Defining I T Infrastructure

• Set of physical devices and software required to operate

an enterprise
• Set of firm-wide services including:
– Computing platforms providing computing services
– Physical facilities management services
– IT management, education, and other services
• “Service platform” perspective
– More accurate view of value of investments

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Figure 5.1 Connection Between the
Firm, I T Infrastructure, and Business
Capabilities

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Evolution of I T Infrastructure
• General-purpose mainframe and minicomputer era: 1959
to present
• Personal computer era: 1981 to present
• Client/server era: 1983 to present
• Enterprise computing era: 1992 to present
• Cloud and mobile computing: 2000 to present

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Figure 5.2 Stages in IT Infrastructure Evolution

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Figure 5.3 A Multitiered (N-Tier)
Client/Server Network

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Technology Drivers of Infrastructure
Evolution (1 of 2)
• Moore’s law and microprocessing power
– Computing power doubles every 2 years
– Nanotechnology
• Law of Mass Digital Storage
– The amount of data being stored each year doubles
• Metcalfe’s Law and network economics
– Value or power of a network grows exponentially as a
function of the number of network members.

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Technology Drivers of Infrastructure
Evolution (2 of 2)
• Declining communication costs and the Internet
– Exponential growth in size of the Internet
• Standards and network effects
– Technology standards
▪ Specifications that establish the compatibility of
products and the ability to communicate in a
network
▪ Unleash powerful economies of scale and result in
price declines

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Figure 5.4 Moore’s Law and
Microprocessor Performance

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Figure 5.5 Falling Cost of Chips

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Nanotubes

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Figure 5.6 The Amount of Storage Per
Dollar Rises Exponentially, 1950–
2016

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Figure 5.7 Exponential Declines in
Internet Communications Costs
($/MBPS)

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What Are the Components of I T
Infrastructure?
1. Computer hardware platforms
2. Operating system platforms
3. Enterprise software applications
4. Data management and storage
5. Networking/telecommunications platforms
6. Internet platforms
7. Consulting system integration services

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Figure 5.8 The I T Infrastructure
Ecosystem

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Computer Hardware Platforms
• Client machines
– Desktop PCs, laptops
– Mobile computing: smartphones, tablets
– Desktop chips vs. mobile chips
• Servers
• Mainframes
– I BM mainframe
– Digital workhorse for banking and telecommunications
networks

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Operating System Platforms
• Corporate servers
– Windows Server
– Unix
– Linux
• Client level
– Microsoft Windows
– Android, iOS, Windows 10 (mobile/multitouch)
– Google’s Chrome O S (cloud computing)

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Enterprise Software Applications
• In 2018, firms spend $389 billion on software for enterprise
applications
• Largest providers: SAP and Oracle
• Middleware providers: I BM, Oracle

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Data Management and Storage
• Database software providers
– I BM (DB2)
– Oracle
– Microsoft (SQ L Server)
– Sybase (Adaptive Server Enterprise),
– My SQ L
– Apache Hadoop
• Physical data storage for large-scale systems
– Dell EM C
– Hewlett Packard Enterprise (H3 C)

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Networking/Telecommunications
Platforms
• Network operating systems
– Windows Server, Linux, Unix
• Network hardware providers
– Cisco, Juniper Networks
• Telecommunication services
– Telecommunications, cable, telephone company
charges for voice lines and Internet access
– AT&T, Verizon

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Internet Platforms
• Hardware, software, management services to support
company websites, intranets
– Web-hosting services
– Routers
– Cabling or wireless equipment
• Internet hardware server market
– I BM, Dell, Oracle, HP
• Web development tools/suites
– Microsoft (Visual Studio and .NET), Oracle-Sun (Java),
Adobe

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Consulting and System Integration
Services
• Even large firms do not have resources for full range of
support for new, complex infrastructure
• Leading consulting firms: Accenture, I BM Global Services,
HP, Infosys, Wipro Technologies
• Software integration: ensuring new infrastructure works
with legacy systems
• Legacy systems: older TPS created for mainframes that
would be too costly to replace or redesign

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What Are the Current Trends in
Computer Hardware Platforms? (1 of 5)
• The mobile digital platform
– Smartphones
– Netbooks
– Tablet computers
– Digital e-book readers and apps (Kindle)
– Wearable devices
• Consumerization of IT and BYO D (bring your own device)
– Forces businesses and IT departments to rethink how
IT equipment and services are acquired and managed

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What Are the Current Trends in
Computer Hardware Platforms? (2 of 5)
• Quantum computing
– Uses quantum physics to represent and operate on
data
– Dramatic increases in computing speed
• Virtualization
– Allows single physical resource to act as multiple
resources (i.e., run multiple instances of O S)
– Reduces hardware and power expenditures
– Facilitates hardware centralization
– Software-defined storage (SDS)
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What Are the Current Trends in
Computer Hardware Platforms? (3 of 5)
• Cloud computing
– On-demand computing services obtained over network
▪ Infrastructure as a service (I aaS)
▪ Software as a service (Sa aS)
▪ Platform as a service (PaaS)
– Cloud can be public or private
– Allows companies to minimize IT investments
– Drawbacks: Concerns of security, reliability
– Hybrid cloud computing model

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What Are the Current Trends in
Computer Hardware Platforms? (4 of 5)
• Edge computing
– Servers at the edge of the Internet
– Reducing latency, and network traffic

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Figure 5.9 Cloud Computing Platform

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Figure 5.10 Amazon Web Services

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Interactive Session: Organizations:
Look to the Cloud
• Class discussion
– What business benefits do cloud computing services
provide? What problems do they solve?
– What are the disadvantages of cloud computing?
– What kinds of businesses are most likely to benefit
from using cloud computing? Why?

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What Are the Current Trends in
Computer Hardware Platforms? (4 of 4)
• Green computing (Green IT)
– Practices and technologies for manufacturing, using,
disposing of computing and networking hardware
– Reducing power consumption a high priority
– Data centers
• High performance, power-saving processors
– Multicore processors
– Power-efficient microprocessors

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Dealing with Platform and
Infrastructure Change
• As firms shrink or grow, IT needs to be flexible and
scalable
• Scalability
– Ability to expand to serve larger number of users
• For mobile computing and cloud computing
– New policies and procedures for managing these new
platforms
– Contractual agreements with firms running clouds and
distributing software required

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Management and Governance
• Governance
• Who controls IT infrastructure?
• How should IT department be organized?
– Centralized
▪ Central IT department makes decisions
– Decentralized
▪ Business unit IT departments make own decisions
• How are costs allocated between divisions, departments?

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Making Wise Infrastructure
Investments
• Under-investment and over-investment can hamper firm
performance
• Rent-versus-buy
• Cloud computing
– Security requirements
– Impact on business processes and workflow
• Outsourcing

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Total Cost of Ownership (T CO) Model
• Analyzes direct and indirect costs
• Hardware, software account for only about 20% of TCO
• Other costs: Installation, training, support, maintenance,
infrastructure, downtime, space, and energy
• TCO can be reduced
– Use of cloud services, greater centralization and
standardization of hardware and software resources

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Competitive Forces Model for I T
Infrastructure Investment
• Market demand for firm’s services
• Firm’s business strategy
• Firm’s IT strategy, infrastructure, and cost
• Information technology assessment
• Competitor firm services
• Competitor firm IT infrastructure investments

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Figure 5.13 Competitive Forces Model
for I T Infrastructure

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