Chapter 2.1: Hardware

2.1.1 Introduction

As you learned in the first chapter, an information system is made up of three components: technology, people, and processes. In this chapter we will focus on the first element of technology-hardware. Computer hardware encompasses devices that you can physically touch including desktop computers, laptop computers, mobile phones, tablets, e-readers, storage devices, and input and output devices. Besides these more traditional computer hardware devices, many items that were once not considered digital devices are now becoming computerized themselves. Digital technologies are being integrated into many everyday objects so the days of a device being labeled categorically as computer hardware may be ending. In this chapter, you will also explore digital devices, beginning with defining what is meant by the term itself.

2.1.2 Digital Devices

A digital device processes electronic signals into discrete values, of which there can be two or more. In comparison analog signals are continuous and can be represented by a smooth wave pattern. You might think of digital (discrete) as being the opposite of analog.

Many electronic devices process signals into two discrete values, typically known as binary. These values are represented as either a one (“on”) or a zero (“off”). It is commonly accepted to refer to the on state as representing the presence of an electronic signal. It then follows that the off state is represented by the absence of an electronic signal. Technically, the voltages in a system are evaluated with high voltages converted into a one or on state and low voltages converted into a zero or off state.

Each one or zero is referred to as a bit (a blending of the two words “binary” and “digit”). A group of eight bits is known as a byte (think of a byte as being a single character you can type from a keyboard). The first personal computers could process 8 bits of data at once. The number of bits that can be processed by a computer’s processor at one time is known as word size. Today’s personal computers can process 64 bits of data at a time which is where the term 64-bit processor comes from. You are most likely using a computer with a 64-bit processor.

As the capacities of digital devices grew, new terms were developed to identify the capacities of processors, memory, and disk storage space. Prefixes were applied to the word byte to represent different orders of magnitude. Since these are digital specifications, the prefixes were originally meant to represent multiples of 1024 (210), this usage is referred to as a binary measurement, but have more recently been rounded for the sake of simplicity to mean multiples of 1000, as shown in the table below. 

2.1.3 Personal Computer Tour

Computers are machines that accept data as input, processes that data using stored instructions, and outputs the information.

All personal computers consist of the same basic components:

• network connection

• motherboard

• central processing unit (CPU)

• storage/memory

• input/output devices

Almost every digital device uses the same set of components, so examining the personal computer will give you insight into the structure of a variety of digital devices. The components will be explored in more detail in the following sections.

Network Connection

Personal computers were first developed as stand alone units, which meant that data was brought into the computer or removed from the computer via removable media (i.e. hard drives, USB devices, CD’s). However, beginning in the mid-1980s, organizations began to see the value in connecting computers together via a digital network. Because of this, personal computers needed the ability to connect to these networks. Initially, this was done by adding an expansion card to the computer that enabled the network connection. These cards were known as Network Interface Cards (NIC). By the mid-1990s, an Ethernet network port was built into the motherboard on most personal computers. As wireless technologies began to dominate in the early 2000s, many personal computers also began including wireless networking capabilities. Digital communication technologies will be discussed further in a later chapter.

Motherboard

The motherboard is the main circuit board on the computer. The CPU, memory, and storage components, among other things, all connect into the motherboard. Motherboards come in different shapes and sizes, depending upon how compact or expandable the computer is designed to be. Most modern motherboards have many integrated components, such as network interface card, video, and sound processing, which previously required separate components. 

The motherboard provides much of the bus of the computer (the term bus refers to the electrical connections between different computer components). The bus is an important factor in determining the computer’s speed (the combination of how fast the bus can transfer data and the number of data bits that can be moved at one time). The traces shown in the image are on the underside of the motherboard and provide connections between motherboard components. 

2.1.4 Processing Data

The CPU

The core of a computer is the Central Processing Unit, or CPU. It can be thought of as the “brains” of the device. The CPU carries out the commands sent to it by the software and returns results to be acted upon. The earliest CPUs were large circuit boards with limited functionality. Today, a CPU can perform a large variety of functions. There are two primary manufacturers of CPUs for personal computers: Intel and Advanced Micro Devices (AMD).

The speed (clock time) of a CPU is measured in hertz. A hertz is defined as one cycle per second. A kilohertz (kHz) is one thousand cycles per second, a megahertz (mHz) is one million cycles per second, and a gigahertz (gHz) is one billion cycles per second. The CPU’s processing power is increasing at an amazing rate.

Besides a faster clock time, today’s CPU chips contain multiple processors. These chips, known as dual-core (two processors) or quad-core (four processors), increase the processing power of a computer by providing the capability of multiple CPUs all sharing the processing load. Intel’s Core i7 processors contain 6 cores and their Core i9 processors contain 16 cores.

Faster & Cheaper

Faster and cheaper are two words that have driven the computer industry for decades. This phenomenon of “faster, cheaper” computing is often referred to as ‘Moore’s Law’, after Intel co-founder, Gordon Moore. Moore recognized that microprocessor transistor counts had been doubling every year, enabling the development of more powerful chips to be manufactured at cheaper prices.[1] Moore’s Law has been generalized into the concept that computing power will double every two years for the same price point. Another way of looking at this is to think that the price for the same computing power will be cut in half every two years. Moore’s Law has held true for over fifty years. (See image below).

The limits of Moore’s Law are now being reached and circuits cannot be reduced further, but a new law, Huang’s Law has arrived. This law, named for Nvidia’s CEO Jensen Huang, says that Graphics Processing Units (GPUs) which power artificial intelligence, are increasing faster than Moore’s Law. In fact the performance has more than doubled every year. [2] 

1. Moore, G. E. (1965). Cramming more components onto integrated circuits. Electronics Magazine, 4 ↵

2. Mims, C. (2020, Sept 19). Huang’s Law Is the New Moore’s Law, and Explains Why Nvidia Wants Arm. The Wall Street Journal.  https://www.wsj.com/articles/huangs-law-is-the-new-moores-law-and-explains-why-nvidia-wants-arm-11600488001 ↵

2.1.5 Storing Data

Random-Access Memory

When a computer boots up (starts), it begins to load information from storage into its working memory. This working memory, called Random-Access Memory (RAM), can transfer data much faster than the hard disk. Any program that you are running on the computer is loaded into RAM for processing. In order for a computer to work effectively, some minimal amount of RAM must be installed. In most cases, adding more RAM will allow the computer to run faster. Another characteristic of RAM is that it is “volatile.” This means that it can store data as long as it is receiving power. When the computer is turned off, any data stored in RAM is lost.

Hard Disk

While the RAM is used as working memory, the computer also needs a place to store data for the longer term. Most of today’s personal computers use a hard disk for long-term data storage. A hard disk is considered non-volatile storage because when the computer is turned off the data remains in storage on the disk, ready for when the computer is turned on. Drives with a capacity less than 1 Terabyte usually have just one platter. Notice the single platter in the image. The read/write arm must be positioned over the appropriate track before accessing or writing data. 

Solid State Drives

Solid State Drives (SSD) are becoming more popular in personal computers. The SSD performs the same function as a hard disk, namely long-term storage. Instead of spinning disks, the SSD uses flash memory that incorporates EEPROM (Electrically Erasable Programmable Read Only Memory) chips, which is much faster.

Solid-state drives are currently a bit more expensive than hard disks. However, the use of flash memory instead of disks makes them much lighter and faster than hard disks. SSDs are primarily utilized in portable computers, making them lighter, more durable, and more efficient. Some computers combine the two storage technologies, using the SSD for the most accessed data (such as the operating system) while using the hard disk for data that is accessed less frequently. SSDs are considered more reliable since there are no moving parts.

Removable Media: USB Drive

Removable storage has changed greatly over the four decades of PCs. Floppy disks have been replaced by CD-ROM drives, then they were replaced by USB (Universal Serial Bus) drives. USB drives are now standard on all PCs, and USB-C is the latest version. USB-C’s shape is oblong instead of rectangular and it is symmetrical, meaning it can be inserted either way which differs from the previous version. New specifications allow for greater data transfer speeds.[1] 

2.1.6 Computer Speed Factors

The speed of a computer is determined by many elements, some related to hardware and some related to software. In hardware, speed is improved by giving the electrons shorter distances to travel in completing a circuit. Since the first CPU was created in the early 1970s, engineers have constantly worked to figure out how to shrink these circuits and put more and more circuits onto the same chip – these are known as integrated circuits. And this work has paid off as the speed of computing devices has been continuously improving.

Multi-core processors, or CPUs, have contributed to faster speeds. Intel engineers have also improved CPU speeds by using QuickPath Interconnect, a technique which minimizes the processor’s need to communicate directly with RAM or the hard drive. Instead, the CPU contains a cache of frequently used data for a particular program. An algorithm evaluates a program’s data usage and determines which data should be temporarily stored in the cache.

The hardware components that contribute to the speed of a personal computer are the CPU, the Motherboard, RAM, and the Hard Disk. In most cases, these items can be replaced with newer, faster components. The table below shows how each of these contributes to the speed of a computer. Besides upgrading hardware, there are many changes that can be made to the software of a computer to make it faster.

2.1.7 Input and Output Devices

In order for a personal computer to be useful, it must have channels for receiving input from the user and channels for delivering output to the user. Input and output devices connect to the computer through connection ports, which are generally part of the motherboard and are accessible outside the computer case. In early personal computers, specific ports were designed for each type of output device. The configuration of these ports has evolved over the years, becoming more and more standardized over time. Today, almost all devices plug into a computer through the use of a USB port. This has increased in its capabilities, both in its data transfer rate and power supplied. 

Bluetooth

Besides USB, some input and output devices connect to the computer via a wireless-technology standard called Bluetooth, which was invented in 1994. Bluetooth exchanges data over short distances of 10 meters up to 100 meters using radio waves. Two devices communicating with Bluetooth must both have a Bluetooth communication chip installed. Bluetooth devices include pairing your phone to your car, computer keyboards, speakers, headsets, and home security, just to name a few.

Input Devices

All personal computers need components that allow the user to input data. Early computers simply used a keyboard for entering data or selecting an item from a menu to run a program. With the advent of operating systems offering the graphical user interface, the mouse became a standard component of a computer. These two components are still the primary input devices to a personal computer, though variations of each have been introduced with varying levels of success over the years. For example, many new devices now use a touch screen as the primary way of data entry.

Other input devices include scanners which allow users to input documents into a computer either as images or as text. Microphones can be used to record audio or give voice commands. Webcams and other types of video cameras can be used to record video or participate in a video chat session.

Output Devices

Output devices are essential as well. The most obvious output device is a display or monitor, visually representing the state of the computer. In some cases, a personal computer can support multiple displays or be connected to larger-format displays such as a projector or large-screen television. Other output devices include speakers for audio output and printers for hardcopy output. 

3D Printing

A 3-D printer allows you to print virtually any 3-D object based on a model of that object designed on a computer. 3-D printers work by creating layer upon layer of the model using malleable materials, such as different types of glass, metals, or even wax. 3-D printing is quite useful for prototyping the designs of products to determine their feasibility and marketability.  3-D printing has also been used to create working prosthetic legs and an ear that can hear beyond the range of normal hearing. The US military now uses 3-D printed parts on aircraft such as the F-18. [1] 

1. The Economist. (2013, September 13). 3-D Printing Scales Up. ↵

2.1.8 Trends in Personal Computing

A personal computer is designed to be a general-purpose device, able to solve many different types of problems. As the technologies of the personal computer have become more commonplace, many of the components have been integrated into other devices that previously were purely mechanical. The definition or description of what defines a computer has changed. Portability has been an important feature for most users. Here is an overview of some trends in personal computing.

Portable Computers

Portable computing today includes laptops, notebooks and netbooks, many weighing less than 4 pounds and providing longer battery life. The MacBook Air is a good example of this: it weighs less than three pounds and is only 0.68 inches thick!

Netbooks (short for Network Books) are extremely light because they do not have a hard drive, depending instead on the Internet “cloud” for data and application storage. Netbooks depend on a Wi-Fi connection and can run Web browsers as well as a word processor.

Smartphones

While cell phones were introduced in the 1970s, smartphones have only been around for the past 20 years. As cell phones evolved they gained a broader array of features and programs. Today’s smartphones provide the user with telephone, email, location, and calendar services, just to name a few. They function as a highly mobile computer, able to connect to the Internet through either cell technology or Wi-Fi. Smartphones have revolutionized computing, bringing the one feature PCs and laptops could not deliver, namely mobility.  The Apple iPhone was introduced in January 2007 and went on the market in June of that same year. Its ease of use and intuitive interface made it an immediate success and solidified the future of smartphones. The first Android phone was released in 2008 with functionality similar to the iPhone.

Tablet Computers

A tablet computer uses a touch screen as its primary input and is small enough and light enough to be easily transported. They generally have no keyboard and are self-contained inside a rectangular case. Apple set the standard for tablet computing with the introduction of the iPad in 2010 using iOS, the operating system of the iPhone. After the success of the iPad, computer manufacturers began to develop new tablets that utilized operating systems that were designed for mobile devices, such as Android. The Samsung Galaxy and Amazon Fire are both popular competitors to the iPad.

Integrated Computing and Internet of Things (IoT)

Along with advances in computers themselves, computing technology is being integrated into many everyday products. From automobiles to refrigerators to airplanes, computing technology is enhancing what these devices can do and is adding capabilities into our everyday lives thanks in part to IoT.

IoT is a network of billions of devices, each with their own unique network address, around the world with embedded electronics allowing them to connect to the Internet for the purpose of collecting and sharing data, all without the involvement of human beings.[1]Objects ranging from a simple light bulb to a fitness band such as FitBit to a driverless truck are all part of IoT thanks to the processors inside them. A smartphone app can control and/or communicate with each of these devices as well as others such as: electric garage door openers, kitchen appliances, thermostats (like Nest), home security systems, and audio speakers.

Section Footnotes: 

1. Ranger, S. (2018, January 19). What is the IoT? ZDNet. http://www.zdnet.com/article/what-is-the-internet-of-things-everything-you-need-to-know-about-the-iot-right-now/. ↵

2.1.9 PC Commoditization and E-Waste

The Commoditization of the Personal Computer

Over the past forty years, as the personal computer has gone from technical marvel to part of everyday life, it has also become a commodity. There is very little differentiation between computer models and manufacturers, and the primary factor that controls their sale is their price. Hundreds of manufacturers all over the world now create parts for personal computers which are purchased and assembled. As commodities, there are essentially little or no differences between computers made by these different companies. Profit margins for personal computers are minimal, leading hardware developers to find the lowest-cost manufacturing methods.

There is one brand of computer for which this is not the case – Apple. Because Apple does not make computers that run on the same open standards as other manufacturers, they can design and manufacture a unique product that no one can easily copy. By creating what many consider to be a superior product, Apple can charge more for their computers than other manufacturers. Just as with the iPad and iPhone, Apple has chosen a strategy of differentiation, an attempt to avoid commoditization.

E-Waste

Advances in computing technology reduce costs, increase productivity and allow innovation to flourish. But there is a dark side to advancement. A PC has an expected lifetime of three to five years, and a cell phone is expected to last less than two years. Rapid obsolescence means the creation of ever-growing mountains of discarded tech junk, known as electronic waste or e-waste. In 2016 alone approximately 44.7 million metric tonnes of e-waste were created. By 2020, it is predicted that amount will increase by 17% and we will create approximately 52.2 million metric tonnes of e-waste annually throughout the world.[1] Canada is a large contributor to this e-waste problem. A report released by Statistics Canada stated that, in 2012 we contributed 14.3 million tonnes of waste to the global e-waste problem. [2] Consumer electronics and computing equipment can be a toxic cocktail that includes cadmium, mercury, lead, and other hazardous materials. Once called the “effluent of the affluent,” e-waste will only increase with the rise of living standards worldwide.

The quick answer would be to recycle, as e-waste contains materials like plastics and aluminum, as well as small bits of increasingly valuable metals such as silver, platinum, and copper. However, there’s often a disconnect between consumers and managers who want to do good and those efforts that are actually doing good. The complexities of the modern value chain, the vagaries of international law, and the nefarious actions of those willing to put profits above principle show how difficult addressing this problem will be.

The process of separating out the densely packed materials inside tech products so that the value in e-waste can be effectively harvested is extremely labor intensive, more akin to reverse manufacturing than any sort of curbside recycling efforts. Therefore a lot of e-waste is sent  abroad which can be much cheaper than processing at home. Much of this waste ends up in China, South Asia, or sub-Saharan Africa.

Thinking deeply about the ethical consequences of a firm’s business is an imperative for the modern manager. A slip up (intentional or not) can, in seconds, be captured by someone with a cell phone, uploaded to YouTube, or offered in a blog posting for the world to see. The worst cases expose firms to legal action and can tarnish a brand for years. Big firms are big targets, and environmentalists have been quick to push the best-known tech firms and retailers to take back their products for responsible recycling and to eliminate the worst toxins from their offerings.

Section Attribution: 

1. Leary, K. (n.d.). The World's E-Waste Is Piling Up at an Alarming Rate, Says New Report.  https://www.sciencealert.com/global-electronic-waste-growth-report-2017-significant-increase ↵

2. Statistics Canada. (2016, May 24). EnviroStats. Trash Talking : Dealing with Canadian household e-waste. http://www.statcan.gc.ca/pub/16-002-x/2016001/article/14570-eng.htm ↵

2.2.1 Chapter Introduction

You will remember from the last chapter that computer hardware is the components of information technology that you can physically touch. Computing hardware is getting faster and cheaper, creating all sorts of exciting and disruptive opportunities for organizations. However, it is the software that makes the magic of computing happen. Software refers to a computer program or collection of programs—sets of instructions that tell the hardware what to do, and without software, the hardware would not be functional. Software gets your computer to behave like a Web browser or word processor, makes your phone play music and video, and enables your bank’s ATM to spit out cash. In this chapter we will explore the different types of software, how to obtain it, and understand the importance of software from a managerial context.

Managers who understand software can better understand the possibilities and impact of technology. They can make better decisions regarding the strategic value of IT and the potential for technology-driven savings. They can appreciate the challenges, costs, security vulnerabilities, legal and compliance issues, and limitations involved in developing and deploying technology solutions.

2.2.2 Operating Systems

Operating Systems

An operating system is first loaded into the computer by the boot program, then it manages all of the programs in the computer, including both programs native to the operating system such as file and memory management and application software. Operating systems provide you with these key functions:

1. Managing the hardware resources of the computer;

2. Providing the user-interface components;

3. Providing a platform for software developers to write applications.

All computing devices require an operating system. The most popular operating systems for personal computers are: Microsoft Windows, Apple’s Mac OS, and various versions of Linux. Smartphones and tablets run operating systems as well, such as iOS (Apple), and Android (Google).

Microsoft provided the first operating system for the IBM-PC, released in 1981. Their initial venture into a Graphical User Interface (GUI) operating system, known as Windows, occurred in 1985. A GUI provides the way a user interacts with a program on a computer. It is what gives a program its look and feel. Today’s Windows 10 supports the 64-bit Intel CPU. Recall that “64-bit” indicates the size of data that can be moved within the computer.

Apple introduced the Macintosh computer 1984 with the first commercially successful GUI. Apple’s operating system for the Macintosh is known as “Mac OS ” and also uses an Intel CPU supporting 64-bit processing. Mac OS versions used to be named after mountains (such as El Capitan) and are now named after locations in California. The most recent version is called Monterey. Multitasking, virtual memory, and voice input have become standard features of both operating systems.

The Linux operating system is open source, meaning individual developers are allowed to make modifications to the programming code. Linux is a version of the Unix operating system. Unix runs on large and expensive minicomputers (computers that are smaller and less powerful than a mainframe or supercomputer but more expensive and more powerful than a personal computer). Linux developer Linus Torvalds, a professor in Finland and the creator of Linux, wanted to find a way to make Unix run on less expensive personal computers. Linux has many variations and now powers a large percentage of web servers in the world.

Productivity Software

Productivity software is a type of application software that has become a standard tool for the workplace. These programs allow office employees to complete their daily work efficiently. Many times these applications come packaged together as integrated software suites, such as in Microsoft’s Office suite. Here is a list of some of these applications and their basic functions:

Some office suites include other types of software. For example, Microsoft Office includes Outlook, its e-mail package, and OneNote, an information-gathering collaboration tool. The professional version of Office also includes Microsoft Access, a database package. Microsoft popularized the idea of the office-software productivity bundle with their release of the Microsoft Office Suite. This package continues to dominate the market and most businesses expect employees to know how to use this software. However, many competitors to Microsoft Office do exist and are compatible with the file formats used by Microsoft. Microsoft also offers a cloud-based version of their office suite named Microsoft Office 365. Similar to Google Drive, this suite allows users to edit and share documents online utilizing cloud-computing technology.

Collaborative Systems

As organizations began to implement networking technologies, information systems emerged that allowed employees to begin collaborating in different ways. These systems allowed users to brainstorm ideas together without the necessity of physical, face-to-face meetings. Tools such as video conferencing with Zoom or WebEx, collaboration and document sharing with Microsoft SharePoint or Teams, and project management with SAP’s Project System make collaboration possible in a variety of endeavors.

Broadly speaking, any software that allows multiple users to interact on a document or topic could be considered collaborative. Electronic mail, a shared Word document, and social networks fall into this broad definition. However, many software tools have been created that are designed specifically for collaborative purposes. These tools offer a broad spectrum of collaborative functions. Here is just a short list of some collaborative tools available for businesses today:

• Google Drive. Google Drive offers a suite of office applications (such as a word processor, spreadsheet, drawing, presentation) that can be shared between individuals. Multiple users can edit the documents at the same time and the threaded comments option is available.

• Microsoft SharePoint. SharePoint integrates with Microsoft Office and allows for collaboration using tools most office workers are familiar with. SharePoint will be covered in greater detail in chapter 5.

• Cisco WebEx. WebEx combines video and audio communications and allows participants to interact with each other’s computer desktops. WebEx also provides a shared whiteboard and the capability for text-based chat to be going on during the sessions, along with many other features. Mobile editions of WebEx allow for full participation using smartphones and tablets.

• GitHub. Programmers/developers use GitHub for web-based team development of computer software.

Utility Software and Programming Software

Utility software includes programs that allow you to fix or modify your computer in some way. Examples include anti-malware software and programs that totally remove software you no longer want installed. These types of software packages were created to fill shortcomings in operating systems. Many times a subsequent release of an operating system will include these utility functions as part of the operating system itself.

Programming software’s purpose is to produce software. Most of these programs provide developers with an environment in which they can write the code, test it, and convert/compile it into the format that can then be run on a computer. This software is typically identified as the Integrated Development Environment (IDE) and is provided free from the corporation that developed the programming language that will be used to write the code.

2.2.4 Desktop and Enterprise Software

Desktop software refers to applications installed on a personal computer—your browser, your Office suite, photo editors, and computer games are all desktop software. Enterprise software refers to applications that address the needs of multiple, simultaneous users in an organization or work group. Most companies run various forms of enterprise software programs to keep track of their inventory, record sales, manage payments to suppliers, cut employee paychecks, and handle other functions.

Some firms write their own enterprise software from scratch, but this can be time consuming and costly. Since many firms have similar procedures for accounting, finance, inventory management, and human resource functions, it often makes sense to buy a software package (a software product offered commercially by a third party) to support some of these functions. Enterprise resource planning (ERP) software packages serve precisely this purpose. In the way that Microsoft can sell you a suite of desktop software programs that work together, many companies sell ERP software that coordinates and integrates many of the functions of a business.

The leading ERP vendors include the firm’s SAP and Oracle, although there are many firms that sell ERP software. A company does not have to install all of the modules of an ERP suite, but it might add functions over time—for example, to plug in an accounting program that is able to read data from the firm’s previously installed inventory management system. And although a bit more of a challenge to integrate, a firm can also mix and match components, linking software the firm has written with modules purchased from different enterprise software vendors. We will discuss enterprise software and decision support software in later chapters.

Most enterprise software works in conjunction with a database management system (DBMS). The database management system stores and retrieves the data that an application creates and uses. Although the DBMS is itself considered an application, it’s often useful to think of a firm’s database systems as sitting above the operating system, but under the enterprise applications. Many ERP systems and enterprise software programs are configured to share the same database system so that an organization’s different programs can use a common, shared set of data. This system can be hugely valuable for a company’s efficiency. We will discuss databases and DBMS’s in a later chapter.

2.2.5 Mobile Software

Just as with the personal computer, mobile devices such as smartphones and tablets also have operating systems and application software. These mobile devices are in many ways just smaller versions of personal computers. A mobile app is a software application designed to run specifically on a mobile device.

As discussed in a previous chapter smartphones are becoming the dominant form of computing, with more smartphones being sold than personal computers.  Businesses have adjusted to this trend by increasing their investment in the development of apps for mobile devices. The number of mobile apps in the Apple App Store has increased from zero in 2008 to over 2 million in 2017.[1]

Cloud Computing

Historically, an individual copy of the software had to be installed on the computer to use it. The concept of cloud computing changed this, as applications, services, and data storage are made accessible through the internet.  Cloud service providers rely on giant server farms and massive storage devices that are connected via a network.

You probably already use cloud computing in some form. For example, if you access your email on your web browser, or use Google Drive’s applications you are using a form of cloud computing. While these are free versions of cloud computing, there is big business in providing applications and data storage over the web. Software as a service (SaaS) is software that is rented rather than purchased. It is subscription-based. Software as a service gives companies access to a large assortment of software packages without having to invest in hardware or install and maintain software on their own computers. The available software, which includes e-mail and collaboration systems and customer relationship management programs, can be customized and used by an individual client or shared among several clients.

The benefit is that all of the software requirements are outsourced to a company with expertise. However, the concern is that this can leave a company vulnerable.  If a traditional software company goes out of business, in most cases its customers can still go on using its products. But if your SaaS vendor goes under, they have all the data, and even if firms could get their data out, most organizations don’t have the hardware, software, staff, or expertise to quickly absorb an abandoned function. Firms that buy and install packaged software usually have the option of sticking with the old stuff as long as it works, but organizations adopting SaaS may find they are forced into adopting new versions. Keep in mind that SaaS systems are also reliant on a network connection. If a firm’s link to the Internet goes down, the link to its SaaS vendor is also severed. Relying on an Internet connection also means that data is transferred to and from a SaaS firm at Internet speeds, rather the potentially higher speeds of a firm’s internal network.

Using a Private Cloud

Many organizations are understandably nervous about giving up control of their data and some of their applications by using cloud computing. But they also see the value in reducing the need for installing software and adding disk storage to local computers. A solution to this problem lies in the concept of a private cloud. While there are various models of a private cloud, the basic idea is for the cloud service provider to section off web server space for a specific organization. The organization has full control over that server space while still gaining some of the benefits of cloud computing.

Virtualization

Virtualization is the process of using software to simulate a computer or some other device. For example, using virtualization a single physical computer can perform the functions of several virtual computers, usually referred to as Virtual Machines (VMs). Organizations implement virtual machines in an effort to reduce the number of physical servers needed to provide the necessary services to users. This reduction in the number of physical servers also reduces the demand for electricity to run and cool the physical servers. For more detail on how virtualization works, see this informational page from VMWare.

1. Statista. (2018). Number of apps in Apple App Store July 2008 to January 2017. https://www.statista.com/statistics/263795/number-of-available-apps-in-the-apple-app-store/. ↵

2. Wikiversity. (n.d.). Amazon Web Services. https://en.wikiversity.org/wiki/Amazon_Web_Services ↵

2.2.6 Obtaining Software

Software can be obtained in a number of different ways. It can be developed internally which is referred to as proprietary software, or it can be purchased off-the-shelf, also referred to as packaged software.  Proprietary software is developed for a specific problem and is owned by the company. If the company does not have the resources within, they may contract another company to build the software for them. Off-the-shelf software is software that is readily available and already developed, such as Microsoft Windows or the Office Suite.

Proprietary Software 

Advantages  

Get exactly what you need and want.

Control over the process.

Disadvantages 

Significant investment (time and money)

Need to provide ongoing support and maintenance.

Off-the-shelf Software 

Advantages 

Initial cost is lower.

Usually will meet the basic needs of the organization, and may have the ability to customize.

Support and training available.

Disadvantages 

Might pay for features that are not needed or wanted.

Software may lack required features and customization can be costly.

(see same information in the image chart below)

Software Creation

Software is created via programming, which is the process of creating a set of logical instructions for a digital device to follow. The process of programming is sometimes called “coding” because the developer takes the design and encodes it into a programming language which then runs on the computer. Modern software applications are written using a programming language such as Java, Visual C, C++, Python, etc. A programming language consists of a set of commands and syntax that can be organized logically to execute specific functions. Using this language a programmer writes a program (known as source code) that can then be compiled into machine-readable form, the ones and zeroes necessary to be executed by the CPU. Languages such as HTML and Javascript are used to develop web pages.

Software programming was originally an individual process, with each programmer working on an entire program, or several programmers each working on a portion of a larger program. However, newer methods of software development include a more collaborative approach, with teams of programmers working on code together. When the personal computer was first released, it did not serve any practical need. Early computers were difficult to program and required great attention to detail. However, many personal-computer enthusiasts immediately banded together to build applications and solve problems. These computer enthusiasts were happy to share any programs they built and solutions to problems they found; this collaboration enabled them to innovate and fix problems quickly.

As software began to become a business, however, this idea of sharing everything fell out of favor, at least with some. When a software program takes hundreds of man-hours to develop, it is understandable that the programmers do not want to just give it away. This led to a new business model of restrictive software licensing, which required payment for software, a model that is still dominant today. This model is sometimes referred to as closed source, as the source code is not made available to others.

Software Ownership

When you purchase software and install it on your computer, are you the owner of that software? Technically, you are not. When you install software, you are actually just being given a license to use it. When you first install a package, you are asked to agree to the terms of service or the license agreement. In that agreement, you will find that your rights to use the software are limited. For example, in the terms of the Microsoft Office software license, you will find the following statement: “This software is licensed, not sold. This agreement only gives you some rights to use the features included in the software edition you licensed.” [1]

For the most part, these restrictions are what you would expect. You cannot make illegal copies of the software and you may not use it to do anything illegal. However, there are other, more unexpected terms in these software agreements. For example, many software agreements ask you to agree to a limit on liability. This means if a problem with the software causes harm to your business, you cannot hold Microsoft or the supplier responsible for damages.

1. Microsoft. (n.d.) Microsoft software license terms.https://support.microsoft.com/en-us/windows/microsoft-software-license-terms-e26eedad-97a2-5250-2670-aad156b654bd  ↵

2.2.7 Open Source Software

The last section discussed closed source software where the source code is not available to others to use or copy. However, there are many who feel that software should not be restricted in this way. Just as with those early hobbyists in the 1970s, they feel that innovation and progress can be made much more rapidly if they share what has been learned. In the 1990s, with Internet access connecting more people together, the open-source movement gained steam.

Open-source software makes the source code available for anyone to copy and use. For most people having access to the source code of a program does little good since it is challenging to modify existing programming code. However, open-source software is also available in a compiled format that can be downloaded and installed. The open-source movement has led to the development of some of the most used software in the world such as the Firefox browser, the Linux operating system, and the Apache web server.

Many businesses are wary of open-source software precisely because the code is available for anyone to see. They feel that this increases the risk of an attack. Others counter that this openness actually decreases the risk because the code is exposed to thousands of programmers who can incorporate code changes to quickly patch vulnerabilities. There are many arguments on both sides of the open-source model debate and can be found below.

Advantages of Open Source 

The software is available for free

The software source-code is available; it can be examined and reviewed before it is installed.

The large community of programmers who work on open-source projects leads to quick bug-fixing and feature additions.

Disadvantages of Open Source 

Technical support is not available like with traditional software products.

Software companies provide updates and features as required by the users.

The user interface may be more challenging to use.