Lecture 1: IT Infrastructure

LEARNING OBJECTIVES
After completing this topic, you will be able to:

 Define IT infrastructure and describe its components.

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

1. IT Infrastructure: Computer Hardware

Because information is becoming such a valuable resource of the digital firm, the
infrastructure used to care for the resource takes on added importance. With the
proliferation of computing devices such as laptop computers, smartphones, and tablet
computers, people want the ability to access information wherever they are whenever
they want it. Data centers help give them those opportunities.

Let us examine all the components that comprise an IT infrastructure of today and
tomorrow and how best to manage them.

1. IT Infrastructure: Computer Hardware

1.1. Infrastructure Components
When you mention the phrase "information technology infrastructure," most people
immediately think of just hardware and software. However, there is more to it than
just those two. Five components must work in concert together to give the firm a
competitive advantage.

 Hardware: input, processing, output, storage, and delivery

 Software: system software, application software, and enterprise integration
 Data management technology: organize and deliver data
 Networking and telecommunications technology: data, voice, audio, and video
 Technology services: run and manage infrastructure and train users

Over the years, it has become quite common to install different systems throughout various
parts of a company's infrastructure. Throwing out all the old hardware and software in legacy
systems and starting from scratch may seem the easiest way to solve a problem. It is just not
practical or cost-effective. Systems integration is the art and science of tying old systems
into newer ones to form a cohesive unit. Piecing together these information systems into a
seamless whole can be a daunting task. However, it is necessary for sharing information among
all departments and managers in a company.
1.2. Types of Computers
Classifying computers depends largely on the computing capacity of the processor and
the peripheral devices. Managers should determine what tasks the system will be used
for, how many users will likely access it at any time, and how much data will be
processed and stored. The categories are: 

 Personal computer: includes desktops, laptops, personal digital assistants, and even

cell phones.
  Workstation: has more computing capacity in its CPU than a typical personal computer.
Scientists, engineers, and those working with large graphics files are the main users.
 Server: used primarily in networks. Some servers contain communication software,
while others contain the application software and data users need to process
transactions.
 Mainframe: has the necessary power and speed to process thousands and millions of
transactions from the Internet and networks and has the storage capacity needed for all
the data captured and processed by larger information systems.
 Supercomputers: are making a comeback in popularity because of the speed and
storage capacity required in networks.

 One more type of computing is called grid computing. Think about how much time
you do not use your personal computer. It is quite a lot. Most computers are idle more
time than not. What if you could combine all the idle time of hundreds or thousands of
computers into a continuous, connected computing capacity to capture, process,
manage, store, and retrieve data? You would not have to purchase mammoth
supercomputers to realize this capability and capacity. You must turn to grid computing.
It allows companies to save money on hardware and software and increase computing
and processing speeds to make the company more agile.

Computer Networks and Client/ Server Computing

 Understanding the server/client computing structure is essential because of the
increasing popularity of networks (see Figure 1.1).

 Figure 1.1: Client/Server Computing

Think of an octopus, with the body representing the server and the tentacles
representing the clients. At the heart of every network is a server. It can be a
mainframe, midrange, workstation, or a souped-up personal computer. Some of the
data, applications software and other instructions are stored that network users need to
communicate with and process transactions. The client computer is the node on the
network that users need to access and process transactions and data.

 Rather than maintain all data and computing processing on a single computer as you
would have in a centralized processing structure, networks provide distributed
processing capability necessary in today's business environment. Data and
applications are available to users wherever they are whenever they need it.
 Compare Figure 1.1 to Figure 1.2, and you will see that the N-tier client/server
architecture merely takes the same client/server structure we discussed and ramps it
up in size to match the computing requirements in large businesses. The "N" represents
any number of servers a business needs with the workload distributed among
specialized servers.

 INSERT PIC

Figure 1.2: A Multitiered Client/Server Network (N-Tier)

If a business has an extensive network, it may decide to isolate anything having to do

with Web sites onto a Web server. Requests for Web pages are processed faster than
if the Web data were co-mingled with other data. The same happens when a business
decides to isolate application operations to an application server. It is not that these
servers are built any differently than other servers. It is simply a matter of having the
servers perform just one function very quickly.

1.3. Storage, Input, and Output Technology

Input, storage, and output peripheral devices play a big role in how fast and efficiently
the digital firm can turn raw data into useful information. 

Secondary Storage Technology

Besides the primary storage areas of ROM and RAM, other storage devices include the
hard disk drives in almost every computer, removable disks, and magnetic tape storage.
These are referred to as secondary storage. The kind of storage necessary is dictated
by the computer’s size and how it’s used. As with most other components, the cost is
dropping significantly while the technology is improving all the time.

 The most common form of secondary storage is the magnetic disk. Just about every
personal computer has a hard disk drive located in the box that sits beside the monitor.
All the operating system software and application program software resides on the hard
disk drive for long-term storage. Data files are also saved to the hard disk. 

Solid state drives (SSDs) are used in smaller PCs, smartphones, and tablets. They are smaller
in physical size while allowing storage of much more data.

USB flash drives are a convenient way to store data but more importantly, give you a
way to take it with you wherever you go. Flash drives come in a variety of storage sizes
and you simply plug them into a USB port on any computing device to access the
contents.
Most personal computers use a single magnetic disk for the hard drive. Businesses that
require more storage space use RAID (Redundant Array of Inexpensive
Disks) technology. Not only does RAID increase storage space, but it provides an extra
measure of reliability; if one disk fails, processing is moved to the other disks. Typically,
this storage technology is reserved for very large networks. 

Optical disks have become one of the most preferred methods of storing data. Although CDs
are still used, DVDs are quickly replacing them.

We’ve probably all seen a compact disk read-only memory (CD-ROM) that holds music. Most
software programs are stored on compact disks (CD). The drawback to this type of disk is that it
can usually be written on only once because the data are stored on the disk by literally burning
pits into its surface. To overcome this problem, users can substitute CD-RWs (compact disk-
ReWritable) instead. This type of CD can be used multiple times.

Digital video disks (DVD) store more data than CDs and can be used on computers, portable
DVD players, or with televisions. The disks hold about 4.7 gigabytes of data; that’s enough for
two to four hours of video. Recordable and rewritable DVDs are popular for storing audio, video,
and graphic files.

Magnetic tape is still used on larger mainframe computers for data that don’t require fast
access, such as historical records maintained by credit card companies. Even though it’s slower
than magnetic and optical disks, many companies still use this technology because it’s cheap
and can store massive amounts of data.
 

The next time you log on to the Internet and access your favorite portal such as Yahoo!,
take a moment to think about how your page preferences are stored. How did Yahoo!’s
computer instantaneously know that you prefer the latest hockey scores instead of stock
quotes? When you go to your favorite shopping Web site, how is it that the computer
remembers your favorite color is blue instead of red? Remember, you’re not the only
one using the Web site; there are thousands and thousands of other people the
computer must keep track of. Where are all those bits and bytes stored?

INSERT PIC

Figure 1.3: A Storage Area Network (SAN)

All that data may very well be kept on a storage area network (SAN), as Figure 1.3
shows. As more and more businesses move to the Internet, these networks will become
more common. Online users want instant access to data, and SANs help companies
provide it.
Input and Output Devices

Data go in and information comes out of computer systems via peripheral devices. The
speed, capacity, and ease-of-use of these devices are constantly improving.

INSERT PIC

1.4. Contemporary Hardware Trends

The network is the computer. Louis Gertsner, former CEO of IBM, uttered this phrase as
far back as the mid-1990s. It’s even truer now than it was back then. We’re no longer
content to view data in a plain-text format on paper. We want to enhance our
communications with graphics, video, and audio. We don’t want four or five different
computing devices but everything all rolled into one package. And, we want all of it
accessible wherever we are whenever we want it.

Let’s take a look at where we’re headed with hardware components.

The Mobile Digital Platform

One of the most dynamic hardware trends to appear for personal and business use is
the increased use of cellphones and smartphones for computing tasks. People are no
longer tied to a desktop PC or laptop computer to transmit data, surf the Web, send
email and instant messages, or access data on corporate systems. Netbooks, tablet
computers, and digital e-book readers, such as the Amazon Kindle, are also taking on
computing tasks that used to require a full-size computer.

These devices present both opportunities and challenges to the digital firm. Users can
access much more data instantaneously wherever they are. On the flip side, they also
create another node on a network that unauthorized users can use to access business
systems and wreak havoc. 

Consumerization of IT and BYOD

 In the past, computing devices and software were developed specifically for business
applications. Very seldom did the hardware and software spill over into the consumer
market. On the flip side, hardware and software created for consumer use saw very little
application in the business world. That has changed in the last few years as the two
have merged and crossed over. Now, software platforms such as Facebook have found
a cozy home in the business world. As more and more people purchased smartphones
and other technologies for their personal use, they were not content to leave the handy
devices at home when they went to work.

The consumerization of IT explains the technology along with BYOD, bring your own

device. But, along with bringing their own devices, employees are bringing a new set of
problems to the doorstep of their organization’s IT department. The most prevalent
problem is securing the business’s core information systems from threats posed by
malware and data theft. Access to the corporate network must continue to be protected
while still giving employees fairly easy access to data, information, and applications.

It’s a delicate balance for the IT department that must manage and control these consumer
technologies while making sure they serve the needs of the business.

Nanotechnology and Quantum Computing

Some of the first computers were huge monstrosities that consumed incredible amounts
of power for very little computing capacity compared to today’s computers. Over the
years, manufacturers have continually reduced chip sizes while increasing capacity. But
there’s only so much they can do with the older technology.

One way chip makers are overcoming size barriers is to use nanotechnology to create
computer chips that are thousands of times smaller than their predecessors. That
enables manufacturers to make more powerful, smaller chips for cell phones, iPod-like
devices, and PDAs while increasing computing capacity.

Quantum computing, based on the principles of quantum physics, increases

computing power by operating in many different states at once, performing different
computations simultaneously, and solving scientific and business problems millions of
times faster than other computers available today.

Virtualization

Server computer hardware prices have fallen over the years to the point where they’re
relatively cheap. Hence, the problem. Rather than increase the efficiency and utilization
of existing hardware, many companies just buy more of it and stick it on the shelf. Not
much thought is given to the total cost of ownership (TCO) of all the hardware. As it
turns out, the TCO is as much or more than the original purchase price. And, the
hardware utilization rates are extremely low. We’ll examine the concept of TCO more at
the end of this chapter.

For example, let’s say you leave your kitchen light burning twenty four hours a day. You
only spend about four hours a day actually in the kitchen. You end up wasting twenty
hours of electricity for those four hours of use.

Of course this is a simplified example but you get the idea of how computer usage is
wasted running all those servers for a fraction of the time they’re actually used. It’s not
unusual for a company to have one server for this application and another server for
that application. The applications are stored on separate servers using different
operating systems. It’s a very wasteful configuration.

Enter virtualization. It’s the process of running multiple operating systems and

application programs on one machine and increasing the overall utilization rates of the
device. Instead of having ten servers running ten different applications, virtualization
consolidates the programs onto one or two servers.

Cloud Computing

Most companies don’t build their own electrical generating plants or their own water
treatment facilities. They purchase only the utilities they need, even in peak demand
times. Why not do that with computing capacity. If JCPenneys.com needs 50 percent
more capacity during the 30-day Christmas buying period, why should it have to
purchase that much infrastructure only to have it sit idle the other eleven months of the
year.

 Cloud computing is defined by five characteristics: 

 On-demand self-service: users can access computing capabilities whenever and

wherever they are
 Ubiquitous network access: no special devices are necessary for accessing data or
services
 Location independent resource pooling: users don’t need to be concerned about
where the data are stored
 Rapid elasticity: computing resources expand and contract as necessary to serve
users
 Measured service: users pay only for the computing capabilities actually used.

Almost any type of computing device can access data and applications from these
clouds through three types of services:

 Cloud infrastructure as a service: allows customers to process and store data,

and use networking and other resources available from the cloud.
 Cloud platform as a service: the service provider offers infrastructure and
programming tools to customers so they can develop and test applications.
 Cloud software as a service: the vendor provides software programs on a
subscription fee basis. Google apps is a great example of cloud software as a
service because they provide easy access to common business applications
through Web browsers.

Cloud computing is becoming popular because customers only pay for the computing
infrastructure that they actually use. In many cases users experience lower IT costs
than if they had to buy all the equipment, hire the technical staff to run it and maintain it,
and purchase software applications. This type of on-demand computing is beneficial to
small- and medium-size companies because they can easily scale up and down their IT
requirements as the pace of their business demands it. Larger organizations however,
may not want their most sensitive data stored on servers which they don’t control.
System reliability is also a special concern to all businesses. The unavailability of
business data and applications for even a few hours may be unacceptable.
Amazon.com Inc.’s Internet-based computing services, used by thousands of business
customers to run their Web pages and store data, crashed this morning and knocked
sites across the U.S. offline.

Amazon Web Services servers in northern Virginia suffered outages beginning at about
5 a.m. local time, affecting a portion of U.S. customers, the Seattle-based company
said. Twelve hours later, Amazon said all but one zone in the U.S. had been restored.

Amazon, the world’s largest online retailer, has billed its cloud-computing services as a
cheap and safe way for businesses to outsource their data centers. The outage is
evidence that companies can’t wholly rely on cloud services to handle important
functions, said Vanessa Alvarez, an analyst at Cambridge, Massachusetts-based
Forrester Research Inc.

“Customers need to start asking tough questions and not assume everything will be
taken care of in the cloud, because it will not,” Alvarez said. “They shouldn’t be counting
on a cloud service provider like Amazon to provide disaster recovery.”
(BusinessWeek.com, “Amazon Web Services Disruption Knocks Customer Sites
Offline”, Galante, Joseph, April 21, 2011)

Two kinds of clouds are available:

 Public cloud: owned and operated by external service providers; accessed

through the Internet; available to anyone; generally used for non-sensitive data.
 Private cloud: proprietary system owned and operated by a specific company;
based on virtualization; available only to users inside the company; generally
used for sensitive financial and personal data.

 On-demand computing, another term for cloud computing, mirrors other utilities that
provide necessary infrastructure from centralized sources. It’s cheaper and helps
companies reduce the total cost of ownership of IT technology. They can also take
advantage of newer technologies than what they are able to buy and maintain on their
own. Cloud computing also gives companies a chance to expand services that perhaps
they wouldn’t be able to provide if they had to buy all the hardware and software.

Green Computing

Virtualization that we discussed earlier makes the concept of green computing more of

a reality. It allows businesses to reduce their total cost of ownership of hardware
through more efficient use of servers, printers, storage devices, and networking
equipment. In turn, that reduces the impact on the environment. Power consumption
alone raises the TCO of servers to very high levels—businesses spend as much
running a server as they did on purchasing it.
High-Performance and Power-Saving Processors

As businesses require more and more computing capacity, hardware and chip
manufacturers are answering the need with multicore processors. Rather than a
single chip on a single processing core, you purchase a machine with two or more
processors. It reduces the overall number of servers or processors, thus reducing the
total cost of ownership, including electricity costs. The motivation to reduce power
consumption is migrating to netbooks, smartphones, and mobile computing devices.

Autonomic Computing

As companies rely more and more on IT to meet the user demands, they can’t afford to
have any system downtime at all. Downtime costs money. Autonomic computing is a
step toward creating an IT infrastructure that is able to diagnose and fix problems with
very little human intervention.

 Autonomic computing features systems that can: 

 Configure themselves
 Optimize and tune themselves
 Heal themselves when broken
 Protect themselves from intruders and self-destruction 

Although this type of computing is still rather new, it promises to relieve the burden
many companies experience in trying to maintain massive, complex IT infrastructures.

Bottom Line: Managers and users should first decide the tasks they want
accomplished and then decide the type of infrastructure components that will
best fit. The most successful companies use the right combinations of hardware,
software, data management technology, networking and telecommunications
technology, and technology services that will help them meet their business
objectives and create a competitive advantage. Hardware is trending toward the
mobile digital platform, cloud computing, autonomic computing, green
computing, and more efficient use of computing resources through virtualization
and multicore processors.

2. IT Infrastructure: Computer Software

What if you bought a beautiful new car with all the fanciest equipment inside, but when
you tried to start the engine nothing happened? How can that be, you ask? The car cost
a lot of money and it’s brand new! However, as soon as you put some gasoline in the
tank, it starts right up and you’re moving down the road.
You can have all the computer hardware money can buy, but if you don’t have the right
software, you can’t do very much with the hardware and you’ve wasted a lot of money.

INSERT PIC

Figure 1.5 show how software is divided into two

categories: system software and application software. The system software manages the
basic operations of the computer and controls the equipment associated with it. The
applications software helps turn raw data into useful information.
2.1. Operating System Software
Operating systems tell computers what to do, when to do it, and how. Operations such
as logging on, file management, and network connectivity are controlled by the
operating system.

The three basic system software functions are: 

 Allocate and Assign: helps the computer decide what hardware resources will be used
to accomplish the task at hand.

 Schedule: helps the computer decide when to use the input and output devices.

 Monitor: keeps track of everything that is going on inside the computer.

 PC, Server, and Mobile Operating Systems

The small mobile computing devices we discussed earlier, cellphones, smartphones,

and netbooks, don’t have the computing capacity to handle a full-size operating system
software program. And, many of the functions in Windows 8, Linux, and Unix, aren’t
necessary on these smaller computers. Users are opting instead for lightweight
operating systems such as Google Chrome and Android instead.

Google Chrome OS is arriving just in time to take advantage of the perfect storm of
cloud services, cheap hardware, and a new generation of platform-agnostic users.
Unlike other Linux-based OSs, Chrome has brand recognition that even the biggest
neophyte could get comfortable with. Chrome is also arriving just in time to take
advantage of dirt-cheap hardware and super-broke consumers. The future for Chrome
based netbooks is in the $200 and under space. At this price level, Microsoft would
have to virtually give away Windows. Within a year or two, netbooks could hit the
magical price of $99. For this price, people will happily purchase a computer that is
nothing more than a simple and fast web-surfing device. While people might expect
$300-plus computers to have full-featured OSs they may be less critical when netbooks
fall into the impulse buy price range, especially when paired with lightning-fast
performance. (PC World, “Google Chrome OS Could Be Pivotal in the Cloud
Revolution,” Michael Scalisi, July 14, 2009)
The Google Chrome OS makes it easy for users to access cloud computing services
through wireless networking. Almost all the software and data are stored on servers and
accessed through a Web browser.

The graphical user interface (GUI) available on most computing devices makes it

easy for people to use them. By far the most prolific operating system for personal
computers is Microsoft Windows in various versions.

Many smartphones use multitouch technology that allows users to pinch the screen or

swipe their fingers over the screen to issue commands.

The first version of an operating system to offer multitouch technology on full-size

desktop and laptop computers was Windows 7. Windows 8 is the current version of
the popular personal computer operating systems and provides enhanced multitouch
interfaces.

Apple’s iOS extends the same technology to full-size Mac desktop and laptop

computers.

Windows is also the operating system used by some nontraditional computing devices
such as hand-held PDAs and cell phones whereas Windows Server 2008 is used in
larger networks.

Windows is not the only operating system available for larger networks using high-end
servers. UNIX was created to make it easier to manage communications and networks
that require a high degree of reliability and scalability. 
In the early 1990s, a graduate student at the University of Finland, Linus Torvald, built
an operating system called Linux that uses open-source software. Anyone can
download it from the Internet. Experts predict its use will expand rapidly, because its
small size makes it ideal for information appliances. It’s also less crash-prone than most
other operating systems, a feature that makes it very attractive to companies running e-
commerce Internet businesses. Linux is becoming the operating system of choice for
organizations looking to save money. Businesses and governments across the globe
are adopting the Linux platform as a way to reduce IT spending and license costs.

2.2. Application Software and Desktop Productivity Tools

We’ve come a long way, baby! Early versions of application software were difficult to
use. It wasn’t easy to move data from one file to another, if it was possible at all. When
you finally learned how to use one application program, you had to start from scratch if
you moved to another. Improvements in application software have erased most of these
problems.

Programming Languages for Business

Even though you may never use some of the common business programming
languages, as a manager and computer user you should be familiar with them:

 C: used to create operating systems and application software for PCs

 C++: enhanced version of C that works better with software objects
 Visual programming language: uses graphics and iconic elements to create
applications
 Visual Basic: visual programming tool for Microsoft Windows operating systems

Java fulfills the need for interactive programming over the

Internet. What makes this language so enticing is that it is platform-
independent. This means that you don’t need to worry about compatibility between sepa
rate operating systems such as Windows, MacIntosh, or
UNIX. Regardless of the hardware or software you use, this language will serve them all
.

Java creates miniature programs called “applets,”

which perform very small, specialized, one-at-a-time tasks. When a user wants to
perform the task, the coding is moved from the server where it’s permanently stored and
then executed on the client computer. When the task is completed, it’s deleted from the
client. In essence, you
use an applet once and then literally throw it away. Using applets reduces storage need
s on client computers and PCs. Again, it doesn’t matter whether the client is a PC or a
terminal attached to a network. In fact, Java applets are being used on handheld
computers, and on many other non-computer appliances.

Java also reduces the “bloatware” problem of huge software application programs with
more functions than the average person could ever hope to use. You don’t need a
large application program to do a simple task. If you want to calculate the monthly
payments for a car loan, you simply use a Java applet instead of a huge spreadsheet
program.

Software Packages and Desktop Productivity Tools

In the past, most application programs were totally separate from one

another. Moving data between them was extremely difficult, if not
impossible. With integrated software packages and software suites, it is much easier to 
use data from one program in another without having to recreate it in every
program. This concept eliminates input redundancy and the
natural human tendency to make errors.

PC software tools are targeted to the nontechnical end user and encompass:

 Word processing (MS Word, WordPerfect)

 Spreadsheets (Excel, Lotus 1-2-3)
 Data management (Access)
 Presentation graphics (PowerPoint, Presentations)
 Software suites (Office 2013, StarOffice)
 Web browsers (Mozilla Firefox, Internet Explorer)

2.3. HTML and HTML5

It’s becoming quite common for the average computer user to create Web pages using
the Hypertext markup language (HTML). In fact, by using the PC software tools we
discussed earlier (Word 2013, Lotus 1-2-3, PowerPoint), you can as easily create a
Web page as you can a letter, chart, or database. Combining HTML language into
everyday applications is one more step toward integrating the Internet into everything
we do.

 
The original version of HTML was created when the Web was first borne. It never took
into account that eventually people would want to incorporate audio, video, and pictures
within a Web page. More importantly, the authors of basic HTML language never
envisioned that people would want to access the Web through small handheld devices,
smartphones, tablets, and netbooks. As our computing hardware has evolved, so too
must the software that provides information to all those devices. The next evolution of
HTML is HTML5.

The World Wide Web’s markup language has always been HTML. HTML was primarily
designed as a language for semantically describing scientific documents, although its
general design and adaptations over the years have enabled it to be used to describe a
number of other types of documents.

2.4. Web Services

Web services use Internet technology to link application programs together without
having to create custom coding. And, as the name suggests, they are Web-based,
making them more universally accepted within a business or across traditional
organizational boundaries extending to customers, suppliers, and business partners.

The distinct advantage of building Web services is their reusability. That is, you can
build one Web service that can be used by many different businesses. This kind of
functionality promises a whole slew of new Internet-related development companies to
spring up in the next few years as this idea takes hold.

In just the past couple of years, several developments have come together to make the
Web more of a real-time experience: ubiquitous high-speed Internet connections; a
growing number of mobile devices such as the iPhone with full Web browsers; and new
Web technologies that enable instant transmission of messages and data. That mix has
made always-on, real-time communications easy and addictive. (BusinessWeek, Robert
D. Hof, “Betting on the Real-Time Web,” Aug 6, 2009)

As we use the Web for more applications, computer languages are evolving to keep up
with new and innovative uses. HTML has worked well for displaying text and graphics.
However, current computing environments demand more.

 
XHTML (Extensible Hypertext Markup Language) combines HTML language with
the XML language to create a powerful tool for building more useful Web pages. It’s
used to describe data in Web pages and databases. It’s all part of the evolution of the
Internet.

Web service-oriented architecture consists of utilities that provide methods for

applications such as secure, third-party billing and payment systems or transporting
messages and identifying available services.

2.5. Software Trends

We’re just not standing still when it comes to improving and improvising how we use the
Internet and the Web. Here are some promising trends.

Open Source Software

We mentioned Linux earlier and discussed how anyone can download the source code,
improve upon it, and post it back to the Web for others to see and use. That’s the idea
behind open source software. Other examples include OpenOffice from Sun
Microsystems, Firefox Web browser, and Google’s Android, software written primarily
for mobile devices that includes an operating system, middleware, and key applications.

Cloud-Based Software Services and Tools

Small- and medium-size companies in need of sophisticated software can rent only
what they need and can afford through online software as a service
(SaaS) providers. For instance, Right Now Technologies provides applications services
via the Internet for customer service and marketing programs. Businesses can
outsource their accounting needs to a Web-based service such as Intuit’s online payroll
services.

Because these services are Web-based, data are accessible from virtually any
computer connected to the Internet. The road-warriors love having instant access to
documents from wherever they are. Workers can collaborate with others in distant
offices through a Web-based SaaS, and no one has to worry about their files being
compatible with others—they are.

There is some danger to outsourcing your information resources to this kind of service.
Remember, all your data are stored on another company’s server computers and you
have little control of it. What happens if the service provider goes out of business? How
secure are data stored on the servers? What kind of scalability and capacity planning
has the service completed? These are just some of the issues managers must address
when they consider using SaaS providers versus in-house technology support.

Mashups and Apps: You may be familiar with mapping services on the Web such as
Mapquest.com or Google maps. These applications provide an easy method to find
your way around town. Separately, you may have used a shopping site to locate stores
that carry products you’re most interested in. What if you could combine these two
separate applications into one and make your Web browsing easier and faster—not to
mention your offline shopping excursion? That’s the idea behind mash-ups. Mash-ups
combine two online applications—mapping and shopping—into one new application. If
you’d like to see an example of how convenient mash-ups are, visit MotoMap.com to
get consolidated information and maps of motor cross and dirt bike trails across the
United States.

Let’s say you’re shopping at Macy’s and see a blouse or shirt that you just love. The
price seems a little high but you’re not sure you can get it more cheaply somewhere
else. All you have to do is pull out your smartphone, download an app, scan the bar
code or enter a few details about the blouse, and in seconds you’ll have information
about other places that carry the item, the price, and maybe how many they have in
stock. Apps, short for applications, are very small programs that perform one particular
task. They can be loaded to your hand-held computing device, including smartphones,
e-book readers (in some cases), or tablet computers such as the iPad. Some are free
and others range from $0.99 to $4.99. They generally are written by third-party
developers following a strict set of guidelines established by the device maker. As the
excerpt below shows, third-party companies are now helping small business owners
develop their own apps.

Tom Johnson is no engineer. But that didn’t stop him from creating software that helps
him market his wedding-video business. Johnson crafted an application, downloadable
to the Apple (AAPL) iPhone, that plays a sample video, connects users to a blog, and
lets would-be clients call his company, Alliance Video Products, by pushing a single
button. Best of all for a non-engineer like Johnson, he did it in a single day, without
writing a single line of code.

To create the app, Johnson relied on a company called Swebapps.com, one of a new
crop of services that help clients order up their own smartphone apps—often in less
time and for less money than it would take to develop an app from scratch. Like Alliance
Video Products, churches, museums, schools, and other small businesses of every
stripe can now get into the app-making game—creating downloadable games, travel
guides, quizzes, and blog feeds—thanks to sites like AppBreeder.com,
GameSalad.com, and MyAppBuilder.com. Often all it takes is plugging specs into online
templates. (“Do-It-Yourself iPhone Apps,” Kharif, Olga, BusinessWeek Technology
Insider.com, Nov 1, 2009)

It’s worth noting that most apps are developed for a specific device or devices from a specific
company. Apps that are written for the Apple company will run on any Apple device. However,
apps written for an Apple device will generally not run on a device manufactured or sold by
Samsung or a BlackBerry. More and more apps are being created for the business user that lets
her access server documents, call up sales data from the corporate database, or schedule
meetings with colleagues or customers.

Bottom Line: As software becomes easier and more powerful to use, managers and
users are creating more sophisticated processes that meet the needs and wants of
employees, customers, suppliers, and business partners. The most appropriate software
is that which allows a business to meet its objectives and gain competitive advantages.

3. Managing Hardware and Software Technology

Companies are rethinking their strategic models for IT infrastructures to meet the
changing demands of customers, suppliers, and business partners. If a company fails to
do so they risk losing business and thousands or millions of dollars. Because of easy
Internet access and competition, customers can simply go elsewhere if the company
doesn’t adjust to the new world.

3.1. Capacity Planning and Scalability

To be sure, it’s extremely hard to figure out ahead of time how much computing
capacity a company will need. It’s like gazing into a crystal ball and trying to discern the
future. Managers need to design scalability into their systems so that they don’t under-
or overbuild their systems. The idea is to initially build the system for what the company
thinks they need, but to design it in such a way that increasing capacity is a fairly easy
thing to do. If the system is more successful than originally thought, or as the number of
users increases, capacity can be increased without having to start over from scratch.

 
A few well-known corporations failed in their capacity planning and lost millions of
dollars. Toys-R-Us is a good example. They developed a very nice Web site to sell their
products online but didn’t plan well for the thousands of customers that would try to
access the site at the same time. The end result was frustrated users who couldn’t
make purchases in time for Christmas delivery and thus went to other Web sites.

3.2. Total Cost of Ownership (TCO) of Technology Assets

Cost issues are becoming more important to businesses and companies as the demand
for computer technology and networks grow. What’s most important to remember is that
the Total Cost of Ownership (TCO) should extend past the hard dollars spent on
hardware and software. The cost should incorporate such items as employee training,
their ability to perform necessary functions given the network configuration, and lost
productivity when the network is down. The TCO should also include the amount of
money spent on communications wiring (telephone wires, fiber-optic cable, etc.) and
security and access issues.

Table 1.2 consolidates all of the components managers should consider when
determining the TCO of technology.

INSERT PIC

3.3. Using Technology Service Providers

It’s not unusual for small- and medium-size businesses to rent office furniture,
telephones, and even workers. Small businesses often hire an outsourcing firm to do
their accounting and bookkeeping rather than try to do it themselves. They may contract
with a shipping firm to move their products to the customer rather than buy the 18-
wheeler and hire the driver themselves. And instead of building a huge warehouse, they
may rent space in someone else’s storage facility.

Most of the time companies choose to do business this way because it’s cheaper.
Sometimes they do it because they want to concentrate on their core business and
“leave the driving” to someone else. Now they can make the same type of decision
regarding their information needs.

Outsourcing

Companies are discovering that it’s cheaper and easier to hire third-party vendors for
software-related tasks such as system maintenance, data management, and program
development. Much as they’ve outsourced mundane and repetitive tasks to mainly
overseas locations, many companies are outsourcing all kinds of software-related
work. The Internet has made this option more viable than it ever was.

A popular example of outsourcing is that of Web hosting services. Rather than

purchase all of the hardware necessary to support Web sites, intranets, and extranets,
many small- and medium-size companies use Web hosting services instead. It’s
cheaper and easier to have these service providers take care of the hardware, software,
and security issues while the business concentrates on its core processes.
IPowerWeb.com is an example of a low-cost, easy-to-use Web hosting service available
to businesses and individuals. You create your own Web site, and they do all the rest.

Two types of outsourcing include domestic-based outsourcing to firms located within the
United States. Offshore software outsourcing describes moving the work to foreign
countries. In spite of the fear many people have about this type of outsourcing
eliminating jobs within the United States, the opposite may be true.

But a more enlightened, strategic view of global sourcing is starting to emerge as

managers get a better fix on its potential. The new buzzword is “transformational
outsourcing.” Many executives are discovering offshoring is really about corporate
growth, making better use of skilled United States staff, and even job creation in the
United States, not just cheap wages abroad. True, the labor savings from global
sourcing can still be substantial. But it’s peanuts compared to the enormous gains in
efficiency, productivity, quality, and revenues that can be achieved by fully leveraging
offshore talent. (BusinessWeek.com, Jan 30, 2006)

Regardless of the type of outsourcing a business uses, astute managers will make sure
they get everything in writing by using a service level agreement (SLA). It spells out
exactly what the service provider is responsible for and what the customer will do. Some
of the items that should be covered are:

 Nature and level of services provided

 Criteria for performance measurement
 Support options
 Provisions for security and disaster recover
 Hardware and software ownership and upgrades
 Customer support
 Billing
  Conditions for terminating the agreement

 Using Cloud Services

Cloud computing mirrors other utilities that provide necessary infrastructure from
centralized sources. It’s cheaper and helps companies reduce the total cost of
ownership of IT technology. They can also take advantage of newer technologies than
what they are able to buy and maintain on their own. Utility computing, another term for
cloud computing, also gives companies a chance to expand services that perhaps they
wouldn’t be able to provide if they had to buy all the hardware and software.

Hybrid cloud services are generally used by large corporations that store the most
essential core activities on their own infrastructure and use the cloud for less-critical
systems or additional processing capabilities.

3.4. Managing Mobile Platforms

Most IT departments and functional managers find it hard enough to track traditional
computer equipment such as desktop PCs and laptops. Now they have to worry about
dozens or hundreds of mobile devices such as cellphones, smartphones, netbooks,
tablets, and even e-book readers. Updating software, maintaining security, developing
usage policies, and controlling data and applications are just a few of the headaches
these devices present to an organization. And, the total cost of ownership is much
higher for mobile devices than traditional computers. However, the benefits and
increased employee productivity make it necessary to assume these tasks.

One way to handle all the headaches with mobile devices is to use mobile device
management (MDM) software. It monitors, manages, and secures mobile devices across
different operating systems and services providers. Using this kind of software, your IT
department can monitor usage, install or update software programs or apps, back up data, and
restore your device to previous versions if necessary. The software can also disable devices
that may be lost or stolen.
3.5. Managing Software Localization for Global Business
All of the issues we’ve discussed in this chapter are tough enough if you only have one
language, one culture, and one set of business processes to work with. Imagine
magnifying all these issues if you are running a global business in which you have
multiple languages, multiple customs and cultures, multiple sets of government rules
and regulations, and multiple ways of doing business?
 

Bottom Line: Managing technology is more than simply purchasing hardware and
software. Managers must concentrate on the total cost of ownership for technology
assets while keeping an eye on future applications that may provide new opportunities
for the organization. Sometimes it may be cheaper and easier to outsource technology
requirements to another company rather than do it yourself.