1. CHAPTER 6 NETWORKS Technologies for Electronic Commerce

2. All Organizations Need to Share and Communicate Information... l Externally with other organizations l Internally among employees. Introduction NETWORK - a connection of two or more IT components that gives people the ability to communicate with each other and share software, information, peripheral devices, and processing power. TELECOMMUNICATIONS - the electronic movement of information. 6-2

3. YOUR FOCUS IN THIS CHAPTER l Client/Server Networks l Network-Enabling Technologies and Concepts l External Electronic Commerce l Internal Electronic Commerce l Network Perfect Service Introduction6-3

4. NETWORKS SUPPORT 5 FUNCTIONS 1. Sharing of software 2. Sharing of information 3. Sharing of peripheral devices 4. Communicating with other people 5. Sharing of processing power Networks6-4 The NETWORK OPERATING SYSTEM - the system software that determines how a network functions - really determines which of these functions you have.

5. l A PEER-TO-PEER NETWORK provides only two abilities - the ability to communicate with other people and the ability to share peripheral devices. l A CLIENT/SERVER NETWORK is a network that contains one or more host computers (called “servers” that provide some type of service to the other computers (called “clients”). –Client/server networks are the emerging blueprint for all networks today. –Client/server is both a business and technical implementation model. Networks6-5

6. CLIENT/SERVER AS A BUSINESS MODEL l INFORMATION –Local information unique to a particular function –Global information that spans the entire organization l SOFTWARE –Local processes that work with local information –Global processes that work with global information l PROCESSING POWER –Local processing power that executes local software to work with local information –Global processing power that executes global software to work with global information Client/Server6-6

7. CLIENT/SERVER IMPLEMENTATIONS l There are 5 client/server implementation models (See Figure 6.3 page 214). l The models differ according to: 1. Where the processing for the presentation of information occurs 2. Where the processing of logic or business rules occurs 3. Where the data management component (DBMS) and information (database) are located Client/Server6-7

8. MODEL 1: DISTRIBUTED PRESENTATION –Client: Presentation –Server: Presentation, logic, and data management MODEL 2: REMOTE PRESENTATION –Client: Presentation –Server: Logic and data management MODEL 3: DISTRIBUTED LOGIC –Client: Presentation and logic –Server: Logic and data management MODEL 4: REMOTE DATA MANAGEMENT –Client: Presentation and logic –Server: Data management MODEL 5: DISTRIBUTED DATA MANAGEMENT –Client: Presentation, logic, and data management –Server: Data management Client/Server6-8

9. CLIENT/SERVER ADVANTAGES l Distribution of processing mirrors organizational workings l Distribution is transparent l Software reuse l Servers can control information use l Flexibility on the client side l Scalability l Support for electronic commerce Client/Server6-9

10. CLIENT/SERVER DISADVANTAGES l Existence of non-client/server-oriented software l Hidden costs –Only 30% of client/server costs are tied up in hardware and software. –The remaining 70% is in the form of labor - both IT professionals and knowledge workers. Client/Server6-10

11. THE KEYS TO CLIENT/SERVER l Knowing how your organization works l Choosing the appropriate implementation model l Implementing client/server with object-oriented techniques Client/Server6-11

12. NETWORK-ENABLING TECHNOLOGIES & CONCEPTS l The technical side of networks is the fastest- moving, most confusing, and most complex aspect of IT. l Network technologies and concepts include: –Types of networks –Communications media –Communications processors –Communications methods, standards, and protocols –Communications service providers Network Technologies6-12

13. TYPES OF NETWORKS l There are many types of networks and many ways to categorize networks. l Peer-to-peer vs. client/server is one way to distinguish between types of networks. l Other ways include: –By geographic distance –By physical structure Network Technologies6-13

14. NETWORKS BY GEOGRAPHIC DISTANCE l LOCAL AREA NETWORK (LAN) - covers a limited geographic distance, such as an office, office building, or a group of buildings within close proximity. l WIDE AREA NETWORK (WAN) - covers large geographic distances, such as a state, a country, or even the entire world. –The Internet is a WAN. –A WAN is often a collection of connected LANs. Network Technologies6-14

15. NETWORKS BY PHYSICAL STRUCTURE l NETWORK TOPOLOGY - refers to the physical arrangement of computers in a network. Network topologies include bus, ring, and star. See Figure 6.7 (page 224) for examples of each. l BUS TOPOLOGY - all computers are connected to a single communications medium over which all communications travel. Network Technologies6-15

16. NETWORKS BY PHYSICAL STRUCTURE l RING TOPOLOGY- all computers are connected to a single communications medium, and that communications medium is connected at both ends to form a closed loop. l STAR TOPOLOGY - has a central computer from which all other computers radiate. Network Technologies6-16

17. COMMUNICATIONS MEDIA l BANDWIDTH refers to the range of frequencies available on a communications medium. Bandwidth really determines capacity and therefore speed. Network Technologies the paths, or physical channels, in a network over which information travels from one place to another. Microwave Satellite Broadcast radio Infrared Twisted-pair cable Coaxial cable Optical fiber 6-17

18. l GUIDED COMMUNICATIONS MEDIA transmit information over a closed path (such as a wire). Guided communications media include twisted- pair cable, coaxial cable, and optical fiber (See Figure 6.8 page 226). l TWISTED-PAIR CABLE - two insulated copper wires twisted in a spiral. l COAXIAL CABLE - one or more central wires surrounded by thick insulation. l OPTICAL FIBER - uses a very thin glass or plastic fiber through which pulses of light travel. Network Technologies6-18

19. l UNGUIDED COMMUNICATIONS MEDIA transmit information through the air. Unguided communications media include microwave, satellite, broadcast radio, and infrared. l MICROWAVES use a high-frequency band of radio broadcast transmission and dish-shaped antennae for sending and receiving information (See Figure 6.9 page 226). l SATELLITES are basically microwave transmission systems in space (See Figure 6.10 page 227). Network Technologies6-19

20. l BROADCAST RADIO are similar to microwaves and satellites, except that the receiving locations needn 抰 be in line of sight or have a dish-shaped antenna to receive information transmissions. l INFRARED uses a red light (below the visibility of the human eye) to transmit information. Network Technologies6-20

21. COMMUNICATIONS PROCESSORS l The most common communications processor is a MODEM - a device that converts the digital signals of your computer into an analog form that can be transmitted over a telephone line and then converts the analog signal back to digital signals at the other end of the transmission. Network Technologies the hardware devices that unite the various communications media and computers and route communications throughout a network. 6-21

22. l MULTIPLEXER - aggregates several communications media and allows them to share a single communications medium that operates at a much higher capacity (Figure 6.12 page 229). l CLUSTER CONTROLLER - manages a group of devices that share a single high-speed communications medium, but doesn 抰 combine and separate communications (Figure 6.13 page 229). Network Technologies6-22

23. l FRONT-END PROCESSOR - handles the communications function for a host computer or server in a network (Figure 6.14 page 230). l INTERNETWORKING UNIT - a special hardware device that connects two or more networks. These units include bridges, routers, and gateways (Figure 6.15 page 231). –BRIDGE - connects two networks of the same kind. –ROUTER - connects networks that are somewhat dissimilar. –GATEWAY - connects networks that are completely dissimilar. Network Technologies6-23

24. COMMUNICATIONS METHODS, STANDARDS, AND PROTOCOLS l Govern the manner in which information moves from one place to another. l Constitute the most technically complex aspect of telecommunications and networks. l There are literally hundreds of different methods, standards, and protocols. l Here, we introduce only a few. Network Technologies6-24

25. l ETHERNET - a communications standard for connecting components of a LAN that uses a shared communications medium, such as a bus topology. l TOKEN RING - a standard that uses a single electronic token or 揷 lip board?that each component uses in turn to send a transmission within the network. l TRANSMISSION CONTROL PROTOCOL/INTERNET PROTOCOL (TCP/IP) - the standard by which the Internet works today. Network Technologies6-25

26. l FIBER DISTRIBUTED DATA INTERFACE (FDDI) - connects high-speed geographically dispersed LANs. FDDI uses two communications media that transmit in different directions and optical fiber (Figure 6.16 page 233). l ASYNCHRONOUS TRANSFER MODE (ATM) - a method for sending information that divides a long transmission into smaller units (called 損 ackets?. See Figure 6.17 page 233. Network Technologies6-26

27. l INTEGRATED SERVICES DIGITAL NETWORK (ISDN) - the plan and international communications standard for the transition of the world 抯 public telephone system from analog to digital for the purpose of transmitting all formats of information simultaneously over twisted-pair telephone lines. l X.12 - the standard for transmitting common- formatted information during electronic data interchange (EDI). Network Technologies6-27

28. l TCP/IP l TCP 负责数据的完整性 l IP 控制数据在 Internet 上的传输 l DSL Digital Subscriber Line 数字用户环路 – 一种采用数字编码技术，通过电话线提供 Internet 上网服务的调制解调技术。它可以获 得最大的传输速度又不干扰在同一条线路上 的话务服务。 –HDSL, SDSL,VDSL,RDSL,ADSL –ADSL Asymmetrical 非对称 DSL ，上行 640k- 1Mbps, 下行 1M-8Mbps,3-5km 。

29. COMMUNICATIONS SERVICE PROVIDERS l Networks of this type include public, private, value-added, and virtual private. l Your choice of these will affect cost, availability, services provided, speed, and security (See Tables 6.1 & 6.2 pages 230 & 234). Network Technologies organizations that provide communications media and services to other organizations for creating networks that cover great distances. 6-28

30. PUBLIC NETWORK l Cost - operate on a pay-as-you-go basis. l Availability - you must compete for use. l Services - Only the ability to communicate information from one place to another. l Speed - the slowest of all communications service provider network types. l Security - little or no guarantee of privacy. Network Technologies a network on which your organization competes for time and use with other people and organizations. 6-29

31. PRIVATE NETWORK l Cost - fixed rate per period (if you lease). l Availability - no competition for use. l Services - additional services beyond just communicating information. l Speed - typically faster than public networks. l Security - higher than that of public networks. Network Technologies a network that your organization either owns or exclusively leases the right to use the communications media. 6-30

32. VALUE-ADDED NETWORK l Cost - operate on a pay-as-you-go basis for time and use. l Availability - no competition for use. l Services - VAN owner provides additional services. l Speed - typically faster than public networks. l Security - higher than that of public networks. Network Technologies a semipublic network that provides additional services beyond the simple communication of information from one place to another. 6-31

33. VIRTUAL PRIVATE NETWORK l Cost - flat fee per month plus fee for time used. l Availability - no competition for use. l Services - VPN owner provides limited additional services. l Speed - typically faster than public networks. l Security - higher than that of public networks. Network Technologies a public network that guarantees availability to your organization, but does not provide you with a dedicated line or communications media. 6-32

34. TWO TYPES OF VIRTUAL PRIVATE NETWORKS (VPNs) l INTERNET VPN - provides your organization with a way of establishing a virtual Internet network that consists of only you, your customer, and suppliers. l INTERNATIONAL VPN - a virtual private network that combines the capabilities of telephone service providers around the world. Network Technologies6-33

35. ELECTRONIC COMMERCE Electronic Commerce a modern methodology that addresses the use of information technology as an essential enabler of business. Electronic commerce supports both internal and external business processes. EXTERNAL ELECTRONIC COMMERCE addresses the use of IT to support how a business interacts with the marketplace. INTERNAL ELECTRONIC COMMERCE addresses the use of IT to support internal processes, functions, and operations. 6-34

36. l EXTERNAL ELECTRONIC COMMERCE –Ordering products and services –Moving money without handling it –Reaching the exact customer –Gathering competitive intelligence l INTERNAL ELECTRONIC COMMERCE –Intranets –Telecommuting Electronic Commerce ELECTRONIC COMMERCE ACTIVITIES AND CONCEPTS In this Chapter 6-35

37. ELECTRONIC DATA INTERCHANGE (EDI) Ordering Products and Services l EDI supports IOSs (from Chapter 2) and information partnerships (from Chapter 3) l EDI uses X.12 as its standard format External Electronic Commerce the direct computer-to-computer transfer of transaction information contained in standard business documents, such as invoices and purchase orders, in a standard format. 6-36

38. EDI AND YOUR ORGANIZATION l It’s becoming the standard for interorganizational transactions. l Many organizations won’t do business with you if you don’t have EDI. l EDI supports just-in-time (JIT) processes. l Most virtual organizations use EDI to move information electronically. External Electronic Commerce6-37

39. ELECTRONIC FUNDS TRANSFER (EFT) Moving Money Without Handling IT l EFT eliminates the movement of all physical instruments, such as checks. l Instead, all information (and money) is transmitted electronically (See Figure 6.22 page 240). External Electronic Commerce the electronic passing of funds (money) between businesses and banks and their customers. 6-38

40. INDIVIDUALIZED ELECTRONIC ADVERTISING l This form of advertising will use the Internet to deliver advertisements. l The keys to this form of advertising are: 1.Extensive databases and contain customer buying habits 2.The presence of computers in every household External Electronic Commerce using technology to determine who gets what advertisements and electronically sending those advertisements to only those people. 6-39

41. GATHERING COMPETITIVE INTELLIGENCE l Many organizations use IT networks to gather competitive intelligence. For example,... –By accessing external databases that might have information about their competitors –By accessing competitors?Web sites to read about upcoming product releases External Electronic Commerce information about the internal workings of your organization as well as the external market surrounding your organization. 6-40

42. INTRANET l An intranet is simply your organization 抯 version of a private Internet. l The special security software that protects against outside access is called a FIREWALL. l If you provide outside access to your Intranet, you have an EXTRANET - a special application that allows other organizations and people access to information published on an intranet. Internal Electronic Commerce an internal organizational Internet that is guarded against outside access by special security software. (See Figure 6.25 page 244) 6-41

43. WHAT 扴 SO GREAT ABOUT INTRANETS? l Intranets support the concept of virtual organizations. l Intranets look just like the Internet (complete with Web sites). l Most all organizations have intranets (or plan to have them). l Most importantly - like the Internet - intranets are platform independent. So, you can use an intranet to connect your entire organization. Internal Electronic Commerce6-42

44. TELECOMMUTING l Telecommuters form two groups: 1. Those people required to work outside the office because that 抯 where the real work is. 2. Those people who can work away from the home office because it doesn 抰 matter where they perform work. l In 1996, over 9 million people telecommuted. How many telecommute today? l Telecommuting is only possible because of network technologies. Internal Electronic Commerce using communications technology to work in a place other than a central location. 6-43

45. ELECTRONIC CASH (E-CASH) Virtual Money on the Internet l A file that represents a denomination of money in electronic form. l You pay an Internet merchant with e-cash. l That Internet merchant can use it to buy other products or trade it in at a bank for real money. For the Internet exactly what its name implies - an electronic representation of cash. 7-21 See Figure 7.12, page 283

46. WHAT 扴 HOLDING UP E-CASH? l Anyone Can Be an Electronic Bank. l There Are No Standards for How E-Cash Should Look. l Merchants Must Have Accounts with Electronic Banks. l E-Cash Makes Money Laundering Easy. l E-Cash Is Easy to Lose. For the Internet7-22

47. HOW ELECTRONIC COMMERCE WILL AFFECT THE BUSINESS WORLD l EDI Will Become a Requirement l Disintermediation Will Displace Many Organizations l EFT May Mean the End of Cash and Checks as We Know Them Electronic Commerce6-44

48. HOW ELECTRONIC COMMERCE WILL AFFECT THE BUSINESS WORLD l Individualized Electronic Advertising Will Require More Focused Market Information l Intranets Will Become the Standard for Communicating Internal Information l Telecommuting Will Allow Everyone to Stay at Home More Electronic Commerce6-45

49. NETWORK PERFECT SERVICE l Network Reach - where the customer wants it (location) l Network Range - how the customer wants it (form) l Network Responsiveness - when the customer wants it (time) Network Perfect Service occurs at the customer 抯 moment of value. So, network perfect service includes... See Figure 6.28 (page 252) for reach, range, and responsiveness in network perfect service. 6-46

50. NETWORK REACH l Will the network be limited to a single location? l Will the network support people and business processes across all domestic operations? l Will the network support international activities? l Will the network support customers, distributors, and suppliers? Network Perfect Service addresses the people, organizations, and business processes that your network should include. 6-47

51. NETWORK RANGE l Does your network need to support only basic communications such as e-mail? l Does your network need to enable shared information access? l Does your network need to support computers that process transactions independently? l Does your network need to support computers that process transactions in cooperation? Network Perfect Service addresses the information and transactions that must travel across your network. 6-48

52. NETWORK RESPONSIVENESS l Does your network need to support information processing and communications that do not require an immediate response? l Does your network need to support information processing and communications that require an immediate response? l Does your network need to support on-demand responses to information processing and communications? Network Perfect Service addresses the level of service - speed, reliability, and security - your network must provide? 6-49

53. NETWORK PERFECT DELIVERY l 24-hour-a-day availability may not be necessary. But, then again, it may be. l Always understand your business needs and let those needs drive your network perfect delivery requirements. Network Perfect Service the extent to which your organization can meet the where, how, and when characteristics and the extent to which your organization can guarantee those characteristics. 6-50

54. TO SUMMARIZE l Networks (collections of IT components) support the concept of telecommunications - the electronic movement of information. l Client/server networks: –are the emerging blueprint for all networks –separate local and global information, software, and processing power –support 5 implementation models that differ according to where presentation, logic, and data management software are executed. 6-51

55. TO SUMMARIZE l Network-enabling technologies and concepts include: –Types of networks –Communications media –Communications processors –Communications methods, standards, and protocols –Communications service providers. l Electronic commerce addresses the use of IT as an essential enabler of business. This includes both internal and external electronic commerce. 6-52

56. TO SUMMARIZE l External electronic commerce includes: –Ordering products and services –Moving money without handling it –Reaching the exact customer –Gathering competitive intelligence l Internal electronic commerce includes: –Intranets –Telecommuting l Network perfect service involves providing network capabilities where, how, and when the customer wants it. 6-53