Chapter 5 it infrastructure and emerging technologies

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IT Infrastructure and Emerging Technologies

Chapter 5

VIDEO CASES

Case 1: ESPN.com: Getting to eXtreme Scale on the Web

Case 2: Salesforce.com: Managing by Smartphone

Case 3: Acxiom’s Strategic Advantage: IBM’s Virtual Blade Platform

Instructional Video 1: Google and IBM Produce Cloud Computing

Instructional Video 2: IBM Blue Cloud Is Ready-to-Use Computing

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Management Information Systems

Chapter 5: IT Infrastructure and Emerging Technologies

• What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

• What are the components of IT infrastructure?

• What are the current trends in computer hardware platforms?

• What are the current trends in computer software platforms?

• What are the challenges of managing IT infrastructure and management solutions?

LEARNING OBJECTIVES

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Chapter 5: IT Infrastructure and Emerging Technologies

• Problem: Competitive and fast-changing industry; opportunities from new technologies

• Solutions: – IT infrastructure investments

– Cloud computing services

– Deploy energy-efficient data center

• Demonstrates IT’s role in reducing costs, ability to also serve social goals (energy efficiency)

Portugal Telecom Offers IT Infrastructure for Sale

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Chapter 5: IT Infrastructure and Emerging Technologies

• IT infrastructure:

– Set of physical devices and software required to operate enterprise

– Set of firmwide services including: • Computing platforms providing computing services

• Telecommunications services

• Data management services

• Application software services

• Physical facilities management services

• IT management, education, and other services

– ““““Service platform”””” perspective

• More accurate view of value of investments

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Chapter 5: IT Infrastructure and Emerging Technologies

The services a firm is capable of providing to its customers, suppliers, and employees are a direct function of

its IT infrastructure. Ideally, this infrastructure should support the firm’s business and information 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.

FIGURE 5-1

CONNECTION BETWEEN THE FIRM, IT INFRASTRUCTURE, AND BUSINESS CAPABILITIES

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Chapter 5: IT Infrastructure and Emerging Technologies

• Evolution of IT infrastructure

– General-purpose mainframe and minicomputer era: 1959 to present

• 1958: IBM first mainframes introduced

• 1965: Less expensive DEC minicomputers introduced

– Personal computer era: 1981 to present • 1981: Introduction of IBM PC

• Proliferation in 80s, 90s resulted in growth of personal software

– Client/server era: 1983 to present • Desktop clients networked to servers, with processing work split between

clients and servers

• Network may be two-tiered or multitiered (N-tiered)

• Various types of servers (network, application, Web)

IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

• Evolution of IT infrastructure (cont.)

– Enterprise computing era: 1992 to present

• Move toward integrating disparate networks, applications using Internet standards and enterprise applications

– Cloud and mobile computing: 2000 to present

• Cloud computing: computing power and software applications supplied over the Internet or other network

– Fastest growing form of computing

IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

Illustrated here are the typical

computing configurations

characterizing each of the five

eras of IT infrastructure

evolution.

FIGURE 5-2

STAGES IN IT INFRASTRUCTURE EVOLUTION

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Chapter 5: IT Infrastructure and Emerging Technologies

Illustrated here are the typical

computing configurations

characterizing each of the five

eras of IT infrastructure

evolution.

FIGURE 5-2

STAGES IN IT INFRASTRUCTURE EVOLUTION (cont.)

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Chapter 5: IT Infrastructure and Emerging Technologies

In a multitiered client/server network, client requests for service are handled by different levels of servers.FIGURE 5-3

A MULTITIERED CLIENT/SERVER NETWORK (N-TIER)

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Chapter 5: IT Infrastructure and Emerging Technologies

• Technology drivers of infrastructure evolution

– Moore’s law and microprocessing power

• Computing power doubles every 18 months

• Nanotechnology:

– Shrinks size of transistors to size comparable to size

of a virus

– Law of Mass Digital Storage

• The amount of data being stored each year doubles

IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

Packing more than 5 billion

transistors into a tiny

microprocessor has

exponentially increased

processing power. Processing

power has increased to more

than 200,000 MIPS (2.6 billion

instructions per second).

FIGURE 5-4

MOORE’S LAW AND MICROPROCESSOR PERFORMANCE

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Chapter 5: IT Infrastructure and Emerging Technologies

Packing more transistors into

less space has driven down

transistor cost dramatically as

well as the cost of the products

in which they are used.

FIGURE 5-5

FALLING COST OF CHIPS

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Chapter 5: IT Infrastructure and Emerging Technologies

Nanotubes are tiny tubes about

10,000 times thinner than a

human hair. They consist of

rolled up sheets of carbon

hexagons and have the

potential uses as minuscule

wires or in ultrasmall electronic

devices and are very powerful

conductors of electrical current.

FIGURE 5-6

EXAMPLES OF NANOTUBES

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Chapter 5: IT Infrastructure and Emerging Technologies

Since the first magnetic storage

device was used in 1955, the

cost of storing a kilobyte of

data has fallen exponentially,

doubling the amount of digital

storage for each dollar

expended every 15 months on

average. Cloud storage services

provide 100 gigabytes of

storage for about $1.00.

FIGURE 5-7

THE COST OF STORING DATA DECLINES EXPONENTIALLY 1950–2012

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Chapter 5: IT Infrastructure and Emerging Technologies

• Technology drivers of infrastructure evolution (cont.)

– Metcalfe’s Law and network economics

• Value or power of a network grows exponentially as a function of the number of network members.

• 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

• Technology drivers of infrastructure evolution (cont.)

– Declining communication costs and the Internet

• An estimated 3 billion people worldwide have Internet access.

• As communication costs fall toward a very small number and approach zero, utilization of communication and computing facilities explodes.

IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

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 less than one penny.

FIGURE 5-8

EXPONENTIAL DECLINES IN INTERNET COMMUNICATIONS COSTS

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Chapter 5: IT Infrastructure and Emerging Technologies

• Technology drivers of infrastructure evolution (cont.)

– Standards and network effects

• Technology standards:

– Specifications that establish the compatibility of

products and the ability to communicate in a

network

– Unleash powerful economies of scale and result in

price declines as manufacturers focus on the

products built to a single standard

IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

• IT Infrastructure has seven main components

1. Computer hardware platforms

2. Operating system platforms

3. Enterprise software applications

4. Data management and storage

5. Networking/telecommunications platforms

6. Internet platforms

7. Consulting system integration services

IT Infrastructure Components

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Chapter 5: IT Infrastructure and Emerging Technologies

There are seven major

components that must be

coordinated to provide the firm

with a coherent IT

infrastructure. Listed here are

major technologies and

suppliers for each component.

FIGURE 5-9

THE IT INFRASTRUCTURE ECOSYSTEM

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Chapter 5: IT Infrastructure and Emerging Technologies

• Computer hardware platforms

– Client machines

• Desktop PCs, laptops

• Mobile computing: smartphones, tablets

– Servers

• Blade servers: ultrathin computers stored in racks

– Mainframes:

• IBM mainframe equivalent to thousands of blade servers

– Top chip producers: Intel, AMD

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Chapter 5: IT Infrastructure and Emerging Technologies

• Operating system platforms

– Operating systems

• Server level: 65% run Unix or Linux; 35% run Windows

• Client level:

– 90% run Microsoft Windows (Windows 8, Windows 7, etc.)

– Mobile/multitouch (Android, iOS)

– Cloud computing (Google’s Chrome OS)

• Enterprise software applications

– Enterprise application providers: SAP and Oracle

– Middleware providers: IBM, Oracle

IT Infrastructure Components

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Chapter 5: IT Infrastructure and Emerging Technologies

• Data management and storage

– Database software:

• IBM (DB2), Oracle, Microsoft (SQL Server), Sybase (Adaptive Server Enterprise), MySQL

– Physical data storage:

• EMC Corp (large-scale systems), Seagate, Western Digital

– Storage area networks (SANs):

• Connect multiple storage devices on dedicated network

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Chapter 5: IT Infrastructure and Emerging Technologies

• Networking/telecommunications platforms – Telecommunication services

• Telecommunications, cable, telephone company charges for voice lines and Internet access

• AT&T, Verizon

– Network operating systems: • Windows Server, Linux, Unix

– Network hardware providers: • Cisco, Alcatel-Lucent, \Juniper Networks

IT Infrastructure Components

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Chapter 5: IT Infrastructure and Emerging Technologies

• Internet platforms

– Hardware, software, management services to support company Web sites (including Web- hosting services), intranets, extranets

– Internet hardware server market: IBM, Dell, Sun (Oracle), HP

– Web development tools/suites: Microsoft (Visual Studio and .NET), Oracle-Sun (Java), Adobe, Real Networks

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Chapter 5: IT Infrastructure and Emerging Technologies

• Consulting and system integration services

– Even large firms do not have resources for full range of support for new, complex infrastructure

– Leading consulting firms: Accenture, IBM Global Services, HP, Infosys, Wipro Technologies

– Software integration: ensuring new infrastructure works with legacy systems

– Legacy systems: older TPS created for mainframes that would be too costly to replace or redesign

IT Infrastructure Components

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Chapter 5: IT Infrastructure and Emerging Technologies

• The mobile digital platform

– Smartphones (iPhone, Android, and Blackberry)

• Data transmission, Web surfing, e-mail, and IM

– Netbooks:

• Small lightweight notebooks optimized for wireless communication and core tasks

– Tablets (iPad)

– Networked e-readers (Kindle and Nook)

– Wearable devices (smart watches, smart glasses)

Current Trends in Hardware Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

Read the Interactive Session and discuss the following questions

Interactive Session: Management

• Wearables aren’t just a consumer phenomenon: they have the potential to change the way organizations and workers conduct business. Discuss the implications of this statement.

• What management, organization, and technology issues would have to be addressed if a company was thinking of equipping its workers with a wearable computing device?

• What kinds of businesses are most likely to benefit from mobile computing? Select a business and describe how a mobile computing device could help that business improve operations or decision making.

Wearable Computers Go to Work

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Chapter 5: IT Infrastructure and Emerging Technologies

• BYOD (Bring your own device)

– Allowing employees to use personal mobile devices in workplace

• Consumerization of IT

– New information technology emerges in consumer markets first and spreads to business organizations

– Forces businesses and IT departments to rethink how IT equipment and services are acquired and managed

Current Trends in Hardware Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Quantum computing

– Uses quantum physics to represent and operate on data

– Dramatic increases in computing speed

• Virtualization

– Allows single physical resource to act as multiple resources (i.e., run multiple instances of OS)

– Reduces hardware and power expenditures

– Facilitates hardware centralization

Current Trends in Hardware Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Cloud computing

– On-demand (utility) computing services obtained over network

• Infrastructure as a service (IaaS)

• Platform as a service (PaaS)

• Software as a service (SaaS)

– Cloud can be public or private

– Allows companies to minimize IT investments

– Drawbacks: Concerns of security, reliability

– Hybrid cloud computing model

Current Trends in Hardware Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

In cloud computing, hardware

and software capabilities are a

pool of virtualized resources

provided over a network, often

the Internet. Businesses and

employees have access to

applications and IT

infrastructure anywhere, at any

time, and on any device.

Figure 5-10

CLOUD COMPUTING PLATFORM

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Chapter 5: IT Infrastructure and Emerging Technologies

Read the Interactive Session and discuss the following questions

Interactive Session: Organizations

• What business benefits do cloud computing services

provide? What problems do they solve?

• What are the disadvantages of cloud computing?

• How do the concepts of capacity planning,

scalability, and TCO apply to this case? Apply these

concepts both to Amazon and to subscribers of its

services.

• What kinds of businesses are most likely to benefit

from using cloud computing? Why?

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Chapter 5: IT Infrastructure and Emerging Technologies

• Green computing (Green IT) – Practices and technologies for manufacturing,

using, disposing of computing and networking hardware

– Reducing power consumption a high priority

– IT responsible for 2% U.S. power demand

• High performance, power-saving processors

– Multi-core processors

– Power-efficient microprocessors

Current Trends in Hardware Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Open-source software:

– Produced by community of programmers

– Free and modifiable by user

– Examples: Apache web server, Mozilla Firefox browser, OpenOffice

• Linux

– Open-source OS used in high-performance computing

– Used in mobile devices, local area networks, Web servers, Android OS

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Software for the Web

– Java:

• Object-oriented programming language

• Operating system, processor-independent

– HTML/HTML5

• Web page description language

• HTML5 is latest evolution

– Embeds media, animation

– Supports cross-platform apps, offline data storage

– Ruby and Python

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Web Services

– Software components that exchange information using Web standards and languages

– XML: Extensible Markup Language

• More powerful and flexible than HTML

• Tagging allows computers to process data automatically

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• SOA: Service-oriented architecture

– Set of self-contained services that communicate with one another to create a working software application

– Software developers reuse these services in other combinations to assemble other applications as needed

• Example: an “invoice service” to serve whole firm for calculating and sending printed invoices

– Dollar Rent A Car

• Uses Web services to link online booking system with Southwest Airlines’ Web site

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

Dollar Rent A Car uses Web services to provide a standard intermediate layer of software to “talk” to other 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.

FIGURE 5-11

HOW DOLLAR RENT A CAR USES WEB SERVICES

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Chapter 5: IT Infrastructure and Emerging Technologies

• Software outsourcing and cloud services

– Three external sources for software:

• Software packages and enterprise software

• Software outsourcing

– Contracting outside firms to develop software

• Cloud-based software services

– Software as a service (SaaS)

– Accessed with Web browser over Internet

– Service Level Agreements (SLAs): formal agreement with

service providers

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

In 2014, U.S. firms will spend more than $279 billion on software. About 35 percent of that will originate

outside the firm, either from enterprise software vendors selling firm-wide applications or individual

application service providers leasing or selling software modules. Another 4 percent ($11 billion) will

be provided by SaaS vendors as an online cloud-based service.

Figure 5-12

CHANGING SOURCES OF FIRM SOFTWARE

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Chapter 5: IT Infrastructure and Emerging Technologies

• Software outsourcing and cloud services (cont.)

– Mashups

• Combinations of two or more online applications, such as combining mapping software (Google Maps) with local content

– Apps

• Small pieces of software that run on the Internet, on your computer, or on mobile device

• Refer commonly to mobile applications

– iPhone, Android

• Tie user to platform

Current Trends in Software Platforms

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Chapter 5: IT Infrastructure and Emerging Technologies

• Dealing with platform and infrastructure change

– As firms shrink or grow, IT needs to be flexible and scalable

– Scalability:

• Ability to expand to serve larger number of users

– For mobile computing and cloud computing

• New policies and procedures for managing these new platforms

• Contractual agreements with firms running clouds and distributing software required

Challenges of Managing IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

• Management and governance

– Who controls IT infrastructure?

– How should IT department be organized?

• Centralized

– Central IT department makes decisions

• Decentralized

– Business unit IT departments make own decisions

– How are costs allocated between divisions, departments?

Challenges of Managing IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

• Making wise infrastructure investments

– Amount to spend on IT is complex question

• Rent vs. buy, cloud computing

• Outsourcing

– Total cost of ownership (TCO) model

• Analyzes direct and indirect costs

• Hardware, software account for only about 20% of TCO

• Other costs: Installation, training, support, maintenance, infrastructure, downtime, space, and energy

– TCO can be reduced

• Use of cloud services, greater centralization and standardization of hardware and software resources

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Chapter 5: IT Infrastructure and Emerging Technologies

• Competitive forces model for IT infrastructure investment

1. Market demand for firm’s services

2. Firm’s business strategy

3. Firm’s IT strategy, infrastructure, and cost

4. Information technology assessment

5. Competitor firm services

6. Competitor firm IT infrastructure investments

Challenges of Managing IT Infrastructure

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Chapter 5: IT Infrastructure and Emerging Technologies

There are six factors you can use to answer the question, “How much should our firm spend on IT

infrastructure?”

FIGURE 5-13

COMPETITIVE FORCES MODEL FOR IT INFRASTRUCTURE

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Chapter 5: IT Infrastructure and Emerging Technologies