Transcript Changing Computer Industry

MGT371: Introduction to PBIS
Session six:
Changing Computer Industry

Information Technology Development.

Changes to Individuals.

Changes in the Industry.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Information Technology Development.
 In hardware :
 Structure changed from vacuum tube --> transistors --> IC -->
large scale integrated circuits(microchips).
 Size changed from 150 m2 occupation to fitting into a palm
 Speed changed from 100 kHz to 100s of MHz
 Capacity changed from few KB to 100s of MB
 Data storage changed from fixed drums/tapes/disks --> diskettes -> CD-ROM(650 Mb) --> DVD(4.7 GB) --> virtual data pools.
 Shifted from scientific, industrial, business applications to
personal computing
 As a result :
 A whole new life/work style & business scheme have emerged
 A whole new set of jobs have been created while many have
disappeared
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Information Technology Development.
 In software :
 Changed from machine language(1GL) to symbolic(2GL) to high
level(3GL) to very high level (4GL) to tools for designers(5GL).
 Software development drifted from EDP professionals to end user
 Software development needed more hardware power and speed
 Hardware development was a drive for power-consuming and
speed-demanding software.
 Government/business affordable SW are now afforded by
individuals and are becoming free(offered with the HW or on the
Internet)
 As a result :
 Computers moved from special big rooms to offices, homes and
roads.
 IT serves as one of the hottest employment segments & as a
powerful business tool.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Information Technology Development.
 In communication :
 Single purpose, one business is became multi purposed,
multifunctional --> multi business --> distributed --> global.
 Single system slow data transfer --> global information
superhighways.
 Single purpose single audience communication has now become
a world wide web of multipurpose multifunctional multi-audience
business.
 As a result :
 A whole new type and style of business operations have
emerged(e-commerce, telebanking, automated teller machine)
 A whole new style of employment has emerged(teleworking)
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Information Technology Development.
 In business :
 IT has moved from universities and military establishments to
large and small private businesses.
 IT always has had increasing tempo of technological change with
rapid product cycles.
 Investments in IT development has become enormous.
 Emphasis has been on imitative or compatible products with vast
international marketplace.
 As a result :
 A whole new style of business operations and management has
emerged.
 A whole new style of employment has emerged(teleworking)
 A whole new set of laws and regulations is being built to support
innovation and avert fraud and misuse of IT.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes to Individuals.
 Opportunities
 Entrepreneurship
 Individuals can now start a business at home with the use of a
home office that is completely on-line.
 Individuals can work at an office or store using computer
technology to facilitate transactions.
 Small businesses are more flexible to take advantage of
opportunities that arise in a shorter amount of time.
 Individuals can utilize their education or experience to occupy
niche markets much faster.
 English-speaking individuals are able to utilize the English
dominance of IT.
 Education
 Lectures produced by integration of words, sounds, pictures, and
both live and animated video can capture students' imaginations.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes to Individuals.
 Opportunities
 Certification
 Certification programs (now offered by scores of software and
hardware vendors) have created opportunities to earn proficiency
and higher salary.
 Certification programs opens doors for those with little to no
experience.
 Certification programs provide a standard measure of
competency and support employers screening mechanisms
 Personal life
 Endless number of opportunities have been rendered by IT in
handling our personal lives.
 Individuals now can control their appliances and heating systems
as well as a multitude of other tasks from the comfort of their office,
hotel or vacation spot.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes to Individuals.
 Opportunities
 Utilizing the opportunities
 Individuals must ensure that they keep pace with the emergence
of new technological trends.
 E-mail services, Intranet and network services, Internet services
and website design are used to develop and promote
entrepreneurship.
 Consultants, retailers, wholesalers, manufacturers (e.g.. Amazon
books, toys 'R Us) are the type of businesses utilizing IT most.
 Various types of software allow entrepreneurs to create business
plans, communicate with employees and customers, keep track
of business transactions.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes to Individuals.
 Constraints :
 Customs and culture :
 Technology may force reform of many traditional customs
 People are forced to adapt quickly or risk being left behind.
 English dominance :
 Non-English individuals are promoting software localization to
preserve their own language, culture & values.
 Non-English individuals face economic, cultural and political
constraints which hinder their access to IT and global economy.
 Localization :
 Localization is feasible if market demands it, there is uniformity of
the written word and system compatibility can be ensured.
 Given the extensive degree of changes associated with software
localization of cultural-specific elements, non-English speaking
individuals are impacted by the complexities of localization.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes to Individuals.
 Constraints :
 Unpleasant work environment :
 As people become further engrossed by technology they often
find themselves working with time constraints, and increasingly,
living in states of isolation.
 Face-to-face interactions are becoming fewer and shorter in
duration.
 Decreased opportunities for release of frustration and bad
feelings.
 Electronic mail devoid of tone or compassion has replaced
interaction of personal meetings.
 Reduction of human interaction may result in increased hostility
and the development of potentially violent occupational and
domestic situations.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Opportunities
 Intranets and the World Wide Web have connected all critical
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business constituencies through electronic commerce.
Shopping, purchase, and delivery of goods is now possible
though E-commerce. However more expensive information
systems and specialists are needed to maintain the E-commerce.
Reduction of transaction costs in e-commerce creates room for
price competition.
English Dominance facilitates a faster growth in the industry,
creating a common language between the developers, vendors
and users.
The ease of obtaining a computer certification with no experience
has increased opportunities both for individuals and employers.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Constraints :
 LEGAL CONSTRAINTS :
 The rapid expansion of technology is creating a call for increased
regulation to protect privacy, security and proprietary rights.
 Bills for personal protection and privacy through the regulation of
encryption technology will allow digital signatures to be
legitimized for use in both the workplace and courtroom.
 Ownership of original thought, and its protection in today's
marketplace is a major concern.
 COMPETITION : Strategies to restrict competition
 Hardware prices reduced through production efficiency
 Capture market share through being the first to market a new
product . Being first is more important than being best
(Lock-in of inferior technology).
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 COMPETITION : Strategies to restrict competition
 Establishing the new product as being standard.
 Broaden lower end markets
 Small local suppliers cannot survive through lower profit margins
 COMPETITION : software monopoly
 Competitive forces model : New entrants, and substitutes are the
main source of competition to a firm while suppliers and
customers have great bargaining power to influence the market
share of a firm.
 Give away product to get market share (Netscape, Java, Doom)
 Adopters locked in by switching costs.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 COMPETITION:
 Traditional model with diminishing returns
Cost
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MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
Cost
 MONOPOLY:
 Increasing returns (high fixed cost/low variable cost ratio)
Fixed Cost
Volume
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 CONSOLIDATION: BENEFITS
 Increase competitiveness,
 Increase resources for innovation and product development,
 Diversification,
 Cost savings and consumer benefit.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints
:
 CONSOLIDATION :
COSTS :
 Limited competition,
 Layoffs
(Oracle & Netscape Compaq & Tandem).
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 MONOPOLY
 Achieved through Network Effects, "franchise" monopoly,
possession of scarce resources, Brand loyalty, Large economies
of scale ( high up-front costs for new competitors to set up
business in the industry).
 Microsoft dominance in OS reinforces its control in application
software. This means Destruction of individual software utility
makers and Lock-in customers.
 Intel as the dominant producer of microprocessors is forced by
competitors to produce its chips even faster, and with subtle
differences as well.
 Network economics creates value for the monopoly as the
number of participants grow in the monopoly's network
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 INNOVATION :
 Competition is a driver of continuous Innovation
 The Need to be the First in the Market
 Meeting consumer's needs (simplicity , ease of use, increased
capability, with new features and functionality, low cost)
 Patents : while broad protection could inhibit competition, it offers
stronger protection for innovators.
 Short Product Life Cycle through innovation is the only way to
survival for companies in the computer industry.
 Follow the Leaders as they set the pace for Innovations in the
Computer Industry
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
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Short Product Life Cycle
Research and Development ==>
New products ==>
Revenue ==>
More Research and Development
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints : Constraints of non-compatible and
diverse products
 Standardization :
 Standardization is mandatory to achieve connectivity for
networking, operating systems and user interfaces with
telecommunications networks.
 Proprietary Standards: patented by a developing company and
available for use only if purchased. This is to gain and hold the
market share and serve as barrier to competition.
 Open Standards: not patented and is available for use to the
public at no charge (PCI Bus, MPEG, JPG, GIF, TCP/IP)
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Avoiding the constraints :
 Y2K : "THE MILLENNIUM BUG"
 Computers and software are not programmed to handle two 00
for year 2000. Stock markets, government payrolls, telephone
bills and any application involving computers are affected.
 Best way is to upgrade the computer's BIOS, old computer
codes rewritten upgrade their operating system
 Trends :
 In high-performing companies, priorities are teamwork,
customer focus, fair treatment of employees, initiative, and
innovation.
 Cheaper and more powerful personal computers.
 Processor-intensive tasks can be performed by new computers.
 Technology breakthrough create new ways of interacting with
computers.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Trends :
 Being first more important than being best.
 Marketing is as important as technology.
 Temporary monopolies are natural in IT.
 Innovation can displace monopolies.
 Individuals must accumulate intellectual capital.
 Government will intervene more into the computer industry due
to the increasing concentration.
 Trends In Operating System :
– 64-Bit addressing, more powerful, greater scalability and
performance.
– Alternative Linux(Impetus to change the current OS scene:
Cheap, Reliable, Open source code, Poses threat to Microsoft's
OS: free giveaways, able to run Java technology-based
application)
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Trends :
 Trends in Software :
– Moving towards simplicity.
– Easy setup and installation of new hardware and software in
desktop computer.
– New user interfaces: speech recognition and combination of
handwriting, voice and keyboard.
– With the right interface, the reluctant novice does not have to
learn computer.
– In year 2001, your personal computer can read e-mail to you,
fetch the latest news and information for you, record voice
messages and favorite TV shows.
MGT371: Introduction to PBIS, Session six: Changing Computer Industry :
Changes in the Industry.
 Trends :
 Trends in Chip and Internet speed
– Introduction of IA-64 processor, code-named Merced by Intel
– Target market: not PC but server and workstation.
– Require programs compiled for the new 64-bit instruction set for
high performance.
– Too expensive for PC.
– Irrelevant to the PC market until 2002 or later.
– Internet transmission new standard: Digital Subscriber Line (DSL)