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MIS Chapter 12
Terms in this set (48)
Unpredictable, but highly impactful events. Scalable computing resources help a firm deal with spiking impact from a black swan event.
Replacing computing resources (either an organization's or an individual's hardware or software) with services provided over the internet.
Describes the use of cloud computing to provide excess capacity during periods of spiking demand, usually as an overflow service.
An activity cost that must be met without regard to level of output; an input cost that is spatially constant.
A cloud computing model in which a service provider makes computing resources such as hardware and storage, along with infrastructure management, available to a customer on an as-needed basis.
LAMP (Linux Apache MySQL Perl/Python/PHP)
An acronym standing for Linux Apache MySQL of any several programming codes that start with a P such as Perl/Python/PHP
powers many sites such as facebook and youtube
An open source software operating system.
Marginal Cost (Variable Cost)
The cost of producing one more unit of one more product.
Microtransaction is a business model where users can purchase virtual goods via micropayments.
Open Source Software (OSS)
Software that is free and where any one can see and potentially modify the code.
Ability to handle either increasing workloads or to easily expanded to handle workload increases. Systems that are not expandable often require significant rewrites.
A massive network of computer servers running software to coordinate their collective use. Server farms provide the infrastructure and backbone to SaaS and hardware cloud service, as well as many large scale internet services.
Service Level Agreement (SLA)
A negotiable agreement between the customer and the vendor. The SLA may specify the availability, serviceability, performance, operation, or other commitment requirements.
Software as a Service (SaaS)
A form of cloud computing where the firm subscribes to a third party software and receives a service that is delivered online.
Structured Query Language (SQL)
A language used to create and manipulate databases.
Total Cost of Ownership (TCO)
An economic measure of the full cost of owning a product. TCO involves direct costs such as purchase price, as well as indirect prices such as training costs, support and maintenance.
A form of cloud computing where a firm develops its own software and then runs it over the internet on a service provider's computer.
paying for your computing usage
How have low marginal costs, network effects, and switching costs combined to help create a huge and important industry?
The software business is attractive due to near-zero marginal costs and an opportunity to establish a standard—creating the competitive advantages of network effects and switching costs; create winner-take-all systems
How is open source software different from conventional offerings?
available for free, but also makes the source code available for review and modification
What are some examples of open source software?
firefox, openoffice, gimp, alfreso, zimbra, mySQL database, asterix, linux, apache
How might firms leverage OSS technology?
while open source alternatives are threatening to conventional software firms, some of the largest technology companies now support OSS initiatives and work to coordinate standards, product improvement and official releases
Why are for-profit companies paying people to develop open source software that they give away for free?
to use OSS to drive a wedge between competitors and their customers, disrupt the finances of their competitors
Why do firms choose to use OSS?
low cost, increased reliability bc more ppl can look at the code, improved security and auditing (security vulnerabilities can be seen more quickly and addressed with greater speed), system scalability, agility and improve a firm's time to market (can skip whole segments of software develop process)
How can OSS beneficially impact industry and government?
• OSS also diverts funds that firms would otherwise spend on fixed costs, like operating systems and databases, so that these funds can be spent on innovation or other more competitive initiative
• Skip whole segments of the software development process, allowing new products to reach the market faster than if the entire software system had to be developed from scratch, in-house
• Allows a firm to scale from startup to blue chip without having to significantly rewrite their code, potentially saving big on software development costs
• Government agencies and the military often appreciate the opportunity to scrutinize open source efforts to verify system integrity
**basically eliminates costs for firms
How do vendors of OSS make money?
selling support and consulting services, drive hardware sales or the sales of proprietary products that augment the OSS, use OSS to form industry standards, save capital investments, and attract third-party complementary product developers
How does the concept of OSS relate to TCO?
OSS is not free due to the TCO from maintenance, support, training compliance auditing, security, backup, provisions for disaster recovery in case of an outage, software development and documentation, purchase price, ongoing license and support fees, deployment
What are the legal risks of OSS?
firms may be at risk if they distribute code and don't know the licensing implications
What is a typical business model for a SaaS vendor?
many firms earn money via a usage-based pricing model akin to a monthly subscription
Other options: free services supported by advertising, promote an upgrade version or premium for fees (dropbox) "freemium"
What are the benefits to users that accrue from using SaaS?
-forgo large upfront costs of buying and installing software packages
-mitigate financial risks
-faster deployment time
-varaible operating expenses (pay as you go)
-higher quality and service levels through instantly available upgrades
-remote access and availability
**SaaS can bring cost savings of 25 to 60 percent if all these costs are factored in
What are the benefits to vendors from deploying SaaS?
-- limit development to single platform
--ability to instantly deploy bug fixes and product enhancments
--lower distribution costs
--reduce software piracy
What are the risks associated with SaaS?
- Dependence on a single vendor
-- Long term viability of partner firm
-- Users may be forced to migrate-- incurring high switching costs
-- Might not have all features of traditional software
-- Data assets stored off site- potential security legal concerns
-- reliance on network connection
-- may be slower, less secure, less stable
What are the challenges and economics involved in shifting computer hardware to the cloud?
hardware and software sales may drop as cloud use increases, while service revenues will increase; shift to cloud computing alters the margin structure for many in the computing industry, market for expensive, high margin, server hardware is threatened by companies moving to cloud
How is cloud computing's impact across industries proving to be broad and significant?
clouds may also lower the amount of capital a firm needs to launch a business, shifting the power away from venture firms in those industries that had previously needed more variable cost money; clouds can shift resources out of capital spending and into profitability and innovation;
How can cloud computing decrease barriers to entry?
by making computing costs a variable cost rather than a huge, fixed up front cost; easier for start up firms to launch and smaller firms to leverage the backing of powerful technology
What factors must be considered when making the make, buy or rent decision?
competitive advantage, security, legal and compliance issues, skill, expertise and available labor, cost, time, vendor issues
why do firms choose open source
agility and time to market
"first copy costs" v marginal costs
cost of software dominated by first copy cost, after that the marginal cost is close to 0
all revenue becomes profit
making a program free, requireing all modified and extended versions of the program to be free as well
complexity of some products
concern about developer community (how many developers support it)
legal and licensing concerns
open source of knowledge
softawre that listens for client request
software that houses underlying apps
software provides database services to other computing devices
distributed app structure that partitions tasks between peers
peers are equal participants as opposed to client-server structure
example of traditional v SaaS
(software as bits v software as service)
MS office (thick customers) v google drive
what is the engine that processes cloud computing
virtualization... it brings servers up and monetizes cloud computing
platform as a service
infrastructure as a service
"first copy costs" v marginal costs