Information Technology as an Integrating Force

RETURN ON INVESTMENT OF TECHNOLOGY In manufacturing, computer capital ROI is 10 times bigger than other capital ROI • Manufacturing – Computer capital 54.2% – Other capital 4.1% • Manufacturing and service – Computer capital 68.7% – Other capital 6.9% The information value chain Business Perspective CONTENT CONTENT Storage Storage • Cosby-show • Actors • Directors • Barney • Writters • MRI equipment • Fotographers • Game producers PACKAGING PACKAGING Processing Processing • Movie studios • Editors (music, movies, newspapers, encyclopaedias etc.) • ESPN • BBC • TVE • Multimedia studios DISTRIBUTION DISTRIBUTION Networks Networks • Satelite anthenas • Cable operators • TVs • Telcos • VCRs • Newspapers distributors • Bookstores • Internet The information value chain Technical Perspective STORAGE STORAGE • RAM • ROM • CD-ROM • Datawarehouse • Memory stick • Flash memory • Removable media PROCESSING PROCESSING • ASP • PDS • Mainframe • PC Appliance • PC • Mobile phone • GPS receptor NETWORKS NETWORKS • Internet • Satellite • ADSL • WLAN • UMTS • GPRS • Infrared The information value chain Business Perspective Expanded CONTENT PACKAGING ENTERTAINMENT DISTRIBUTION channel final user AIR TV TRANSACTIONS PHONE INFORMATION EDITING NAVIGATION CABLE ATM PERS. COMMUNICATIONS SURFACE LEARNING COMPUTER New Technologies change very rapidly (cont.) “Moore’s Law” Computers: Cost in $ of 1 instruction per second; 1975 = 100 100 10 IBM host Digital VAX Cray 1 Sun Micr. 2 1 IBM PC 0,1 Pentium 0,01 Pentium II 0,001 1975 Pentium III 1980 1985 1990 1995 2000 Expressing Memory Capacity • Measured in bytes (=groups of 8 bits) • Each byte can store a binary number from 00000000 to 11111111 (255 = 28-1) • More generally: n binary digits can store numbers from 0 to 2n-1 • Frequently used multiples: – Kilobyte (KB) = 1,024 (210) bytes – Megabyte (MB) = 1,024 KB = 1,048,576 (220) bytes – Gigabyte (GB) = 1,024 MB ~ 1 billion (230) bytes Phone costs: Cost of a 3minute call between New York and London 1990 constant $ 250 200 150 100 50 0 1920 1940 1960 1980 2000 Evolution of the Internet • • • • • • 60’s: – DARPA (Defense Advanced Research Projects Agency) 1969: – ARPANET interconnected 4 large hosts Early 80’s: – 100 hosts in ARPANET. Other networks appear 1982: – Adoption of the TCP/IP as de facto standard 1983: – Interconnection of several networks. The Internet is born 1986: – NSFnet (network from the National Science Foundation) interconnects 5 of the largest supercomputers in the USA not to depend from the Defense Secretary. Use TCP/IP. Size and Bandwidth for some applications Mbps Size Mby 10000 1000 100 10 1 0.1 0.01 Movie Bandwidth Mbps Fiber O. 10000 Newspaper with pic. Coaxial 1000 High resol. picture Novel Twisted Pair Symphony Newspaper (text) Bank statement HDTV 100 TV 10 1 0.1 Voice Music 0.01 Videotext How much space does your life take? Storage Bandwidth In other words, one hour “uses” 64Mbytes/28=2,29Mbytes or 2,29X8=18,32Mbits (this is similar to a single MP3 song) Processing power Internet Adoption Rates vs. Other Mediums Internet as Mass Medium — North American Adoption Curves TECHNOLOGY RATE OF CHANGE – MANUFACTURING PERSPECTIVE If Rolls-Royce product and manufacturing progress 1950 - 2000 matched computer progress, then a Rolls-Royce would: – – – – – – – Cost $4 Capacity 120,000 Mileage 40,000,000 Miles Per Gallon Maximum speed 400,000 Miles Per Hour Size 1 Cubic Foot Weight 0.05 Pounds Repairs Once every 1000 Years Difficulties to predict the future All that can be invented has been invented Charles Duell. Director U.S. Patent Office, 1899 This craziness for the radio will die soon Thomas Edison, 1922 There is a world market for about five computers Thomas Watson, IBM chairman, 1943 In the future, computers will not weight more than 1,5 tons Popular Mechanics, 1949 There is no reason for anyone to have a computer at home Ken Olsen, president of Digital, 1977 64K will be enough for anybody Bill Gates, president of Microsoft, 1981