Cloudy Internet HKU | Faculty of Business and Economics IIMT2601 IT Infrastructure (II) Dr. C K Lok Dr. C K Lok Overall Learning Objectives Recognize that the impactful changes brought about by several increasingly adopted technologies including open source software, cloud computing, and software as a service (Saas) 2 HKU | Faculty of Business and Economics Investigate what Web services are and the benefits that Web services bring to firms 3 HKU | Faculty of Business and Economics Dr. C K Lok Open Source Software Open source software (OSS): Software that is usually free and where anyone can look at and potentially modify the codes Linux Open source operating system Code Contrast Source code for OSS products Openly shared In contrast to the practice of conventional software firms which: • Can be changed and redistributed by anyone • The Internet has enabled OSS • Treat their intellectual property as closely guarded secrets • Almost never provide the source code for their commercial products • But, it is changing … 4 HKU | Faculty of Business and Economics Open Source Dr. C K Lok Open Source Software LAMP: Acronym for Linux, Apache Web server software, MySQL database, and Perl/Python/PHP Powers many of the sites visited each day from Facebook to YouTube •5 HKU | Faculty of Business and Economics Seen as a threat by some firms undermining their economic model Dr. C K Lok Open Source Software Dr. C K Lok Why Open Source? Cost Security – “many eyes” Scalability – Ability to either handle increasing workloads or to be easily expanded to manage workload increases Agility and time to market – adapt/adopt 6 HKU | Faculty of Business and Economics Reliability – “many eyes” IE Visio Photoshop Whatsapp AutoCAD MS Office Windows 1. 2. 3. 4. 5. 6. 7. Firefox Dia Gimp Signal FreeCAD OpenOffice Linux 7 HKU | Faculty of Business and Economics 1. 2. 3. 4. 5. 6. 7. Dr. C K Lok Examples of Open Source Software Dr. C K Lok Key Questions to Address How vendors make money on open source through the Internet? What is an Open Source example? 8 HKU | Faculty of Business and Economics What is the disproportional impact that OSS has on the IT market? Dr. C K Lok Disproportional Impact of OSS on IT Market Reliable, secure, and lowers computing costs for all users Diverts funds that can be used for other competitive initiatives and encouraging innovations 9 HKU | Faculty of Business and Economics Lowers the cost of computing and makes computing options accessible to smaller firms Dr. C K Lok Business of Open Source Vendors make money on OSS by selling support and consulting services • Pre-Linux days - Almost every major hardware manufacturer made its own incompatible version of the Unix operating system o They had difficulty attracting third-party vendors to write application software • Now all major hardware firms run Linux resulting in a large, unified market attracting software developers 10 HKU | Faculty of Business and Economics Industry’s evolution (standards competition) 11 HKU | Faculty of Business and Economics Dr. C K Lok Another Open Source Example 12 HKU | Faculty of Business and Economics Dr. C K Lok What is Cloud Computing? Software as a service (SaaS): Firm subscribes to a third-party software and receives a service that is delivered online 13 HKU | Faculty of Business and Economics Cloud computing: Replacing computing with services provided over the Internet Dr. C K Lok Cloud Computing - SaaS Dr. C K Lok Earning Money Through SaaS How? Offer free services that are supported by advertising Promote the sale of upgrades or premium versions for additional fees 14 HKU | Faculty of Business and Economics Money can be earned via a usage-based pricing model such as monthly subscription 15 HKU | Faculty of Business and Economics Source: http://sixteenventures.com/2011/12 Dr. C K Lok Upgrades or Premium Versions for Additional Fees 16 HKU | Faculty of Business and Economics Dr. C K Lok SaaS – CRM 17 HKU | Faculty of Business and Economics Dr. C K Lok SaaS - AWS 18 HKU | Faculty of Business and Economics Dr. C K Lok Benefits of SaaS to Corporate Users Concern about the long-term viability of partner firms Users may be forced to migrate to new versions Reliance on the Internet to access SaaS – stability and security issues? Possibly incurring unforeseen training costs and shifts in operating procedures 19 HKU | Faculty of Business and Economics Dependence on a single vendor Dr. C K Lok Risks Associated with SaaS Dr. C K Lok Risks Associated with SaaS – Too Cloudy? Data asset stored off-site may lead to security and legal concerns User interface of Web-based software is sometimes less sophisticated and lacks the richness of most desktop alternatives Ease of adoption may lead to pockets of unauthorized IT being used throughout a firm IS governance issue: IT and application controls to assure validity, accuracy, and completeness of business data 20 HKU | Faculty of Business and Economics Limited configuration, customization, and system integration options compared to packaged software or alternatives developed in-house Dr. C K Lok Challenges Remain – Too Cloudy? Firms considering cloud computing need to do a thorough financial analysis Firms should enter the cloud cautiously, particularly where mission-critical systems are concerned 21 HKU | Faculty of Business and Economics Installing a complex set of systems on someone else’s hardware is very difficult Dr. C K Lok Impact on IT Industry Microsoft Office is dropping in sale while Microsoft Office 365 is gaining momentum Cloud computing can accelerate innovation Changes the desired skills mix and job outlook for IS workers Enables organizations to spend less on hardware infrastructure and reinvest in strategic efforts and innovation 22 HKU | Faculty of Business and Economics Shifting to cloud computing modifies the margin structure for many in the computing industry: product revenue to service revenue Dr. C K Lok Future of the Internet – Internet of Things – Allow a vast network to collect data, analyze input, and automatically coordinate collective action HKU | Faculty of Business and Economics • Vision of embedding low-cost sensors, processors, and communication into a wide array of products and the environment 24 HKU | Faculty of Business and Economics Dr. C K Lok Future of the Internet – Internet of Things Dr. C K Lok Thanks! Q&A HKU | Faculty of Business and Economics By leveraging IT, does doing business mean something totally different?
