1 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 Telecommunications and Networks

2 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives  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.

3 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives (continued)  Identify the basic components, functions, and types of telecommunications networks used in business.  Explain the functions of major types of telecommunications network hardware, software, media, and services.

4 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Section I The Networked Enterprise

5 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Networking the Enterprise  Networking business and employees  Connecting them to customers, suppliers, and other stakeholders.

6 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Telecommunications

7 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Telecommunications (continued)  Industry  More competitive  More options for the firm  Technology  Unrestricted connectivity  Easy access for end users  Open systems  Use common standards for hardware, software, applications, & networking.

8 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Telecommunications (continued)  Technology (continued)  High degree of interoperability  Digital networks  Higher transmission speeds  Moves larger amounts of information  Greater economy  Lower error rates  Multiple types of communications on the same circuits

9 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Telecommunications (continued)  Technology (continued)  Fiber-optic lines & cellular, PCS, satellite & other wireless technologies  Faster transmission speeds

10 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Trends in Telecommunications (continued)  Business applications  Dramatic increase in the number of feasible telecommunication applications.  Cut costs, reduce lead times, shorten response times, support e-commerce, improve collaboration, share resources, lock in customers & suppliers, & develop new products & services

11 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Business Value of Telecommunications Networks

12 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. The Internet  A network of networks  Popular uses   Instant messaging  Browsing the World Wide Web  Newsgroups and chat rooms

13 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. The Internet (continued)  The business value of the Internet

14 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Intranets  Within an organization  Uses Internet technologies  Business value of Intranets  Used for information sharing, communication, collaboration, & support of business processes.  Web publishing  Comparatively easy, attractive, & lower cost alternative for publishing & accessing multimedia business information

15 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Intranets (continued)  Business Operations & Management  Used for developing & deploying critical business applications  Supports operations and managerial decision making

16 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Extranets  Network links that use Internet technologies to interconnect the firm’s intranet with the intranets of customers, suppliers, or other business partners  Consultants, subcontractors, business prospects, & others

17 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Extranets (continued)  Business value  Improve communication with customers and business partners  Gain competitive advantage in  Product development  Cost savings  Marketing  Distribution  Leveraging their partnerships

18 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Section II Telecommunications Network Alternatives

19 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Network Alternatives

20 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. A Telecommunications Network Model

21 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. A Telecommunications Network Model (continued)  Consists of five basic components  Terminals  Any input/output device that uses telecommunication networks to transmit or receive data  Telecommunication processors  Support data transmission and reception between terminals and computers

22 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. A Telecommunications Network Model (continued)  Telecommunications channels  The medium over which data are transmitted and received  Computers  Interconnected by telecommunications networks  Telecommunications control software  Control telecommunications activities & manage the functions of telecommunications networks

23 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks  Wide Area Networks (WAN)  Cover a large geographic area.  Local Area Networks (LAN)  Connect computers & other information processing devices within a limited physical area.  Connected via ordinary telephone wiring, coaxial cable, or wireless radio & infrared systems

24 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks (continued)  Virtual Private Networks  A secure network that uses the Internet as its main backbone network, but relies on fire walls and other security features

25 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks (continued)

26 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks (continued)  Client/Server Networks  Clients – end user PCs or NCs  Server – helps with application processing and also manages the network

27 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks (continued)

28 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Types of Telecommunications Networks (continued)  Network computing  “the network is the computer”  Thin clients process small application programs called “applets.”

29 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. A Telecommunications Network Model (continued)  Peer-to-Peer (P2P)  Two major models  Central server architecture  Pure peer-to-peer

30 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Media  Twisted-pair wire  Coaxial cable  Minimizes interference and distortion  Allows high-speed data transmission  Fiber optics  Glass fiber that conducts pulses of light generated by lasers  Size and weight reduction  Increased speed and carrying capacity

31 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Media (continued)

32 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Wireless Technologies  Terrestrial Microwave  Line-of-sight path between relay stations spaced approximately 30 miles apart.  Communications Satellites  Geosynchronous orbits  Serve as relay stations for communications signals transmitted from earth stations

33 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Wireless Technologies (continued)  Cellular & PCS Systems  Each cell is typically from one to several square miles in area.  Each cell has its own low-power transmitter or radio relay antenna.  Computers & other communications processors coordinate & control the transmissions to/from mobile users as they move from one cell to another

34 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Wireless Technologies (continued)  Wireless LANs  Spread spectrum  Wi-Fi (wireless fidelity)  Wireless Web  Uses Web-enabled information appliances  Very thin clients

35 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Processors  Modems (modulation/demodulation)  Changes signals from analog to digital and back to analog  Multiplexers  Allows a single communication channel to carry simultaneous data transmissions from many terminals

36 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Processors (continued)  Internetwork Processors  Switches  Makes connections between telecomm circuits so a message can reach its intended destination  Router  Interconnects networks based on different rules or protocols

37 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Processors (continued)  Hub  Port switching communications processor  Gateway  A processor that interconnects networks that use different communications architecture

38 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Software  Provides a variety of communications support services including connecting & disconnecting communications links & establishing communications parameters such as transmission speed, mode, and direction.

39 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Telecommunications Software (continued)  Network Management  Traffic management  Security  Network monitoring  Capacity planning

40 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Network Topologies  Star  Ties end user computers to a central computer  Considered the least reliable  Ring (sometimes called Token Ring)  Ties local computer processors together in a ring on a more equal basis.  Considered more reliable & less costly

41 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Network Topologies (continued)  Bus  Local processors share the same bus, or communications channel  Tree is a variation which ties several bus networks together

42 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Network Topologies (continued)

43 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Network Architectures & Protocols  Protocols  A standard set of rules & procedures for the control of communications in a network  Standards for the physical characteristics of cables and connectors  Network Architecture  Goal is to promote an open, simple, flexible, efficient telecommunications environment

44 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Network Architectures and Protocols (continued)  OSI Model  TCP/IP  Transmission Control Protocol/Internet Protocol  Used by the Internet and all intranets and extranets

45 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Bandwidth Alternatives  Bandwidth is the frequency range of a telecommunications network  Determines the channel’s maximum transmission rate  Measured in bits per second (bps) or baud  Narrow-band  Low-speed transmission  Broadband  High-speed transmission

46 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Switching Alternatives  Circuit switching  Packet switching  Cell switching

47 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions  The Internet is the driving force behind developments in telecommunications, networks, and other information technologies. Do you agree or disagree?  How is the trend toward open systems, connectivity, and interoperability related to business use of the Internet, intranets, and extranets?

48 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  How will wireless information appliances and services affect the business use of the Internet and the Web?  What are some of the business benefits and management challenges of client/server networks? Network computing? Peer-to-peer networks?

49 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  What is the business value driving so many companies to rapidly install and extend intranets throughout their organizations?  What strategic competitive benefits do you see in a company’s use of extranets?

50 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  Do you think that business use of the Internet, intranets, and extranets has changed what businesspeople expect from information technology in their jobs?  Do you believe that the insatiable demand for everything wireless, video, and Web-enabled will be the driving force behind developments in telecommunications, networking, and computing technologies for the foreseeable future?

51 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 – FedEx versus UPS  Why does telecommunications play such a key role in the competition between FedEx and UPS?  Why does “information about the package” have such a strategic business value in the express delivery business?

52 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 (continued)  What telecommunications products or services would you recommend that FedEx or UPS use to improve their competitive position in the overnight delivery and shipping business?  Consider the different management styles of FedEx and UPS. What makes them work?

53 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 (continued)  What other IT or web-based services could FedEx and UPS offer their business or consumer customers?

54 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 – Nielsen Media Research  Managing bandwidth use  Monitoring and enforcing  Centralizing operations  Testing & tuning applications

55 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 (continued)  How do the network bandwidth problems experienced by the companies in this case affect their business performance?  What network management tactics are used to help solve these problems?

56 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 (continued)  What other network management tactics would you recommend to help solve the business problems identified in this case?  What are some network usage problems not mentioned in the case that could be solved by better network management?

57 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 3 – Link Staffing, FMC, AutoWeb, & APL Logistics  Why do companies implement virtual private networks?  What is the business case for outsourcing VPN services?

58 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 3 (continued)  What role does network management software play in implementing and managing VPNs?  What challenges did each company face and how did they use VPNs to help answer those challenges?

59 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 4 – Dow Chemical  Why have companies been reluctant to rely on Internet telephony instead of traditional telephone systems for business use?  Do the potential business benefits support Dow Chemical’s decision to implement a new global VOIP network?

60 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 4 (continued)  Would you recommend that more companies implement IP telephony services? Why?

61 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 5 – General Motors Corp.  What is the business value of wireless LANs to GM?  What are the security vulnerabilities of wireless LANs? Is GM taking appropriate security measures?

62 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 5 (continued)  What are some other possible business applications of wireless LANs?  What are some of the benefits and challenges of LANs in a small business environment?