MGT371: Introduction to PBIS Session six: Changing Computer Industry

1. MGT371: Introduction to PBISSession six:Changing Computer Industry Information Technology Development. Changes to Individuals. Changes in the Industry.

2. 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

3. 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.

4. 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)

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. MGT371: Introduction to PBIS, Session six: Changing Computer Industry :Changes in the Industry. • Opportunities • Intranets and the World Wide Web have connected all critical 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.

12. 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).

13. 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.

14. MGT371: Introduction to PBIS, Session six: Changing Computer Industry :Changes in the Industry. • Avoiding the constraints : • COMPETITION: • Traditional model with diminishing returns

15. REVENUE Revenue Variable Cost Cost Fixed Cost Volume MGT371: Introduction to PBIS, Session six: Changing Computer Industry :Changes in the Industry. • Avoiding the constraints : • MONOPOLY: • Increasing returns (high fixed cost/low variable cost ratio)

16. 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.

17. 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).

18. 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

19. 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

20. MGT371: Introduction to PBIS, Session six: Changing Computer Industry :Changes in the Industry. Short Product Life Cycle • Research and Development ==> • New products ==> • Revenue ==> • More Research and Development

21. 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)

22. 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.

23. 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)

24. 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.

25. 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)