Understanding Business Strategies, Information Systems, and Cloud Computing
Competitive Strategy and Value Chains
The competitive strategy of an organization determines its primary activity, delivering products to consumers. The competitive strategy followed by an organization is derived from the structure of its industry.
Porter developed the 5 forces model to help organizations determine the potential profitability of an industry. The 5 forces model can be grouped into forces related to competition and forces related to supply chain bargaining power. These forces include:
- Bargaining power of customers
- Threat of substitutes
- Bargaining power of suppliers
- Threat of new entrants
- Rivalry
The intensity of each of the five forces determines the characteristics of the industry, how profitable it is, and how sustainable that profitability will be.
The bargaining power of a customer is weak if the availability of a substitute is limited.
Porter’s model of business activities includes linkages, which are interactions across value activities.
Is the Strength of Competitive Forces Low?
The strength of competitive forces is low when switching costs are high. New entrants can capture the market with new and innovative services.
Margin
Margin is the difference between the value that an activity generates and the cost of the activity.
Outbound Logistics
Outbound logistics involves collecting, storing, and physically distributing products to buyers.
Firm Infrastructure
Firm infrastructure includes general management, finance, accounting, legal, and government affairs.
Information Systems
Central Processing Unit (CPU)
The central processing unit (CPU) selects instructions, processes them, performs arithmetic and logical comparisons, and stores results of operations in memory.
A dual-processor computer has 2 CPUs.
The speed of a central processing unit (CPU) is expressed in cycles called hertz.
Server Farm
A server farm is used to receive and process thousands of requests from a large number of users.
Data Representation
Computers represent data using binary digits called bits.
Bits are grouped into 8-bit chunks called bytes.
Common data size units include: Byte, kilobyte, megabyte, gigabyte, terabyte, petabyte, exabyte, zettabyte.
Memory
A device’s cache and main memory are volatile.
Magnetic disks are an example of nonvolatile memory.
The memory of a device is said to be nonvolatile if its contents are retained when the system is restarted.
If the contents of a device are lost when the power is turned off, the memory of the device is said to be volatile.
Operating System
An operating system is a program that controls a computer’s resources.
It comes in particular versions that are written for particular types of hardware.
Application Programs
Native applications are programs that are written to use a particular operating system.
Thin-client applications are application programs that run within a browser, without the need to be pre-installed on client computers. They mostly run on a single operating system.
Linux
Linux is an open-source operating system.
Virtual Machines
Virtual machines are host operating systems that run one or more operating systems as applications.
Virtualization
Virtualization is the process by which one physical computer hosts many different virtual machines.
Databases
What is a Database?
A database is:
- A self-describing collection of integrated records
- Used to store lists of data involving multiple themes
Database Terminology
- Columns = fields
- Rows = records
- Group of similar rows = table = file = relation
- A column or group of columns that identifies a unique row in a table = key
Databases that carry their data in the form of tables and represent relationships using foreign keys are called relational databases.
Metadata
Metadata is special data that describes the structure of a database.
SQL
SQL stands for Structured Query Language.
Database Management System (DBMS)
An administrative function of the database management system (DBMS) includes adding structures to improve the performance of database applications.
Monitoring the performance of a database after providing solutions for improving its performance is an activity of the DBMS pertaining to administration.
A DBMS is different from a database in that a DBMS is a software program while a database is a collection of tables, relationships, and metadata. Almost no organization develops its own DBMS. Instead, companies license DBMS products from vendors such as IBM, Microsoft, Oracle, and others.
Cloud Computing
What is the Cloud?
The cloud is the elastic leasing of pooled computer resources over the Internet.
Cloud resources are pooled because many different organizations use the same physical hardware.
Elasticity
The term “elastic” means that the computing resources leased can be increased or decreased dynamically in cloud-based hosting.
Cloud-Based Hosting
Disadvantages
The negatives of cloud computing involve loss of control. Users are dependent on a vendor; changes in the vendor’s management, policy, and prices are beyond their control. Further, users don’t know where their data, which may be a large part of their organization’s value, is located. The users don’t know how many copies of their data there are or even if they are located in the same country as they are. Finally, users have no visibility into the security and disaster preparedness that is actually in place. Their competitors could be stealing their data and they would not know it.
Advantages
Three factors have made cloud-based hosting advantageous today. First, processors, data communication, and data storage are so cheap that they are nearly free. At the scale of a Web farm of hundreds of thousands of processors, providing a virtual machine for an hour costs essentially nothing. Data communication is so cheap that getting the data to and from that processor is also nearly free. Second, virtualization technology enables the near-instantaneous creation of a new virtual machine. The customer provides (or creates in the cloud) a disk image of the data and programs of the machine it wants to provision. Virtualization software does the rest. Finally, Internet-based standards enable cloud-hosting vendors to provide processing capabilities in flexible, yet standardized, ways.
One disadvantage of cloud-based hosting is that it gives little visibility over the security being used to protect data.
A key advantage is the development of virtualization technology that allows near-instantaneous creation of new virtual machines.
In-House Hosting
In-house hosting gives greater control over the location of data.
Infrastructure as a Service (IaaS)
The cloud-based service that provides the hardware and allows customers to load an operating system of their choice is known as infrastructure as a service (IaaS).
Content Delivery Network
A content delivery network is an information system that stores user data in many different geographical locations and makes that data available on demand.
Benefits of a Content Delivery Network
- Provides protection from denial-of-service (DOS) attacks.
- Reduces access costs by delivering data faster.
Private Cloud
An internal information system built using Web services is said to be using the cloud if it offers elasticity in the usage of servers.
Organizations can dynamically reuse servers that use Web services internally by creating a private cloud.