1. IT Infrastructure and Emerging Technologies
Chapter Five (10th ed)

2. Significance of IT Infrastructure
IT infrastructure (ITI) is the foundation for
Serving customers
Working with suppliers and
Managing internal business processes
An example: If you are a bank and you want to sell banking services (savings, checking, car loans, home loans, brokerage accounts, etc) to all of your customers on a global level, your choices of ITI will make or break you.
ITI is critical component of any business strategy

3. The Connection between the Firm, IT Infrastructure, and Business Capabilities
Figure 6-1

4. Definitions of ITI
(1) ITI is the shared technology resources that provide the platform for the firm’s specific information system applications. These technology resources include the hardware and software required to operate the enterprise.
(2) ITI is a set of firm wide services budgeted by management and comprising both human and technical capabilities that provide services to employees, customers, and suppliers.
The latter definition puts more emphasis on the business value provided by investments in ITI

5. Listing of the Services from the Second Definition of ITI
IT management services for planning and managing ITI
IT standards services for developing policies
IT education services that provide training
IT research and development services for developing future projects
Data management services that manage data and provide analysis tools
Computing platforms that provide computing services
Telecommunication services provide data, voice, and video connectivity
Application software services provide access to ERP, SCM, CRM, and KM
Physical facilities management services

6. Evolution of IT Infrastructure
Electronic accounting machine era: (1930–1950)
General-purpose mainframe and minicomputer era: (1959 to present)
Personal computer era: (1981 to present)
Client/server era: (1983 to present)
Enterprise internet computing era: (1992 to present)

7. Technology Drivers of Infrastructure Evolution
Moore’s law and microprocessing power
Microprocessor power (MIPS) doubles every 18 months
Number of transistors on a chip doubles every 18 months
Cost of computing falls by ½ every 18 months
Near future will continue, but heat issues and consumer needs may slow this process
The law of mass digital storage
The number of kilobytes stored for $1 has doubled every 15 months since 1950
Metcalfe’s law and network economics
Power of a network grows exponentially as a function of the number of network members (network economics)
Declining communications costs and the Internet
Standards and network effects
ASCII, COBOL, UNIX
TCP/IP, Ethernet, and WWW
IBM/Microsoft/Intel

8. Moore’s Law
Figure 6-5

9. Moore’s Law: Falling Cost of Chips
Figure 6-6

10. The Growth of Mass Digital Storage
Figure 6-8

11. Cost of Mass Digital Storage
Figure 6-9

12. Exponential Declines in Internet Communications Costs
Figure 6-10

13. Seven Key Infrastructure Components
Computer Hardware Platforms
Operating System Platforms
Enterprise Software Applications
Data Management and Storage
Networking/Telecommunications Platforms
Internet Platforms
Consulting and System Integration Services

14. Estimated Size of US Infrastructure Components (2005)
Expenditure (billions)
% of total
Computer hardware
145 9%
Operating system platforms
110 7%
Enterprise and other IT soft apps
297
19%
Database mgmt and storage 42 3%
Networking and telecom
769
50%
Internet platforms 35 2%
Consulting services
130
Total
1,528

15. Computer Hardware Platforms
Client machines
Desktops and mobile computing devices ( PDAs or laptops )
Server market
Blade servers
Major players
Microprocessors – IBM, Intel, and AMD
Hardware – HP, IBM, Dell, and Sun
Mainframes
Market dominated by IBM
Serve as giant servers (an alternative to blade servers)

16. Computer Software Platforms
Operating systems
Client OS dominated by some form of Microsoft Windows
Server OS dominated by UNIX and Linux
Major providers of UNIX are IBM, HP, and Sun
Enterprise applications (e.g., SCM, CRM, ERP)
Major providers are SAP and Oracle
Microsoft is trying to capture the low end of this market
Client applications
Microsoft is the dominant provider

17. Data Management and Storage
Data management software
Oracle and IBM dominate the market.
Microsoft (SQL Server) and Sybase tend to serve smaller firms.
Open source Linux MySQL
Data storage hardware
The hard disk market is consolidating around a few huge firms like EMC and smaller PC hard disk firms like Seagate, Maxtor, and Western Digital

18. Networking/Telecommunications Platforms
Network operating systems
LANS are dominated by Windows Server other players include Novell, Linux, and Unix
Enterprise networking almost entirely Linux or UNIX
Virtually all networks use the TCP/IP protocols
Networking hardware providers
Cisco, Lucent, Nortel, and Juniper Networks
Telecommunications services market
MCI, AT&T, and Sprint providing most trunk line services for both phone and Internet.
Rapid growth of non-telephone Wi-Fi and Wi-Max services, and Internet telephony

19. Internet Platforms
This area overlaps with networking, hardware, and software platforms
Internet hardware server market
Dell, HP, and IBM
Some Web software tools
Microsoft’s ExpressionWeb and .Net families of tools
Adobe software (Dreamweaver and Flash)
WebSphere from IBM to manage a Web site
Apache server is an open source software tool for managing stored Web pages on a server (on 70 percent of all Web servers)
Java from Sun for interactive applications

20. Consulting and System Integration Services
Most firms today, even large firms, cannot develop their systems without significant outside help.
$130 billion annually spent on computer system design, and related business services like business process redesign in the United States
About 85% of business consulting in the United States involves IT business consulting.
Integration services involves integrating data, and applications in a firm.
Connecting new applications and systems to legacy systems
IBM has transformed itself into a systems integration firm with IBM Global Services, the largest system integration firm.

21. Contemporary Hardware Platform Trends: Overview
Cost of IT infrastructure is rising
Cost of computing services and software
Intensity of computing & communications has increased requiring more powerful networks and client devices
Other challenges
Integration of data across platforms
Infrastructures must withstand huge spikes in demand and continual assaults from hackers
High customer expectations
Five trends
Integration of Computing and Telecommunications Platforms
Grid Computing
On-Demand (utility) Computing
Autonomic Computing and edge computing
Virtualization and multicore processors

22. Integration of Computing and Telecommunications Platforms
Increasingly computing takes place over the network.
Client level: integration of cell phones and PDAs (Example: Palm Treo)
Television, video, and radio move toward digital production.
Server level: The integration of voice telephone and the Internet bring together two historically separate and distinct global networks.
The network in many respects is the source of computing power.

23. Grid Computing
Rather than purchase huge mainframes or super computers, firms can chain together thousands of smaller desktop clients into a single computing grid; computers may be geographically remote
It is estimated that from 25% - 50% of the computing power in the United States is unused.
Grid computing saves infrastructure spending, increases speed of computing, and increases the agility of firms.
Examples: Royal Dutch/Shell Group and the National Digital Mammography Archive
Another example from the University of Wisconsin (

24. On-Demand (Utility) Computing
Firms off-loading peak demand for computing power to remote, large-scale data processing centers
Developed by IBM, SUN, and HP
Firms pay only for the computing power they use, as with an electrical utility.
Excellent for firms with spiked demand curves caused by seasonal variations in consumer demand, e.g. holiday shopping
Saves firms from purchasing excessive levels of infrastructure

25. Autonomic Computing
Autonomic computing is an industry-wide effort to develop systems that can:
Configure, optimize, and tune themselves
Heal themselves when broken
Protect themselves from outside intruders and self-destruction
Why is there a need for this?
Computer systems (both hardware and software) have become so complex that the cost of managing them has risen.
Thirty to fifty percent of a company’s IT budget is spent preventing or recovering from system crashes.
Operator error is the most common cause of crashes.
Example: Windows XP and Max X OS automatically download patches and updates.

26. Virtualization and Multicore Processors
Both of these techniques are designed to reduce power consumption
Virtualization is the process of presenting a set of computing resources so that they can be access in multiple ways without regard to physical configuration or geographical location
Multicore processors
As the clockspeed of cpus increased, the amount of heat generated and electricity consumed increased.
Solution is to use two or more slower processors to generate the same computing power but reduce heat and power consumption

27. Intel Chip History

28. Software Platform Trends: Overview
Linux and the open-source software movement
Java
Software for enterprise integration
Enterprise wide systems
Linkage to older systems and applications
Enterprise application integration
Middleware
Web services and service-oriented architecture
AJAX, Mashups and Web-based software applications
Software outsourcing

29. The Open-Source Software Movement
Open-source software is free and can be modified by users. Developed and maintained by a worldwide network of programmers and designers under the management of user communities (opensource.org).
The movement has evolved over 30 years and has demonstrated it can provide high quality software.
Major examples include Linux, Firefox (browser), and Apache (Web server software that resides on the server and delivers Web content to your browser)
Linux is the most widely used open-source software program. Linux is an operating system derived from Unix.
IBM, HP, Intel, Dell, and Sun have adopted and support Linux. Linux is a major alternative to Windows server and even client operating systems
Linux runs on all major hardware platforms – mainframes, servers, and clients
Major threat to Microsoft

30. Java
A programming language that is independent of the operating system and hardware processor.
Applications written in Java can run on any hardware for which a Java virtual machine has been defined.
Anytime an object moves or input is required from a user a Java applet has been employed
Applets are small Java programs that are downloaded from the server. Users do not need to have complex software on their machines.
Java is embedded in PDAs, cell phones, music players, automobiles, set-top cable TV systems, and browsers.
Java is the leading interactive programming environment for the Web.
Dispute with Microsoft

31. Software For Enterprise Integration
An important software trend of the last decade is the usage of enterprise-wide software systems by firms (SCM, ERP, CRM, and KM).
Rather than build their own software, large firms increasingly purchase enterprise applications prewritten by specialized software firms like SAP or Oracle.
The goal is to achieve an integrated firm-wide information environment, reduce cost, increase reliability, and to adopt business best practices which are captured by the software.
Enterprise software firms achieve economies of scale by selling the same software to hundreds of firms.

32. Software For Enterprise Integration (continued)
How do you link new enterprise software with older legacy applications?
Middleware approach
Special software that creates an interface between two different systems
Enterprise application integration approach
Enterprise application integration software creates a single software hub where multiple systems can exchange data through a single hub rather than building countless interfaces for each system

33. Enterprise Application Integration (EAI) Software Versus Traditional Integration
Figure 6-13

34. Web Services And Service-Oriented Architecture
An alternative to middleware and EAI is to use new Web-based standards to create a communication platform allowing older applications to communicate with newer applications.
Web services refers to a set of loosely coupled software components that exchange information with each other using Web communication standards and languages
Web services permit computer programs to communicate with one another and share information without rewriting applications, or disturbing older legacy systems.
Web services are based on XML, and standards like SOAP, WSDL, and UDDI to create this communication environment.

35. Web Services And Service-Oriented Architecture (continued)
XML stands for extensible markup language and is a more powerful version of HTML that enables one to tag items that provide meaning to data.
Web Services Description Language (WSDL) describes the tasks performed by the Web service and the commands and data it will accept so that it can be used by other applications.
Universal description discovery and integration (UDDI) enables a Web service to be listed in a directory of Web services for easy location.
The collection of Web services used to build a firm’s software constitute what is know as a service-oriented architecture (SOA)

36. AJAX
Ajax (asynchronous JavaScript and XML) is a group of inter-related Web development tools for creating interactive Web applications . Ajax enables increased responsiveness and interactivity of Web pages by exchanging small amounts of data with the server "behind the scenes" so entire Web pages do not have to be reloaded each time there is a need to fetch data from the server. JavaScript is the language in which AJAX function calls are usually made.[1
Ajax is one form of a set of related techniques called rich Internet applications (RIA). Adobe’s Flash is another member of RIA.

37. Web-Based Applications
The Google model
Google delivers a number of applications including a word processor, spreadsheet, , instant messaging, and a calendar in a suite called Google Apps.
Users pay a subscription fee that provides unlimited usage for a specified time.
All of the apps and data are stored on Google servers.
Google uses Ajax and other RIA tools to do this.
Enterprise software firms like SAP and Oracle are also delivering software in this same manner
The Google model is a direct threat to Microsoft’s business model

38. Mashups
A mashup is a Web application that combines data and/or functionality from more than one source. The term is derived from the hip hop practice of building a new song by combining parts of other songs.
Example mashups
Typical mashups combine mapping and satellite image software with local content (see or ). Enables real estate listings to be displayed on Google maps.
Celebrities linked to maps and YouTube

39. Software Outsourcing: Packages
Prewritten off-the-shelf software built by a software company
Eliminates the need for the company to write their own
Available for all standard business applications within and across industries
Includes all the transaction processing systems mentioned in earlier chapters
Also includes the large enterprise applications

40. Software Outsourcing: Application Service Providers
A business that delivers and manages applications and computer services from remote computer centers to multiple users using the Internet or a private network. Software is not installed on the firm’s systems.
Rather than purchase hardware and software, firms can go onto the Internet and find providers who offer the same functionality over the Internet, and charge on a per-user or license basis.
Example: Salesforce.com provides customer relationship management and sales force management services to firms

41. Software Outsourcing: Custom Software
A firm contracts custom software development or maintenance of existing legacy programs to outside firms, often in low-wage countries.
Example: Dow Chemical hired IBM for $1.1 billion to create an integrated communication system for 50,000 Dow employees in 63 countries.
Why would Dow not build this system itself?

42. Changing Sources of Firm Software
Figure 6-15

43. Management Issues
ITI management must be guided by the firm’s need to provide computer-based services to customers, employees, and suppliers. To this wisely the firm must deal with:
How do we make wise infrastructure investments?
How do we allocate control and management of III (centralize or decentralized control)
How do we prepare for infrastructure change (scalability)?

44. Management Solutions
Consider your strategic situation: six questions to ask (see next slide)
Start out small, with respect to large scale infrastructure changes (develop one module at a time)
Consider the total cost of ownership
Develop benchmarks for the total cost of ownership

45. Six Questions to Ask
1. What is the market demand for computer-based services from customers, employees, and suppliers?
2. What is your firm’s business strategy or what new services are needed to achieve goals?
3. What is the firm’s IT strategy with respect to ITI and costs?
4. What is the position of your firm with respect to IT compared to your competition (ahead or behind)?
5. What is the position of your firm with respect to computer-based services to customers, employees, and suppliers compared to your competition?
6. How do your expenditures for ITI compare with your competition?

46. Total Cost of Ownership
When calculating the costs of systems, be sure to include all the costs:
Hardware acquisition
Software acquisition
Installation
Training
Support
Maintenance
Infrastructure requirements
Downtime
Space and energy
The desktop management concept for distributed computer assets ( )