info systems

14.9

-It's estimated that 80 percent of corporate tech spending goes toward data center maintenance. Cloud computing helps tackle these costs by allowing firms to run their own software on the hardware of the provider, paying only for services that are used. -Amazon, Google, IBM, Microsoft, Oracle/Sun, Rackspace, Salesforce.com, and VMware are among firms offering cloud computing services. -Cloud computing varieties include platform as a service (PaaS), where vendors provide a platform (e.g., the operating system and supporting software like database management systems, a software development environment, testing, and application service) but where client firms write their own code; and infrastructure as a service (IaaS), where cloud vendors provide and manage the underlying infrastructure (hardware, storage, and networking), while clients can create their own platform, and choose operating systems, applications, and configurations. -Some firms use cloud computing technology on hardware they own or lease as a sole customer. This is referred to as a private cloud. Other firms allocate resources between their own systems (the private cloud) and the public cloud (where resources may be shared with other clients). This is referred to as a hybrid-cloud strategy. -Amazon provides software and services, helping the CIA build and maintain its own private cloud. -Users of cloud computing run the gamut of industries, including publishing (the New York Times), finance (NASDAQ), and cosmetics and skin care (Elizabeth Arden). -Benefits and risks are similar to those discussed in SaaS efforts. Benefits include the use of the cloud for handling large batch jobs or limited-time tasks, offloading expensive computing tasks, and cloudbursting efforts that handle system overflow when an organization needs more capacity. -Most legacy systems can't be easily migrated to the cloud, meaning most efforts will be new efforts or those launched by younger firms. -Cloud (utility) computing doesn't work in situations where complex legacy systems have to be ported or where there may be regulatory compliance issues. -Some firms may still find TCO and pricing economics favor buying over renting—scale sometimes suggests an organization is better off keeping efforts in-house.

15.4 takeaways

- A major factor limiting business intelligence initiatives is getting data into a form where it can be used (i.e., analyzed and turned into information). -Legacy systems often limit data utilization because they were not designed to share data, aren't compatible with newer technologies, and aren't aligned with the firm's current business needs. -Most transactional databases aren't set up to be simultaneously accessed for reporting and analysis. In order to run analytics the data must first be ported to a data warehouse or data mart.

key takeaways 15.3

- For organizations that sell directly to their customers, transaction processing systems (TPS) represent a source of potentially useful data. - Grocers and retailers can link you to cash transactions if they can convince you to use a loyalty card which, in turn, requires you to give up information about yourself in exchange for some kind of financial incentive such as points or discounts. -Enterprise software (CRM, SCM, and ERP) is a source for customer, supply chain, and enterprise data. - Survey data can be used to supplement a firm's operational data. -Data obtained from outside sources, when combined with a firm's internal data assets, can give the firm a competitive edge. - Data aggregators are part of a multibillion-dollar industry that provides genuinely helpful data to a wide variety of organizations. - Data that can be purchased from aggregators may not in and of itself yield sustainable competitive advantage since others may have access to this data, too. However, when combined with a firm's proprietary data or integrated with a firm's proprietary procedures or other assets, third-party data can be a key tool for enhancing organizational performance. - Data aggregators can also be quite controversial. Among other things, they represent a big target for identity thieves, are a method for spreading potentially incorrect data, and raise privacy concerns. -Firms that mismanage their customer data assets risk lawsuits, brand damage, lower sales and fleeing customers, and can prompt more restrictive legislation. -Further raising privacy issues and identity theft concerns, recent studies have shown that in many cases it is possible to pinpoint users through allegedly anonymous data, and to guess Social Security numbers from public data. -New methods for tracking and gathering user information are raising privacy issues, which possibly will be addressed through legislation that restricts data use.

14.7

- SaaS firms may offer their clients several benefits including the following: - lower costs by eliminating or reducing software, hardware, maintenance, and staff expenses - financial risk mitigation since startup costs are so low -potentially faster deployment times compared with installed packaged software or systems developed in-house -costs that are a variable operating expense rather than a large, fixed capital expense -scalable systems that make it easier for firms to ramp up during periods of unexpectedly high system use -higher quality and service levels through instantly available upgrades, vendor scale economies, and expertise gained across its entire client base -remote access and availability—most SaaS offerings are accessed through anyWeb browser, and often even by phone or other mobile device - Vendors of SaaS products benefit from the following: - limiting development to a single platform, instead of having to create versions for different operating systems - tighter feedback loop with clients, helping fuel innovation and responsiveness -ability to instantly deploy bug fixes and product enhancements to all users -lower distribution costs -accessibility to anyone with an Internet connection -greatly reduced risk of software piracy -SaaS (and the other forms of cloud computing) are also thought to be better for the environment, since cloud firms more efficiently pool resources and often host their technologies in warehouses designed for cooling and energy efficiency.

17.3 key takeaways

-An organization's information assets are vulnerable to attack from several points of weakness, including users and administrators, its hardware and software, its networking systems, and various physical threats. -Social engineering attempts to trick or con individuals into providing information, while phishing techniques are cons conducted through technology. -While dangerous, a number of tools and techniques can be used to identify phishing scams, limiting their likelihood of success. -Social media sites may assist hackers in crafting phishing or social engineering threats, provide information to password crackers, and act as conduits for unwanted dissemination of proprietary information. -Most users employ inefficient and insecure password systems; however, techniques were offered to improve one's individual password regime. -Viruses, worms, and Trojans are types of infecting malware. Other types of malware might spy on users, enlist the use of computing assets for committing crimes, steal assets, destroy property, serve unwanted ads, and more. - Examples of attacks and scams launched through advertising on legitimate Web pages highlight the need for end-user caution, as well as for firms to ensure the integrity of their participating online partners. - SQL injection and related techniques show the perils of poor programming. Software developers must design for security from the start—considering potential security weaknesses, and methods that improve end-user security (e.g., in areas such as installation and configuration). -Encryption can render a firm's data assets unreadable, even if copied or stolen. While potentially complex to administer and resource intensive, encryption is a critical tool for securing an organization's electronic assets.

5.2 takeaways

-As chips get smaller and more powerful, they get hotter and present power-management challenges. And at some point, Moore's Law will stop because we will no longer be able to shrink the spaces between components on a chip. -Multicore chips use two or more low-power calculating "cores" to work together in unison, but to take optimal advantage of multicore chips, software must be rewritten to "divide" a task among multiple cores. -3-D transistors are also helping extend Moore's Law by producing chips that require less power and run faster. -New materials may extend the life of Moore's Law, allowing chips to get smaller. Entirely new methods for calculating, such as quantum computing, may also dramatically increase computing capabilities far beyond what is available today.

14.5

-Business models for firms in the open source industry are varied, and can include selling support services and add-on products, offering hosting to run and maintain customer projects "in the cloud," licensing OSS for incorporation into commercial products, and using OSS to fuel hardware sales. -Many firms are trying to use OSS markets to drive a wedge between competitors and their customers. -Linux has been very successful on mobile devices and consumer electronics, as well as on high-end server class and above computers. But it has not been as successful on the desktop. The small user base for desktop Linux makes the platform less attractive for desktop software developers. Incompatibility with Windows applications, switching costs, and other network effects-related issues all suggest that Desktop Linux has an uphill climb in more mature markets. -OSS also has several drawbacks and challenges that limit its appeal. These include complexity of some products and a higher total cost of ownership for some products, concern about the ability of a product's development community to provide support or product improvement, and legal and licensing concerns.

15.6 takeaways

-Canned and ad hoc reports, digital dashboards, and OLAP are all used to transform data into information. -OLAP reporting leverages data cubes, which take data from standard relational databases, calculating and summarizing data for superfast reporting access. OLAP tools can present results through multidimensional graphs, or via spreadsheet-style cross-tab reports. - Modern datasets can be so large that it might be impossible for humans to spot underlying trends without the use of data mining tools. -Businesses are using data mining to address issues in several key areas including customer segmentation, marketing and promotion targeting, collaborative filtering, and so on. - Models influenced by bad data, missing or incomplete historical data, and over-engineering are prone to yield bad results. -One way to test to see if you're looking at a random occurrence in your data is to divide your data, building your model with one portion of the data, and using another portion to verify your results. - Analytics may not always provide the total solution for a problem. Sometimes a pattern is uncovered, but determining the best choice for a response is less clear. - A competent business analytics team should possess three critical skills: information technology, statistics, and business knowledge.

13.4 key takeaways

-Client-server computing is a method of distributed computing where one program (a client) makes a request to be fulfilled by another program (a server). -Server is a tricky term and is sometimes used to refer to hardware. While server- class hardware refers to more powerful computers designed to support multiple users, just about any PC or notebook can be configured to run server software. Many firms choose to have their server software hosted "in the cloud" on the computers of third-party firms. -Web servers serve up websites and can perform some scripting. -Most firms serve complex business logic from an application server. -Isolating a system's logic in three or more layers (presentation or user interface, business logic, and database) can allow a firm flexibility in maintenance, reusability, and in handling upgrades. Web services and APIs allow different applications to communicate with one another. The terms are imprecise and you'll often hear them used interchangeably. -Web services and APIs define the method to call a piece of software (e.g., to get it to do something), and the kind of response the calling program can expect back. -APIs and Web services make it easier to link applications as distributed systems, and can make it easier for firms to link their systems across organizations. Expedia uses APIs to expand its reach and bring in some $2 billion from revenue-sharing partners that use its technology. -Popular messaging standards include EDI (older), XML, and JSON. Sending messages between machines instead of physical documents can speed processes, drastically cut the cost of transactions, and reduce errors. -Distributed computing can yield enormous efficiencies in speed, error reduction, and cost savings and can create entirely new ways of doing business. -When computers can communicate with each other (instead of people), this often results in fewer errors, time savings, cost reductions, and can even create whole new ways of doing business.

14.6

-Cloud computing refers to replacing computing resources—of either an organization or individual's hardware or software—with services provided over the Internet. -Software as a service (SaaS) refers to a third-party software-replacing service that is delivered online. -Platform as a service (PaaS) delivers tools (a.k.a., a platform) so an organization can develop, test, and deploy software in the cloud. These could include programming languages, database software, and product testing and deployment software. -Infrastructure as a service (IaaS) offers an organization an alternative to buying its own physical hardware. Computing, storage, and networking resources are instead allocated and made available over the Internet and are paid for based on the amount of resources used. IaaS offers the most customization, with firms making their own choices on what products to install, develop, and maintain (e.g., operating systems, programming languages, databases) on the infrastructure they license. -SaaS typically requires the least amount of support and maintenance; IaaS requires the most, since firms choose the tech they want to install, craft their own solution, and run it on what is largely a "blank canvas" of cloud-provided hardware. - Cloud computing is reshaping software, hardware, and service markets and is impacting competitive dynamics across industries.

14.10

-Cloud computing's impact across industries is proving to be broad and significant. -Clouds can lower barriers to entry in an industry, making it easier for startups to launch and smaller firms to leverage the backing of powerful technology. -Clouds may also lower the amount of capital a firm needs to launch a business, shifting power away from venture firms in those industries that had previously needed more VC money. -Clouds can shift resources out of capital spending and into profitability and innovation. -Hardware and software sales may drop as cloud use increases, while service revenues will increase. -Cloud computing can accelerate innovation and therefore changes the desired skills mix and job outlook for IS workers. Tech skills in data center operations, support, and maintenance may shrink as a smaller number of vendors consolidate these functions. -Demand continues to spike for business-savvy technologists. Tech managers will need even stronger business skills and will focus an increasing percentage of their time on strategic efforts. These latter jobs are tougher to outsource, since they involve an intimate knowledge of the firm, its industry, and its operations. -The market for expensive, high-margin, server hardware is threatened by companies moving applications to the cloud instead of investing in hardware. -Server farms require plenty of cheap land, low-cost power, and ultrafast fiber-optic connections, and benefit from mild climates. -Google, Oracle's Sun, Microsoft, IBM, and HP have all developed rapid-deployment server farm modules that are preconfigured and packed inside shipping containers.

17.2 key takeaways

-Computer security threats have moved beyond the curious teen with a PC and are now sourced from a number of motivations, including theft, leveraging compromised computing assets, extortion, espionage, warfare, terrorism, national security, pranks, protest, and revenge. -Threats can come from both within the firm as well as from the outside. -Cybercriminals operate in an increasingly sophisticated ecosystem where data harvesters and tool peddlers leverage robust online markets to sell to cash-out fraudsters and other crooks. -Technical and legal complexity make pursuit and prosecution difficult. -Government surveillance efforts can put citizens and corporations at risk if poorly executed and ineffectively managed. -Many law enforcement agencies are underfunded, underresourced, and underskilled to deal with the growing hacker threat.

15.5 takeaways

-Data warehouses and data marts are repositories for large amounts of transactional data awaiting analytics and reporting. -Large data warehouses are complex, can cost millions, and take years to build. -The open source Hadoop effort provides a collection of technologies for manipulating massive amounts of unstructured data. The system is flexible, scalable, cost-effective, and fault-tolerant. Hadoop grew from large Internet firms but is now being used across industries.

17.4 key takeaways

-End users can engage in several steps to improve the information security of themselves and their organizations. These include surfing smart, staying vigilant, updating software and products, using a comprehensive security suite, managing settings and passwords responsibly, backing up, properly disposing of sensitive assets, and seeking education. -Frameworks such as ISO27k can provide a road map to help organizations plan and implement an effective security regime. -Many organizations are bound by security compliance commitments and will face fines and retribution if they fail to meet these commitments. -The use of frameworks and being compliant is not equal to security. Security is a continued process that must be constantly addressed and deeply ingrained in an organization's culture. - Security is about trade-offs—economic and intangible. Firms need to understand their assets and risks in order to best allocate resources and address needs. - Information security is not simply a technical fix. Education, audit, and enforcement regarding firm policies are critical. The security team is broadly skilled and constantly working to identify and incorporate new technologies and methods into their organizations. Involvement and commitment is essential from the boardroom to frontline workers, and out to customers and partners.

17.1 key takeaways

-Information security is everyone's business and needs to be made a top organizational priority. -Firms suffering a security breach can experience direct financial loss, exposed proprietary information, fines, legal payouts, court costs, damaged reputations, plummeting stock prices, and more. -Information security isn't just a technology problem; a host of personnel, operational, and procedural factors can create and amplify a firm's vulnerability.

5.1 takeaways

-Moore's Law applies to the semiconductor industry. The widely accepted managerial interpretation of Moore's Law states that for the same money, roughly eighteen months from now you should be able to purchase computer chips that are twice as fast or store twice as much information. Or over that same time period, chips with the speed or storage of today's chips should cost half as much as they do now. -Nonchip-based technology also advances rapidly. Disk drive storage doubles roughly every twelve months, while equipment to speed transmissions over fiberoptic lines has doubled every nine months. While these numbers are rough approximations, the price/performance curve of these technologies continues to advance exponentially. -These trends influence inventory value, depreciation accounting, employee training, and other managerial functions. They also help improve productivity and keep interest rates low. -From a strategic perspective, these trends suggest that what is impossible from a cost or performance perspective today may be possible in the future. Fast/cheap computing also feeds a special kind of price elasticity where whole new markets are created. This fact provides an opportunity to those who recognize and can capitalize on the capabilities of new technology. As technology advances, new industries, business models, and products are created, while established firms and ways of doing business can be destroyed. -Managers must regularly study trends and trajectory in technology to recognize opportunity and avoid disruption. -Moore's Law (and related advances in fast/cheap technologies in things like storage and telecommunications) has driven six waves of disruptive, market-transforming computing. The sixth wave involves embedding intelligence and communications in all sorts of mundane devices. Some point to a future "Internet of Things," where objects will collect and share data and automatically coordinate collective action for radical efficiency improvements.

14.2

-OSS is not only available for free, but also makes source code available for review and modification (for the Open Source Initiatives list of the criteria that define an open source software product, see http://opensource.org/docs/osd). -While open source alternatives are threatening to conventional software firms, some of the largest technology companies now support OSS initiatives and work to coordinate standards, product improvements, and official releases. -The flagship OSS product is the Linux operating system, now available on all scales of computing devices from cell phones to supercomputers. -The LAMP stack of open source products is used to power many of the Internet's most popular websites. Linux can be found on a large percentage of corporate servers; supports most Web servers, smartphones, tablets, and supercomputers; and is integral to TiVo and Android-based products. -The majority of people who work on open source projects are paid by commercially motivated employers.

13.1 key takeaways

-Software refers to a computer program or collection of programs. It enables computing devices to perform tasks. -You can think of software as being part of a layer cake, with hardware at the bottom; the operating system controlling the hardware and establishing standards; the applications executing one layer up, and the users at the top. -How these layers relate to one another has managerial implications in many areas, including the flexibility in meeting business demand, costs, legal issues, and security. -Software is everywhere—not just in computers, but also in cell phones, cars, cameras, and many other technologies.

16.3 key takeaways

-TCP/IP, or the Internet protocol suite, helps get perfect copies of Internet transmissions from one location to another. TCP works on the ends of transmissions, breaking transmissions up into manageable packets at the start and putting them back together while checking quality at the end. IP works in the middle, routing packets to their destination. -Routers are special computing devices that forward packets from one location to the next. Routers are typically connected with more than one outbound path, so in case one path becomes unavailable, an alternate path can be used. - UDP is a replacement for TCP, used when it makes sense to sacrifice packet quality for delivery speed. It's often used for media streaming. - TCP/IP doesn't care about the transition media. This allows networks of different types—copper, fiber, and wireless—to connect to and participate in the Internet. - The ability to swap in new applications, protocols, and media files gives the network tremendous flexibility. - Decentralization, fault tolerance, and redundancy help keep the network open and reliable. - VoIP allows voice and phone systems to become an application traveling over the Internet. This is allowing many firms to save money on phone calls and through the elimination of old, inefficient circuit-switched networks. As Internet applications, VoIP phone systems can also have additional features that circuit-switched networks lack. The primary limitation of many VoIP systems is quality of service. -Many firms in the finance industry have developed automated trading models that analyze data and execute trades without human intervention. Speeds substantially less than one second may be vital to capitalizing on market opportunities, so firms are increasingly moving equipment into colocation facilities that provide high-speed connectivity to other trading systems. -The Internet is a network of networks, and these networks swap traffic by peering—that is, connecting their networks together. Most peering between commercial networks (e.g., between firms like AT&T and Verizon) is done without exchanging fees. However, some ISPs are demanding payment (paid peering) for access to faster, private peering points.

16.2 key takeaways

-The Internet is a network of networks. Internet service providers connect with one another to share traffic, enabling any Internet-connected device to communicate with any other. -URLs may list the application protocol, host name, domain name, path name, and file name, in that order. Path and file names are case sensitive. - A domain name represents an organization. Hosts are public services offered by that organization. Hosts are often thought of as a single computer, although many computers can operate under a single host name and many hosts can also be run off a single computer. - You don't buy a domain name, but can register it, paying for a renewable right to use that domain name. Domains need to be registered within a generic top-level domain such as ".com" or ".org" or within a two-character country code top-level domain such as ".uk," ".ly," or ".md." ICANN (Internet Corporation for Assigned Names and Numbers) has allowed the expansion of gTLDs to new names and even trademarks. - Registering a domain that uses someone else's trademark in an attempt to extract financial gain is considered cybersquatting. The United States and other nations have anticybersquatting laws, and ICANN has a dispute resolution system that can overturn domain name claims if a registrant is considered to be cybersquatting. - Every device connected to the Internet has an IP address. These addresses are assigned by the organization that connects the user to the Internet. An IP address may be assigned temporarily, for use only during that online session. - We're running out of IP addresses. The current scheme (IPv4) is being replaced by IPv6, a scheme that will give us many more addresses and additional feature benefits but is not backward compatible with the IPv4 standard. Transitioning to IPv6 will be costly, take time, and introduce delay when traffic transfers between IPv4 and IPv6 networks. -The domain name system is a distributed, fault-tolerant system that uses name servers to map host/domain name combinations to IP addresses.

15.1 takeaways

-The amount of data being created doubles every two years. -In many organizations, available data is not exploited to advantage. However new tools supporting big data, business intelligence, analytics, and machine learning are helping managers make sense of this data torrent. -Data is oftentimes considered a defensible source of competitive advantage; however, advantages based on capabilities and data that others can acquire will be short-lived.

13.7 key takeaways

-The care and feeding of information systems can be complex and expensive. The total cost of ownership of systems can include software development and documentation, or the purchase price and ongoing license and support fees, plus configuration, testing, deployment, maintenance, support, training, compliance auditing, security, backup, and provisions for disaster recovery. These costs are collectively referred to as TCO, or a system's total cost of ownership. -Information systems development projects fail at a startlingly high rate. Failure reasons can stem from any combination of technical, process, and managerial decisions. -System errors that aren't caught before deployment can slow down a business or lead to costly mistakes that could ripple throughout an organization. Studies have shown that errors not caught before deployment could be 100 times more costly to correct than if they were detected and corrected beforehand. -Firms spend 70 percent to 80 percent of their IS budgets just to keep their systems running. -IS organizations can employ project planning and software development methodologies to implement procedures and to improve the overall quality of their development practices. -IS organizations can leverage software development methodologies to improve their systems development procedures, and firms can strive to improve the overall level of procedures used in the organization through models like CMMI. However, it's also critical to engage committed executive leadership in projects, and to frame projects using business metrics and outcomes to improve the chance of success. -A combination of managerial and technical issues conspired to undermine the rollout of HealthCare.gov. While the website was effectively unusable at launch, a systematic effort of management authority, communication, coordination, and expertise rescued the effort, allowing the site to exceed enrollment projections.

14.13

-The make, buy, or rent decision may apply on a case-by-case basis that might be evaluated by firm, division, project, or project component. Firm and industry dynamics may change in a way that causes firms to reassess earlier decisions, or to alter the direction of new initiatives. -Factors that managers should consider when making a make, buy, or rent decision include the following: competitive advantage, security, legal and compliance issues, the organization's skill and available labor, cost, time, and vendor issues. -Factors must be evaluated over the lifetime of a project, not at a single point in time. -Managers have numerous options available when determining how to satisfy the software needs of their companies: purchase packaged software from a vendor, use OSS, use SaaS or utility computing, outsource development, or develop all or part of the effort themselves. -If a company relies on unique processes, procedures, or technologies that create vital, differentiating, competitive advantages, the functions probably aren't a good candidate to outsource.

14.3

-The most widely cited benefits of using OSS include low cost; increased reliability; improved security and auditing; system scalability; and helping a firm improve its time to market. -Free OSS has resulted in cost savings for many large companies in several industries. -OSS often has fewer bugs than its commercial counterparts due to the large number of software developers who have looked at the code. -The huge exposure to scrutiny by developers and other people helps to strengthen the security of OSS. -"Hardened" versions of OSS products often include systems that monitor the integrity of an OSS distribution, checking file size and other indicators to be sure that code has not been modified and redistributed by bad guys who have added a back door, malicious routines, or other vulnerabilities. -OSS can be easily migrated to more powerful computers as circumstances dictate, and also can balance workload by distributing work over a number of machines. -Vendors who use OSS as part of product offerings may be able to skip whole segments of the software development process, allowing new products to reach the market faster.

13.2 key takeaways

-The operating system (OS) controls a computer's hardware and provides a common set of commands for writing programs. -Most computing devices (enterprise-class server computers, PCs, phones, set-top boxes, video games, cars, the Mars Rover) have an operating system. -Some products use operating systems provided by commercial firms, while others develop their own operating system. Others may leverage open source alternatives (see Chapter 14 "Software in Flux: Open Source, Cloud, Virtualized, and App-Driven Shifts" "Software in Flux: Partly Cloudy and Sometimes Free"). -Embedded systems are special-purpose computer systems designed to perform one or a few dedicated functions, and are frequently built into conventional products like thermostats, door locks, cars, air conditioners, industrial equipment, and elevators. -Embedded systems can make products and services more efficient, more reliable, and more functional, and can enable entire new businesses and create or reinforce resources for competitive advantage.

16.4 key takeaways

-The slowest part of the Internet is typically the last mile, not the backbone. While several technologies can offer broadband service over the last mile, the United States continues to rank below many other nations in terms of access speed, availability, and price. - Cable firms and phone companies can leverage existing wiring for cable broadband and DSL service, respectively. Cable services are often criticized for shared bandwidth. DSL's primary limitation is that it only works within a short distance of telephone office equipment. - Fiber to the home can be very fast but very expensive to build. -An explosion of high-bandwidth mobile applications has strained wireless networks. The transition from 3G to 4G is increasing bandwidth and capacity, but usage continues to skyrocket as smartphone and tablet users stream increasing amounts of video and audio. -Femtocells are a technology that can improve wireless service by providing a personal mobile phone hotspot that can plug into in-home broadband access. -Emerging fifth-generation (5G) wireless technologies promise speeds that can compete with cable television providers, while lowering latency, and increasing overall network capacity. These services will be critical as advances from self-driving vehicles to connected smart homes place increasing demands on wireless networks. -Satellite systems show promise in providing high-speed access to underserved parts of the world, but few satellite broadband providers have been successful so far. -Net neutrality is the principle that all Internet traffic should be treated equally. Google, Netflix, and other firms say it is vital to maintain the openness of the Internet. Telecommunications firms say they should be able to limit access to services that overtax their networks, and some have suggested charging content providers for providing access to their customers.

14.1

-The software business is attractive due to near-zero marginal costs and an opportunity to establish a standard—creating the competitive advantages of network effects and switching costs. -New trends in the software industry, including open source software (OSS), cloud computing, software as a service (SaaS), and virtualization are creating challenges and opportunities across tech markets. Understanding the impact of these developments can help a manager make better technology choices and investment decisions.

14.4

-There are thousands of open source products available, covering nearly every software category. Many have a sophistication that rivals commercial software products. -Not all open source products are contenders. Less popular open source products are not likely to attract the community of users and contributors necessary to help these products improve over time (again we see network effects are a key to success, this time in determining the quality of an OSS effort). -Just about every type of commercial product has an open source equivalent.

16.1

-There's all sorts of hidden magic happening whenever you connect to the Internet. But what really makes it possible for you to reach servers halfway around the world in just a fraction of a second? Knowing this is not only flat-out fascinating stuff; it's also critically important for today's manager to have at least a working knowledge of how the Internet functions. - That's because the Internet is a platform of possibilities and a business enabler. -Understanding how the Internet and networking works can help you brainstorm new products and services and understand roadblocks that might limit turning your ideas into reality. -Marketing professionals who know how the Internet reaches consumers have a better understanding of how technologies can be used to find and target customers. - Finance firms that rely on trading speed to move billions in the blink of an eye need to master Internet infrastructure to avoid being swept aside by more nimble market movers. -And knowing how the Internet works helps all managers understand where their firms are vulnerable. In most industries today, if your network goes down then you might as well shut your doors and go home; it's nearly impossible to get anything done if you can't get online. Managers who know the Net are prepared to take the appropriate steps to secure their firms and keep their organization constantly connected.

14.11

-Virtualization software allows one computing device to function as many. The most sophisticated products also make it easy for organizations to scale computing requirements across several servers. -Virtualization software can lower a firm's hardware needs, save energy, and boost scalability. -Data center virtualization software is at the heart of many so-called private clouds and scalable corporate data centers, as well as the sorts of public efforts described earlier. -Virtualization also works on the desktop, allowing multiple operating systems (Mac OS X, Linux, Windows) to run simultaneously on the same platform. -Virtualization software can increase data center utilization to 80 percent or more. -While virtualization is used to make public cloud computing happen, it can also be used in-house to create a firm's own private cloud. -While traditional virtualization acts as a software representation of hardware where each virtual machine requires its own operating system, a type of virtualization known as containers performs many of the functions of virtualization without requiring a separate operating system. This saves even more power and computer space, and helps resources execute even faster. -A number of companies, including Microsoft and Dell, have entered the growing virtualization market. Container startup Docker is seeing widespread adoption across industries and leading firms.

14.8

The risks associated with SaaS include the following: -dependence on a single vendor -concern about the long-term viability of partner firms -users may be forced to migrate to new versions—possibly incurring unforeseen training costs and shifts in operating procedures -reliance on a network connection—which may be slower, less stable, and less secure -data asset stored off-site—with the potential for security and legal concerns -limited configuration, customization, and system integration options compared to packaged software or alternatives developed in-house -The user interface of Web-based software is often less sophisticated and lacks the richness of most desktop alternatives. - Ease of adoption may lead to pockets of unauthorized IT being used throughout an organization.