EMC - 1-Min-1-233-2

32 / ELECTRONIC COMMERCE
The concept of 'marketspace' (Rayport & Sviokla 1994) has been adopted to distinguish the space,
within which EC is conducted, from the conventional, physical marketplaces in which traditional
commerce occurs. The marketspace is the virtual context in which buyers and sellers discover one
artother, and transact business. lt is the working environment that arises from the complex of
increasingly rich and mature telecommunications-based services and tools, and the underlying
info rmation i nf rastructu re.
EC can support most of the processes involved in the purchasing of physical goods and services,
with the exception of the actual delivery or performance: as the old hacker's joke goes, there just is
no u ubp (unix-to-unix-beer-protocol).
Digital goods and services (Negroponte 1995) are those whose purchase can be not only negotiated
and settled using the information infrastructure, but which can also delivered through the same
channels. Hence, for digital goods and services, the marketspace provides a context that can support
the entire procurement process.
Web Designing and Publishing: Form of Electronic Commerce
lntroduction
The term'electronic publishing'can be used to refer to the efforts of conventional publishers to adapt
their existing forms of hard-copy publishing to take advantage of the new opportunities offered by the
information infrastructure. This paper takes the view that this is an unnecessarily constraining
perspective, and should be avoided if the real potentials of the technology are to be fullilled.
A considerable proportion of the existing literature on the topic relates expressly to the publication of
academic works (Harnad 1991, 1995, Clarke 1994, Barry 1995b, Treloar 1995, 1996, Peek & Newby
1996, Bailey 1995-97), and particularly e-journals (Odlyzko 1995). Another segment relates to e-
zines (electronic magazines - Labowitz 1997). Many sources focus on particular technologies and
their application to electronic publishing, particularly the World-Wide Web (Zwass 1996). Another
relevant literature is that relating to digital libraries (D-lib 1997, Ketchpel 1997). For general references,
see also Varian (1997) and Kahin (1997).
This paper adopts an alternative approach. lt considers electronic publishing as a pariicular form of
the general class of electronic commerce systems.
iele,rant concepts of electronic commerce are reviewed, in order to establish a working def inition of
electronic publishing.Three models are then presented, which provide:
O a structured description of the processes involved in the business of electronic publishing;
tr a taxonomy of business models whereby electronic publishing can be funded; and
tr an interpretation of the maturation path that is being followed by existing publishers, as
they convert from conventional to electronic publishing.
lmplications of the analysis are drawn, for both practitioners and researchers.
Electronic Commerce
This short, preliminary section provides an outline of key electronic commerce concepts, as a basis
for the subsequent analysis.
'Electronic commerce' (EC) is a general term for the conduct of business with the assistance of
telecommunications infrastructure, and of tools and services running over that infrastructure.
EC's scope extends across all forms ol business process within and between private sector
organisations (corporations, partnerships and sole traders), public sector agencies, convivial sector
organisations (associations and clubs) and individuals.
E-COMMERCE : CONVERGENCE OF TECHNOLOGIES / 33
EC's most active area of application has to date been in procurement processes, where models of
both'deliberative purchasing'also encompasses other business processes such as the design of
complex artefacts like buildings, ships and aircraft, and administrative mechanisms such as insurance
claims, and registration, licensing and court procedures.
The concept of 'marketspace' (Rayport & Sviokla 1994) has been adopted to distinguish the space,
within which EC is conducted, from the conventional, physical marketplaces in which traditional
commerce occurs. The marketspace is the virtual context in which buyers and sellers discover one
another, and transact business. lt is the working environmeni that arises from the complex of
increasingly rich and mature telecommunications-based services and tools, and the underlying
info rmation inf rastructu re.
EC can support most ol the processes involved in the purchasing of physical goods and services,
with the exception of the actual delivery or pedormance: as the old hacker's joke goes, there just is
no uubp (unix{o-unix-beer-protocol).
Digital goods and services (Negroponte 1995) are those whose purchase can be not only negotiated
and settled using the information infrastructure, but which can also delivered through the same
channels. Hence. for digital goods and services, the marketspace provides a context that can support
the entire procurement process.
Ouestions With Answers

Consumer electronics companies and PC manufacturers will converge into the industry.
a. information packaging
b. digitized content
c. information appliances
d. information transpori
2 One reason information industries have traditionally been defined in terms of lhe form of information
is because the government has actively constrained companies f rom entering other types of information
busrnesses.
a. true
b. false
With information technology moving toward electronics and digitization, the structural transformation
of the information industry is predicted to result in major inCustries instead of
a. two: six
b. three; five
c. seven; five
d. five; three
4 Which of the fotlowing factors will be crucial toward the luture of the information industry?
a. flexibility, speed, and productivity
b. alliances and partnering
c. global orientation
d. all of the above
5 Convergent technologies witl tead to worldwide end-to-end voice. data, fax, vicieo, and image services
and a global network that is both a transparent communications service and a platform for content-
filled or content-enhancecl services.
a. true
b false
6 The five functions of information are creation, display, storage, processing' and -........'...
a. digitizaticn
b. imagtng
c. transpori
d. convergence
7' lt was the dramatic, and iotally unexpected, growth in video-on-demand and interactive shopping that
created the demand for more bandwidth to the residential marketptace.
a. true
b. false
8. All companies in the industry will have to focus on customers, as they provide the volume and velocity
needed to achieve required price/performance ratios.
a. true
b. false
9. Today'q information industry is characterized by which of the foilowing?
a. inefficientinformationdistribution
b. adequate matching of information content with the needs of recipients
c. limited use of economic resources
d. all of the above
10. Of the three new form-based industries, the transpoft area is farthest along in moving to the new
model.
a. true
b. false
ANsWERs
l.c 2.a 3.b 4.d 5.a 6.c 7.b 8.a 9.a 10.b
Cuprn 2
ELECTRO]VCS AI{D
COMM(I]VICATIOI{S
2.1 Electronics
The introduction of vacuum tubes at the beginning of the 20th century was the starting point of the
rapid growth of modern electronics.With vacuum tubes the manipulation of signals became possible,
which could not be done with the early telegraph and telephone circuit or with the early transmitters
using high-voltage sparks to create radio waves. For example, with vacuum tubes weak radio and
audio signals could be amplified, and audio signals, such as music or voice, could be superimposed
on radio waves.The development of a large variety of tubes designed for specialized functions made
possible the swift progress of radio communication technology before World War ll and the develop-
ment of early computers during and shortly after the war.
The transistor, invented in 1948, has now almost completely replaced the vacuum tube in most of its
applications. lncorporating an arrangement of senticonductor materials and electrical contacts, the
trahsistor provides the same functions as the vacuum tube but at reduced cost, weight, and power
consumption and with higher reliability. Subsequent advances in semiconductortechnology, in part
attributabte to the intensity of research associated with the space-exploration eflort, led to the devel-
opment of the integrated circuit. lntegrated circuits may contain hundreds of thousands of transis-
tors on a small piece of materialand allow the construction of complex electronic circuits, such as
those in microcomputers, audio and video equipment, and communications satellites.
2.2 Electronic Components

Electronic circuits consist of interconnections of electronic components. Components are classified
into two categories-active or passive. Passive elements never supply more energy than they absorb;
active elements can supply more energy than they absorb. Passive components include resistors,
capacitors, and inductors. Components considered active include batteries, generators, vacuum
tubes, and transistors.
2.2.1 Vacuum lbbes

A vacuum tube consists of an air-evacuated glass envelope that contains several metal electrodes.
A simple, two-element tube (diode) consists of a cathode and an anode that is connected to the
positive ierminal of a power supply. The cathode-a small metal tube heated by a filament-frees
plate). tf
electrons , which migrate to the anode-a metalcylinder around the cathode (also called the
positive
an alternating voltage is applied to the anode, electrons will only flow to the anode during the
half-cycle; during tne negative cycle of the alternating voltage, the anode repels the electrons, and
no cuirent passes tnrorigh the tube. Diodes connected in such a way that only the positive halt
cycles of an alternating current (AC) are permitted to pass are called rectifier tubes; these are used
in the conversion of alternating current to direct current (DC) (see Electricity; Rectification). By
inserting a grid, consisting of a spiral of metalwire, between the cathode and thsanode and applying
a negative voltage to the grid, the flow of electrons can be controlled. When the grid is negative, it
repels electrons, and only a fraction of the electrons emitted by the cathode can reach the anode.
Such a tube, called a triode, can be used as an amplifier. Smallvariations in voltage at the grid, such
as can be produced by a radio or audio signal, will cause large variations in the flow of electrons f rom
the cathode to the anode and, hence, in the circuitry connected to the anode.
2.2.2 Transistors
Transistors are made from semiconductors.These are materials, such as silicon or germanium, that
are "doped" (have minute amounts of foreign elements added) so that either an abuidance or a lack
of free electrons exists. ln the former case, the semiconductor is called n-type, and in the latter
case, p-type. By combining n{ype and ptype materials, a diode can be produced. When this diode
is connected to a battery so that the p{ype material is positive and the ntype negative, electrons are
repelled from the negative battery terminal and pass unimpeded to the p-pggion, which lacks elec-
trons. With battery reversed, the electrons arriving in the p-material can pasi only with difficulty to
the n-material, which is already filled with free electrons, and the current is almosi zero.
The bipolar transislor was invented in 1 948 as a replacement for the triode vacuum tube. lt consists
of three layers of doped material, forming two p-n (bipolar) junctions with configurations of p-n-p or n-
p-n. One junction is connected to a battery so as to allow current flow (forwaid bias), and the other
junction has a battery connected in the opposite direction (reverse bias). tf the curreni in the lonruard-
biased junction is varied by the addition of a signal, the current in the reverse-biased junction of the
transistor will vary accordingly. The principle can be used to construct amplifiers in which a small
signal applied to the forward-biased junction causes a large change in current in the reverse-biased
junction.
Another type of transistor is the field-effect transistor (FET). Such a transistor operates on the
principle of repulsion or attraction of charges due to a superimposed electric field. Amplification of
current is accomplished in a manner similar to the grid control of a vacuum tube. Field-effect transis-
tors operate more efficiently than bipolar types, because a large signal can be controlled by a very
small amount of energy.
2.2.3 lntegratedCircuits
Most integrated circuits are small pieces, or "chips," of silicon, perhaps 2 to 4 sq mm (0.0g to 0.1 5 sq
in) long, in which transistors are fabricated. Photolithography enables the designerto create tens of
thousands of transistors on a single chip by proper placement of the many n-type and p{ype regions.
Fig. 2.1 : A part of microprocessor Fig. 2.2 : Compteted Microprocessor

circuit magnified havlng very large scale lntegrated clrcult
(vLsr)
ELECTRONICS AND COMMUNICATIONS / 37
Topview t<;
F.l[TE
Nor gstet
ffil
AEF
1oo
connectihg pint 110*J I
Fig.2.3 :Typical comPonents used in a microprocessor circuit
Fig.2.4 : Size of a chip as compared to a ball pen

These are interconnected ths during fabrication to produce complex
special-purpose circuits. s ed monolithic because they are fabricated
on a single crystal of silicon. s space and power and are cheaperto manufacture
than anlquivalent circuit built by employing individual transistors'
2.2A Resistors
lf a battery is connected across a conducting material, a certain amount of current
willflow through
current is dlpendent on the voltage of the battery, on the dimensions
the material (see Resistance).This
of the material itself. Resistors with known resistance are
of the sampie, and on the conductivity
used for current control in electronic circuits.The resistors are made from
carbon mixtures, metal
resistors, with an adjustable
films, or resistance wire and have two connecting wires attached. Variable
to control volume on radios and television sets'
sliding contact arm, are often used
2.2.5 Capacitott
material (see capacitor).
capacitors consist of two metal plates that are separated by an insulating
lf a battery is connected to both plates, an electric charge will flow for a short
time and accumulate
on each plate. lf the battery is disconnected, the capacitor retains the charge and the voltage
associated with it. Rapidly changing voltages, such as caused by an audio o, radio signal, produ-e
larger current llows to and from the plates; the capacitor then functions
for the
changing current. This effect can be used, for example, to separate an audio".or" radio
"onjrctor
signalfrom a
direct current in order to connect the output of one amplifier stage to the input of the neit
amplifier
stage.
2.2.6 lnductors
lnductors consist of a conducting wire wound into the form of a coil. When a current passes through
the coil, a magnetic field is set up around it that tends to oppose rapid changes in current intensity
(see lnduction). As a capacitor, an inductor can be used to distinguish betwlen rapidly and
slowly
changing signals. When an inductor is used in conjunction with a capacitor, the voltage in the inductor
reaches a maximal value for a specific frequency. This principle is used in a radio receiver, where a
specific frequency is selected by a variable capacitor.
2.2.7 Near Past llevelopments in Electronics

The development of integrated circuits has revolutionized the fields of communications, information
handling, and computing. lntegrated circuits reduce the size of devices and lower manufacturing and
system costs, while at the same time providing high speed and increased reliability. Digital watches,
hand-held computers, and electronic games are systems based on micropro"essors. O-ther develop-
ments include the digitalization of audio signals, where the frequency and amplitude of an audio
signal are coded digitally by appropriate sampling techniques, that is, techniques for measuring the
amplitude of the signal at very short intervals. Digitally recorded music shows a fidelity that is not
possible using direct-recording methods. Digital playback devices of this nature have already
en-
tered the home market. Digital storage could also form the basis of home video systems and may
significantly alter library storage systems, because much more information can bqstored on a disk
for replay on a television screen than can be contained in a book.
Medical electronics has progressed from computerized axial tomography, or the use of CAT or CT
scanners (see X Ray), to systems that can discriminate more and more of the organs of the human
body. Devices that can view blood vessels and the respiratory system have been developed as well.
Ultrahigh definition television also promises to substitute for many photographic processes, because
it eliminates the need for silver.
Today's research to increase the speed and capacity of computers concentrates mainly on the
improvement of integrated circuit technology and the development of even faster switching compo-
nents. Very-large-scale integrated (VLSI) circuits that contain several hundred thousand components
on a single chip have been developed. Very-high-speed computers are being developed in which
semiconductors may be replaced by superconducting circuits using Josephson junctions (see
Josephson Effect) and operating at temperatures near absolute zero.
2.3 Computers : The lnformation Ptocessor

The physical computer and its components are known as hardware. Computer hardware includes the
memory that stores data and instructions; the central processing unit (CPU) that carries out instructions;
the bus that connects the various computer components; the input devices,. such as a keyboard or
mouse, that allow the user to communicate with the computer; and the output devices, such as
printers and video display monitors, that enable the computer to present information to the user. The
programs that run the computer are called software. Software generally is designed to perform a
particular type of task{or example, to control the arm of a robot to weld a car's body, to write a letter,
to draw a graph, or to direct the general operation of the computer.
2.3.1 The 0perating System

When a computer is turned on it searches for instructions in its memory. Usually, the first set of
these instructions is a special program called the operating system, which is the software that
makes the computer work. lt prompts the user (or other machines) for input and commands, reports
the results of these commands and other operations, stores and manages data, and controls the
sequence of the software and hardware actions. When the user requests that a program run, the
operating system loads the program in the computer's memory and runs the program. Popular oper-
such as Windows 95 and the Macintosh operating system, have a graphical user
"iing "yJt"rs,
inteiace (GUl)-that is, a display that uses tiny pictures, or icons, to represent various commands.To
execute these commands, the user clicks the mouse on the icon or presses a combination of
keys
on the keyboard.
2.3.2 Computer l{emory

To process information electronically, data are stored in a computer in the form of binary digits, or
bits, each having two possible representations (O or 1). lf a second bit is added to a single bit of
00,
information, the number of representations is doubled, resulting in four possible combinations:
01 , 10, or 1 1 . A third bit added to this two-bit representation again doubles the number of combina-
tions, resulting in eight possibilities: ooo,001,010,011,100, 101, 1'10, or 111. Each time a bit
is
added, the number of possible patterns is doubled. Eight bits is called a byte; a byte has 256
possible combinations of 0s and 1s.
infor
A byte is a usefulquantity in which to store es enough possible patterns
fo represent the entire in lower and numeric digits, punctuation
"tpn"U"t, graphics sy
marks, and severalcharacter-sized nglish characters such as d'
A kilobyte-
A byte also can be interpreted as a pittern that represents a number between 0 and 255-
characters; a gigabyte can
10oo bytes-can store lOOO characters;a megabyte can store 1 million
store 1 billion characters; and a terabyte can store 1 trillion characters'
read or
The physical memory of a computer is either random access memory (RAM), which can be
can be read the computer
changed by the user or computer, or read-only memory (ROM), which by
in tiny
but not altered. One way to store memory is within the circuitry of the computer, usually
within these computer chips
computer chips that holi millions of bytes of information. The memory
on external storage de-
is RAV. Memory also can be stored outside the circuitry of the computer
vices, such as magnetic floppy disks, which can store about 2 megabytes of information; hard
(compact discs),
drives, which can store thousahds of megabytes of information; and CD-ROMs
can store nearly as much
which can store up to 630 megabytes of infoimation. A single CD-ROM
information as 700 floppy disks can.
2.t.3 The Bus

components in a
The bus is usually a flat cable with numerous parallel wires- The bus enables the
a time are sent
computer, such ai the CPU bits
nicate. Typically, several at
transmis-
along the bus. For example, rallel wires, allows the simultaneous
sion-of 16 bits (2 bytes) of in ce to another'
2.3.4 lnput Devices

with the
lnput devices, such as a keyboard or mouse, permit the computer user to communicate
computer. Other input devices include a joystick, a rodlike device often used by game players; a
scanner, which converts images such as photographs into binary inforrnation that the computer can
manipulate; a light pen, which can draw on, or select objects from, a computer's video display by
pressing the pen against the display's surface; a touch panel, which senses the placement of a
user's finger;and a microphone, used to gather sound information.
The Central Processing Unit (CPU) lnformation from an input device or memory is communicated via
the bus to the CPU, which is the part of the computer that translates commands and runs programs.
The CPU is a microprocessor chip{hat is, a single piece of silicon containing millions of electrical
components. lnformation is stored in a CPU memory location called a register. Registers can be
thought of as the CPU's tiny scratchpad, temporarily storing instructions or data. When a program is
run, one register called the program counter keeps track of which program instruction comes next.
The CPU's control unit coordinates and times the CPU's functions, and it retrieves the next instruc-
tion from memory.
ln a typical sequence, the CPU locates the next instruction in the appropriate memory device. The
instruction then travels along the bus f rom the computer's memory to the CPU, where it is stored in
a special instruction register. Meanwhile, the program counter is incremented to prepare for the next
instruction. The current instruction is analyzed by a decoder, which determines what the instruction
will do. Any data the instruction needs are retrieved via the bus and placed in the CPU's registers.
The CPU executes the instruction, and the results are stored in another register or copied to Jpecific
memory locations.
2.3-S Output Devices

Once the CPU has executed the program instructio.n, the program may request that information be
communicated to an output device, such as a video display monitor or a flat liquid crystal display.
Other output devices are printers, overhead projectors, videocassette recorders (VCRs), and speakeri.
2.1.6 Programminglanguages
Programming languages contain the series of commands that create software. ln g6neral, a lan-
guage that is encoded in binary numbers or a language similar to binary numbers that a computer's
hardware understands is understood more quickly by the computer. A program written in this type of
language also runs faster. Languages that use words or other commands that reflect how humans
think are easier for programmers to use, but they are slower because the language must be trans-
lated first so the computer can understand it.
(1) Machine Language
Computer programs that can be run by a computer's operating system are called executables. An
executable program is a sequence of extremely simple instructions known as machine code. These
instructions are specific to the individual computer's CPU and associated hardware; for example,
lntel Pentium and Power PC microprocessor chips each have different machine languages and
require different sets of codes to perform the same task. Machine code instructions are few in
nurhber (roughly 20 to 200, depending on the computer and the CPU). Typical instructions are for
copying data f rom a memory location or for adding the contents of two memory locations (usually
registers in the CPU). Machine code instructions are binary-that is, sequences of bits (Os and 1s).
Because these numbers are not understood easily by humans, computer instructions usually are not
written in machine code.
(21 Assembly Language
Assembly language uses commands that are easier for programmers to understand than are machine-
language commands. Each machine language instruction has an equivalent command in assembly
language. For example, in assembly language, the statement "MOV A, B" instructs the computer to
copy data f rom one location to another. The same instruction in machine code is a string of 16 Os and
1s. Once an assembly-language program is written, it is converted to a machine-language program
by another program called an assembler. Assembly language is fast and powerful because of its
correspondence with machine language. lt is still difficult to use, however, because assembly-language
instructions are a series of abstract codes. ln addition, different CPUs use different machine languages
and therefore require different assembly languages. Assembly language is sometimes inserted into
a high-level language program to carry out specific hardware tasks or to speed up a high-level
program.
(3) High-LevelLanguages
High-level languages were developed because of the difficulty of programming assembly languages.
High-level languages are easier to use than machine and assembly languages because their com-
mands resemble natural human language. ln addition, these languages are not CPU-specific. ln-
stead, they contain general commands that work on different CPUs. For example, a programmer
writing in the high-level Pascal programming language who wants to display a greeting need include
only the following command:
*Write ( rHello, e-Commerce User! I ),.
This command directs the compute/s CPU to display the greeting, and it will work no matter what
type of CPU the computer uses. Like assembly language instructions, high-level languages also
must be translated, but a compiler is used. A compiler turns a high-level program into a CPU-specific
machine language. For example, a programmer may write a program in a high-level language such as
C and then prepare it for different machines, such as a Cray Y-MP supercomputer or a personal
computer, using compilers designed for those machines. This speeds the programmer's task and
makes the software more portable to different users and machines.
American naval officer and mathematician Grace Murray Hopper helped develop the first commerbially
available high-level software language, FLOW-MATIC, in 1957. Hopper is credited for inventing the
term bug, which indicates a computer malfunction; in 1945 she discovered a hardware failure in the
Mark ll computer caused by a moth trapped between its mechanical relays.
From 1954 to 1958 American computer scientist Jim Backus of lnternational Business Machines,
lnc. (lBM) developed FORTRAN, an acronym for FORmula TRANslation. lt became a standard
programming language because it can process mathematicalformulas. FORTRAN and its variations
are still in use today.
Beginner's All-purpose Symbolic lnstruction Code, or BASIC, was developed by American math-
ematician John Kemeny and Hungarian-American mathematician Thomas Kurtz at Dartmouth Col-
lege in 1 964. The language was easier to learn than its predecessors and became popular due to its
friendly, interactive nature and its inclusion on early personal computers (PCs). Unlike other lan-
guages that require that all their instructions be translated into machine code first, BASIC is inter-
preted-that is, it is turned into machine language line by line as the program runs. BASIC commands
typify high-level languages because of their simplicity and their closeness to natural human lan-
guage. For example, a program that divides a number in half can be written as
10 INPUT IIENTER A NUMBER,I' X
20 l=X/2
30 PRrNT ilHALF OF THAT NUMBER rS, r' Y
The numbers that precede each line are chosen by the programmer to indicate the sequence of the
commands'The first line prints "ENTER A NUMBER" on the computer
screen followed by a question
mark to prompt the user to type in the number labeled "X." ln
the next line, that number is divided by
two, and in the third line, the result of the operation is displayed
on the computer screen.
otherhigh-level languages in use today include C, Ada, pascal, LlSp, prolog,
Java' New compilers are being developed, and many features
coBol, HTML, and
available in one language are being
made available in others.
(4) Object-Oriented programming Languages
object-oriented programming (ooP) languages like c++ are based
on traditional high-levet languages,
but they enable a programmer to think in terms of collections of
cooperating objects instead of lists
of commands. objects, such as a circle, have properties such
as the radius of the circle and the
inherit features from other
tures such as right angles
es the programmer's task,
2.4 Types of Computers: Itigital and Analog

computers can be eirher digitaror anarog. Digitar
puters that manipu-
late binary numbers (Os or 1s), which iepresen
or off by electrical
current. Analog refers to numerical values that h
O and 1 are analog
numbers, but so is 1.5 or a number like d (approximr
le, consider a desk
lamp' lf it has a simple on/off switch, then ii is'digital, because the lamp
either produces tight at a
given moment or it does not. lf a dimmer replaies the on/off
switch, then the lamp is analog,
because the amount of light can vary continuously from on to off
and all intensities
in between.
Analog computer systems were the first type to be
20th century was the slide rule. lt performs calcu
inside a rulerlike holder. Because the sliding is con
exact value, the slide rule is analog. New interes
particUlarly in areas such as neural networks th
modern computers, however, are digital machines w
for example, the o or 1 , or on or off of bits. These bits can be
combined to denote information such
as numbers, letters, graphics, and program instructions.
2.5 Range of Computer Ability

Computers exist in a wide range of sizes and power. The smallest are
embedded within the circuitry
of appliances, such as televisions and wrist watches.These computers
are typically preprogrammed
for a specific task, such as tuning to a particular television frequency
or keeping accurate time.
Programmable computers vary enormously in thei
size.The smallest of these computers Can be
assistants (PDAs).They are used as notepads,
with a cellular phone, they can connect t,o wor
regardless of location.
Laptop computers and Desktop PCs are typically used in businesses
and at home to communicate
on computer networks, for word processing, to track finances, and
to play games. They have large
amounts of internal memory to store hundreds of programs and documents.They
are equipped with
a keyboard; a mouse, trackball, or other pointing Oeviie; and video
a display monitor or liquid crystal
display (LCD)to display information. Laptop computers usually have similar hardware and software
as pCs, but they ur" ror" compact and have flat, lightweight LCDs instead of video display monitors.
workstations are similar to personal computers but have greater memory and more extensive
to
mathematical abilities, and they are connected to other workstations or personal computers
that
exchange data. They are typicilly found in scientific, industrial, and business environments
require high levels of computational abilities.
Mainframe computershave more memory, speed, and capabilities than workstations and are usually
and
shared by multiple users through a series of interconnected computers.They control businesses
industrial facilities and are used lor scientific research. The most powerful mainframe computers,
used to
called supercomputers, process complex and time-consuming calculations, such as those
and the
create weather predictrons. They are used by the largest businesses, scientif ic institutions,
military. Some supercomputers have many sets of CPUs. These computers break a
task into small
pro""sses portion the task to increase overall speed and efficiency. Such
pieceq and each bpU a of
computers are called parallel processors.
2.6 Uses of ComPuters

people use computers in a wide variety of ways. ln business, computers track inventories with bar
ln
codes and scanners, check the credii status of customers, and transfer funds electronrcally'
control the indoor
homes, tiny computers embedded in the electro ric circuitry of most appliances
recorders on and
temperature, operate home security systems, tell the time, and turn videocassette
ofl.
gas nrileage. Computers also
Computers in automobiles regulate the flow of fuel, thereby increasing
from a digitally
enteitain, creating digitized sound on stereo systems or computer-animated features
every level of education, from
encoded laser disc. Computer programs, or applications, exist to aid
calculus. Educators use
programs that teach simple addition or sentence construction to advanced
projection units, they can
coriputers to track grades and prepare notes; with computer-controlled
add graphics, sound, and animation to their lectures'
display
Computers are used extensively in scientific research to solve mathematical'problems,
such as testing the air
complicated data, or model systems that are too costly or impracticalto build,
in sophisticated
flow around the next generation of space shuttles. The military employs computers
to ericode and unscramble messages, and to keep track of
personnel and supplies'
communications
2-7 ltigital TechnologY

manipulate numbers'
DigitalTechnology includes study and development of devices that store and
for a computer to process and then
Digital devices can translat *oid" and pictures into numbers
"
translate the numbers back into pictures or words'
By contrast, analog technology is the study of
bers. For example, an analog watch contains
steady motion of its hands. Although numbers
nism does not store or use those numbers to
stores and manipulates numbers representing t
watch.
of these digits' Every digit in
Humans write numbers using ten digits. O through 9, and combinations
store numbers using only two
a decimal number 1."pr"."ni" powe-rs of ten. Modern digital devices
Every digit in a binary number
digits, 1 and 0, called bits. such numbers are called binary numbers'
44 I ELECTRONIC COMMERCE
represents a power of two. For example, tn the
binary number 101 . the 1 at the right represents
1 x 20:
*,2.,:?nd the_1'to thei",i"ti',"p,esenrs 1 x 22 (see
R:",t"*l^f^Til1=lT_?Tl
systems).Thedecimarequi arentof 1o.r rs(1 x 2,)+(ox21)+rr'""r,iill'_lr:1-]"r:
_? Number
2.8 Processing Digital lnformation

ts that can turn on and off exlremely rapidly.
n a circuit ls off, lt represents a value of O rn
matical operations by iurning these switches
pid rate at which a computer can manipulate

computers. All instructions that direct the
uters are first converted into binary numbers
urckly.
ed to perform mathematlcal operations as fast as possible.
Devices that
g complete multiple operations simultaneously.
Fipelined devices behave
that at any given time, severar operations in various
.tug". are being
Computerst into brnary numbers in a process called
encod
digital
letter wrth its numericai positron (1-26) in
the alphabet
.- , that measure its pitch and into binai.y equivalents. A sound can be
^, numbers
encoded as a series of
voiume at each instant in time. An image
can be encoded as a sequence of numbers that represent
the color and brightness of each portion of
the picture' The computer is able to decode information
oy conveiting the numbers back into letters,
sounds, or images.
Digitaldevices can process encoded information i
nds, and chec
aldevice also
epresenting th
on, and it save
Progress n by the human ne ate. Acjvanced compression
technolog store, and transmi nts of information efficiently.
Digitally e es, and video can her on magnetic media and
compact disks and broadcast over cable to homes and
o cellular phones.
computer, machine that performs tasks, such as mathematical
calculations or electronic
s called a program. programs usually reside
the computer's electronics, and the
Irogram
ideo display monitors or printers. Computers
ability, accuracy, and speed.
2.9 Digital logic
Digital logic is a rational process rue,,oi. ,,false,, decisions based on the rules of
Boolean algebra. "True" can be and ,,false,, by a O, and in logic circuits the
numerals appear as signals of tw Logic circuits are used to make specific true-
false decisions based on the presence of murtipl e-fa]se signals at the inputs
The signals may be generated by mechanical switches or by solid-state transducers. Once the input
signal has been accepted and conditioned (to remove unwanted elecirical signals, or "noise"), it is
processed by the digital logic circuits.The various families of digitai logic devices, usually integrated
circuits, perform a variety of logic functions through logrc gates, including "OR;'"ANDJ'and "NOT"'
and combinations of these (such as "NOR." which includes both OR and NOT). One widely used logic
family is the transrstor-transistor logic (TTL)" Another family is the complementary metal oxide semi-
condlctor logic (CMOS), which performs srmilar functions at very low power levels bui at slightly
lower operatrng speeds. Several other, less popular tamilies of logic circuits exist, including the
currently obsolete resistor-transistor logic (RTL) and the emitter coupled logic (ELC), the latter used
for very-high-speed systems.
The elemental blocks in a logrc device are called digital logic gates. An AND gate has two or more
inputs and a single output. The output of an AND gate is true only if all the inputs are true. An OR
gate has two or more inputs and a single output. The output of an OR gate is true if any one of the
Inputs is true and is false if all of the inputs are false. An INVERTER has a single input and a single
output terminal and can change a true signal to a false signal, thus performing the NOT function.
More complicated logic circurts are built up from elementary gates. They include flip{lops (binary
switches), counters, comparators, adders, a.nd more complex combinations.
To perform a desired overallfunction, large numbers of logtc elemenls may be connected in complex
circuits. ln some cases microprocessors are utilized to perform many of the switching and timing
functions of the individuai logic elements (see Micrcprocessor). The processors are specifically
programmed with individual inslructions to perform a given task or tasks. An advantage of micro-
proJ"..or. is that they make possible the performance ol different logrc functions, depending on the
program instructions that are stored. A disadvantage of microprocessors is that normally they oper-
ateln a sequential mode, which may be too slow for some applications. ln these cases specifically
designed logic circuits are used'
2.1 0 Communications
More and more businesses and other governmental agencies are using PCs and computer in networks
for basic business applications.The small computer is providing an economical method for distributing
computing needs within am organization. lnstead of using a computer terminal connected to the
main computer system for performing these simple computing functions, a computer network consisting
of small computers in conlunction *ith larger central system with data base inforrnation is'becorning
"
a more feasible alternative.
ln cases where the officesiplants of an organisation are spread over the large geographical area, it
has been felt that computerisation of officeslplants activities in isolation does not step up efficiency.
ln such cases reliable data communication has to go hand with computerisation to achieve the
desired efl iciency standards.
The clevelopment of computer systems has been combined with improved communication
facilities
be
which extend the power ol the computer beyond the computer room, and a!low system benefits to
more widely available. This combination allows computer facilities at remote sites, whilst
preserving
is the "dialing-
on one site the expertise needed to operate the whole system.The simplest example
up,, on the telephone network to connect a remote terminal with the computer and
all its facilities.
Fig. Z.1is an example of a combination of computers and a communications

network for a large f irm
wiih numerous branch offices and several factories. Each of the factories could have its own me-
dium-sized computer, linked to terminals within the lactory and further terminals at adjacent branch
offices. Communications links could also exist between at adjacent branch offices. Communications
links could also exist between these machines and a larger machine at the corporate headquarters.
The individualterminals would be used for the collection and dissemination of the user data, with the
"satellite" computer collating and editing this data and carrying out much of the total data processing.
Major computation and corporate matters would be passed to and handled by the large machine at
headquarters.
A Backbone Network
Backbone bus
Outside
Modem world
Tape device
Prini server
Network server File server
Star
LAN PC Hard disk Printer
To PBX
network
Fig.2.1 : Combination Computers and Communication

This blend of computers and communications is now taken for granted and as industry-standard in a
rapidly growing number of business organisations. Even the most unsophisticated user may un-
t<nowingty be using very complex systems. For example, a small business may have a fairly simple
terminai which is connected, via telephone, to a local computer service bureau, in orderto use one of
the facilities offered by that bureau.
Not apparent to user, however, the local call may link to a system a very long way from home (see
Fig.2,1). The first connection is to the local small communications computer. This concentrates the
da1a, along with that from other local users, and passes it to a larger computer in the capital. Here,
because ol the particular services being used, it is passed via a communications satellite in orbit
above the ocean, to the service company's main computer centre in the United States. The results
come back over the same links, giving the user the impression that the bureau is just next door'
This development was mobilised due to developments in "personal/office computing" (e.9. word-
processing, desk-top microcomputers, business minicomputers) coupled with moves towards digital
communications, as exemplified by digitaltelephone exchanges, digitalfacsimile, etc. Opportunities
are now being seized to take advantage of the economies of scale and added cost-efficiency offered
by combining services. The convergence of voice, word processing and message systems is being
cipitalised on to the advantage of the user. The results are that a business manager will no longer
have to turn separately to the :
o lnformation technology department for computer services
o PABX for telephones
c Typing pool for document preparation
D Mail room for document transmission'
The first step towards understanding communications is to look at computer data at its must base
level. As all of .us know computer and computer device manage store and exchange data using
electronic pulses or digital signals, that come in two varieties, the binary digit'0' indicates the
absence 1"bFf"; and't;indicaie ("ON") the presence of electric current. A series of ONs and OFFs
in various combinations can be sent on the communication channels to represent any character.
Every character (letter, numeral, symbol, or punctuation mark) is composed of a group of bits called
codes. To avoid incompatibility beiween systems, the computer industry has created a number of
standards that establish relationships between bit combinations and their corresponding characters.
The most widely used codes are the American Standards Code for lnformation lnterchange ((ASCll))
and the IBM standard, Extended Binary Coded Decimal lnterchange Code (EBCDIC).
To ensure successfultransmission of data between two points, the sender and receivers should use
the same code, or they can use translates to aid in communication. Translation are data communica-
tion software, which translate the sender's data into the codes receiver understand.
To ensure successfultransmission of data between two points, the sender and receivers should
use
the same code, or they can use translates to aid in communication. Translation are data communica-
tion software, which translate the sender's data into the codes receiver understand.
There are several manufacturers of computer hardware and software across the globe. For successful
data communication these products should be compatibles with each other or they should conform
to certain set of rules so that any one can use them. These set of rules is known as communication
protocols or communication standard.
ln other words protocols are technical customs or guide lines that govern the exchange of signal
transmission and reception between equipments'
48 / ELECTRONTC COMMERCE
Each protocolspecifies the exact order in which signals will be transferred, what signalwill indicate
that the opposite device has completed its transfei, and so forth. Both hardwar" anO
software are
designed to handle specific protocols.
Communication protocols are usually defined and approved by some international body
such as lSO,
CCITT or IEEE' At times protocols defined by certain manlfacturer of comput"r. t; networking
products become so widely accepted, that they be :ome'defacto/ standard
even tirough these protocols
may not have approval of any standardisation body. Some ol the functions thal communication
protocol regulates are:
A Controlof information transfer
D Structure and formats of data
D Error recoveries
D Retransmissioncontrol
O lnterfaces management.
Only communication devices using same protocols can communicate with each other.
To make sure that the bits (or characters) are securely transmitted through the channel or line, we
need a link level protocol between two computers. Some of the main functions to be performed by
such a link level protocol are:
O Assuring the data to be transmitted is split into data blocks with beginning and ending
markers. This is called framing and the transmission block is called alr"re.
D Achieving data transparency. This allows a link to treat a bit pattern, including normally
restricted control characters, just as pure data.
tr Controlling the flow of data across the link. lt is essential not to transmit bits faster. Than
they can be received at the other end. Otherwise, the receiver overflows and the data is
overrun, or all buffering capacity is used up, leading to loss of data.
o Controlling errors. This involves detection of errors using some kind of redundancy check.
It also involves acknowledgement or correctly received messages and requests for
retransmission of faulty messages.
There are basically two classes of link protocols.They are, Binary SYNchronous protocols (BlSNyC)
and High Level Data Link Control (HDLC) protocols. BISYNC is based on character control, whereas
HDLC is a bit oriented protocol. ln fact, HDLC is widely used in most link protocols of computers.
Computing technology today allows people to create stunning graphics, the likes we have seen in
Jurassic Park, and The Abyss, and provide impressive digitized sound systems such as the Talk
album by the Classic Rock band of the seventies Yes. Yet, the most amazing technologies are really
those available to the common household and businesses, Networking technology is racing towards
the future in instant global communication.There are now proposals for global coverage of data and
telephony communication via satellites f rom various organizations but before we can tilk to the boss
through video telephones on a regular basis like George Jetson, we first have to understand the
current capabilities of global networks and computing technology.
For businesses, large and smallalike, computing and networking technology is quickly becoming an
absolute necessity. Computers are already populating many offices by providing tools such as word
processors, databases, and spreadsheets. Towards the late 8O's, Local Area Networks (LANs) of
computers became a much demanded utility as businesses tried to connect the various depart-
ments of their organization together. Now into the 9O's, networking on a much larger scale, nation-
wide and even global, is becoming the need.

Why is global networking so important? Some businesses have discovered that their area of service
naturally extends to a global scale and wish to contact a whole new base clients. Others have found
peer organizations and people involved in similar work to share and communicate new ideas for
various aspects of their business. Still others have found a whole new way of advertising their
company's services or products. Global networks such as the lnternet have also become a cost-
effective and quicker way to transfer important documents to remote offices than courier services or
even fax.
2.t t llata Communications

Data communications are used to link the systems both locally and throughout the networks. ln a
sense, data communications is something of a misnomer, since analogue transmission is being
changed to digital transmission, and it is thus possible to transmit information in all its forms with
equal facility. The forms include speech, numerical information, text and images, whether in fax or
video format.
A communication or telecommunication process consists of three components:
tr Source device
tr Destination device
tr A medium actively engaged in exchange of data.
Sending a message involves a devise at source end and another devise at destination end.The
message is communicated using a communication medium. To be effective one more processed
added of getting feedback from the remote (destination) station. As such there are four essential
components (Fig. 2.6) of any communication system.
a. The sender creates the message.
b. The medium carries the message.
c. The receiver receives the message.
d. Feedback verifies the message.
The SENDOR
creates the
The MEDIUM I FEEDBACK

creates lhe
message
T verilies the
T message
I
I
I
Fig.2.6 :The Essential four components of communication process

The field of data communications links the computer and the telecommunications industries.
Computers are digital in nature and transfer information internally via parallel connections.Traditionally
telecommunications have been an analog process, and data have been transmitted in a serialfashion.
Data has a wide definition and includes multimedia objects may range from a simple text retrieval to
intricate voice-annotated changes in a complex 3-D visualization model of particle physics. The
range of bandwidth involved is truly staggeririg. A typical database text retrieval requires about 1
Kbps, whereas a complex visualization needs an 800 Mbps throughout, which is almost a million
times greater.
ln between those extremes there is a whole gamut of multimedia objects such as text, graphics,,
audio, and video, each of which requires a different amount of bandwidth for timely transmission
within computers and across the netWorks depending on the type of application of which they are a
part. The most demanding of those multimedia objects are high-quality videos with synchronized
audio that must be transmitted interactively and in real time. As a result, audio and video transmis-
sions are practical only when compression schemes are incorporated within the transmission proc-
ESS.
This variety of multimedia objects must be transported over private and public networks and data
transmission facilities consisting of various types of analog and digital links whose configurations
offer different bandwidth capabilities. These may range from 1O Kbps of the traditional telephone
lines all the way to the 1.2- Gbps, capacity of high-speed ATM cell relay services.
Bandwidth capacities also depend on the nature of connecting media, which may range from copper
wire, througI coaxial cable and optical fiber to photonic networks of the future. Switching and inter-
facing mechanisms present varying bandwidth capacities that must also be taken into account in
multimedia networking design.
Data communications includes data transmission, but also includes the control, checking and move-
ment handling of information . ln computer systems, it includes:
tr The physicaltransmission circuits and networks
tr The hardware and software which support the data communication functions
D Procedures for detecting and recovering f rom errors
tr Rules and protocols to ensure the disciplined (and therefore comprehensible) exchange of
information.
2.12 Data Transmission

Data transmission is the movement of information using some form of representation appropriate to
the transmission medium. This will include:
D Electrical signals carried along a conductor
tr Opticalsignals along an opticalfibre
tr Electro-magnetic waves, eg radio, or infra-red signals transmitted through space.
With the small computer now available in many homes and offices, there is often a need to share
data and programs and other in{ormation between the various computers. Consider a company
manager or planning officer who is preparing a budget. lt could be for a particular project, work
center, company department, or even the consolidated company budget. There are now several
inexpensive programs available for PCs which are designed specif ically for this activity. ln perform-
ing these planning activities, information on such items as salaries, equipment,etc. is usually needed.
The user may have this information at hand, or it may be in a data base administered by another,
perhaps larger, compuier, then the planner will need to access this data base.
The fact that the data base computer needs to be accessed via an information channel between the
computers provides the basrs for a computer network. We shall study this in chapter 2. The planner
would access the computer with the needed data base through the network by using the appropriate
network and systems software, and request that the desired information be transferred to a f ile within
his/her own system. Any additional information needed from another data base for completing this
budget could be obtained in a similar manner.When the planner's finished, a hard copy of the budget
.ouh b" printed and mailed,and /or the budget file could be sent through a network to another
system for review by other personnel'
Suppose a manager had to Write several letters to clients. lnstead of dictating these letters to a
,""i"t"ry as has been done in the past, he/she would use the same PC and a word processing
program for writing the main body of each letter. These letters are then sent via the network to a
similar small computer on the secretary's desk for completion. The secretary uses the same or
a
similar word processing program to perform any needed editing and to complete each letter by adding
the p[roper address. n'"opy of each letter suitable for mailing is then obtained by using a
letter
qu"iity printer located in yet anothe t areaand which is shared by other users' The secretary would
quality printer, once
send ihe finished letter to the computer which is dedicated to serving the letter
quality printer, insert the
again using the same network.Then the secretary would walk to the letter
afpropriate letterhead paper and direct this third computer to print each letter'
personnel in other
Now suppose that the manager has some technical memorandums to be sent to
company divisions in other physical locations. lnstead of actually printing a hard copy and mailing it,
be sent by network directly to the computer of the division secretaries where
the memorandum could
possible because the company's cornputer network consists not only the
it would be printed. This is
computers in the same UuitOing ( local network), but also those at remote sits. These sites may be
even different countries. This type of communications is often
in the same town, different towns, or
described
referred to as electronic mail. The business office using the equipment and methods
above is often referred to as an electronic office'
2.13 Types of Signals in Communication

as either analog or
The signals that pass along physicalwires and wireless media can be classified
digital. (Fig.2.3)
O Analog Signals
of numerous
Analog signals carry data as continuous waves. For instance, the human voice consists
ol sound waves. All signals that travel over these older
complex inflections that are combinations
telephone lines are in analog form.
Any analogue is a system of representing real-world quantities by
electrical
voliage thir models the quantiiies. For example, in a calculation ted by 1
volt, i metres by 2 volts and so on. While analogue computers enj ll modern
computers are digital.
O Digital Signals
1-bit of a data can be
Digital signals carry data as on/off or high/low electrical signals. Thus, the
of both data and
represented as an on (high) signal; the O-bit, an off signed for digitaltransmission
voice.
2.t5.1 Analogue Yelsus Digital Communication

The difference between analog and digital signals is shown in Figure 2'7
<_1
ttttttttlt
tllttttttt
llrl_Jl_Jl_J,<o
Fig.2.7:The difference between analog and digital signals.
The dispute about the relative merits

1970, when the problem that it required
incontrovertible way. The solution was
sands to millions of electronic compon i
2.14 [haracteristics of Electrical Waves

strength of the signal
imilar location on the
equency of the signal
interval. These three
Points A1 , &, A,, . ...... ...Arare suil to be in the same pHASE
AMPLITUDE
--i Time
FREOUENCY = numbers or times repeated

in unit interval of time
= S in this tigure
Fig. 2.8 : showing sine-wave and depicting Ampritude, phase

and Freguency
lf the basic shape of a wave form is known, a few measurement
at selected time intervals (in other
For a
words, a sampling) provide the receiving instrument with enough data to identify the signals.
and a maximum frequency required to deline a
provides a different signalto encode a state. For
represented by a signal having one amplitude,
n be represented by a signal having the same
2.t4.1. Wavelength of a Signal

ints in the adjacent cycles of a waveform signal
the illustration. ln wireless systems. this length is
ters. ln the case of inlrared, visible light, ultravio-
ften specified in nanometers (units ol 10-9 meter)
signal, the shorter the

Wavelength is inversely related to frequency.The higher the frequency of the
w is the wavelength as
waveleng-th. lf f is the iiLqr"n"V of tne iignaias mealured in megahertz, and
gOOlt a-nd conversely f = 300/w' Wavelength is sometimes repre-
measured in meters, then w =
sented by the Greek letter lambda.
2.14.2 Frequency of the Transmission

is the number of complete cycles per second in
recjuency is the hertz, abbreviated Hz. ll acurrent
cy is t H2; 60 cycles per second equals 60 Hz (the
(1,000's) of cycles per

Larger units of frequency include the kilohertz (kHz) representing thousands
second, the
representing billions of cycles per second'
used; 1THI= 1,000, per second' Note that
owers of 10, in cont for multiples of bytes'
Fig.2.9Frequency spectrum ol various electronic signals

:
writing, new personal computers
computer clock speed is generally specified in megahertz. As of this
have clock speeds ranging from about 166 MHz to
more than 3oo MHz. within a few years, we will
probably see personar computers whose crock
speeJ; il;;p,=;sed in siqahertz.
l-requency is important in wireless communicatiors, where
the frequency of a signal is mathematically
related to the wavelength. lf f is the frequency of an
electior"grJii" field in free space as measured
and w is the wavetength as measured in mete"rs,-tlen
lbil;:"n"rtz, w = 300/f and conversely f =
The frequency spectrum of ail types of erectronic signars

are shown in Fig. 2.g.
2.15 Data Transmission 0uality Factors
2.15.1 lnformation Carrying Capacity
The amount of be carried on a communications channel between any
points'The disti two
ation and data is a subtle one, so the terms'information carry-
ing capacity an (or rate)'are used interchangeably.
(1) The Speed of communication : Bit Rate
The handling of comput erized data may occur at many speeds.
For some users, dialed service is
adequate, while others might need satellites to teleprocess
data between continents. The speed of
each codtmunications media is measured by the number
of bits transmitted per second, or the BpS
rate' For ease of identifications, three classes of speeds or bandwidths
have been established as
detailed in section 2.15'2' Each bandwidth defines a category
of Bps rate within which that service
is available.
The amount of data that a computer network can transmit is
called the bandwidth of the network and
is usually measured in Kil per second (Mbps). A bit_the smallest
unit of information that co
of two values, either O or 1. A Kilobit is
one thousand bits' while ransportation of information between
routers generally uses communication lines dedicated to this function,
with capacities currenly
rangingfrom64KbpsuptoasmuchasseveralhundredMbps.
The speed at which information can be transmitted across the
lnternet depends on the lofuest infor-
mation transporting capacity along the route and the number of people
using that route at any given
time' A narrow bandwidth somewhere along the route acts as
a botflenecr tJdata transport, and the
more people using the line, the less informltion each of them
can transport at any one time.
(21 Signaling Rate (baud)The Baud Rate
The signaling rate of a line is measured in bauds. lt's the switching
speed, or number of transitions
(voltage or f requency changes) that are made per second.
The speed at which data is transmitted is referred to as baud. Baud
is commonly identified as the
number of bits d over a communication line. Bald rates vary. The
most common rs are 3OO baud and 1p0O baud. A 2,400_baud
sisnarof *s str
modem is avai
used only in specialized data transmission.

.Tf:.litr""r""1'#"Tl:',RTffiJl,x.":T;s3*:
(3) Difference between BpS and Baud
ual to bits per second; for exampre, 300 baud is equar to 3oo
bps.
e to represent more than one bit per second. For exampre, the
bps at 600 baud. Thus it is commonry (and erroneousry) used to
specify bits per second for modem speed; for example , 12OO baud means 1200 bps'
Bir
Value
Baud 112 34 567

Number *lon" +
Bit
Va ue
Baud
Number
Bit
Value
Baud
*
1
Number I on, sign?r p"..ioo l.-

Fig.2.10 :The relationship between bps and baud
Shannon,s law concerning a communications channel provides the formula that relates bandwidth
in
Hertz,to information carrying capacity in bit per second. Formally:
e:B1og2(1+S)
where e (lCC), B is the bandwidth , and S is tbe signal-to-noise
is the information carrying capacity
ratio. This expression shows that the ICC is proportional to the bandwidth , but is not identical
to it.
2.t5.2 Grade of Communication Channels and Bandwidth

The term internal data transmission refers to the transfer of data within a computer, while external
(e.9., printers) or
data transmission refers to the transfer of data to either local peripheral equipment
remote computers.
A data-communications channel is a path through a medium that data can take to accomplish
a
sending sta-
communications task. ln effect, channels are "data highways," carrying signals from
tions to receiving station along predefined routes.
speed
Bandwidth is the range of frequencies which a system can handle, or (sloppily) the maximum
of data communication. Bandwidth is used in two main contexts in modern computing.
(1) Network or Communication Bandwidth
by a
Network or communication bandwidth is the maximum amount of data that can be handled
(like a modem ).This is a slang term, and should not be
network or other communications equipment
For more details see the article on Shannon's law .
used by people who should know better.
(2) Display Bandwidth
an incoming
Display bandwidth is the maximum frequency at which a monitor must be able to accept
signal to create a picture of a particular quality.
The grade or bandwidth of a channel determines the rate at which the channel can transmit data. A
narrow bandwidth channel, such as telegraph line, transmits data rates of 45 to g0 baud. Telephone
lines have a wider f requency rage and fall into the classif ication of voice-grade channels. They carry
data at 300 to 9,600 baud. For high-speed transmission of large volumes of data, broadband
channels transmit data at rates of up to 120,000 baud. Coaxial cables, microwaves, and f iber optic
cables
(3) Narrowband Channel
Narrowband handles low data volumes. Data transmission rates are f rom 45 to 3OO baud. The low-
speed devices might use narrowband communications. Narrowband rates are effective for low-speed
operations such as those used with telegraph or teletype lines. Western Union is the largest com-
mon carrier which offers this type of service.
(4) Voiceband channel
Voiceband channel handles moderate data transmission volumes between 300 and 9600 baud.They
are used for applicati6ns ranging from operating a CRT to running a line printer.Their major applica-
tion is fortelephone voice communication- hence, the term voiceband.This is the most widely used
service, as it involves the use of common telephone lines from which its name is derived. Voice-
grade transmissions support much of today's online processing activities. Common telephone lines
are generally rated at 1800 BPS. Through a process called conditioning, the transmission speed of
telephone lines may be increased to 9600 BPS. Conditional lines reduce the interference which
normally accompanies higher transmission rates. Leased lines, WATA lines, and regular telephone
lines are examples of voice-grade service.
(5) Broadband Channel
Also called wideband channel handles very large volumes of data.Wideband channels have the
highest transmission rates, with speeds of 19,200 BPS and higher. Transmission rates this high are
possible with coaxial cables, fibreoptic cables, and microwave transmissions.These systems provide
data transmission rates upto 1 millionbaud or more. High-speed data analysis and satellite
communications are examples of broadband communications systems.
2.15.5 Latency
The information carrying capacity of a communications channel is very important, but it is an
average figure; it tells us nothing about how quickly a given bit of data will move from one point to
another. The time taken for this to happen is called the latency of the system. The theoretical limit
to latency is the speed of light; as far as we know, information cannot be transmitted faster than this.
An electrical signal propagates along a wire at about 70% of the speed of light. Over a wide-area
network the latency is much longer, because the message has to be processed at a number of
intermediate stations between the sender and the recipient.
2.t5 Transmission Degradation

Depending on the media type, the following problems can affect the quality of transmissions:
O Attenuation refers to loss of signal as it goes through the transmission medium, measured
in decibels (dB).
O Electromagnetic interference (EMl) is electrical background noise that disturbs or distorts
a signal as it travels down the transmission media. Fiber-optic cable is usually immune to
EMI because it uses light rather than electronic signals to transfer data.
tr Crosstalk is a form of EMI caused by wires next to each other interfering with signals as
they travel through the transmission media.
D Dispersion applies to f iber-optic cables. Chromatic dispersion occurs when light enters the
core at different angles and spreads apart slightly as it travels to the destination.
2.17 Wireless Communication

Wireless Communications includes various telecommunications systems that use radio waves to
carry signals and messages across distances. Wireless communications systems use devices
called transmitters to generate radio waves. A microphone or other mechanism converts messages,
like sounds or other data, into electronic impulses. The transmitters change, or modulate, the radio
waves so they can carry the impulses, and then transmit the modulated radio signals across dis-
tances. Radio receivers pick up these signals and decode them back into the original messages.
Commercial radio and television are also wireless telecommunications systems, but radio and televi-
sion are mainly public broadcast services rather than personal communications systems.
Wireless communications allow people greater f lexibility while communicating, because they do not
need to remain at a fixed location, such as a home or office. Wireless technologies make communi-
cations services more readily available than traditional wire-based services (such as ordinary tel-
ephones), which require the installation of wires. This is useful in places where only temporary
communications services are needed, such as at outdoor festivals or large sporting events. These
technologies are also useful for communicating in remote locations, such as mountains, jungles, or
deserts, where telephone service might not exist. Wireless services allow people to communicate
while in a car, airplane, or other moving vehicle. Police, fire, and other emergency departments use
two-way radio to communicate information between vehicles that are already responding to emer-
gency calls, which saves valuable time. Construction and utility workers frequently use hand-held
radios for short-range communication and coordination. Many businesspeople use wireless commu-
nications, particularly cellular radio telephones, to stay in contact with colleagues and clients while
traveling.
All wireless communications devices use radio waves to transmit and receive signals. These de-
vices operate on different radio frequencies so that signals from one device will not overlap and
interfere with nearby transmissions from other devices. The number of companies offering wireless
communications services has grown steadily in recent years. ln 1988 about 500 companies offered
cellular radio telephone (cell phone) services. By 1995 that number had grown to over 1500 compa-
nies serving millions of subscribers. Wireless communication is becoming increasingly popular be-
cause of the convenience and mobility it affords, the expanded availability of radio frequencies for
transmitting, and improvements in technology.
2.18 Principles of Wireless Communications

Wireless communications begin with a message that is converted into an electronic signal by a
device called a transmitter. The transmitter uses an oscillator to generate radio waves. The transmit-
ter modulates the radio wave to carry the electronic signal and then sends the modified radio signal
out through space, where it is picked up by a receiver. The receiver decodes, or demodulates, the
radio wave and plays the decoded message over a speaker. Wireless communications provide more
flexibility than wire-based means of communication. However, there are some drawbacks. Wireless
communications are limited by the range of the transmitter (how far a signal can be sent), and since
radio waves travel through the atmosphere, they can be disturbed by electrical interferences (such
as lightning) that cause static.
Wireless communications systems involve either one-way transmissions, in which person
a merely
receives notice of a message, or two-way transmissions, such as a telephone conversation
between
two people' An example of a device that sends one-way transmission is a pager, which is
a radio
receiver.When a person dials a pager number, the pager company sends a radio-signal to
the desired
pager.The encoded signaltriggers the pager circuitry and notifies the customer
cairying the pager of
the incoming call with a tone or a vibration, and >ften the telephone number of the caller. Advanced
pagers can display short messages from the caller, or provide news updates
or sports scores.
Two-way transmissions require both a transmitter and a receiver for sending and receiving signals.
A
device that functions as both a transmitter and a receiver is called a transceiver. Cellular radio
telephones and two-nray radios use transceivers, so that back-and-forth communication between
two people can be maintained. Early transceivers were very large, but they have decreased in size
due to advances in technology. Fixed-base transceivers, such ai those us-ed at police stations, can
fit on a desktop, and hand-held transceivers have shrunk in size as well. Several current models of
hand-held transceivers weigh less than 0.2 kg (0.5 lb).
2.19 ).lodes of Wireless Communkation

Wireless communications systems have grown and changed as technology has improved. Several
different systems are used today, allof which operate on different radio frJquencies. New technolo-
gies are being developed to provide greater service and reliability.
2.19.1 Sea and Air Transceivers

The first wireless communications devices were radio telegraphs. A telegraph is a device that sends
simple electrical pulses along copper wires. The pulses were caused bytontact between two metal
surfaces, and receivers interpreted these electrical pulses as tones or beeps. A code of long and
short signals was developed to represent the letters of the alphabet (see Morse Code, lnternational),
and in this way coded messages could be sent between telegraphs. Radio telegraphs used radio
waves rather than wire telegraph lines to send and receive messages. Radio te-legiaphs sent tel-
egraph signals over long distances and were ideal for ship-to-shoie communication. Bulky radio
telegraphs were installed on ships as early as 1899 and were widely used by 1905. A telegraph-
equipped ship was found to have been sailing in the vicinity of the Titanic afterihe Titanic,s collision
with an iceberg in 1 912, but the telegraph operator had gone off duty. Because of the Titanic disaster,
government representatives met and established rules for enhancing the safety of life at sea through
the use of wireless communications. One of these rules required major ocean-going vessels to
monitor distress frequencies on a 24-hour basis.
Radio operators still monitor distress channels, but maritime and aviation telecommunications sys-
tems now use high{requency radios and satellites capable of transmitting speech, rather than wire-
less telegraphy, to send messages. Aircraft pilots use radios to communicate with air traffic control-
lers at airports and also to communicate with other pilots. Navigation beacons are equipped with
transmitters that send automated signals to help ships and aircraft in distress determine their posi-
tions. While high-frequency radio can transmit signals over long distances, the quality of these
signals can be diminished by bad weather or by electrical interJerence in the atmosphere, which is
often caused by radiation from the sun.
Hand-Held Radio Transceivers Police, fire, and other emergency organizations, as well as the mili-
tary, have used two-way wireless radio communication since the 1930s. Early vehicle-based radios
were large, heavy units. After the invention of the transistor in 1948, radios shrank in size to small
hand-held radio transceivers, which civil authorities now use to communicate with each other di-
rectly. Public two-way radios with several frequency options are widely available as well. Usually
limited in range to a few miles, these units are great aids for such mobile professionals as construc-
tion workers, film crews. event planners, and security personnel. Simpler two-way radios, called
walkie-talkies, have been popular children's toys for years. Most walkie-talkies broadcast on channel
14 of the citizens band (CB), a range ol frequencies grouped into channels and allocated for public
use. CB radios can lransmit and receive on 40 different channels.
Shortwave Long-range broadcast services and f requencies, in what is known as the shortwave radio
band (with frequencies of 3 to 30 megaherlz), are available for amateur or ham radio operators.
Shortwave radio broadcasts can travel long distances because of the concentration of ionized, or
electrically charged, particles in the layer ol the atmosphere known as the ionosphere. This layer
reflects radio signals, sending signals that are transmitted upward back to earth. This skipping of
waves against the ionosphere can greatly increase the range of the transmitter.The degree of reflec-
tivity of the ionosphere depends on the time of day. During daylight hours, the ionosphere has the
concentration of ions necessary for reflectirrg radio waves in the higher f requencies of the shbrtwave
band back to earth. At night, it has the concentration necessary for reflecting lower frequencies
within the shortwave band. lf adequate density of ions is not reached, the radio waves simply
continue through the ionosphere into space.
2.19.2 Cellular Radio Telephones

Cellular radio telephones, or cell phones, combine their portable radio capability with the wired, or
wireline, telephone network to provide mobile users with access to the rest of the public telephone
system used by non-mobile callers. An early form of radio telephone communicated with a single
powerful antenna within a given geographic or metropolitan area.This large antenna was wired to the
telephone system. (These fixed radio telephones are still used in some remote locations to substi-
tute for wireline telephone exchange facilities.) Because there was only one antenna for a given
metro area, this limited the number of frequencies that could be used, since radio telephone frequen-
cies would often overlap and cause interference. Modern cellular telephones use a network of sev-
eral short-range antennas that connect to the telephone system. Because the antennas have a
shorter range, f requencies can be reused a short distance away without interference.
Cell phone towers pick up requesls from cell phones for dialtone and also deliver inboLrnd calls to the
appropriate cell phone.To do this, the cell phone must have a singular identity that can be recognized
by computers housed in a central Mobile Telephone Switching Office (MTSO). When a cell phone is
turned on, it connects by radio to the nearest cell tower (the tower receiving the strongest signal).
The cell towers are spaced so their receiving ranges slightly overlap.This continuous contact makes
it possible lor the MTSO to transfer a call from tower to tower as a mobile cell phone user (in a
moving vehicle, for instance) moves from one ceJl area to another.
2.19.5 SatelliteCommunications
Satellite communications services connect users directly to the telephone network from almost
anywhere in the world. Specialtelephones are available to consumers that communicate directly
with communications satellites orbiting the earth. The satellites transmit these signals to ground
stations that are connected to the telephone system.These satellite services, while more expensive
than celtular or other wireless services, give users access to the telephone network in areas of the
v.rorld where no telephone service exists.
2.2O Networks
Computers can communicate with other computers through a series of connections and associated
hardware called a network. The advantage of a network is that data can be exchanged rapidly, and
software and hardware resources, such as hard-disk space or printers, can be shared.
One type of network, a local area network (LAN), consists of several PCs or workstations connected
to a special computer called the server. The server stores and manages programs and data. A server
often contains all of a networked group's data and enables LAN workstations to be set up without
storage capabilities to reduce cost.
Mainframe computers and supercomputers commonly are networked. They may be connected to
PCs, workstations, or terminals that have no computational abilities of their own. These "dumb"
terminals are used only to enter data into, or receive output from, the central computer.
Wide area networks (WANs) are networks that span large geographicalareas. Computers can connect
to these networks to use facilities in another city or country. For example, a person in Los Angeles
can browse through the computerized archives of the Library of Congress in Washington, D.C. The
largest WAN is the lnternet, a global consortium of networks linked by common communication
programs.The lnternet is a mammoth resource of data, programs, and utilities. lt was created mostly
by American computer scientist Vinton Cerf in 1973 as part of the United States Department of
Defense Advanced Research Projects Agency (DARPA). ln 1984 the development of lnternet
technology was turned over to private, government, and scientific agencies.The World Wide Web is
a system of information resources accessed primarily through the lnternet. Users can obtain a
variety of information in the form of text, graphics, sounds, or animations.These data are extensively
cross-indexed, enabling users to browse (transfer f rom one information site to another) via buttons,
highlighted text, or sophisticated searching software known as search engines.
2.21 Future Developments in Computing

ln 1965 semiconductor pioneer Gordon Moore predicted that the number of transistors contained on
a computer chip would double every year.This is now known as Moore's Law, and it has proven to be
somewhat accurate. The number of transistors and the computational speed of microprocessors
currently doubles approximately every 18 months. Components continue to shrink in sjze and are
becoming faster, cheaper, and more versatile.
With their increasing power and versatility, computers simplify dayto-day life. Unfortunately, as
computer use becomes more widespread, so do the opportunities for misuse. Computer hackers-
people who illegally gain access to computer systems-often violate privacy and can tamper with or
destroy records. Programs called viruses or worms can replicate and spread from computer to
computer, erasing information or causing computer malfunctions. Other individuals have used
computers to electronically embezzle funds and alter credit histories (see Computer Security). New
ethical issues also have arisen, such as how to regulate material on the lnternet and the World Wide
Web. lndividuals, companies, and governments are working to solve these problems by developing
better computer security and enacting regulatory legislation.
Computers will become more advanced and they will also become easier to use. Reliable speech
recognition will make the operation of a computer easier. Virtual reality, the technology of interacting
with a computer using all of the human senses, will also contribute to better human and computer
interfaces. Standards for virtual-reality program languages, called Virtual Reality Modeling language
(VRML), currently are being developed for the World Wide Web.
Breakthroughs occurred in the area of quantum computing in the late 1990s. Quantum computers
under development use components of a chloroform molecule (a combination of chlorine and hydro-
gen atoms) and a variation of a medical procedure called magnetic resonAnce imaging (MRl) to
compute at a molecular level. Scientists used a branch of physics called quantum mechanics, which
describes the activity of subatomic particles (particles that make up atoms), as the basis for quan-
tum computing. Quantum computers may one day be thousands to millions of times faster than
current compulers, because they take advantage of the laws that govern the behavior of subatomic
particles. These laws allow quantum computers to examine al!-possible answers to a query at one
iime. Future uses of quantum computers could include code breaking and large database queries.
Communications between computer users and network$ Atill benefit f rom new technologies such as
broadband communication systems that can carry signilicantly more data and carry it faster, to and
from the vast interconnected databases that continue to grow in number and type.
ln 1965, Gordon Moore was preparing a speech and made a memorable observation.When he
started to graph data about the growth in memory chip performance, he realized there was a striking
trend. Each new chip contained roughly twice as much capacity as its predecessor, and each chip
was released within 18-24 months of the previous chip. lf this trend continued, he reasoned, comput-
ing power would rise exponentially over relatively brief periods of time.
Moore's observation, now known as Moore's Law, described a trend that has continued and is still
remarkably accurate. lt is the basis for many planners' performance forecasts. ln 26 years the
numbei. of transistors on a chip has increased more than 3,200 times, from 2,300 on the 4004
in 1971
to 7.5 million on the Pentium" ll processor.
,,Gordon Moore just plain got it right . . . I should also mention that Moore's Law has also given rise
to Machrone's Law, which was true for many years, which is that the machine you want always costs
$5,0001'
E Bill Machrone : A very small addendum to Moore's Law is Rock's Law which says that the
cost of capital equipment to build semiconductors will double every four years."
D lntel's recent roadmap for notebook products looks quite jolly. Already in the beginning of
next year we will see the first Giga Hertz processor for mobile platforms and mobile Pentium
lll processors at up to 1.26 GH1 will arrive soon afterwards as well. The workstation and
server roadmap is not quite as interesting, except for the lSct that lntel is counting a loi on
,Third party'chipset makers to provide non-RDRAM platfdrms for those systems.
2.22 ).lobile Processors

ntium 4 plans of reaching the 2 GHz-barrier in Q2l
might find your respect as well. ln the next quarter
Pentium lll at 9OO MHz and 1 GHz, thus being the
ks in history. Both of those processors will still be
l, Celeron and Pentium lll processors do for more
than 18 months now.
tlas lntel will release Pentium lll
he'Coppermine-T' core which You
OO0. lt is not hard to figure out that
that runs at 133 MHz, thus finallY
's Pentium lll brothers in desktop systems. ln this
obile'Tualatin'-Pentium lll processors at 1 '1'3 and
B. This might be the first official appearance of
,Tualatin', since it makes more sense for lntel to supply the mobile market with this 0.13-micron
process cPU early, due to its lower power and heat requirements.
going from a
Basically we can see lntel pushing the mobile processor market quite hard next year,
850 MHz Pentium lll that is available now to '1.26 GHzin only some 6 months.
obviously those new
processors and their specs require new mobile chipsets ai well,
which will Oe exptained in detail
further down the article. ., 'r ev
The mobile Celeron is not in quitJJ's much of
brother
Pentium lll is. ln fact, the mobile Celeron sbems
of 2OO1
will see the mobile Celeron T1},e2l2}Otauil,l bri
. By this
time Celeron is far behind pentium lllandJht wo
I
.F'
a
t
.q,
fl
Cn par 3
IIfFORMATIO]Y
TECH]VOLOGY
5.t Fundamentals of lnformation Systems

5.1.1 Data
Very few information systems text-books ever bother to define the term 'data', assuming that its
meaning is so obvious that it doesn't need discussion. Many misunderstandings can arise from that
failure to consider the meaning of such a basic concept.
'Data'is the plural of 'datum'. A dictionary definition of 'datum'is "any fact assumed to be a matter of
direct observation" .This approach adopts the conventional assumption that there is a reality outside
the human mind, which humans cannot directly capture, but which they can sense and measure.The
same dictionary defines'fact'as "what has really happened or is the case; truth; reality". A fact is
therefore in the'real world'and a'datum'is in the human mind.
For the discipline of information systems, a little more care is needed in the def ining such a key term
as'data'. lf the dictionary formulation is used, then numbers produced by a random number generator
in a computer might be excluded, and we would need another word to describe those kinds of
numbers.
The following def inition caters for that problem:
D 'Data' is any symbol, sign or measure which is in a form which can be directly captured by
a person or a machine. We can then use related terms to differentiate between different
kinds of data. ln particular:
tr 'Real-world data'is data which represents or purports to represent a fact in the real world;
whereas'synthetic data'is data which does not.
tt
3.1.2 lnformation
Like'data', the term'information' is often used in information systems text-books without a clear
definition being given. Many authors assume that their readers' conceptions of the notion are sufficiently
similar to their own that it can be taken for granted.
Dictionary definitions identify two senses of the word. One is from Shannon and Weaver's theory of
communications, in which information is 'a measure of the quantity of data in a message'. This has
been extremely important in communications engineering; but it is far too narrow to serve the pur-
poses of the information systems discipline. The other is 'an accretion to knowledge'. But this is very
similarto the definition of real-world data, with the minor exception that
it implies that the data is new,
i'e' not previously in the collection.To provide a basis for information
systems tn"ory, *" must probe
a little deeper than the dictionaries go.
y carried out). But we don't usually bother even

measuring, let alone recording, the pressure in the tyres on the trucks, the number
ortnip-marks in
the painiwork, the condition of the valves on the motor, or the number of consecutive
hours the driver
has been at the wheel'There are myriad real-world facts that we let go by, and
never capture as data.
of the real-world data'which we do capture, many kinds are very uninteresting.The contents
of
s record the background noise emanating f rom various parts of the
signal from a projectile launched from the earth, and just possibly
which an inter-stellar event can be inferred, or perhaps the exist-
in the universe. But usually the contents are extremely boring, and
devoid of any value to anyone. Similarly, a great deal of the data captured by
commerce, industry
and government is either'just for the record'or of interest for only a very shorftime,
and then filed in
case someone ever wants to look at it again.
5.1.3 Relevance
What is it that makes data interesting or valuable? The most straightforward way in which
data is
useful is when it is relevant to a decision. Each morning, we don't usually think about
what the
weather is like outside until we 1re deciding what to do with the day (if it's a weekend) or
what to wear
(if it's a workday). Data about a delivery of a particular batch of baby-1qe6
to a particular supermarket
is lost in the bowels of the company's database, never to come to light again, unless and
until
something exceptional such as the bill not being paid, the custom]er complaining abotrt
l"?p"l:,
short delivery, or an extortionist making a telephone call io claim that poison has bben
added to
some of the bottles.
The question as to what data is 'relevant to a decision' is not always clear-cut. The narrowest
interpretation that we could make is that data is relevant and of value, only if it actually
;"1;;
difference to the decision made. As we shall see in the next section, decision-making processes
are
often corniilex,^anci in many circumstances it is unknowable whether data made a difference
or not.
So that very ndrrow criterion, attractive though it may seem, is not a very useful approach.
A broader interpretation is that data is relevant and thErefore of value, if, depending on whether
or not
it is available to the decision-maker, it could make a difference to the decision. inis approach
can
also lead to difficulties. How do we decide whether it might make difference? What if the data
4 might
make a difference, but in law shouldn't (e.g. where a person's etlthic background or mar1al
status is
precluded by anti-discrirnination legislation from being a factor in employment
decisions, but the
decision-maker is known to have a bias for or against people from a pariicular race or country, or
people who are divorced)? What if the data might make a difference but logically
shouldn't (e.g.
because the person making the decision doesn'f understand how interest is catcutiteo on
a loan)?
ln addition to decision-making, there are other circumstances in which data can be interesting
or
valuable' When we read the newspaper, listen to the news on the radio, or watch ,infotainment,
programs on television, we are seldom making decisions, and yet we perceive informational
value in
some of the data presel:teC to us. Sometimes it is merely humorous. Sometimes it is not what we
INFORMATION TECHNOLOGIES / 65
would have expected, and therefore has'surprisal'value ("GoshlThe government might survive the
election yet!" Or "An injury incurred in training will keep the star fullback out of the Grand Final!").
ln other cases, it may be something that fits into a pattern of thought we have been quietly and
perhaps only semi-consciously developing for some time, and which seems, for no very clear rea-
son, to be worth filing away (things like the proportion of this year's immigrants who were British, or
Kiwis; or the proportion of companies who are requiring skills with web-publishing as a condition of
employment).
The most useful and convCntional way to use the term'information' in the information systems
discipline is to encapsulate these points:
A 'lnformdtion' is data that has value. lnformational value depends upon context. Until it is
placed in an appropriate context, data is not information, and once it ceases to be in that
context it ceases to be information.
O Some people feelvery uncomfortable with this def inition. lt forces us to confront the f luidity
of the sjtuation. Rather than a nice, straightforward 'thing', describable in mathematical
terms, and analysable using formidable scientific tools, this definition makes information
rubbery and intangible, a'will o'the wisp'.
Finally, we must again acknowledge that the term'information'is frequently used, even in the infor-
mation systems discipline, in senses different f rom the somewhat formal def inition proposed above.
ln particular,'information'and'data'are olten used interchangeably (which seems like a terrible
waste of a usefulword).
3.1.4 Decision
The most common manner in which data can have value, and thereby become information, is by
making a difference to a decision. lt is therefore important to consider in some depth what a decision
is, and what decision-making processes are about. A'decision'is a choice arnong alternative courses
of action. ln many cases, the making of the decision is performed in the same breath as the taking
of the action itself. ln other circumstances, however, we may make a nrental commitment, but take
no action until a short time later. Note, too, that'action' includes 'inaction', i.e. we can decide to do
nothing, as in "shall ltake part in the demonstration against the cuts to the tertiary education budget
tomorrow? No, I don't think l'll bothe/'.
A'decision-making process' is the procedures which result in a decision being reached. How a
decision comes about is important to understand.The simplest model of decision-making envisages
four steps:
D ATrigger
tr lnformation-Gathering
O Alternative-Generation
5.1.5 Ghoice t
The'trigger'is something that causes a person to realise a decision is needed, such as the notice
you will receive to re-enrol for units next year. ln order to make the decision, you will need to gather
information about what units are going to be offered, and of course you'll need to know your results
for the previous year. The decision-maker needs to generate a set of options, and then to choose
among them.
Gaining access to information is crucial to most of these steps. ln order to choose, for example, you
n99d to know what your objectives are, in order to work out a criterion whereby you
can work out
which is the best of the available options.
ln practice, this model is too simple. lt's a'normative model', because it describes
how scientists
think people ought to make decisions.To support organisations making complex
decisions, we need
'behavioural models' which describe how managers and executives really
make them.
One example of the difference between the two is that most people don't actually
search out the
'satisfice'. This odd word was coined, because peo-
ey don't diligently search a huge decision-space in
think of a few possibilities, and ask themselves ,,ls
that's adequate, they stop searching, and the deci-
sion's made. That's 'satisficing'. ln order to understand topics in information systemi, it is important
to always keep in mind these fundamental notions of data, information and decision-making.
3.2 The Relationship Between lnformation and l{nowledge

ln a related document, knowledge is defined as either:
O (Naively) a body of facts and principles accumulated by mankind in the course of time;
or
o (More usefully) the matrix of impressions within which an individual situates newly acquired
information.
A further concept which can be confused with information is'wisdom'. This is, however, on an
entirely different plane from information, because it has to do with judgement exercised by applying
decision criteria to knowledge combined with new information.
Note that the orthodoxy represented in this document is not universally shared. A nice expression of
the philosophical sceptic's position is as follows:"lnformation, [even today], is no more than it has
ever been: discrete little bundles of fact, sometimes useful, sometimes tiivial, and never the sub-
stance of thought [and knowledge] ...The data processing model of thought ... coarsens subfle
distinctions in the anatomy of mind ... Experience ... is more like a stew than a filing system ...
Every piece of software has some repertory of basic assumptions, values, limitationj embedded
within it '.: [For example], the vice of the spreadsheet is that its neat, mathematical facade, its
rigorous logic, its profusion of numbers, may blind its user to the unexamined ideas and omissions
that govern the calculations ... garbage in - gospel out. What we confront in the burgeoning surveil-
lance machinery of our society is not a value-neutraltechnological process ... lt is, ratn"r, the social
vision of the Utilitarian philosophers at last fully realized in the computer. lt yields a world without
shadows, secrets or mysteries, where everything has become a naked quanfity"
3.= Information Age

There is no doubt about it, we are in the information age. lf you don't believe me all you have to do
is listen to the media who tell us this hundreds of times a day, dr just simply read any business,
computer or internet publication which no doubt will emphatically ntake this point on numerous
occasrons.
lf listening or reading is not to your liking, then give your fingers some exercise and log-on to the
World Wide Web. There you will find oodles of information ranging from information about Moses'
brother Aaron to an analysis of the shape and unique design olthe stripes of each zebral
Of course with all of this information, there is no doubt that the human race is better off . Or are they?
3.4 What are lnformation Systems

lnformation Systems is a particulardiscipline, or branch of learning. lt is concerned with the application
of information to organisational needs.The scope of lS includes manual, computer-based and other
forms of automated procedures, and applications of information technology generally.'lnformation
Systems' (lS).is the study of information production, flows and use within organisations.
lS makes extensive use of information technology (lT) artefacts. But it is very important to appreciate
that its scope encompasses systems in their entirety, including manual activities, the interface
between manual and automated components of systems, design aspects of lT artefacts, and
economic, legal, o€anisational, behavioural and socialaspects of systems.
lnlormation systems overlaps with both the computer science and business clusters of disciplines;
lor example, software engineering and database management and some aspects of application
software development overlap with computer science, and systems analysis and organisational
behaviour overlap with the business-related disciplines.
Commercial lnformation System is derivative from a wide variety of disciplines. These include:
tr Computer science, electronic and telecommunications engineering;
D Accounting, economics, operations research and other decision sciences;
tr Business administration, individual behaviour (particularly the developing fieid of the cognitive
sciences), linguistics and organisational behaviour;
O And law.
A major applications area is in commercial, administrative and industrial systems, but it is also being
applied in association with other disciplines, including applied sciences (such as geography and
geology), social sciences (such as econometrics) and humanities (such as art history).
5.5 Who Processes lnformation?

Clearly, our young students can write more informative book reports and as consumers, obviously
we can make more informed purchase decisions. lmagine, at our f ingertips lies the ability to find out
everything about every product ever made and more! Gee, with all of this information all we have to
do is plug it into some formula or equation and out comes an answer. Ah, but where is that formula?
Who holds the magic key that enables us to process all of this information into a comprehensive
conclusion?
The answer currently is no one, not even ourselves. Many years ago, Jack Jacoby, a well-known
marketing scholar established that consumers can easily suffer f rom information overload at rela-
tively low levels of information processed. ln fact, the human brain begins to have processing prob-
lems when only 5 pieces of information are processed simultaneously.
Unfortunately the human fingers can type hundreds of requests for information on the internet much
faster than the brain can process them, and overload lor fingers occurs much later than an over-
loaded brain! ?
So we ask, what is dramatically needed in today's world? Clearly, it is not more information, we have
that in buckets. No, what is needed is the ability to process information into a cohesive who. When
this occurs, information transforms itself into knowledge and knowledge is the second level on the
learning hierarchy.
Those who believe that bigger is better have been watching too many Godzilla movies. Size may
matter in horror movies, but it does not cut the mustard when one has been given the task to write
corporate strategic reports or marketing positioning statements. Here what matters is clarity, con-
ciseness and support for one's conclusions.
5-5 lnformation lndustry

goods and services_a
P). Perhaps even more
formation industry is its
, the United States has
economic power in the world, largely as a result of
tion technology.
ln the next ten to fifteen years, the world will undergo one of history's
greatest technologicaltransfor-
rgoes a rapid and fundamental transformation. A
dramatic shifts in consumer needs or desires but
technological movement is triggering a corre_
e new information industry. Combined, the two
and upheaval.
the core of an expansive array of informa_
d digitat. The buitding btocks of this digitat
ors_will realign the computer, telecommuni_
ess, a new competitive landscape will be spawned.
ew commercial entities, enabled through an amal_
y.The same landscape willalso be litteied with the
remains of once-dominant companies and institutions unwilling to graif the magnituOe anO
Evolving patterns of escalating_even
rowth opportunity ratherthan a mere
will replace physical assets and physical
d entertainment.
3.7 Transformation to lligital Technology
The information industry.today is in the early stages ation. Historically, the
industry has been organized on the basis oi infoima n the inUustry tended
to focus on business opportunities related to r si such as voice, text,
ary advances have occurred over the past two
digital electronics. Coupled with the changes now
tion transmission to broadband communications,
d a major paradigm shift in the information industry.
with digital electronics fast becoming the dominant technorogy for eveLy existing information-based
business, a realignment of the broader information industry [is become inevitable.
We believe that
this realignment will occur along the lines of information function or capability. ln short,
information-
oriented businesses will, over the next ten to fifteen years, (offcource from year 2OOo)
reorganize
themselves into the following three broad groups:
D Players involved in the creation and collection of diverJe
[pes of information content
? Players involved in the manufacture of a wide variety of information
a Players organized to engage in various modes of information transpoit"ppfi"n"".
Significantly, we believe that today's computer hardware industry will be relegated
to an important
but constricted role as the supplier of memory and processing capabilities-to each
of the three
functionally defined information industries. To iuccer'
nies must
learn how
conce'ts;
customize bilitY' and
efficiency;
The information industry is far from being a mature industry, as evidenced by the low penetration of
even basic phone service in a large partbf the world. While the information industry is about a sixth
of the U.S. economy, it accounts ior a mere fraction of that amount for the vast majority of nations.
However, that proportion will surely increase, fueling unprecedented growth. Coupled with the dra-
it is
matic new capabiiities made possible by phenomenal and unrelenting advances in technology,
evident that the information industry is in perhaps the most exciting period ever seen in any industry.
5.8 The lnefficient lnformation lndustry

and
Because information-based businesses are becoming increasingly crucial to our commercial
For example,
social lives, inefficiencies in the information marketplace are becoming less tolerable.
today's informatioh industry is characterized by the following:
B Significant waste of economic and ecological resources-Consider, for example, the pro-
Orition and distribution of bulky newspapers. A single Sunday printing of the New York
Times consumes sixteen acres of forest, and the typical customer discards most of
the
paper unread.
of
tr lnadequate matching of information content with the needs of the recipients-An example
this is the average llrge city-phone customer who uses only a handful of the rnillion-plus
numbers available in the localphone directories'
O Severe time and place constraints on information access and availability-For example,
with prescheduled broadcasts ol television and radio programs, it is safe to assume that
a
large portion of the target market is excluded from the audience.
tr Cumbersome and expensive physical infrastructures for information distribuiion-Examples

of these are books, movies, videotapes, and software'
D video rentals.
P:?::ffiIJ
Book authors
producers
receive barely 10 to 15 percent of what customers pay for their product' CD-ROM
typically sp"nO 60 to 7b percent of retail revenues on wholesale and retail margins.
But the question remains, how can such final solution (Salvalion or nirvana)
be obtained? A col-
task one day to present a marketing positioning report to the
league once told me that he had the
and hours on the report and the
r"i"g"r"nt of a large consumer goods companv. He worked hours
night before the presentation, and did not get any sleep'
200 slides to
When he was ready to present on the morning of the next day, he brought along over
peeled olf the firsi slide and said good morning, the
make his case to management. As he sleepily
"ok, in two sentences or less, I want you to sumtnarize your
CEO of the company stJod up and said:
his cup of coffegand held back his anger. He hesitated
entire presentationl; My colleague put down
products into the
for a moment, thinking all alon-g and then said-"ok, you have introduced five new
will be losers and one I am undecided about'"The
market, in my opinionion" will-be a winner, three
CEO then asked him to begin his presentation from the top'
an attempt should
So what does this example suggest? lt implies that as one collects information
that the data suggests. Once these themes are
always be made to ideniify thJunderlying themes
categories that tell a
identified, the information collected can easily be categorized into relevant
simple yet convincing story.
But the story does not end here, in the learning process, when
information is amassed and organized
it leads to knowledge, but it is only when knowledge is amassed
that we have achieved wisdom.
I am sad to say that few. of us get to gain wisdom. The problem'with
wisdom is that it takes time to
achieve' ln our information addicted iociety where yesieroay is
a day too late, we lack neither the
time nor the motivation to accumulate the knowledg'e which lLads
to wisdom.
our.dot'com society is alluring and seductive, but as we ale beginning
to see many companies and
bodies are beginning to fall by the wayside, lt is my belief thaiwe
should begin to slow things up,
begin to "smell the roses, or the coffee" and realize that information
which is older than 1O minutes
old is indeed worthwhile if it can be adeptly fit into the jig.saw
iu=zlecaled t nowteJg;.
The marketing professor who asked his students to write a report where
no reference was more
recent than 1952, had the correct idea. As soon as the.laughter subsided
in his classroom, he made
the point that we should nevei forget the information'which was obtained
when a given field was
young, for it was the foundation of the knowledg > in that field.
We all know that witho-ut a strtng foundation the house is likely to fall and
we will forever be con-
demned to toil in the information age instead of seeking to advance through
knowledge into the age
of wisdom! ,
5.9 lnformation Functions

The horizontal dimension of the matrix in Table 1 depicts what people do with
information_create,
display, store, process, or distribute it.
Table 3.1 Examples of Today's lnformation lndustry
Text (Publishing) Voice(Telcom) lmage(Photography) AudioA/ideo (Entertainment)
Data
(Computing)
Content' (creation and collection)writers, ncies directory
ph
publishing and Yellow Pages
ising agencies
acto
writers, singers, musicians, servicJs lOow
publ
Jones, Compuserve, AOL), database tioris
Display (devices) books, magazines, newspapers, and coupons terephone equipment,
cpE
(handsets, key systems, and pBX), and wireless (pagers and ceiluiar prrbnes;
photographs, slides, slide projectors, fax machines, piint6rs, copiers,
and photo cti
TV f ilm (movies), radio, high fidelity consumer commercial projectors, VCRs, and
HDTV
PCs, PDAs, terminals, and workstations
Store (memory devices) libraries and information services pagers, answering
machines, and
voice mailfilm, pictures, slides, cD-RoM, and microiic6e videotape,
audio tape, bbs,
film (movies), disks, and game cartridges disks;tapes;floppies; optical,
nasn memorv,
and PCMCIA cards
Process (applications) printing and publishing industry and
ryord-processing software voice
processing and telco network_equipment photo-developing services,
iriage processing,
and linotronic film production, TV production, and editing Pds, workstationi,
maintrameii
supercomputers, transaction processing, and service bureaus
distribute (transport) U.S. Postal Service, other express delivery, fax books, distribution
system,
and telecom services telecom voice service, communication services, pagini,
ani
messaging U.S. Postal Service, other express delivery, fax, and telecom servic6s
fVl
radio broadcast, cable, satellite, theaters, and video'prrchas" and rental computer
networks (LAN, WAN) and telecom data services.
3.9.1 Creation
The first function is the creation and collection of information content. ln the digital future, content is
clearly key, and the networks will evolve to support increasingly rich forms of it. Content includes
text, images, data, movies, and television programming (including sports), as well as evolving con-
tent, including on-line games and interactive shopping.
5.9.2 Display
The second function is information display. Historically, each form of content utilized its own form of
display, creating manufacturing companies with distinct core competencies. For example, textual
information has been predominLntly displayed on paper;telecommunications companies have used
audio handsets; still images have mostly been displayed on photographic paper (with a trend toward
plain paper); computer lnd television images are typically displayed on cathode ray tube (CRT)
ierminals; and portable computers and similar devices use liquid crystal displays (LCD) and other
f lat-screen technologies.
3.9.3 Storage
The third function is information storage. Because the creation and consumption of information are
typically separated, and because information tends to have lasting value, storing information is a
jaluabie function. lnformation can be stored through a variety of means: books, magnetic media,
CD-ROMs, microfiche, answering machines, film, videotape, audiotape, and game cartridges. Other
emerging technologies for storage include DVD-ROMs, llash memory (semiconductor-based memory
cards), and holographic memorY.
The key driver of the value of a storage system is the extent to which information within it is readily
accessible.Thus, storage that permitJthe use of advanced database-management software, as well
as random access, is increasingly preferred over other kinds of storage'
3.9.4 Processing
The fourth function is the processing of information (the applications business), which creates infor-
mation through the intelligent manipulation of data. ln the past, a variety of processing approaches
and technologies have be-en used, based on the specific media. For voice information in the telecom-
munications industry, companies have used voice-processing technologies. For text information,
publishers have used wordprocessors (with spelling and grammar checks) and desktop-publishing
software. ln the imaging business, companies have primarily used chemical processes to improve
images, though sottware-Uased approaches are becoming more prevalent. For audio/video informa-
tionJcompanies have relied heavily on editing and mixing technologies. Finally, processing has been
(almost by definition) the most intensive for data applications.
5.9.5 lransport
The filth function is the dist igformatio lndustries
based on different forms of 5laborate infrastruc.
tures for distribution.The tel velopeda network of
copper wires. ln the past decade, a wireless infrastructure based on cellular technology has also
been created for voice communication.Text information has historically been distributed in a manner
similar to manufactured goods_from factory to intermediaries to end users. lmage information has
largely ridden on the same infrastructure, which includes the postal system and various express-
deiivery companies. The telecommunications industry has also entered this area via the fax ma-
chine. Video and audio information was historically broadcast over the airwaves; but, in the last two
72 I ELECTRONIC COMMERCE
cjecades, the cable-television system has come to dominate video distribution, along
with the sale
and rental of videocassettes. lncreasingly, satellite transmission is also playing a larler role
in the
distribution of video information. Finally, for data transport, a variety of'compirter-n6tworking
ap-
proaches, such as Ethernet and token-rings, h we become widespread. The
lnternet, utilizing the
telephone rtation network for computers. The underlying
technologi he separation of these industries by form have
been rend the forces at work leading to convergence.
5.10 The Functionally Based Companies of the Future

We postulate that when the industry realigns based on functional capabilities, the dominant players
worldwide are very likely to be from the:
O Entertainment
O Consumer Electronics
D PersonalComputer
O Communications lndusi?ies.
5.10.1 The lnformation Content lndustry
Content is the driver behind all of the information industries. Networks will evolve to deliver increasingly
rich content, eventually full broadband multimedia. Similarly, appliances must advance to display
content in color, full video, and high-fidelity stereo. The expense of these advancements will be
rationalized by the content they will carry and display.
Publishing and entertainment companies will converge into the digitized content business. lncreas-
ingly, content is being created or translated into its binary equivilent. Once digitized, content be-
comes increasingly valuable because it can be reproduced per{ectly and transmitted instantane-
ously to almost any point on the planet. Much of the information users need is already out there but
is inaccessible in a timely and convenient manner. Providing greater time and place value on exist-
ing information will thus be a big part of the future content business.
Packaging of information and verifying its accuracy (symbolized in information brands) will be an
important value-added function provided by content players. Newspapers and magazines are well
positioned for the future, because they already deal in digitized information.
5.10.2 Adapting to the Xew Paradigm

Of the three new form-based industries, the conient area is farthest along in moving to the new
model' First, a great deal of content is alr-eady digitized. Second, the rationalization of content
businesses has been underway for some time, so that rve already have large content entities such
asTime-Warner, which owns magazine and book production, television prograrming, movies, music
labels, sports teams, and cartoons.
Consolidation will continue between the entertainment industry gnd the publishing industry on a
global basis. The two will dominate the content business in all forms (including voice, data, and
image content), not just the forms in which they previously specialized (video and text). They will
also take over content lrom other businesses; for example, they are likely to acquire the yellow
Pages and white Pages directory businesses currently owned by telcos.
5.t0.5 The lnformation Appliances lndustry

Consumer electronics companies and PC manufacturers will converge into the information appli-
ances industry. Companies such as Sony, Matsushita (Panasonic), Sharp, LG (Lucky Goldstar)
Thomson, and Philips have already moved ahead in developing a new generation of content display
devices. They dominate the manufacturing of traditional consumer electronics products as well as
for telephony and fax machines, which places them in a superior position to PC manufacturers and
traditional telecommunications providers such as Lucent, Motorola, and Nokia. These companies
will continue to dominate in infrastructure but will cede the consumer markets to electronics manu-
facturers.
Devices were originally manufactured to display content in the form in which it was created. Sepa-
rate industries were creatbd around designing and building phones, televisions, computers, and
printing presses, and developing and printing film. Devices are now being designed to handle content
in multiple forms. For example, digitalwireless phones have an LCD display that can receive alpha-
numeric messages, including caller lD and eventually e-mail.
5.1I The lnformation Transport lndustry

Public telephone networks, the lnternet, wireless networks (including satellite), cable television,
broadcast media, and private networks will be consolidated into the information transport business'
The nerve system of the future information industry, indeed of the future global economy, will be a
communications network of enormats capacity and sophistication. By the year 2010, a global net-
work of virtually infinite capacity will be in place. lt will be a network of networks, consisting of
multiple overlapping and interconnected webs that collectively will realize the promise of huge (by
today's standards) two-way bandwidth to virtually every node.
During the next ten to fifteen years, convergent technologies will lead to worldwide end-to-end voice,
data, fax, video, and image services.These services will begin between hub cities and work outward
toward suburban and rural areas, much the way telephone service did in the 1 920s and 1 930s. The
global network of networks will be both a transparent communications service and a platform for
content-f illed or content-enhanced services.
ln the future, we will see integrated, not just interoperable networks. By this we mean that the same
network can serve multiple needs, and the network will have a common backbone and shared re-
sources, such as telephony and video-entertainment applications or wireless and wireline applica-
tions.
ln the information-transport industry, a premium will be placed on managerial attributes such as
efficient operations, timely maintenance, and outstanding customer service.The information-trans-
port industry will be the heir to today's telecommunications industry. Other players, coming from
industries with lower standards, must upgrade their capabilities rapidly and adjust their mind-sets.
The cable industry, for instance, has been rightly criticized in this area. Most customers will have a
choice of transport suppliers in the futur.e, and companies will have to provide the type of customer
service that makes those customers feel close to their suppliers.
5.1l.l lnformation : The PC versus TV Debate /

As the PC becomes more passive (receiving video streams like.today's televisions), the TV will get
more interactive; hence, convergence will occur.The convergence of the telephone, television, and
computer will lead to hybrid devices that combine the strongest features of each. Like the television,
the new devices will display video, sound, and text and be familiar and easy to use. Like the tel-
ephone, they will allow people to communicate anywhere. Like the computer, they will be intelligent,
powerful machines that take raw data and turn it into useful information.
We believe that the PC and the television will converge into a device with a f lat screen and broadband
connection to the world. Savvy manufacturers will also design devices that can be customized to
meet the preferences of each consumer and grow with the menu of services on the network.
3.12 Where Today-s Computing lndustry Will Be

Computing will be diffused with distributed memory and processing. Three critical ingredients of all
information businesses will be :
O lnformation Storage (memory),
O Processing, and
O Software-based manipulation
(see Figure 3.1).These capabilities will become widely diffused, utilized by each of three highly
computerized information industries: content, devices, and networks. Because the transformation
will result in three industries (not five), it will enhance operating efficiencies in the process.
/\ €
Netu,orks Devices
PROCESSINC
Figure 3.1 :The New Computer lndustry

Thus, the computer industry as we know it today will no longer exist. Rather than downstreaming into
products, the computer industry will go further upstream to focus on creating superior raw materials.
The two raw materials_components (both memory and processing) and software_will be distributed
through miniaturization and electronic networks. These capabilities will get diffused to the point that
traditional stand-alohe computers will be unnecessary; however, many new services will certainly
emerge (see Figure 3.2).
Figure 3.2 : Possible New Seririces
3.13 Future of lnfornation Presentation

ln this report, we have presented a rationale for transformation, industry consolidation, alliance-
formation, and specialization in the information industry, based on functionality for customers and
markets rather than on internal technology factors. Adopting such an orientation requires that
companies make specific types of investments. lntegrating multiple media can be exceedingly
complex. For example, in networking, different network platforms will have to converge and integrate,
as discussed earlier. ln the same manner, devices must evolve to handle increasingly rich content.
However, we believe that clarity of strategy and marketing capabilities will be as important as
technological strength.
The upper limits of adoption, especially for electronic and information-based products, are typically
underestimated. For example, when the televiSion was first introduced, it was considered a luxury;
the average household now has three televisions. How users interact with applications will also be
key, and the development of intuitive interaction will greatly spur market expansion. For example,
speech-recognition software is becoming lar more lunctional and is routinely used in telecommunica-
tions applications. Thus, it will rapidly migrate to a variety of multifunction appliances.
5.15,1 The lnportance of Alliances

Few current players enjoy large incumbency advantages in making the transition to the new industry
structure, because the required core competencies are substantially different from those that
companies have develfied so far (with the possible exception of content providers). Because nobody
has all of the needed core competencies, the industry will develop via equity partnerships and
alliances.
Rather than ownership, a kieretsu-style modelwill emerge. lf each industry pursues an independent
course, consumer adoption will be slow and fitful. All three industries must work together in symbi-
otic alliances to create the market.This is similarto the relationship between software and hardware
in PC markets or between content and conduit, which was responsible for most of the cable indus-
try's growth.
3.1r.2 Critical Success Factors

Not all corporations are adept at dealing with change of this magnitude. While status quo or reactive
management styles are often successful in stable environments, what will be required of players in
the information industry is anticipatory management (see Figure 3.3). Anticipatory managers align
their company with the direction in which the industry is heading and, when possible, in f ront of the
trend. This requires a clear vision of the future, a strategic game plan, and an underStanding of which
position is to be desired in the future. Based on our analysis of the requirements for success,
companies will have to emphasize the following areas in particular.
3.13.3 Global Orientation

Companies aspiring to succeed in the information marketplace must be globally oriented and create
a global brand. lnformation technology is inherently boundary-free;the boundaries that have existed
so far have been imposed by governments or have resulted from cultural differences. Both of these
barriers are collapsing. ln telecommunications, governments are privatizing state-owned PTTs and
breaking their monopoly. Companies such as lBM, Philips, and NEC are creating a global, rather
than multidomestic, focus.
.t
3.1t.4 )'lanaging Geopolitical Dynamics
While world markets are opening up, regional trading blocs are becoming more widespread. For
example, the three majortrading blocs are expanding their spheres of inlluence.The North American
Free Trade Agreement (NAFTA) will ultimately expand to cover most of the Americas;the European
Union (EU) will rapidly integrate Eastern Europe; and the informalAsian bloc willcontinue to expand
(possibly to include lndia). Globally oriented companies must establish a significant presence within
at least two of these blocs.
5.13.5 Flexibility, Speed, and productivity

Large companies must be as nimble as small ones in responding rapidly
to fleeting opportunities.
With shifting geopoliticaldynamics, the windows of opportunity aL oiten-brief.
Comianies must be
highly adaptive and learn to reduce their time{o-market with new products
and services. They must
continuously increase their productivity to compete globally. Success will be decided
by an increas-
ingly unforgiving marketplace.
5.13.5 Alliances and Partnering

Companies that are culturally not able to partner with suppliers, customers, and even
competitors
will be at a major disadvantage. Partnering will be required horizontally as well as vertically.
For
example, Time Warner, a contenl company, was instrumental in the deveiopment of the DVD piayer.
t.13.7 Ouality0bsession
Outstanding quality will bEa minimum requirement to be in the running for global business. Companies
must benchmark their performance against the best in the world anO aOopt continuous improvement
processes to stay competitive.
5.13.8 XassCustomization
lncreasingly, companies are called upon to provide customized products to markets at costs
compa-
rable to mass-produced ones. Companies can do this by creating flexible manufacturing
systems
and by investing heavily in information technology. Both Dell and Gateway computers are built to
order and shipped directly to the customer. By avoiding high inventory and distribution costs, both
are redefining how to address the market; both Apple and Compaq are moving to this model.
5.15.9 Weakthroughlnnovation
With the rapidity of technological change in the information industry, the importance of research and
development has never been greater. Technological breakthroughs will be crucial at both the basic as
well as the applied levels. ln other words, companies must periodically break preveiiling price/per-
formance norms. For example, Sony has excelled at creating new products that meet needs custom-
ers never thought they had, with products such as the transistor radio, Walkm an stereos, aid com-
pact-disc players. Leading the markets in this manner wilt be key in the future.
3.15.10 Access to Capital

Competing on a global basis in the information industry will require access to significant amounts of
capital. Obtaining it will require tapping global capital markets (especially for constructing informa-
tion highways) as well as sources such as the world Bank and vendor financing.
5"t5.1I lnvestments in Human Capital

Companies must invest in upgrading and maintaining their numdfr capital, as the half-life of knowledge
in afast-changing environment is remarkably short. Because the'information industry is likely to
evolve along a very different path than envisioned just a few years ago, there are very few off-the-
shelf experts to guide companies into the future. Companies must develop new knowleige and train
their employees on an almost continuous basis.
3.13.12 End-User Focus

All companies in the industry must keep a focus on the customer's customer (i.e., the ultimate end
user). Witlrout such a discipline, product-development efforts will fail. Furthermore, end users pro-

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32 / ELECTRONIC COMMERCE

Ouestions With Answers

2.2 Electronic Components

2.2.1 Vacuum lbbes

Fig. 2.1 : A part of microprocessor Fig. 2.2 : Compteted Microprocessor

Fig.2.3 :Typical comPonents used in a microprocessor circuit

Fig.2.4 : Size of a chip as compared to a ball pen

2.2.7 Near Past llevelopments in Electronics

2.3 Computers : The lnformation Ptocessor

2.3.1 The 0perating System

2.3.2 Computer l{emory

2.t.3 The Bus

2.3.4 lnput Devices

2.3-S Output Devices

2.4 Types of Computers: Itigital and Analog

2.5 Range of Computer Ability

2.6 Uses of ComPuters

2-7 ltigital TechnologY

2.8 Processing Digital lnformation

pid rate at which a computer can manipulate

Fig. Z.1is an example of a combination of computers and a communications

Network server File server

Fig.2.1 : Combination Computers and Communication

wide and even global, is becoming the need.

2.t t llata Communications

The MEDIUM I FEEDBACK

Fig.2.6 :The Essential four components of communication process

2.12 Data Transmission

2.13 Types of Signals in Communication

2.t5.1 Analogue Yelsus Digital Communication

The dispute about the relative merits

2.14 [haracteristics of Electrical Waves

Points A1 , &, A,, . ...... ...Arare suil to be in the same pHASE

FREOUENCY = numbers or times repeated

Fig. 2.8 : showing sine-wave and depicting Ampritude, phase

2.t4.1. Wavelength of a Signal

signal, the shorter the

2.14.2 Frequency of the Transmission

(1,000's) of cycles per

Fig.2.9Frequency spectrum ol various electronic signals

The frequency spectrum of ail types of erectronic signars

used only in specialized data transmission.

Baud 112 34 567

Number I on, sign?r p"..ioo l.-

2.t5.2 Grade of Communication Channels and Bandwidth

2.t5 Transmission Degradation

2.17 Wireless Communication

2.18 Principles of Wireless Communications

2.19 ).lodes of Wireless Communkation

2.19.1 Sea and Air Transceivers

2.19.2 Cellular Radio Telephones

2.21 Future Developments in Computing

2.22 ).lobile Processors

5.t Fundamentals of lnformation Systems

y carried out). But we don't usually bother even

3.2 The Relationship Between lnformation and l{nowledge

3.= Information Age

3.4 What are lnformation Systems

5.5 Who Processes lnformation?

5-5 lnformation lndustry

5.8 The lnefficient lnformation lndustry

tr Cumbersome and expensive physical infrastructures for information distribuiion-Examples

5.9 lnformation Functions