Managing Telecommunications

1. Managing Telecommunications Lecture 14

2. Telecommunications • Telecommunications is the flow of information among individuals, work groups, departments, customer sites, regional offices, between enterprises, and with the outside world • The Internet has also opened up a “cyberspace” where people can be in a virtual world, where organizations can conduct business, and in fact, a place where organizational processes exist. This is providing the foundation for the e-business economy, as just about everything about telecom is shifting

3. Today’s Lecture • Introduction • The Evolving Telecommunications Scene • A New Telecommunications Infrastructure is Being Built • The Telecom Industry is Being Transformed • The Internet is the Network Of Choice • Digital Convergence Has Become a Reality • The OSI Reference Model Underlies Today’s Networks • The Rate of Change is Accelerating

4. Today’s Lecture • The Optical Era Will Provide Bandwidth Abundance • The Wireless Century Begins • Messaging is a Killer App • Coming: An Internet of Things • The Role of the IS Department

5. Introduction • Telecommunications = electronically sending data in any form from one place to another between • People • Machines, or • Objects

6. Introduction... • Generally, IS departments have been responsible for designing, building, and maintaining the information highway in the same way that governments are responsible for building and maintaining streets, roads, and freeways • Once built, the network, with its nodes and links, provides infrastructure for the flow of information and messages

7. Introduction… • In early 2000s Telecom became the basis for the way people and companies started working • It provides the infrastructure for moving information and messages • South Korea’s largest telecommunications firm. • It is able to transmit data at a rate of 4 megabits per second, about four times faster than the typical cable modem deliver-ing high-speed Internet service to U.S. households.

8. Introduction... • The company uses radio sensors to track the movement of parts as they move from fabrication shop to the side of a drydock and then onto a ship under construction. • Workers on the ship use notebook computers or handheld mobile phones to access plans and engage in two-way video conversations with ship designers in the office, more than a mile away.

9. In Past • In the past, workers who were inside a vessel below ground or below sea level had to climb topside to use a phone or walkie-talkie when they had to talk to someone about a problem. • The new wireless network is connected to the electric lines in the ship, which convey digital data • HYUNDAI HEAVY INDUSTRIES CREATES A WIRELESS SHIPYARD to Wi-Fi wireless transmitters: placed around the hull during construction. Workers’ Internet phones, webcams, and PCs are linked to the Wi-Fi system, so workers can use Skype VoIP to call their colleagues on the surface.

10. Contin… • Designers in an office building a mile from the con-structionsite use the webcams to investigate problems. • On the shipyard roads, 30 transporter trucks fitted to receivers connected to the wireless network update their location every 20 seconds to a control room. • This helps dispatchers to identify the location of transporters with orders for parts, shortening the trips each truck makes. • All of the day’s movements are finished by 6 P.M. instead of 8 P.M. By making operations more efficient and reducing labor costs, the wire-less technology is expected to save Hyundai Heavy $40 million annually.

11. The Korea Herald, March 30, 2010 • Sources: Evan Ramstad, “High-Speed Wireless Transforms a Shipyard,” The Wall Street Journal, March 15, 2010 and “Hyundai Heavy Plans Wireless Shipyard,” The Korea Herald, March 30, 2010.

12. The Evolving Telecommunications Scene • Even with the recent ‘downturn’ (correction?) in some countries – the changes in Telecom are coming fast and furiously. Here are some major changes taking place: • A New Telecommunications Infrastructure is Being Built: • The oldest part of the telecommunications infrastructure is the telephone network

13. The Evolving Telecommunications Scene ... • This global network was built on twisted-pair copper wires and was intended for voice communications • It uses analog technology, which although appropriate for delivering high-quality voice, is inefficient for data transmission • Dedicated circuit (switching)

14. The Evolving Telecommunications Scene cont. • A New Telecommunications Infrastructure is Being Built cont.: • The basic traffic-handling mechanism had to change for data • Today, the new telecommunications infrastructure is being built around the world aimed at transmitting data, and consists of: • Wired - fiber optic links • Wireless – radio signals

15. The Evolving Telecommunications Scene cont. • Both use packet switching, where messages are divided into packets, each with an address header, and each packet is sent separately • No circuit is created; each packet may take a different path through the network

16. The Evolving Telecommunications Scene cont. • Packets from any number of senders and of any type, whether e-mails, music downloads, voice conversations, or video clips, can be intermixed on a network segment – • Making these next generation networks able to handle much more traffic and a great variety of traffic

17. The Evolving Telecommunications Scene cont. • This architecture allows new kinds of services to be deployed much more rapidly • The Internet can handle all kinds of intelligent user devices, including: • Voice-over-IP (VoIP) phones • Personal digital assistants (PDAs) • Gaming consoles, and • All manner of wireless devices • The global telecom infrastructure is changing from a focus on voice to a focus on data

18. The Telecommunications Industry is Being Transformed • The telecom structure of old was originally provided by (often Government owned) monopolies • Only ones with the $ to support set up costs • Public infrastructure • Gradually, the telecom industry has been deregulated

19. The Telecommunications Industry is Being Transformed • The telecom industry is becoming like the computing industry in that each year brings ‘predictable’ (and ‘huge’) improvements • Performance • Capacity • Bandwidth on fiber is now doubling capacity every four months

20. The Telecommunications Industry is Being Transformed cont. • ‘Last Mile’ problems: • Who ‘owns’ the ‘last mile’ • In the 1990s, the ‘monopolies’ began encountering competition for “the last mile” • Bottleneck issues (hose to straw) • Visualize the world’s networks as huge fire hoses because they use fiber optic cables that can transmit at a whopping speed of a terabit (1012 bits per second) • 1,000,000,000,000

21. The Telecommunications Industry is Being Transformed cont. • Then visualize the twisted pair phone line coming into your home or business as a straw, only operating at speeds of 56 kbps (104) • 10,000

24. Current Situation • The current wave of growth in mobile data services and traffic is driving connection and handset penetration ever higher. • As the long tail of emerging market users gets connected, the number of mobile connections is projected to surpass the global human population in 2014 (see Figure 1).

26. Current Situation… • At the same time, global smartphone shipments are continuing to ramp up impressively (see Figure 2). • However, minutes of use (MoU) is flattening in some markets as consumers’ usage shifts toward data and away from traditional services such as voice,despite a rising proportion of packages offering unlimited minutes and text messages.

29. Hong Leong Investment bank

30. ICG COMMUNICATIONSCase example: Changes in the Telecom Industry • This competitive local exchange carrier provides voice and data services in 25 metropolitan areas in the United States

31. Contin… • It was formed in 1984 to provide local telephone service in Denver. It expanded to provide long distance, buying up companies with fiber routes • It later focused on being an Internet backbone provider, serving ISPs

32. Contin… • When the dot-com bubble burst, ICG filed for bankruptcy, but moved out of bankruptcy in late 2002 • ‘Similar’ things have happened in other countries

33. The Internet is the Network of Choice • What has surprised most people is the Internet’s surprisingly fast uptake for business use • As did the fast plummet of the dot-com and telecommunications industries

34. The Internet is the Network of Choice… • In the late 1990s, the Internet caught most IS departments by surprise, not to mention the hardware and software vendors who serve the corporate IS community • The Internet actually began in the 1960s when it was called ARPANET, mainly used for electronic mail • By 1993, it was still mainly a worldwide network for scientists and academics, text only - no graphics

35. The Internet is the Network of Choice cont. • That all changed in 1994 when the World Wide Web was invented (By Tim Berners-Lee at CERN in Geneva.) • This graphical “layer” of the Net made it much more user friendly: • Web sites had addresses specified by their universal resource locator (URL) • Its multimedia Web pages were formatted using hypertext markup language (HTML)

36. The Internet is the Network of Choice cont. • All the Web sites could be accessed via an easy-to-use browser on a PC • At first populated by computer geeks’ homepages, business (and ‘normal’ people’s) use of the Web skyrocketed by the late 1990s • The Internet has done for telecom what the IBM PC did for computing: brought it “to the masses”

37. The Internet is the Network of Choice cont. • In 1981, when the IBM PC was introduced, its architecture was open • An entire industry developed around this open architecture. The same is happening with the Internet because it provides the same kind of openness • Like the PC, this openness yields the most powerful solutions and the most competitive prices

38. The Internet is the Network of Choice cont. • The Internet has three attributes that make it important to corporations: • Ubiquity • Reliability, and • Scalability

39. The Internet is the Network of Choice cont. • Today, the protocols underlying the Internet have become the protocols of choice in corporate networks, for internal communications as well as communications with the outside world • The norm is now end-to-end Internet protocol (IP) networks

40. E-COMMERCE • The use of the Internet and the Web to transact business. • Formally, digitally enabled commercial transactions between and among organizations and individuals • Digitally enabled transactions include all transactions mediated by digital technology

45. XYZ COMPANYCase example: Network Options • The Internet will be the heart of XYZ’s corporate operation. So the CTO will create: • An intranet for use by employees • An extranet for use by suppliers and some large customers, and of course, • The Internet as the all-important central public network

46. XYZ COMPANYCase example: Network Options cont. • Serving remote users: XYZ has 4 choices of communications wiring: • twisted pair (standard phone line) • coaxial cable (like cable TV) • fibre optic (glass fibre that carries signals via light pulses) and • wireless

47. XYZ COMPANYCase example: Network Options cont. • Modems can be: • standard telephone modems (56kbps) – no longer really a viable option due to size of files (PowerPoints etc,) • digital subscriber line (DSL) modems at 1.2 mbps 20 times faster, or • cable modems at 10mbps or 200 times faster

48. XYZ COMPANYCase example: Network Options cont. • Serving local users: In the office, all the computers and telephones will be connected directly to an always-on LAN. The various LANs in XYZ’s offices will use hubs, switches and routers to route traffic • The CTO will likely choose Fast Ethernet Protocol for his IP-based LAN. It has speeds of 100 mpbs (10^8) • Communicating Between Offices: XYZ employees need to communicate between sites, so they need some sort of wide area network. As expected, the CTO has choices here as well

49. XYZ COMPANYCase example: Network Options cont. • Asynchronous transfer mode (ATM) is high speed - up to 622 mbps • A fairly new option for XYZ to link several offices in a city, or link floors within a building, is a Gigabit Ethernet which operates at speeds of one gbps (10^9 bits per second) • The CTO is definitely going to base all his decisions on being Internet protocol centric

50. Extranets • Not long after creating intranets, businesses realized they could extend the intranet concept into an extranet • A special part of the intranet for use by trading partners, customers, and suppliers for electronic commerce • The notion caught on and extranets have become an important component of B2B e-commerce