McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved Chapter 13 Creating Innovative Organizations

13-2 Learning Outcomes 13.1 Compare disruptive and sustaining technologies 13.2 Explain how the Internet caused disruption among businesses

13-3 Learning Outcomes 13.3 Define the relationship between the Internet and the World Wide Web 13.4 Describe the Internet’s impact on information along with how these changes are affecting business

13-4 Disruptive Technology How can a company like Polaroid go bankrupt? Digital Darwinism – implies that organizations which cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction

13-5 Disruptive Versus Sustaining Technology What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? –Disruptive technology – a new way of doing things that initially does not meet the needs of customers –Sustaining technology – produces an improved product customers are eager to buy

13-6 Disruptive Versus Sustaining Technology

13-7 Disruptive Versus Sustaining Technology Companies that capitalized on disruptive technology

13-8 The Internet – Business Disruption One of the biggest forces changing business is the Internet Organizations must be able to transform as markets, economic environments, and technologies change Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology

13-9 Disruptive Versus Sustaining Technology Internet penetration by world region

13-10 Evolution of the Internet The Internet began as an emergency military communications system operated by the Department of Defense Gradually the Internet moved from a military pipeline to a communication tool for scientists to businesses –Internet – computer networks that pass information from one to another using common computer protocols –Protocol – standards that specify the format of data as well as the rules to be followed during transmission

13-11 Evolution of The World Wide Web World Wide Web (WWW) – a global hypertext application system that uses the Internet as its transport mechanism Hypertext transport protocol (HTTP) – the Internet standard that supports the exchange of information on the WWW

13-12 What is the Internet? - A world-wide network of computer networks (some are not computer at all, like network printers) TCP IP - Since 1982, all connections between computers use a low-level communication protocol called TCP( Transmission Control Protocol )/IP( Internet Protocol ) -TCP/IP hides the differences among devices connected to the Internet -In most cases a higher level protocol runs on top of TCP/IP

13-13 What is the Internet (Cont.)? A network of 1000s of interconnected networks connecting millions of computers Backbones (international reach) Network Service Providers (NSPs) – major telecommunication companies WorldCom, AT&T & Sprint Access/delivery sub-networks local and regional Internet Service Providers (ISPs) (e.g. Eastlink, Sympatico, AT&T WorldNet) Private institutional networks connecting organizational servers ( e.g. StFX network)

13-14 Internet network architecture

13-15 The Internet

13-16 No one owns the Internet. It has no formal management organization.

13-17 Evolution of the Internet

13-18 Internet Growth Trends 1977: 111 hosts on Internet 1981: 213 hosts 1983: 562 hosts 1984: 1,000 hosts 1986: 5,000 hosts 1987: 10,000 hosts 1989: 100,000 hosts 1992: 1,000,000 hosts 2001: 150 – 175 million hosts 2002: over 200 million hosts 2004: over 800 million hosts 2010, about 80% of the planet are on the Internet

13-19 Evolution of The World Wide Web

13-20 Evolution of the World Wide Web The Internet’s impact on information –Easy to compile –Increased richness –Increased reach –Improved content

13-21 New Business Models and Value Propositions The internet changes economics related to access to information The Internet reduces information asymmetry: –one party involved in a transaction has more information that the other –Example: buying a car – The Internet eliminates the tradeoff between richness and reach of information –Richness: The amount and quality of information that a business can supply to and collected from customer –Reach: measure of how many people a business can connect and how many products it can offer those people.

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13-23 Before the Internet Organizations attempted to integrate information systems with those of suppliers and customers Organizations have been trying to become digital for a long time. Used own technology to integrate info (non-standard) Difficult, time consuming and expensive The Internet is: –A universal, inexpensive and easy to use set of technologies and technology standard –More on this in later chapter

13-24 Internet Technology affects the Organization Internet technology allows organizations to communicate directly with their constituents at a very low cost Removes layers between the organization and its partners (disintermediation) Reduces transaction costs Around-the-clock service: Web sites available to consumers 24 hours a day

13-25 Internet-summary: Lowers Search Costs: The time & money it takes to find a suitable product & the best price Shrinks Information Asymmetry: No party in a transaction has more information than the other Increases Richness: Depth and detail of information Increases Reach: Number of people contacted

13-26 The WWW: What and How The WWW is an Internet Application –Like all Internet applications, it is fundamentally made up of two components: A Client (Browser) A Server (Web Server)

13-27 The Browser and The Server The original static model of Web Serving: The HyperText Transfer Protocol (HTTP) enables web pages to be requested and transferred between the browser and server Web Browser Web Server HTTP Request Web Page File System

13-28 WWW - The User Interface Hypermedia is an extension of the ‘hypertext’ concept to allow objects such as graphics to be references to other objects HTML,The language used to describe WWW documents is HTML, The HyperText Mark-up Language

13-29 What is the difference between the Internet and the Web? The Internet is a physical network The Web is a capability accomplished with a set of software applications, primarily Web browsers

13-30 Web or Internet? The Web uses one of the protocols, HTTP, that runs on the Internet There are several others application and protocols (telnet, FTP mailto, file, news, etc.)

13-31 Various Internet Protocols mailtoSMTP [Simple Mail Transfer Protocol] (mailto Protocol) -A protocol for sending and receiving s FTP (File Transfer Protocol) – A communication standard to transfer files over the Internet TelnetTelnet (Telnet Protocol) – remote login to another computer Internet Relay Chat (IRC Protocol) – Communication via chat newsUsenet (news Protocol) Discussion groups HTTPWeb ( HTTP Protocol)

13-32 Evolution of The World Wide Web File formats offered over the WWW

13-33 Web Browsers First browsers were text-based Mosaic - NCSA (Univ. of Illinois), in early 1993 –First to use a Graphical User Interface (GUI), led to explosion of Web use Browsers are clients - always initiate, servers react The Web supports variety of protoclos, but the most common one is HyperText Transfer Protocol (HTTP) Most common Web browsers are: MS Internet Explorer, Netscape, Opera and Mozilla

13-34 Web Servers They are programs that provide documents to requesting browsers. They are slave programs. Provide responses to browser requests, either existing documents or dynamically built documents The most commonly used Web servers are Apache, MS Internet Information Server (IIS) and Netscape Server Other servers include FTP server, Telnet server, e- mail server.

13-35 Evolution of The World Wide Web The Internet makes it possible to perform business in ways not previously imaginable It can also cause a digital divide –Digital divide – when those with access to technology have great advantages over those without access to technology

13-36 The term "Web 2.0" (2004–present) is commonly associated with web applications that facilitate interactive information sharing, interoperability, user- centered design, and collaboration on the World Wide Web. WEB 2.0

13-37 WEB 2.0 Examples of Web 2.0 include web-based communities, hosted services, web applications, social-networking sites, video-sharing sites, wikis, blogs, mashups (syndications),

13-38 WEB 2.0 Web a set of economic, social, and technology trends that collectively form the basis for the next generation of the Internet

13-39 WEB 2.0 Timeline of Web 1.0

13-40 Semantic Web [WEB 3.0] The Semantic Web is an evolving development of the World Wide Web in which the meaning (semantics) of information and services on the web is defined, making it possible for the web to "understand" and satisfy the requests of people and machines to use the web content

13-41 Demos The Future Internet: Service Web 3.0 Evolution Web 1.0, Web 2.0 to Web 3.0