IT Infrastructure and Platforms

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

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Management Information Systems Chapter 6 IT
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OBJECTIVES

• Assess contemporary computer hardware platform
  trends
• Assess contemporary software platform trends
• Evaluate the challenges of managing IT
  infrastructure and management solutions

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Hong Kongs New World Telecommunications Case

• Challenge fragmented, high cost IT
  infrastructure slowed down market and customer
  response times
• Solutions integrated storage area network to
  enable the flow of information among different
  types and brands of computer servers
• Reduce number of servers from 107 to 70
• Illustrates the importance of IT infrastructure
  for achieving business objectives

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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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IT INFRASTRUCTURE
The Connection between the Firm, IT
Infrastructure, and Business Capabilities
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Management Information Systems Chapter 6 IT
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IT INFRASTRUCTURE
Levels of IT Infrastructure

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

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Management Information Systems Chapter 6 IT
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IT INFRASTRUCTURE
Levels of IT Infrastructure
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Management Information Systems Chapter 6 IT
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IT INFRASTRUCTURE
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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IT INFRASTRUCTURE
A Multitiered Client/Server Network (N-tier)
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IT INFRASTRUCTURE
Technology Drivers of Infrastructure Evolution

• Moores law and microprocessing power
• The law of mass digital storage
• Metcalfes law and network economics
• Declining communications costs and the Internet
• Standards and network effects

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IT INFRASTRUCTURE
Moores Law and Microprocessor Performance
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IT INFRASTRUCTURE
Falling Cost of Chips
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IT INFRASTRUCTURE
Examples of Nanotubes
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IT INFRASTRUCTURE
The Capacity of Hard Disk Drives Grows
Exponentially, 19802004
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Management Information Systems Chapter 6 IT
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IT INFRASTRUCTURE
The Cost of Storing Data Declines
Exponentially,19502004
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IT INFRASTRUCTURE
Exponential Declines in Internet Communications
Costs
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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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    INFRASTRUCTURE COMPONENTS

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

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    INFRASTRUCTURE COMPONENTS
The IT Infrastructure Ecosystem
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    INFRASTRUCTURE COMPONENTS
Computer Hardware Platforms

• 110 billion annual spend in the U.S.
• 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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    INFRASTRUCTURE COMPONENTS

• 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 annual spend in the U.S.
• 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 annual spend in the U.S. 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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• 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 annual spend in the U.S.
• Oracle and IBM continue to dominate the database
  software market
• Microsoft (SQL Server) and Sybase are 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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• 35 billion annual spend in the U.S. 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 annual spend on networking and
  telecommunications hardware
• 700 billion annual spend 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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• 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 Spring 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 annual spend on Internet
  infrastructure in the U.S.
• 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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• Open-source Apache remains the dominant Web
  server software, followed by Microsofts 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

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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 annual spend on computer system
  design, and related business services like
  business process re-design in the U.S.
• About 85 of business consulting in the U.S.
  involves IT business consulting

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• Integration services involves integrating data,
  and applications, in a firm
• Connecting new applications and systems to legacy
  systems
• IBM has transformed itself in 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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CONTEMPORARY HARDWARE PLATFORM TRENDS

• 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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CONTEMPORARY HARDWARE PLATFORM TRENDS
Grid Computing

• Involves connecting geographically remote
  computers into a single network capable of
  working in parallel on business problems which
  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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CONTEMPORARY HARDWARE PLATFORM TRENDS

• Most computers in the world are loafing, and at
  night they are sleeping
• It is estimated that from 25 - 50 of the
  computing power of the U.S. 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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CONTEMPORARY HARDWARE PLATFORM TRENDS
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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CONTEMPORARY HARDWARE PLATFORM TRENDS

• Excellent for firms with spiked demand curves
  caused by seasonal variations in consumer demand,
  e.g. holiday shopping
• Example Harry and David use IBM's 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
• 30-50 of a company's IT budget is spent
  preventing or recovering from system crashes
• Operator error is the most common cause of
  crashes

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CONTEMPORARY HARDWARE PLATFORM TRENDS

• 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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• 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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CONTEMPORARY SOFTWARE PLATFORM TRENDS
The Rise of Linux and Open-Source Software

• Open source software is free and can be modified
  by users
• Developed and maintained by a world-wide network
  of programmers and designers under the management
  of user communities

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CONTEMPORARY SOFTWARE PLATFORM TRENDS

• 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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CONTEMPORARY SOFTWARE PLATFORM TRENDS
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

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CONTEMPORARY SOFTWARE PLATFORM TRENDS
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 pre-written by
  specialized software firms like SAP, Oracle,
  PeopleSoft, and others

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CONTEMPORARY SOFTWARE PLATFORM TRENDS

• 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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CONTEMPORARY SOFTWARE PLATFORM TRENDS
Enterprise Application Integration (EAI) Software
Versus Traditional Integration
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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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CONTEMPORARY SOFTWARE PLATFORM TRENDS

• Web services permit computer programs to
  communicate with one another and share
  information without re-writing 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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• 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 firms and small 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 pre-written 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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CONTEMPORARY SOFTWARE PLATFORM TRENDS

• 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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CONTEMPORARY SOFTWARE PLATFORM TRENDS
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
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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Opportunities
Because of changes in hardware and software
platforms, firms face significant new
opportunities to obtain hardware and software
capabilities which are more reliable, less
costly, and more flexible than in the past
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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Challenges

• Making wise infrastructure investments
• Choosing and coordinating infrastructure
  components
• Dealing with infrastructure change
• Management and governance

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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Solutions

• Consider your strategic situation
• Start out small, develop one module at a time
• Consider the total cost of ownership

This model illustrates six strategic factors you
should consider when making infrastructure
decisions
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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Competitive Forces Model for it Infrastructure
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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Starting out small

• Experiment with new technologies on a smaller
  scale before taking up a large-scale
  infrastructure project

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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