1-1

Information Systems: A Manager’s Guide to Harnessing Technology

1-2

This work is licensed under theCreative Commons Attribution-Noncommercial-Share Alike 3.0 Unported License.To view a copy of this license,visit http://creativecommons.org/licenses/by-nc-sa/3.0/or send a letter toCreative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105,

USA

1-3

Chapter 12A Manager’s Guide to The Internet and

Telecommunications

1-4

Learning Objectives

• Describe how the technologies of the Internet combine to answer the questions: What are you looking for? Where is it? And how do we get there?

• Interpret a URL, understand what hosts and domains are, describe how domain registration works, describe cybersquatting, and give examples of conditions that constitute a valid and invalid domain-related trademark dispute

1-5

Learning Objectives

• Describe certain aspects of the Internet infrastructure that are fault tolerant and supports load balancing

• Discuss the role of hosts, domains, IP addresses, and the DNS in making the Internet work

• Understand the layers that make up the Internet – application protocol, transmission control protocol, and internet protocol – and describe why each is important

1-6

Learning Objectives

• Discuss the benefits of Internet architecture in general, TCP/IP in particular

• Name applications that should use TCP, and others that might use UDP

• Understand what a router does, and the role these devices play in networking

1-7

Learning Objectives

• Conduct a traceroute and discuss output, demonstrating how Internet interconnections work in getting messages from point to point

• Appreciate why mastery of Internet infrastructure is critical to modern finance, and be able to discuss the risks in automated trading systems

• Describe VoIP, contrast circuit vs. packet switching, along with organizational benefits and limitations of each

1-8

Learning Objectives

• Understand the last mile problem, and be able to discuss the pros and cons of various broadband technologies including DSL, cable, fiber, and various wireless offerings

• Describe 3G and 4G systems, listing major technologies and their backers

• Understand the issue of net neutrality and put forth arguments supporting or criticizing the concept

1-9

Figure 12.1 – The Internet is a network of networks, and these networks are connected together

• The Internet is a network of millions of networks

1-10

Figure 12.2 – Anatomy of a Web Address

1-11

The Web Address

• Hypertext transfer protocol (http) - application transfer protocol that allows web browsers and web servers to communicate

• A domain name represents an organization and a host refers to public services offered by that organization

– Host and domain names are case-insensitive

• Path maps to folder location where file is stored on server

– Path and filenames are case sensitive

• Filename refers to name of file stored on serverItem Number: 101783940

1-12

Host and Domain Names: A Bit More Complex Than That

• A domain name represents an organization– Hosts are public services offered by that organization

• Load Balancing: Distributing a computing or networking workload across multiple systems in order to avoid congestion and slow performance

• Fault Tolerant: Systems that are capable of continuing operation even if a component fails

1-13

I Want My Own Domain

• One can register a domain name, paying for a renewable right to use that domain name

• Domain name registration is handled on a first-come, first-served basis. All registrars share registration data to ensure that no two firms gain rights to the same name

• Cybersquatting: Acquiring a domain name that refers to a firm, individual, product, or trademark; with the goal of exploiting it for financial gain

1-14

IP Addresses and the Domain Name System

• Every device connected to the Internet has an identifying address called the Internet Protocol (IP) address

• The domain name service is hierarchical system of nameservers that maps host-domain name combinations to IP addresses

• The cache is a temporary storage space that speeds up IP address mapping by avoiding nameserver visits

1-15

Figure 12.3 – When your Computer needs to find the IP address for a host or domain name, it sends a message to a DNS resolver, which looks up the IP address starting at the root nameserver

1-16

The Internet is Almost Full

• Inefficient allocation of IP addresses and exploding number of Internet connected devices means that we’re running out of IP addresses

• Shifting to a new IP scheme such as IPv6 increases the possible address space to a new theoretical limit of 2128 addresses

1-17

TCP/IP – The Internet’s Secret Sauce

• The Internet Protocol Suite consists of:– Transmission Control Protocol (TCP)– Internet Protocol (IP)

• TCP works at both ends of Internet communications to ensure perfect copies of messages are sent

• IP is a routing protocol in charge of forwarding packets on the Internet

• Routers are computing devices that connect networks and exchange data between them

1-18

Figure 12.4 – TCP/IP in Action

1-19

Routers

• Routers are special computing devices that forward packets from one location to the next

• Routers are typically connected with more than one outbound path, so that in case one path becomes unavailable, an alternate path can be used

1-20

UDP: TCP’s Faster, Less Reliable Sibling

• TCP is a perfectionist and this is essential for web transmissions, e-mail, and application downloads

• Streaming media applications, like Internet voice chat and video conferencing, require sacrificing of perfection for speed

• User Datagram Protocol (UDP) works as a TCP stand-in. Speed is needed and quality has to be sacrificed

1-21

VoIP

• Old phone systems use circuit switching for a dedicated connection between two entities

• Internet networks are packet switched, where conversations are sliced into packets and squeezed into smaller spaces

• VoIP allows voice and phone systems to become an application traveling over the Internet

1-22

Finance has a Need for Speed

• Electronic trading systems leverage data mining and other techniques to crunch massive volumes of data, and discover exploitable market patterns

• Models are then run against real-time data and executed the instant a trading opportunity is detected

• Systems that run on their own can move many billions instantly and the actions of one system may cascade, triggering actions by others

1-23

Watching the Packet Path via Traceroute

• Traceroute sends clusters of three packets - starting at first router connected to a computer, then the next, and so on, building out paths packets take to their destination

• Some networks block traceroute because hackers have used the tool to probe a network to figure out how to attack an organization

1-24

What Connects the Routers and Computers?

• Computers are connected to the Internet by:

– Copper cable, for short distances

– Fiber optic lines, for long distances

– Wireless

• TCP/IP is not dependent on transmission media

• Most Internet communications are carried out via a combination of transmission media

Item number: 92041959

1-25

Last Mile: Faster Speed, Broader Access

• The Internet Backbone, made of fiber optic lines, is very fast

• Amdahl’s law sates that a system’s speed is determined by its slowest component or the last mile

• High-speed last mile technologies are often referred to as Broadband Internet Access

• Various technology upgrades are happening to speed up last mile connectivity

1-26

Cable Broadband

• Majority of domestic broadband connections are through copper cable technology

• Coaxial copper cables have shielding to reduce electrical interference

• Signals travel longer distances without degrading and at significant speeds

• Fiber/optic hybrid based networks are expensive, but offer higher speeds

1-27

DSL – Phone Company Copper

• DSL technology uses copper wire that phone companies have already run into homes

• Unlike cable, DSL uses standard copper wiring without shielding

• Signals degrade with distance from phone company offices

• DSL technology is popular in Europe and Asia owing to densely populated cities

• DSL connections are infeasible in the U.S. where cities are sparsely populated

1-28

Fiber – A Light-filled Glass Pipe to your Doorstep

• FTTH or Fiber to the Home is the fastest last mile technology around

• FTTH networks need to be built from scratch, as they do not have preexisting infrastructure

• However, FTTH can be profitable as it supports a wide range of services

• Many ISPs, like Google and Verizon, have made multi-billion investments in FTTH for experimental and business reasons

1-29

Wireless

• Mobile wireless service is provided to customers via cell towers

• With boom in sales of smart phones, bandwidth crunch is becoming a serious concern for ISPs

• Wireless networks are transitioning from third generation (3G) to fourth generation (4G)

• 3G networks are slower than 4G and offer a lesser range of services

Item number: 94099985

1-30

3G standards

• 3G standards are divided along two camps:

– Global System for Mobile Communications (GSM)

– Code Division Multiple Access (CDMA)

• The GSM standard is the most used around the world

• CDMA is limited by its inability to support voice and data communication at the same time

Item number: 95207220

1-31

4G standards

• 4G standards are divided along the lines of:

– Long Term Evolution (LTE)

– Worldwide Interoperability for Microwave Access (WiMax)

• DSL, cable, and fiber firms could be affected by 4G implementations

– 4G offers them option of entering mobile phone business and offer a wider range of services

– If speeds of 4G networks increase, more users could switch from cable, DSL, and fiber to wireless Internet access

1-32

Satellite Wireless

• Early satellite based telecommunications services suffered from problems such as:

– Download-only capability

– Required expensive and bulky equipment

– High latency

• O3b networks has offered to provide fiber-quality broadband access

• O3b plans to use a network of middle earth orbit satellites to reduce latency

• If O3b’s efforts are successful, it could transform the broadband industry

1-33

Wi-Fi and other hotspots

• Computer and mobile devices have Wireless Fidelity antennas built into their chipsets

• To connect to the Internet, a device needs to be within range of a base station or hotspot

• Cell coverage is often limited due to lack of service towers

• Fentocells are being offered to improve wireless reception

Item number: 97889798

1-34

Net Neutrality- What’s Fair?

• Net neutrality is the principle that all Internet traffic should be treated equally

• Many ISPs offer varying coverage, depending on service used and bandwidth consumed

• Internet firms say it is vital to maintain the openness of the Internet

• Telecommunications firms say they should be able to limit access to services that overtax their networks

• Another concern for service providers is ever-increasing demand for greater bandwidth