1. 15 - 1 Chapter 15 The Third Component: Powerful Networks

2. 15 - 2 The First Networks Internet - inexpensive web site - gives a small firm a global presence - hundreds of millions of people can access Used by businesses for –electronic linking and communications –electronic customer-supplier relationships Proprietary networks Electronic data interchange - customers and suppliers - agree on standards for exchanging information

3. 15 - 3 The First Networks Until the advent of the Internet all data networks were private –The Internet provides an international network that is available at low cost - information superhighway –Tie together people and organizations –Remove constraints of time and place –‘netcentric’ - understands potential of networks and incorporate them into structure and operations –Model of the future

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5. 15 - 5 The Impact of Communications Technology Ubiquitous computing - method of enhancing computer use by making many computers available throughout the physical environment, but making them effectively invisible to the user. Transparency - uses different networks or resources without user knowledge The telephone system is an example of a large international network that has been developed based on published standards Private networks –EDI –Proprietary data networks Private networks have greater security than the Internet and can provide guaranteed levels of service

6. 15 - 6 EDI Networks in which multiple parties agree to follow a standard for exchanging data electronically Most EDI takes place in batch mode EDI networks can lower costs while increasing accuracy and quality in purchasing goods –Require expertise and resources - expensive –Have no common telecommunications infrastructure –Proprietary - no industry standard –Will eventually move to the internet

7. 15 - 7 The Virtual Private Network A company replaces leased lines with interfaces to the Internet VPN communication equipment convert user data to packets, encrypts the packets, and send them to their desired destination –Secure –To the user communications appear to be traveling over a dedicated network

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9. 15 - 9 Typology of a Network Huge, global network Internet Service Providers Backbone Service Providers –Global fiber optic networks Metropolitan Area Exchange (MAE) –Helps traffic from one backbone network get onto another backbone network The Internet can create a revolution in the telephone business –Voice over IP

10. 15 - 10 An Example of a Global Backbone Network

11. 15 - 11 A North American Backbone

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13. 15 - 13 The Internet Transforms Business and Commerce The Internet is a world wide connection of networks –Started in 1969 as the Arpanet –Allows heterogeneous computers to connect using a number of communication options Based on two core protocols –TCP: Transmission control protocol Responsible for flow of packets and data accuracy –IP: Internet protocol Responsible for getting packets from the sender to the receiver in the shortest time

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15. 15 - 15 The Internet Internet domain names identify the type of organization –Common suffixes edu: educational institutes com: a commercial firm gov: the government mil: the military The World Wide Web and graphical browsers made the Internet easy to use The http protocol and client-server architecture have enabled devices on the Internet to communicate

16. 15 - 16 Internet Technologies Browsers and search engines help navigate the Internet using uniform resource locators (URLs) Interaction with the Web can be –User initiative vs. push technology The Internet’s open, decentralized, extendible architecture and open culture encourages users and providers to participate

17. 15 - 17 Intranets and Extranets Intranets are build on Internet protocols but contain proprietary information –Offers the potential to tie employees and disparate information systems together Customers and others can also access the company’s internal servers if given permission to do so –Such extranets use Internet technology to provide online access to internal servers –Utilizes the existing worldwide Internet

18. 15 - 18 A Variety of Ways to Access the Internet Wireless (WiFi Networks) –Based on IEEE 802.11x standards Cell phones, PDAs, and Refrigerators Other devices and applications –Home security systems

19. 15 - 19 The Impact of the Internet Helped remove the constrain of time and space on communications Leveled the playing field for small businesses Created new business models Established an open network infrastructure Enabled companies to dramatically reduce transaction costs Provided the means for companies to more closely integrate their supply chains Fostered information sharing among business partners

20. 15 - 20 The Impact of the Internet Provided communication links encouraging companies to outsource and create value networks Encouraged the creation of alternative forms of organizations such as the T-Form Created new businesses such as eBay as well as network service providers Allowed businesses to open a new channel to their customers Provided new convenience and service to individuals

21. 15 - 21 The Impact of the Internet Created a virtual library of information on a host of topics Widened the divide between industrialized and developing countries Created a source of uncensored ideas that are difficult for a government to control

22. 15 - 22 Assign #8: Ch 10: - Discussion Questions, pg. 206-207: #1, 6, 9, 12, 14, 17, 19; Assign #9: Ch 11: - Discussion Questions, pg. #1, 5, 6, 11, 12, 19, 24, 25.