20110814 An Introduction to Economics of Communications

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วา่ที� รอ้ยตรี พรพรหม อธตีนนัท์Pornprom Ateetanan

Deputy DirectorDeputy DirectorNSTDA Academy

http://www.NSTDAacademy.com

pornprom [dot] ateetanan [at] nstda [dot] or [dot] th

@pornprom

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@pornprom

http://www.facebook.com/pornprom.ateetanan

http://www.linkedin.com/in/Pornprom

http://www.slideshare.net/pornprom

Agenda

1. Your Lecturer

2. Course Syllabus2. Course Syllabus

3. Q&A about the course

4. Collaborative Tools

5. Lectures• The Network Economy• The Network Economy• Technology Matters• Open Source Software (Optional)

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Your Lecturer

• What would you like to know about me?

• http://www.linkedin.com/in/Pornprom

• http://www.facebook.com/pornprom.ateetanan

• http://www.twitter.com/pornprom

• http://picasaweb.google.com/pornprom• http://picasaweb.google.com/pornprom

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Interests 1. ICT

• ICT for Public/ Education/Business • ICT for Public/ Education/Business

Services Delivery

• Technology Adoption

2. Science & Technology 2. Science & Technology

• Technology for Green Practices

3. Social Media5

NSTDA Academy

NSTDA Academy, NSTDA Academy, an advanced training arm of NSTDA Academy, NSTDA Academy, an advanced training arm of

the NSTDA, was established with a strong

intention to weave practical S&T knowledge

into the Thai society

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Three Flagship Services

Executive Education ProgramExecutive Education Program

Green Practices Program

Professional Standard & Assessment & Examination

S & T as a tool for improving Manufacturing & Services Sector’s Productivity

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Flagship Services: (3) ICT Professional Standard & Exam

Non-vendor Certified ICT Standard

Information Technology Professional Examination: ITPEInformation Technology Professional Examination: ITPE

Vendor Certified ICT Standard

Authorized Prometric Testing Center: APTC

8http://www.NSTDAacademy.com/itpehttp://www.NSTDAacademy.com/itpe 8

Outline of ITPEC

Briefing of ITPEC and METI

Information Technology Professionals Information Technology Professionals

Examination Council

Information Technology Professionals

Examination Council (ITPEC for short) is the

organization for promoting the standard of IT

professionals throughout the Asian countries.

It was formed on

November 11, 2005 to co-ordinate the efforts

of member countries in the implementation of

the IT Professionals Examination in Asia.

The council is currently comprised of

members from 7 countries the Philippines,

Thailand, Vietnam, Myanmar, Malaysia,

Mongolia, and Japan.

Ministry of Economy, Trade and Industry (METI)

of Japan is supporting the IT Professionals

Examination activities through ITPEC.

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Com mon Career/Skill Fram ework Vender Side / User Side

Inform System / Embedded System

Independent

Advanced professional examinations

Sys

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xa

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xa

InfoM

an

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x a

Level 3

Level 4

tems A

uditor Exam

ination

(SA

)

rmation T

echnology

ategist Exam

inatio

n(S

T)

tems A

rchitect E

xamin

ation (S

A)

ject M

anager Ex

amination

(P

M)

work S

pecialist Exam

ination (N

W)

abase S

pecialist

amina

tion

(DB

)

bedded S

ystems S

pecialist am

ination

(E

S)

rmation T

echnology S

ervice nage

r Exam

ination

(SM

)

rmation S

ecurity Specialist

amina

tion

(SC

)

Applied Information Technology Engineer Examination (AP)

Level 1

Level 2

Level 3

Fundamental Information Technology Engineer Examination (FE)

Information Technology Passport Examination ( IP)

Applied Information Technology Engineer Examination (AP)

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Examination Site

Rajamangala University of

Technology Krungtep: RMUTK (Bangkok)South-East Asia University:

SAU (Bangkok)

National Science and

Prince of Songkla University:PSU (Phuket) Prince of Songkla University:PSU (Hat Yai)

Rajabhat Rajanagarindra University:

RRU (Chachengchao)Rajamangala University of

Technology Thanyaburi: RMUTT (Pathumthani)

National Science and

Development Agency: NSTDA (Pathumthani)

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Certificate Giving Ceremony

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Other Enhancement Services

In-House Training

ICT Professional Training

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สถาบนัวทิยาการ สวทช.@NSTDAAcademy

http://www.NSTDAacademy.com

T. 0 2642 5001-10F. 0 2642 5014

วา่ที9 รอ้ยตร ีพรพรหม อธตีนันท์วา่ที9 รอ้ยตร ีพรพรหม อธตีนันท์รองผูอํ้านวยการ

สถาบนัวทิยาการ สวทช.@pornprom

[email protected]

Course Objectives1. To understand and apply Economics principle

with Computer Information Systems

2. To understand definitions, theories, and

frameworks of Computer Information Systems,

ICT Adoption and its relation with Economics

3. To discuss on Computer Information System

and its applications

4. To encourage analytical thinking and writing16

Course Description• Necessity of economics of communication and

computer information systems adoption in enterprises. enterprises.

• The applications and convergence of wireless information system, database management, knowledge management, software requirements and software quality management, security of information system, management, security of information system, human computer interface and human resource economics and Information technology for collaborative work.

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Course Outline1. An Intro to Economics of communications

2. Database management

3. Software requirements management3. Software requirements management

4. Mobile and wireless information system

5. Security/privacy of information and information system

6. Software quality management

7. Knowledge management

8. Human computer interface and human resource economics

9. Information technology and collaborative work18

Collaborative Tools

1. Facebook Closed Group• http://www.facebook.com/groups/1410411126514

55/55/

2. Google Docs

3. SlideShare.net

4. New Social Media tools

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Today’s Presentation

1. The Network Economy

2. Technology Matters

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2. Technology Matters

3. Open Source Software

The New Economy

• A controversial issue

• The importance of knowledge

• High tech often replaces human communication

and brainpower

• Electronic transactions

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The Network Economy

• The advent was foreseen in 1969 by Peter DruckerDrucker• Teacher, writer, consultant, thinker, and lecturer

on the contemporary organization

• Wall Street Journal editor and frequent HBR contributor

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The Network Economy

1. Connected World

• Increasing Web traffic

• Novice users acquire computes

• New web participants• Web bots, intelligent agents, mobile objects, etc.• Web bots, intelligent agents, mobile objects, etc.

• Moore’s Law

• Gilder’s Law

• Metcalfe's Law23

The Network Economy• The observation made in 1965 by Gordon

Moore , co-founder of Intel.

• The number of transistors per square inch on • The number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented.

• Moore predicted that this trend would continue for the foreseeable future.

• Currently, it is 18 - 24 months.• Currently, it is 18 - 24 months.

• Most experts, including Moore himself, expect Moore's Law to hold for at least another two decades.

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The Network Economy

Gilder’s Law• The bandwidth of both wired and wireless • The bandwidth of both wired and wireless

networks has been continuously increasing• Follows the Gilder’s Law• Bandwidth grows three times as fast as the

CPU speed• This trend facilitates the development of

various innovative technologies, including wireless Internet access and mobile portals

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The Network Economy

2. Exponential Value

• As the number of nodes increases linearly, the • As the number of nodes increases linearly, the

value of the network grows exponentially

• The network’s value is derived from plentitude

• E.g., as volume of online transactions increases, • E.g., as volume of online transactions increases,

the cost of every transaction diminishes

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The Network Economy2. Exponential Value

• Metcalfe's Law

• Robert Metcalfe founded 3Com Corporation and

designed the Ethernet protocol for computer

networks

• Metcalfe's Law states that the usefulness, or • Metcalfe's Law states that the usefulness, or

utility, of a network equals the square of the

number of users

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Utility

Metcalf’s Law

Utility = Users2

Users28

METCALFE’S LAW

The value of a network is proportional to the square of the number of nodes on the network.

Metcalfe’s law relates to the power of an interconnected network to enable collaboration and extend the reach of an organisation. We often forget that Internet is short for ‘Interconnected network’

The web followed what is known as Metcalfe’s law first stated by Bob Metcalfe, who was co-founder and former chief executive of networking company 3Com. He was reputed to have said in presentations made for the company:

‘The power of the network increases exponentially by the number of computers connected to it. connected to it. Therefore, every computer added to the network both uses it as a resource while adding resources in a spiral of increasing value and choice.’(Dave Chaffey, April 2005 ).

Dr. Michael D. Featherstone 29

V α N²

V= Value of the network

N=Number of nodes in the network

What is the ‘Value’ of this network?

N=Number of nodes in the network

Metcalfe’s Law relates the value of a digital network to the number of connections (or users or members) it has.

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Metcalf’s Law

350

400

150

200

250

300

Val

ue o

f net

wor

k

Individual network value

Community network value

0

50

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Size of network

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The Network Economy

3. Lifespan of Innovation

• Ideas spread really fast

• Hard to achieve a sustainable competitive

advantage

• Continuous innovation

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The Network Economy

4. Increasing Returns

• After the dot-com crash, some individuals have • After the dot-com crash, some individuals have

become ‘dot-com averse’

• Under investing vs. over investing

• E.g., continuous investing in a market leader will

make it stronger and weaken the competitors

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The Network Economy

5. Decreasing Prices

• Consumers may count on superior quality for • Consumers may count on superior quality for

less price over time

• Scientists find ways to get more out of less

materialmaterial

• Computers, cars, electronic devices, computer

memory, etc.

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The Network Economy

6. Information is the king!• The value of accurate and timely information

increasesincreases

• If you have perfect information, the best deal is guaranteed

• Technology may empower the user

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The Network Economy6. Information is the king!

• Shopping bots – price comparison engines

• Perfect information

• Try to search for one of course textbooks

• E-vendors tend to commoditize offerings

• Name, delivery options, shipping time• Name, delivery options, shipping time

• Single free competition market with zero long-term

profit – Price wars

• E-vendor bots36

The Network Economy

7. People expect free

• Freeware or at least trial versions of software • Freeware or at least trial versions of software

programs are taken for granted

• Get a product for free and pay for service or

supportsupport

• E.g., Java language, Open Source Software,

OpenOffice.org, LibreOffice, Joomla, Wordpress

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The Network Economy

8. High Dependency

• In a linked economy, the fate of an organization • In a linked economy, the fate of an organization

depends on other companies in the supply value

chain, their competitors, and the external

environment

• Organizations have to become highly adaptive

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The Network Economy

9. High Rate of Displacement

• The agricultural era – industrial era

• People have to change professions

• Companies have to change product lines and

restructure

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The Network EconomySummary

1. Connected world2. Exponential value2. Exponential value3. Lifespan of innovation4. Increasing returns5. Decreasing prices6. Value of information7. People expect free7. People expect free8. Dependency9. Displacement

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Technology Matters!

Technological evolution, choice, transfer, and adaptationtransfer, and adaptation

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Two intertwined technological forces

The Moore’s law –the acceleration of computing power doubles about every 18 months power doubles about every 18 months One of Intel’s cofoundersthe faster, smaller, and cheaper digital devices

The Metcalfe’s law —the extending connectivity squares the network utility The inventor of Ethernet and the 3Com’s founderv=n², v=utility, n=the number of connected nodesv=n², v=utility, n=the number of connected nodes

Reach and Richness contributed by wireless and broadband

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Hardware innovation• Processor & Storage: exponential

growth• The speed & value attributed by the • The speed & value attributed by the

Moore’s law bypassed the constraints of Rock’s law

• Handheld & wearable IT devices• Miniaturization & pervasiveness —• Miniaturization & pervasiveness —

ubiquitous connectedness of embedded systems between and within home, office, and any entities.

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Software creativity• From proprietary to Portability &

Interoperability• The platform/structural organizer of value network • The platform/structural organizer of value network

• Portable programming languages

• Software/Data can interacts each other smartly under a delegation world

• Distributed objects and standards

• Manipulating the One -way/Two -way • Manipulating the One -way/Two -way compatibility• The middleware/converter innovation—the purpose of

leveragability vs. the strategy of cannibalization

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Trends of Telecommunication• From circuits to packets

• TCP/IP protocol & QoS challenges• DSP power & IPv6 compensate VoIP problem for

DiffServDiffServ• From electrical to optical transmission

• From the core/backbone of network to the on-ramp/edge of network

• Butter’s law: fiber’s capacity could double every 9 months—DWDM fiber capacity up to 57.6 terabits ps

• Overcoming the last mile• Overcoming the last mile• Fixed access—xDSL, cable modem, microwave LMDS,

M/LEO (medium-/low-earth orbit) satellite• Sub-aerial mobile systems—1G,2G,3G, WLAN,

Wi-max, 4G, etc.

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Telecommunication convergence• Connection between the fixed-line networks

and the wireless networks• PSTN, CATV, LAN, xDSL, FTTH, power• GSM, CDMA, PHS, PCS, Wi-Fi, Wi-max, HomeRF, • GSM, CDMA, PHS, PCS, Wi-Fi, Wi-max, HomeRF,

IrDA, satellite GPS, LMDS, cdma2000, WCDMA, TD-SCDMA

• Connection between end devices and servers• PCs, NB, PDA, mobile phones, Home/office/personal

appliances, vehicles• Telecom/mobile (virtual) network operators, CATV • Telecom/mobile (virtual) network operators, CATV

System operators, ISPs, WISPs, • Connection between decentralized contents

and disperse transmission islands• HTML. XML languages • IP, IPng technologies

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Evolution of mobile standards

cdmaOneIS-95A

IS-95BCDMA2000 1x

IS-95CCDMA2000 1x EV DO CDMA2000 1x EV

DV

IS-95AIS-95A

GSM

GPRS

HSCSD

EDGE

WCDMAPDC-P

PDC

3G2.5G2G

PHS

Minor routeMain route

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Management Information Systems , James O'Brien, George Marakas ,McGraw-Hill/Irwin; 9 edition

ISBN-10: 0073376760, ISBN-13: 978-0073376769

References

ISBN-10: 0073376760, ISBN-13: 978-0073376769Dertouzos, M. L. (1999), “The Future of

Computing,” Scientific American, 281(2), August, pp15-26.

Ackoff, R. (1967), “Management MISInformation Systems,” Management Science, 14(4), pp.147-56.56.

ITU 1999 Annual Report, “Challenges to the Network: Internet for Development,”http://www.itu.org

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Wade, Michael and John Hulland (2004), “Review: The Resource-Based View and Information Systems Research: Review, Extension and Suggestions for

References (cont.)

Research: Review, Extension and Suggestions for Future Research,” MIS Quarterly, Volume 28, Number 1, pp.107-143.

Amit, R. and P. J. H. Schoemaker (1993), Strategic Assets and Organizational Rents,” Strategic Management Journal, vol.14, pp.33-46.

Dierickx, I. and K. Cool (1989), “Asset Stock Accumulation and Sustainability of Competitive Advantage,”and Sustainability of Competitive Advantage,”Management Science, vol.35, pp.1504-11.

Wernerfelf, B. (1984), “A Resource-based View of the Firm,”Strategic Management Journal, vol.5, pp.171-180.

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References (cont.)

Venkatesh, Viswanath, Michael G. Morris, Gordon B. Davis, and Fred D. Davis (2003), “User B. Davis, and Fred D. Davis (2003), “User Acceptance of Information Technology: Toward a Unified View,” MIS Quarterly, Volume 27, Number 3, pp.425-78.

Bagozzi, R. P., and J. R. Edwards (1998), “A General Approach to Construct Validation in Organizational Research: Application to Measurement of Work Values,”Research: Application to Measurement of Work Values,”Organizational Research Methods, 1(1), pp.48-87.

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References (cont.)

Bharadwaj, Anandhi S. (2000), “A resource-based perspective on information technology capability and firm performance: An empirical investigation,” MIS Quarterly, Vol. 24, Iss. 1.

Teece, D. J. (1998), “Capturing Value from Knowledge Assets: The New Teece, D. J. (1998), “Capturing Value from Knowledge Assets: The New Economy, Markets for Know-how, and Intangible Assets,” California Management, Review, 40(3), pp.55-79

Peteraf, M. (1993), “The Cornerstones of Competitive Advantage: A Resource-based view,” Strategic Management Journal, vol.14, pp.179-91.

Mata, Francisco J, William L. Fuerst, and Jay B. Barney (1995), “Information technology and sustained competitive advantage: A resource-based analysis,” MIS Quarterly, Vol. 19, Iss. 4.resource-based analysis,” MIS Quarterly, Vol. 19, Iss. 4.

Castanias, R. P. and Helfat, C. E. (1991), “Managerial Resources and Rents,” Journal of Management, 17(1), pp. 155-71.

Barney, J. C. (1986), “Strategic Factor Markets: Expectations, Luck, and Business Strategy,” Management Science, 32(10), pp.1231-41.

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This Concludes Today’s Presentation

Thank you for your attention

This Concludes Today’s Presentation

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