1. Business Technologies 2011 Class 7
Technological Change

2. Sources Change http://en.wikipedia.org/wiki/Moore’s_law
Cloud Computing
Let IT Rise, Survey of Corporate IT, The Economist, 23 October 2008
Preparing for the Future: Understanding the Seven Capabilities of Cloud Computing, Bala Iyer and John Henderson, MISQ Executive, June 2010
 The ICT Industry
The End of Wintel, The Economist, 31 July 2010

3. Moore’s Observation
The number of transistors on an integrated circuit has doubled approximately every two years
It is accurate, in part because the it is used to guide long-term planning and to set targets for R&D

4. Computations Per Second

5. Lithography Road Map

6. More Observations Cooper’s Kryder’s
The number of bits that can be broadcasted in the useful radio spectrum has doubled every two-and-a-half years for the past century years
Starting with Marconi’s radio transmission in 1895
Kryder’s
Magnetic disk storage density doubles annually
The first disk drive (1956) stored 2,000 bits, while today’s disks store 100 billions
The density of storage is more important to enabling new applications than advances in semiconductors, Kryder remarks. Without it, Apple's iTunes and on-demand TV would still be a dream

7. Cloud Computing

8. Evolution of Organizational Computing

9. Hardware: Google’s vs. Microsoft
Google is operating about three dozen data centers with more than 2m servers
There is little information about the hardware and software Google uses
Microsoft’s center at Northlake, Illinois: $500m, 46,000 square meters, 200 shipping containers, each with 2,500 PCs, totaling 400,000 servers
Installation
a truck places the container inside a bare steel-and-concrete building
Workers connect it to the electric grid, the computer network and a water supply for cooling
the necessary software is downloaded automatically
within four days all the servers are ready

10. Why?
Operators of computing clouds have shown that this is a far more efficient way of running IT systems
The way in which corporate IT infrastructure has grown is unsustainable
Most corporate data centers are complex, underused hardware that require more and more people, space and power to keep them going HP
used to have 85 data centers with 19,000 IT workers worldwide
it expects to cut this to 6 facilities with 8,000 employees, in the US
reducing its IT budget from 4% to 2% of revenue
More can be done with less
העתיד – בעננים
בעוד העולם העיסקי ממשיך להתלבט האם המשבר העולמי הגיע לנקודת השפל, וכיצד יראה העולם לאחר המשבר, תעשיית המיחשוב יודעת כבר היום שהעתיד יהיה חדש ונפלא (כמובן), ואפילו יש לו שם – מיחשוב עננים! הכוח המיחשובי ושירותי התוכנה יופרדו מן המחשבים בסביבתנו הפיזית ויתקבלו ממרכזי חישוב מרוחקים באמצעות תקשורת. הרעיונות הללו אינם מאד חדשים – יבמ למשל דיברה על אספקת כוח מיחשובי כמו שמספקים כוח חשמלי כבר לפני עשר שנים – אבל בשנים האחרונות התברר שהחזון הטכנולוגי הפך למציאות עיסקית, וכרגיל בשנים האחרונות סוכן השינוי הוא חברת גוגל. גוגל מפעילה כשלושים מרכזי חישוב ברחבי העולם המכילים כשני מיליון מחשבים, ואנחנו צורכים את השירותים של גוגל על הרשת – הנייחת או הניידת – מבלי שיש לנו מושג היכן המחשבים. אנחנו מסתפקים בידיעה המעורפלת שהשירותים מגיעים מן "הענן" המיחשובי של גוגל. במקביל לשינוי הגוגליאני הזה, חברות גדולות אחרות גילו שריכוז הכוח המיחשובי האירגוני הוא יעיל יותר – למשל HP מדווחת שבמקום 85 מרכזי חישוב ו 19, עובדים שהפעילה בעבר ברחבי העולם, היא מקבלת את אותם שירותים מ 6 מרכזים ו 8,000 עובדים כולם בארה"ב, ובתקציב שהוא בערך מחצית מן העלות בעבר. התוצאה של שתי המהפכות האלה – זו של גוגל באספקת שירותים לצרכנים וזו של חברות גדולות באספקת מיחשוב אירגוני יצרו את ההבנה שהעתיד המיחשובי יהיה אחר, ממורכז יותר, יעיל יותר וגם גמיש יותר.

11. Software: Services Oriented Architecture
Modularity is not a new idea, but …
Now, thanks to plenty of bandwidth and wireless connectivity, computing is able to regroup into specialised services
“We now live in a world where…a subroutine can exist on another computer across the internet” (Bill Gates, Microsoft)
“When I want to do something new, I do not need to build a new application but can use the pieces I already have” (Steve Mills, IBM)
“Any of the process components can now become a service provided by some other firm” (Peter Zencke, SAP)
Despite all this, SoA has not really taken off yet
With the exception of consumer applications: housingmaps.com
But history tells us that it takes time: see, for example, printing, clocks, sewing machines, cars, electricity, …

12. Business: Adaptable, Interwoven, Specialized
Businesses will be like the technology itself: more adaptable, more interwoven and more specialized
However, IT has always promised to make companies more agile
In the 1990s, companies re-engineered their business processes with enterprise-resource planning software
But once these massive software packages were in place, it was exceedingly difficult to change them
If IT makes companies modular & flexible …
It will become easier to outsource parts of business processes
“industry operating systems” will provide basic services
Electronic interactions between people will change to be more external and cooperative
All this will require major managerial and cultural shifts, which will certainly be slow and difficult!

14. Preparing for Cloud Computing
To understand clouds and make investment decisions companies have to move away from technical issues to user-related ones
Cloud strategy should result in cost savings and organizational agility
The Seven Capabilities
Identify optimal mix
Organize information as services
Identify gaps
Implications on Roles and Governance
Implication on Competition
Controlled Interface: API control and use (Apple, Salesforce, Google)
Location Independence: DBMS vs. infrastructure ensures that applications use the right data, keeping data integrity high
Sourcing Independence: switch service providers quickly
Ubiquitous Access: from any device
Virtual Business Environments: integrated processes that support major business capabilities
Addressability and Traceability
Rapid Elasticity: scaling up or down service usage, transparently and automatically

15. The ICT Industry

16. The 2010 Industry is Vertically Integrated …
Apple
Google
Microsoft
Intel HP
IBM
Oracle
Cisco
Employees, latest
34,300
19,835
93,000
79,800
304,000
399,409
86,000
68,574
Revenues, 2009 $bn
46.7
23.7
58.7
35.1
117
95.8
23.2
35.5
Net Income, 2009 $bn
9.4
6.5
16.3
4.4 8
13.4
5.8
6.1
Net Income, %Revenues
20%
27%
28%
13% 7%
14%
25%
17%
Revenue, per employee
1,361,516
1,194,858
631,183
439,850
384,868
239,854
269,767
517,689
Hardware √
Software
Services
Cloud Computing
Mobile Devices
Highest and lowest numbers are in red