Chapter 7

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Telecommunications, the Internet,
and Wireless Technology

VIDEO CASES
Case 1: Traveling the Internet and Wireless Technology
Case 2: Unified Communications Systems With Virtual Collaboration: IBM and
Forterra
Instructional Video 1: AT&T Launches Managed Cisco Telepresence Solution
Instructional Video 2: CNN Telepresence

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Learning Objectives

• What are the principal components of telecommunications

networks and key networking technologies?

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• What are the main telecommunications transmission media and
types of networks?
• How does the Internet and Internet technology work and how do
they support communication and e-business?
• What are the principal technologies and standards for wireless
networking, communication, and Internet access?

• Why are radio frequency identification (RFID) and wireless sensor

networks valuable for business?

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Hyundai Heavy Industries Creates A
Wireless Shipyard

• Problem: Shipbuilding space is too large (4.2 sq mi) and complex

to track inventory in real-time, limiting efficiency

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• Solution: High-speed wireless network built by KT Corp, using
radio sensors, notebooks, mobiles, Web cams
• Illustrates:
Powerful capabilities and solutions offered by contemporary
networking technology
Use of radio sensor technologies to track inventory

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

• Networking and communication Trends

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Convergence:
 Telephone networks and computer networks converging into
single digital network using Internet standards
 E.g. cable companies providing voice service
Broadband:
 More than 60% U.S. Internet users have broadband access
Broadband wireless:
 Voice and data communication as well as Internet access are
increasingly taking place over broadband wireless platforms

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
• What is a computer network?
Two or more connected computers

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Major components in simple network
 Client computer
 Server computer
 Network interfaces (NICs)
 Connection medium
 Network operating system
 Hub or switch
Routers
 Device used to route packets of data through different
networks, ensuring that data sent gets to the correct address

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
COMPONENTS OF A SIMPLE COMPUTER NETWORK

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Illustrated here is a very simple computer network, consisting of computers, a
network operating system residing on a dedicated server computer, cable (wiring)
FIGURE 7-1
connecting the devices, network interface cards (NICs), switches, and a router.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
• Components of networks in large companies
Hundreds of local area networks (LANs) linked to firmwide

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corporate network
Various powerful servers
 Web site
 Corporate intranet, extranet
 Backend systems
Mobile wireless LANs (Wi-Fi networks)
Videoconferencing system
Telephone network
Wireless cell phones

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

CORPORATE
NETWORK

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INFRASTRUCTURE
Today’s corporate network
infrastructure is a collection
of many different networks
from the public switched
telephone network, to the
Internet, to corporate local
area networks linking
workgroups, departments, or
office floors.

FIGURE 7-2

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
• Key networking technologies
Client/server computing

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 Distributed computing model
 Clients linked through network controlled by network server
computer
 Server sets rules of communication for network and provides
every client with an address so others can find it on the
network
 Has largely replaced centralized mainframe computing
 The Internet: Largest implementation of client/server
computing

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

• Key networking technologies (cont.)

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Packet switching
 Method of slicing digital messages into parcels (packets),
sending packets along different communication paths as they
become available, and then reassembling packets at
destination

 Previous circuit-switched networks required assembly of

complete point-to-point circuit

 Packet switching more efficient use of network’s

communications capacity

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
PACKED-SWITCHED NETWORKS AND PACKET COMMUNICATIONS

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FIGURE 7-3
Data are grouped into small packets, which are transmitted independently over
various communications channels and reassembled at their final destination.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
• Key networking technologies (cont.)
TCP/IP and connectivity

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 Connectivity between computers enabled by protocols
 Protocols: Rules that govern transmission of information
between two points
 Transmission Control Protocol/Internet Protocol (TCP/IP)
○ Common worldwide standard that is basis for Internet
 Department of Defense reference model for TCP/IP
○ Four layers
1. Application layer
2. Transport layer
3. Internet layer
4. Network interface layer
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Telecommunications and Networking in
Today’s Business World
THE TRANSMISSION
CONTROL PROTOCOL/

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INTERNET PROTOCOL
(TCP/IP) REFERENCE
MODEL

This figure illustrates the

four layers of the TCP/IP
reference model for
communications

FIGURE 7-4

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

• Signals: digital vs. analog

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Modem: Translates digital signals into analog form
• Types of networks
Local-area networks (LANs)
 Campus-area networks (CANs)
 Peer-to-peer
 Topologies: star, bus, ring
Metropolitan and wide-area networks
 Wide-area networks (WANs)
 Metropolitan-area networks (MANs)

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
FUNCTIONS OF THE MODEM

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A modem is a device that translates digital signals into analog form (and vice
versa) so that computers can transmit data over analog networks such as
FIGURE 7-5 telephone and cable networks.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

NETWORK
TOPOLOGIES

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The three basic network
topologies are the star,
bus, and ring.

FIGURE 7-6

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World

• Physical transmission media

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Twisted wire (modems)
Coaxial cable
Fiber optics and optical networks
 Dense wavelength division multiplexing (DWDM)
Wireless transmission media and devices
 Microwave
 Satellites
 Cellular telephones
Transmission speed (hertz, bandwidth)

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
Telecommunications and Networking in
Today’s Business World
BP’S SATELLITE TRANSMISSION SYSTEM

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Communication satellites help BP transfer seismic data between oil exploration
FIGURE 7-7
ships and research centers in the United States.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

• What is the Internet?

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• Internet Addressing and Architecture
The Domain Name System
 Hierarchical structure
 Top-level domains

Internet Architecture and Governance

 No formal management: IAB, ICANN, W3C

The Future Internet: IPv6 and Internet2

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet
THE DOMAIN NAME SYSTEM

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Domain Name System is
a hierarchical system
with a root domain, top-
level domains, second-
level domains, and host
computers at the third
level.

FIGURE 7-8

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet
INTERNET NETWORK ARCHITECTURE

The Internet backbone

connects to regional
networks, which in turn

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provide access to
Internet service
providers, large firms,
and government
institutions. Network
access points (NAPs) and
metropolitan area
exchanges (MAEs) are
hubs where the backbone
intersects regional and
local networks and where
backbone owners connect
with one another.

FIGURE 7-9

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

THE BATTLE OVER NET NEUTRALITY

Read the Interactive Session and discuss the following questions

Copyright © 2013 Dorling Kindersley (India) Pvt. Ltd.

• What is network neutrality? Why has the Internet operated under
net neutrality up to this point in time?
• Who’s in favor of net neutrality? Who’s opposed? Why?
• What would be the impact on individual users, businesses, and
government if Internet providers switched to a tiered service
model?
• Are you in favor of legislation enforcing network neutrality? Why
or why not?

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

• Internet services

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E-mail
Chatting and instant messaging
Newsgroups
Telnet
File Transfer Protocol (FTP)
World Wide Web
VoIP
Virtual private network (VPN)

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

MONITORING EMPLOYEES ON NETWORKS: UNETHICAL OR GOOD

BUSINESS?
Read the Interactive Session and discuss the following questions

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• Should managers monitor employee e-mail and Internet usage?
Why or why not?
• Describe an effective e-mail and Web use policy for a company.
• Should managers inform employees that their Web behavior is
being monitored? Or should managers monitor secretly? Why or
why not?

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

 The World Wide Web

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 HTML (Hypertext Markup Language):
– Formats documents for display on Web
Hypertext Transfer Protocol (HTTP):
 Communications standard used for transferring Web pages
Uniform resource locators (URLs):
 Addresses of Web pages
○ E.g. http://www.megacorp.com/content/features/082602.html

Web servers
 Software for locating and managing Web pages

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

• The World Wide Web (cont.)

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Search engines
 Started in early 1990s as relatively simple software programs
using keyword indexes
 Today, major source of Internet advertising revenue via search
engine marketing, using complex algorithms and page ranking
techniques to locate results

Shopping bots
 Use intelligent agent software for searching Internet for
shopping information

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet
HOW GOOGLE WORKS

The Google search

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engine is continuously
crawling the Web,
indexing the content of
each page, calculating its
popularity, and storing
the pages so that it can
respond quickly to user
requests to see a page.
The entire process takes
about one-half second.

FIGURE 7-13

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet
TOP U.S. WEB SEARCH ENGINES

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FIGURE 7-14 Google is the most popular search engine on the Web, handling 72 percent of all
Web searches.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Global Internet

• Web 2.0

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Four defining features
 Interactivity
 Real-time user control
 Social participation
 User-generated content
Technologies and services behind these features
 Cloud computing
 Blogs/RSS
 Mashups & widgets
 Wikis
 Social networks
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 The Global Internet

• Web 3.0 − the Semantic Web

Effort of W3C to add meaning to existing Web

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Make searching more relevant to user
• Other visions
More “intelligent” computing
3D Web
Pervasive Web
Increase in cloud computing, SaaS
Ubiquitous connectivity between mobile and other access
devices
Make Web a more seamless experience

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Cellular systems

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Competing standards for cellular service
 CDMA: United States
 GSM: Rest of world, plus AT&T and T-Mobile
Third-generation (3G) networks
– Suitable for broadband Internet access
– 144 Kbps – 2Mbps
4G networks
 Entirely packet-switched
 100 Mbps – 1Gbps

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Wireless computer networks and Internet access

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Bluetooth (802.15)
 Links up to 8 devices in 10-m area
 Useful for personal networking (PANs) and in business to
transmit data from handheld devices to other transmitters
Wi-Fi (802.11)
 Set of standards: 802.11a, 802.11b, 802.11g, 802.11n
 Used for wireless LAN and wireless Internet access
 Use access points: Device with radio receiver/transmitter for
connecting wireless devices to a wired LAN

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

A BLUETOOTH
NETWORK
(PAN)

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Bluetooth enables a
variety of devices,
including cell phones,
PDAs, wireless keyboards
and mice, PCs, and
printers, to interact
wirelessly with each
other within a small 30-
foot (10-meter) area. In
addition to the links
shown, Bluetooth can be
used to network similar
devices to send data
from one PC to another,
for example.

FIGURE 7-15

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution
AN 802.11 WIRELESS LAN
Mobile laptop computers
equipped with network
interface cards link to the

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wired LAN by
communicating with the
access point. The access
point uses radio waves to
transmit network signals
from the wired network
to the client adapters,
which convert them into
data that the mobile
device can understand.
The client adapter then
transmits the data from
the mobile device back to
the access point, which
forwards the data to the
wired network.
FIGURE 7-16

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Wireless computer networks and Internet access

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Wi-Fi (cont.)
 Hotspots: Access points in public place to provide maximum
wireless coverage for a specific area
 Weak security features
WiMax (802.16)
 Wireless access range of 31 miles
 Require WiMax antennas
 Sprint Nextel building WiMax network as foundation for 4G
networks

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Radio frequency identification (RFID)

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Use tiny tags with embedded microchips containing data about
an item and location, and antenna
Tags transmit radio signals over short distances to special RFID
readers, which send data over network to computer for
processing
Active RFID: Tags have batteries, data can be rewritten, range
is hundreds of feet, more expensive
Passive RFID: Range is shorter, also smaller, less expensive,
powered by radio frequency energy

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Radio frequency identification (RFID) (cont.)

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Common uses:
 Automated toll-collection
 Tracking goods in a supply chain
Requires companies to have special hardware and software
Reduction in cost of tags making RFID viable for many firms

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution
HOW RFID WORKS

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RFID uses low-powered radio transmitters to read data stored in a tag at
FIGURE 7-17
distances ranging from 1 inch to 100 feet. The reader captures the data from the
tag and sends them over a network to a host computer for processing.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution

• Wireless sensor networks (WSNs)

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Networks of hundreds or thousands of interconnected wireless
devices embedded into physical environment to provide
measurements of many points over large spaces
 Devices have built-in processing, storage, and radio frequency
sensors and antennas
 Require low-power, long-lasting batteries and ability to endure
in the field without maintenance
Used to monitor building security, detect hazardous substances
in air, monitor environmental changes, traffic, or military
activity

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 The Wireless Revolution
A WIRELESS SENSOR NETWORK

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The small circles
represent lower-level
nodes and the larger
circles represent high-
end nodes. Lower level
nodes forward data to
each other or to higher-
level nodes, which
transmit data more
rapidly and speed up
network performance.

FIGURE 7-18

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon