Why would Dow not build this system itself?

6.38 © 2006 by Prentice Hall
 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY INFRASTRUCTURE TRENDS

Mobile platform:
Mobile platform: more and more business computing
is moving from PCs and desktop machines to mobile
devices like cell phones and smartphones. Data
transmissions, Web surfing, e-mail and instant
messaging, digital content displays, and data
exchanges with internal corporate systems are all
available through a mobile digital platform. Netbooks,
small low-cost lightweight subnotebooks that are
optimized for wireless communication and Internet
access, are included.

6.39 © 2006 by Prentice Hall

 Management Information Systems
Chapter 6 IT Infrastructure and Platforms

CONTEMPORARY INFRASTRUCTURE TRENDS

Grid and Cloud Computing

Grid computing: connects geographically remote
computers into a single network to create a “virtual
supercomputer” by combining the computational power
of all computers on the grid.

Cloud computing: a model of computing where firms

and individuals obtain computing power and software
applications over the Internet, rather than purchasing
their own hardware and software. Data are stored on
powerful servers in massive data centers, and can be
accessed by anyone with an Internet connection and
6.40 standard Web browser. © 2006 by Prentice Hall