IT Infrastructure and Platforms

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IT Infrastructure and Platforms
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Management Information Systems Chapter 6 IT
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IT INFRASTRUCTURE
Defining IT Infrastructure

• Includes hardware, software, and services
• A set of physical devices and software
  applications that are required to operate the
  entire enterprise
• Your firm is largely dependent on its
  infrastructure for delivering services to
  customers, employees, and suppliers.
• You can think of infrastructure as digital
  plumbing, but its much more than that!

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The Connection between the Firm, IT
Infrastructure, and Business Capabilities
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Levels of IT Infrastructure

• Three major levels of infrastructure
• Public
• Enterprise
• Business unit

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Levels of IT Infrastructure
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Evolution of IT Infrastructure 19502005

• Electronic accounting machine era (19301950)
• 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)

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Eras in IT Infrastructure Evolution
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A Multitiered Client/Server Network (N-tier)
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Falling Cost of Chips
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Examples of Nanotubes
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The Capacity of Hard Disk Drives Grows
Exponentially, 19802004
Source Authors.
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The Cost of Storing Data Declines
Exponentially,19502004
Source Exponential Growth an Illusion?
Response to Ilkka Tuomi, by Ray Kurzweil,
KurzweilAl.net, September 23, 2003. Used with
permission.
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Exponential Declines in Internet Communications
Costs
Source Authors.
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    INFRASTRUCTURE COMPONENTS
Seven Key Infrastructure Components

• Computer Hardware Platforms
• Operating System Platforms
• Enterprise Software Applications
• Data Management and Storage

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Seven Key Infrastructure Components (Continued)

• Networking/Telecommunications Platforms
• Internet Platforms
• Consulting and System Integration Services

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    INFRASTRUCTURE COMPONENTS
The IT Infrastructure Ecosystem
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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

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Computer Hardware Platforms (Continued)

• 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

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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

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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.

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Enterprise Software Applications (Continued)

• 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.

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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.

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Data Management and Storage (Continued)

• 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

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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

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Networking/Telecommunications Platform (Continued)

• Enterprise networking almost entirely Linux or
  UNIX
• Cisco, Lucent, Nortel, and Juniper Networks
  continue to dominate networking hardware.
• The telecommunications services market is highly
  dynamic with MCI, ATT, and Sprint providing most
  trunk line services for both phone and Internet.
• Growth of non-telephone Wi-Fi and Wi-Max
  services, and Internet telephony

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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

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Internet Platforms (Continued)

• Open-source Apache remains the dominant Web
  server software, followed by Microsofts IIS
  server.
• Suns 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.

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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.

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Consulting and System Integration Services
(Continued)

• 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.

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CONTEMPORARY HARDWARE PLATFORM TRENDS
The 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.

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The Integration of Computing and
Telecommunications Platforms (Continued)

• 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.

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Grid Computing

• Involves connecting geographically remote
  computers into a single network capable of
  working in parallel on business problems that
  require short-term access to large computational
  capacity
• Rather than purchase huge mainframes or super
  computers, firms can chain together thousands of
  smaller desktop clients into a single computing
  grid.

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Grid Computing (Continued)

• Most computers in the world are loafing, and at
  night they are sleeping.
• 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

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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.

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On-Demand (Utility) Computing (Continued)

• Excellent for firms with spiked demand curves
  caused by seasonal variations in consumer demand,
  e.g. holiday shopping
• Example Harry and David use IBMs On-Demand
  computing
• Saves firms from purchasing excessive levels of
  infrastructure

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Autonomic Computing

• Computer systems (both hardware and software)
  have become so complex that the cost of managing
  them has risen.
• Thirty to fifty percent of a companys IT budget
  is spent preventing or recovering from system
  crashes.
• Operator error is the most common cause of
  crashes.

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• 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
• Example Windows XP and Max X OS automatically
  download patches and updates.

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Edge Computing

• Edge computing is a multitier, load-balancing
  scheme for Web-based applications.
• Processing load is distributed closer to the user
  and handled by lower-cost servers.
• Lowers cost of hardware

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Edge Computing (Continued)

• Increases service levels
• Provides firm greater flexibility in responding
  to service requests
• Seasonal spikes in demand can be off-loaded to
  other edge servers.

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Edge Computing Platform
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CONTEMPORARY SOFTWARE PLATFORM TRENDS
The four major themes in contemporary software
platform evolution

• Linux and open-source software
• Java
• Web services and service-oriented architecture
• Software outsourcing

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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

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The Rise of Linux and Open-Source Software
(Continued)

• Linux is the most widely used open-source
  software program. Linux is an operating system
  derived from Unix.
• Mozilla Firefox browser and Thunderbird mail
  clients are the most widely used open-source
  applications. Others include MySQL.
• IBM, HP, Intel, Dell, and Sun have adopted and
  support Linux. Linux is a major alternative to
  Windows server and even client operating systems.
  

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Java Is Everywhere
Java

• An operating systemIndependent,
  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.

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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.

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Software for Enterprise Integration (Continued)

• 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.

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Enterprise Application Integration (EAI) Software
Versus Traditional Integration
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).
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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.

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Web Services and Service-Oriented Architecture
(Continued)

• 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.

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Service-Oriented Architecture

• SOA refers to the use of Web services in a firm
  to achieve integration among disparate
  applications and platforms.
• A firm might have applications (payroll) running
  on older AS400 IBM machines, IBM mainframes
  (customer data and inventory) and newer
  applications running on client/server networks.

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Service-Oriented Architecture (Continued)

• In SOA, these applications are integrated so that
  information stored on various systems can be
  brought together and fed into newer applications
  running on more contemporary equipment.
• SOA is generally less expensive than rebuilding
  all the older applications and adopting a new
  enterprise wide system.

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How Dollar Rent a Car Uses Web Services
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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

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Purchase of Software Packages and Enterprise
Software
Enterprise software packages prewritten
off-the-shelf software

• 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

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Purchase of Software Packages and Enterprise
Software (Continued)

• 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

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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?

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Changing Sources of Firm Software
Sources BEA National Income and Product
Accounts, Forrester Research, December 2003
eMarketer Inc., IT Spending 2004,
www.emarketer.com and author estimates.
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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS

• Total cost of ownership of technology assets
• 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