1. 6.1 © 2006 by Prentice Hall 7 Chapter IT Infrastructure Evolution

2. 6.2 © 2006 by Prentice Hall OBJECTIVES Define IT infrastructure and describe the components and levels of IT infrastructure Identify and describe the stages of IT infrastructure evolution Identify and describe the technology drivers of IT infrastructure evolution Management Information Systems Chapter 6 IT Infrastructure and Platforms

3. 6.3 © 2006 by Prentice Hall OBJECTIVES (Continued) Management Information Systems Chapter 6 IT Infrastructure and Platforms Assess contemporary computer hardware platform trends Assess contemporary software platform trends

4. 6.4 © 2006 by Prentice Hall IT INFRASTRUCTURE The Connection between the Firm, IT Infrastructure, and Business Capabilities Management Information Systems Chapter 6 IT Infrastructure and Platforms

5. 6.5 © 2006 by Prentice Hall IT INFRASTRUCTURE Levels of IT Infrastructure Management Information Systems Chapter 6 IT Infrastructure and Platforms Three major levels of infrastructure: Public Entails public infrastructure such as internet, national back bones e.g. Uganda’s NBI Enterprise Enterprise wide infrastructure Business unit

6. 6.6 © 2006 by Prentice Hall IT INFRASTRUCTURE Levels of IT Infrastructure Management Information Systems Chapter 6 IT Infrastructure and Platforms

7. 6.7 © 2006 by Prentice Hall IT INFRASTRUCTURE Management Information Systems Chapter 6 IT Infrastructure and Platforms 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) Evolution of IT Infrastructure: 1950–2005

8. 6.8 © 2006 by Prentice Hall IT INFRASTRUCTURE Eras in IT Infrastructure Evolution Management Information Systems Chapter 6 IT Infrastructure and Platforms

9. 6.9 © 2006 by Prentice Hall IT INFRASTRUCTURE A Multitiered Client/Server Network (N-tier) Management Information Systems Chapter 6 IT Infrastructure and Platforms

10. 6.10 © 2006 by Prentice Hall IT INFRASTRUCTURE Management Information Systems Chapter 6 IT Infrastructure and Platforms Moore’s law and microprocessing power Moore's law is the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years The law of mass digital storage The amount of digital information is roughly doubling every year: the amount of digital information is roughly doubling every year and the cost of information storage is approximately halving Technology Drivers of Infrastructure Evolution

11. 6.11 © 2006 by Prentice Hall Metcalfe’s law and network economics A network’s value to participants grows exponentially as the network takes on more members. As the number of members in a network grows linearly, the value of the entire system grows exponentially and theoretically continues to grow forever as members increase. Declining communications costs and the Internet Rapid decline in costs of communication and the exponential growth in the size of the Internet is a driving force that affects the IT infrastructure. As communication costs fall toward a very small number and approach zero, utilization of communication and computing facilities explodes. Standards and network effects Growing agreement in the technology industry to use computing and communication standards. Technology standards unleash powerful economies of scale and result in price declines as manufacturers focus on the products built to a single standard. Without economies of scale, computing of any sort would be far more expensive than is currently the case.

12. 6.12 © 2006 by Prentice Hall IT INFRASTRUCTURE Moore’s Law and Microprocessor Performance Management Information Systems Chapter 6 IT Infrastructure and Platforms

13. 6.13 © 2006 by Prentice Hall IT INFRASTRUCTURE Falling Cost of Chips Management Information Systems Chapter 6 IT Infrastructure and Platforms

14. 6.14 © 2006 by Prentice Hall IT INFRASTRUCTURE The Capacity of Hard Disk Drives Grows Exponentially, 1980–2004 Management Information Systems Chapter 6 IT Infrastructure and Platforms Source: Authors.

15. 6.15 © 2006 by Prentice Hall IT INFRASTRUCTURE Exponential Declines in Internet Communications Costs Management Information Systems Chapter 6 IT Infrastructure and Platforms Source: Authors.

16. 6.16 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Computer Hardware Platforms $110 billion annually spent in the United States Dominance of Intel, AMD, and IBM 32-bit processor chips at the client level Server market increasingly dominated by inexpensive generic processors from the same manufacturers INFRASTRUCTURE COMPONENTS

17. 6.17 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Strong server market growth for 64 bit generic processors from AMD, Intel and IBM Blade servers replace box servers Mainframes continue as a presence working as very large servers INFRASTRUCTURE COMPONENTS Computer Hardware Platforms (Continued)

18. 6.18 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Operating System Platforms $100 billion annually spent in the United States Continued dominance of Microsoft OS in the client (95%) and handheld market (45%) Growing dominance of Linux (UNIX) in the corporate server market (85%) Windows 2002 and 2003 Server remains strong in smaller enterprises and workgroup networks INFRASTRUCTURE COMPONENTS

19. 6.19 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Enterprise Software Applications $165 billion annually spent in the United States for basic enterprise software infrastructure SAP, Oracle, PeopleSoft (now Oracle), and Siebel dominate this market. Middleware firms like BEA and JD Edwards serve smaller firms, and work also in the Web services space. INFRASTRUCTURE COMPONENTS

20. 6.20 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms The enterprise market is consolidating around a few huge firms that have gained significant market share such as SAP and Oracle. Microsoft is expanding into smaller firm enterprise systems where it can build on its Windows server-installed base. INFRASTRUCTURE COMPONENTS Enterprise Software Applications (Continued)

21. 6.21 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Data Management and Storage $70 billion annually spent in the United States. Oracle and IBM continue to dominate the database software market. Microsoft (SQL Server) and Sybase tend to serve smaller firms. Open source Linux MySQL now supported by HP and most consulting firms as an inexpensive, powerful database used mostly in small to mid- size firms. INFRASTRUCTURE COMPONENTS

22. 6.22 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms $35 billion annually spent in the United States for physical hard disk storage 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 INFRASTRUCTURE COMPONENTS Data Management and Storage (Continued)

23. 6.23 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Networking/Telecommunications Platforms $150 billion annually spent on networking and telecommunications hardware $700 billion annually spent on telecommunications services, e.g. phone and Internet connectivity Local area networking still dominated by Microsoft Server (about 75%) but strong growth of Linux challenges this dominance INFRASTRUCTURE COMPONENTS

24. 6.24 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Internet Platforms $32 billion annually spent on Internet infrastructure in the United States Internet hardware server market concentrated in Dell, HP, and IBM Prices falling rapidly by up to 50% in a single year for low-power servers INFRASTRUCTURE COMPONENTS

25. 6.25 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Open-source Apache remains the dominant Web server software, followed by Microsoft’s IIS server. Sun’s Java grows as the most widely used tool for interactive Web applications. Microsoft and Sun settle a long-standing law suit and agree to support a common Java. INFRASTRUCTURE COMPONENTS Internet Platforms (Continued)

26. 6.26 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms The four major themes in contemporary software platform evolution: Linux and open-source software Java Web services and service-oriented architecture Software outsourcing CONTEMPORARY SOFTWARE PLATFORM TRENDS

27. 6.27 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms The Rise of Linux and Open-Source Software 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 CONTEMPORARY SOFTWARE PLATFORM TRENDS

28. 6.28 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Java: An operating system—Independent, processor- independent, object-oriented programming language Applications written in Java can run on any hardware for which a Java virtual machine has been defined. Java is embedded in PDAs, cell phones, and browsers. Java is a leading interactive programming environment for the Web. CONTEMPORARY SOFTWARE PLATFORM TRENDS Java Is Everywhere

29. 6.29 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Software for Enterprise Integration: One of the most important software trends of the last decade is the growth of “enterprise in a box” or the purchase of enterprise-wide software systems by firms. Rather than build all their own software on a custom basis, large firms increasingly purchase enterprise applications prewritten by specialized software firms like SAP, Oracle, PeopleSoft, and others. CONTEMPORARY SOFTWARE PLATFORM TRENDS

30. 6.30 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms 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. Today's enterprise systems are capable of integrating older legacy applications with newer Web-based applications. CONTEMPORARY SOFTWARE PLATFORM TRENDS Software for Enterprise Integration: (Continued)

31. 6.31 © 2006 by Prentice Hall Enterprise Application Integration (EAI) Software Versus Traditional Integration Management Information Systems Chapter 6 IT Infrastructure and Platforms CONTEMPORARY SOFTWARE PLATFORM TRENDS EAI software (a) creates a common platform through which all applications can freely communicate with each other. EAI requires much less programming than traditional point-to-point integration (b).

32. 6.32 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Web Services and Service-Oriented Architecture Web Services: An alternative to enterprise systems 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. CONTEMPORARY SOFTWARE PLATFORM TRENDS

33. 6.33 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Web services permit computer programs to communicate with one another and share information without rewriting applications, or disturbing older legacy systems. CONTEMPORARY SOFTWARE PLATFORM TRENDS Web Services and Service-Oriented Architecture (Continued)

34. 6.34 © 2006 by Prentice Hall How Dollar Rent a Car Uses Web Services Management Information Systems Chapter 6 IT Infrastructure and Platforms CONTEMPORARY SOFTWARE PLATFORM TRENDS

35. 6.35 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Software Outsourcing Today large and small firms purchase most of their software from outside vendors. Three kinds of outsourcing: Purchase of software packages Using application service providers Custom outsourcing CONTEMPORARY SOFTWARE PLATFORM TRENDS

36. 6.36 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms 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 Enterprise software packages: prewritten off-the-shelf software CONTEMPORARY SOFTWARE PLATFORM TRENDS Purchase of Software Packages and Enterprise Software

37. 6.37 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Application Service Providers: Rather than purchase hardware and software, firms can go onto the Internet and find providers who offer the same functionality over the entertainment, and charge on a per-user or license basis. Example: Salesforce.com provides customer relationship management and sales force management services to firms CONTEMPORARY SOFTWARE PLATFORM TRENDS Purchase of Software Packages and Enterprise Software (Continued)

38. 6.38 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Software Outsourcing of Custom Applications 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? CONTEMPORARY SOFTWARE PLATFORM TRENDS

39. 6.39 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Mobile platform: Mobile platform: more and more business computing is moving from PCs and desktop machines to mobile devices like cell phones and smartphones. Data transmissions, Web surfing, e-mail and instant messaging, digital content displays, and data exchanges with internal corporate systems are all available through a mobile digital platform. Netbooks, small low-cost lightweight subnotebooks that are optimized for wireless communication and Internet access, are included. CONTEMPORARY INFRASTRUCTURE TRENDS

40. 6.40 © 2006 by Prentice Hall Management Information Systems Chapter 6 IT Infrastructure and Platforms Grid and Cloud Computing Grid computing: connects geographically remote computers into a single network to create a “virtual supercomputer” by combining the computational power of all computers on the grid. Cloud computing: a model of computing where firms and individuals obtain computing power and software applications over the Internet, rather than purchasing their own hardware and software. Data are stored on powerful servers in massive data centers, and can be accessed by anyone with an Internet connection and standard Web browser. CONTEMPORARY INFRASTRUCTURE TRENDS