CHAPTER 6 NETWORKS Technologies for Electronic Commerce

CHAPTER 6CHAPTER 6

NETWORKSNETWORKS

Technologies for Technologies for Electronic CommerceElectronic Commerce

All Organizations Need to Share All Organizations Need to Share and Communicate Information...and Communicate Information...

Externally with other organizations Internally among employees.

Introduction

NETWORK - a connection of two or more IT components that gives people the ability to communicate with each other and share software, information, peripheral devices, and processing power.

TELECOMMUNICATIONS - the electronic movement of information.

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NETWORKS SUPPORT 5 NETWORKS SUPPORT 5 FUNCTIONSFUNCTIONS

1. Sharing of software2. Sharing of information3. Sharing of peripheral devices4. Communicating with other people5. Sharing of processing power

Networks6-4

The NETWORK OPERATING SYSTEM - the system software that determines how a network functions - really determines which of these functions you have.

A PEER-TO-PEER NETWORK provides only two abilities - the ability to communicate with other people and the ability to share peripheral devices.

A CLIENT/SERVER NETWORK is a network that contains one or more host computers (called “servers”) that provide some type of service to the other computers (called “clients”).

Client/server networks are the emerging blueprint for all networks today.– Client/server is both a business and technical implementation model.

Networks6-5

CLIENT/SERVER AS A BUSINESS CLIENT/SERVER AS A BUSINESS MODELMODEL

INFORMATION– Local information unique to a particular function– Global information that spans the entire organization

SOFTWARE– Local processes that work with local information– Global processes that work with global information

PROCESSING POWER– Local processing power that executes local software to work with local

information– Global processing power that executes global software to work with

global information

Client/Server6-6

CLIENT/SERVER CLIENT/SERVER IMPLEMENTATIONSIMPLEMENTATIONS

There are 5 client/server implementation models (See Figure 6.3 page 214).

The models differ according to:1. Where the processing for the presentation of information occurs

2. Where the processing of logic or business rules occurs

3. Where the data management component (DBMS) and information (database) are located

Client/Server6-7

CLIENT/SERVER ADVANTAGESCLIENT/SERVER ADVANTAGES Distribution of processing mirrors

organizational workings Distribution is transparent Software reuse Servers can control information use Flexibility on the client side Scalability Support for electronic commerce

Client/Server6-9

CLIENT/SERVER CLIENT/SERVER DISADVANTAGESDISADVANTAGES

Existence of non-client/server-oriented software

Hidden costs– Only 30% of client/server costs are tied up in hardware

and software.– The remaining 70% is in the form of labor - both IT

professionals and knowledge workers.

Client/Server6-10

NETWORKS BY GEOGRAPHIC NETWORKS BY GEOGRAPHIC DISTANCEDISTANCE

LOCAL AREA NETWORK (LAN) - covers a limited geographic distance, such as an office, office building, or a group of buildings within close proximity.

WIDE AREA NETWORK (WAN) - covers large geographic distances, such as a state, a country, or even the entire world.– The Internet is a WAN.– A WAN is often a collection of connected LANs.

Network Technologies6-14

NETWORKS BY PHYSICAL NETWORKS BY PHYSICAL STRUCTURESTRUCTURE

NETWORK TOPOLOGY - refers to the physical arrangement of computers in a network. Network topologies include bus, ring, and star. See Figure 6.7 (page 224) for examples of each.

BUS TOPOLOGY - all computers are connected to a single communications medium over which all communications travel.


NETWORKS BY PHYSICAL NETWORKS BY PHYSICAL STRUCTURESTRUCTURE

RING TOPOLOGY- all computers are connected to a single communications medium, and that communications medium is connected at both ends to form a closed loop.

STAR TOPOLOGY - has a central computer from which all other computers radiate.


COMMUNICATIONS MEDIACOMMUNICATIONS MEDIA

BANDWIDTH refers to the range of frequencies available on a communications medium. Bandwidth really determines capacity and therefore speed.

Network Technologies

the paths, or physical channels, in a network over which information travels from one place to

another.

•Microwave•Satellite•Broadcast radio•Infrared

•Twisted-pair cable•Coaxial cable•Optical fiber

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GUIDED COMMUNICATIONS MEDIA transmit information over a closed path (such as a wire). Guided communications media include twisted-pair cable, coaxial cable, and optical fiber (See Figure 6.8 page 226).

TWISTED-PAIR CABLE - two insulated copper wires twisted in a spiral.

COAXIAL CABLE - one or more central wires surrounded by thick insulation.

OPTICAL FIBER - uses a very thin glass or plastic fiber through which pulses of light travel.


STP UTP

shield

main wire

insulation

ground

insulation

Fiber Versus CopperNot only does optical fiber provide enormous transmission bandwidth, but it takes a lot less room. The single strand of fiber in the center is equivalent in capacity to any one of the copper bundles in the picture. (Photo courtesy of Corning Incorporated.)

UNGUIDED COMMUNICATIONS MEDIA transmit information through the air. Unguided communications media include microwave, satellite, broadcast radio, and infrared.

MICROWAVES use a high-frequency band of radio broadcast transmission and dish-shaped antennae for sending and receiving information (See Figure 6.9 page 226).

SATELLITES are basically microwave transmission systems in space (See Figure 6.10 page 227).


BROADCAST RADIO are similar to microwaves and satellites, except that the receiving locations needn’t be in line of sight or have a dish-shaped antenna to receive information transmissions.

INFRARED uses a red light (below the visibility of the human eye) to transmit information.


COMMUNICATIONS PROCESSORSCOMMUNICATIONS PROCESSORS

The most common communications processor is a MODEM - a device that converts the digital signals of your computer into an analog form that can be transmitted over a telephone line and then converts the analog signal back to digital signals at the other end of the transmission.


the hardware devices that unite the various communications media and computers and route

communications throughout a network.

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MULTIPLEXER - aggregates several communications media and allows them to share a single communications medium that operates at a much higher capacity (Figure 6.12 page 229).

CLUSTER CONTROLLER - manages a group of devices that share a single high-speed communications medium, but doesn’t combine and separate communications (Figure 6.13 page 229).


FRONT-END PROCESSOR - handles the communications function for a host computer or server in a network (Figure 6.14 page 230).

INTERNETWORKING UNIT - a special hardware device that connects two or more networks. These units include bridges, routers, and gateways (Figure 6.15 page 231).

BRIDGE - connects two networks of the same kind.– ROUTER - connects networks that are somewhat dissimilar.– GATEWAY - connects networks that are completely dissimilar.


LAN segment

BRIDGE

LAN segment

REPEATER

LAN segment LAN segment

Switched E thernet,Switched Token Ring, ATM

E thernet, Token Ring

GATEWAY

SNA to TCP/IPIPX/SPX to TCP/IPSNA to DECnet, etc.

LAN

ROUTER

LAN

LAN

LAN HARDWARE

OSI LAYER 4 (Transport layer) and up

OSI LAYER 3 (Network layer)

OSI LAYERS 1 & 2 (Data link layers)

Convertfromoneprotocolto another.

TCP/IPIPX/SPXSNADECnetAppleTalk

SegmentLANsor convertbetweenE thernet &Token Ring.

Regeneratesignals tospan longerdistances.

Shared

HUB SWITCH

Dedicated

COMMUNICATIONS METHODS, COMMUNICATIONS METHODS, STANDARDS, AND PROTOCOLSSTANDARDS, AND PROTOCOLS Govern the manner in which information moves

from one place to another. Constitute the most technically complex aspect

of telecommunications and networks. There are literally hundreds of different

methods, standards, and protocols. Here, we introduce only a few.


ETHERNET - a communications standard for connecting components of a LAN that uses a shared communications medium, such as a bus topology.

TOKEN RING - a standard that uses a single electronic token or “clip board” that each component uses in turn to send a transmission within the network.

TRANSMISSION CONTROL PROTOCOL/INTERNET PROTOCOL (TCP/IP) - the standard by which the Internet works today.


AUI

10Base5 "Thick"

TransceiverTransceivers are usedto connect the adapterto the cable. Theyattach to the adaptervia the AUI port and tothe cable with screwconnectors or avampire tap that"bites" into the coax.

AUI

The BNC T-connectortwists onto the adaptersocket. Both sides of thecable must have femaleBNC connectors whichtwist onto each endof the T-connector.

BNC

10Base2 "Thin"

BNC

Connection to the adapterand to the hub is madewith RJ-45 connectors.

RJ-45

RJ-45

10BaseT & 100BaseT

hub

RJ-45 CONNECTOR (10BaseT, Type 3 Token Ring)

RJ-45 connectors are a larger version of the common RJ-11 telephone plug and socket. RJ-45s are used on 10BaseT "Twisted Pair" Ethernet as well as with Type 3 Token Ring devices.

TOKEN RING

Main Ring

LocalWorkgroup Workstation (client)

Server

Multi-StationAccess Units

(MAUs)

OutIn

Out

In

Token Ring networks use two types of connectors: the Type 1 IBM connector or the Type 3 RJ-11 connector.

FIBER DISTRIBUTED DATA INTERFACE (FDDI) - connects high-speed geographically dispersed LANs. FDDI uses two communications media that transmit in different directions and optical fiber (Figure 6.16 page 233).

ASYNCHRONOUS TRANSFER MODE (ATM) - a method for sending information that divides a long transmission into smaller units (called “packets”). See Figure 6.17 page 233.


Normal Operation

Primary

Secondary

Rerouted

Primary

break inline

INTEGRATED SERVICES DIGITAL NETWORK (ISDN) - the plan and international communications standard for the transition of the world’s public telephone system from analog to digital for the purpose of transmitting all formats of information simultaneously over twisted-pair telephone lines.

X.12 - the standard for transmitting common-formatted information during electronic data interchange (EDI).


COMMUNICATIONS SERVICE COMMUNICATIONS SERVICE PROVIDERSPROVIDERS

Networks of this type include public, private, value-added, and virtual private.

Your choice of these will affect cost, availability, services provided, speed, and security (See Tables 6.1 & 6.2 pages 230 & 234).


organizations that provide communications media and services to other organizations for creating networks that cover great distances.

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PUBLIC NETWORKPUBLIC NETWORK

Cost - operate on a pay-as-you-go basis. Availability - you must compete for use. Services - Only the ability to communicate information from one place to another. Speed - the slowest of all communications service provider network types. Security - little or no guarantee of privacy.


a network on which your organization competes for time and use with other people and

organizations.

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PRIVATE NETWORKPRIVATE NETWORK

Cost - fixed rate per period (if you lease). Availability - no competition for use. Services - additional services beyond just communicating information. Speed - typically faster than public networks. Security - higher than that of public networks.


a network that your organization either owns or exclusively leases the right to use the

communications media.

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VALUE-ADDED NETWORKVALUE-ADDED NETWORK

Cost - operate on a pay-as-you-go basis for time and use. Availability - no competition for use. Services - VAN owner provides additional services. Speed - typically faster than public networks. Security - higher than that of public networks.


a semipublic network that provides additional services beyond the simple communication of

information from one place to another.

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VIRTUAL PRIVATE NETWORKVIRTUAL PRIVATE NETWORK

Cost - flat fee per month plus fee for time used. Availability - no competition for use. Services - VPN owner provides limited additional services. Speed - typically faster than public networks. Security - higher than that of public networks.


a public network that guarantees availability to your organization, but does not provide you with

a dedicated line or communications media.

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ELECTRONIC COMMERCEELECTRONIC COMMERCEElectronic Commerce

a modern methodology that addresses the use of information technology as an essential enabler of business. Electronic commerce supports both internal and external business processes.

EXTERNAL ELECTRONIC COMMERCE addresses the use of IT to support how a business interacts with the marketplace.

INTERNAL ELECTRONIC COMMERCE addresses the use of IT to support internal processes, functions, and operations.

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EXTERNAL ELECTRONIC COMMERCE– Ordering products and services– Moving money without handling it– Reaching the exact customer– Gathering competitive intelligence

INTERNAL ELECTRONIC COMMERCE– Intranets– Telecommuting

Electronic Commerce

ELECTRONIC COMMERCE ELECTRONIC COMMERCE ACTIVITIES AND CONCEPTSACTIVITIES AND CONCEPTS

In this ChapterIn this Chapter

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ELECTRONIC DATA ELECTRONIC DATA INTERCHANGE (EDI)INTERCHANGE (EDI)

Ordering Products and ServicesOrdering Products and Services

EDI supports IOSs (from Chapter 2) and information partnerships (from Chapter 3)

EDI uses X.12 as its standard format

External Electronic Commerce

the direct computer-to-computer transfer of transaction information contained in standard business documents, such as invoices and

purchase orders, in a standard format.

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EDI AND YOUR ORGANIZATIONEDI AND YOUR ORGANIZATION

It’s becoming the standard for interorganizational transactions.

Many organizations won’t do business with you if you don’t have EDI.

EDI supports just-in-time (JIT) processes. Most virtual organizations use EDI to move information

electronically. The Internet enables small and medium size

companies to use EDI

External Electronic Commerce6-37

ELECTRONIC FUNDS ELECTRONIC FUNDS TRANSFER (EFT)TRANSFER (EFT)

Moving Money Without Handling ITMoving Money Without Handling IT

EFT eliminates the movement of all physical instruments, such as checks.

Instead, all information (and money) is transmitted electronically (See Figure 6.22 page 240).


the electronic passing of funds (money) between businesses and banks and their customers.

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INDIVIDUALIZED ELECTRONIC INDIVIDUALIZED ELECTRONIC ADVERTISINGADVERTISING

This form of advertising will use the Internet to deliver advertisements. The keys to this form of advertising are:

1.Extensive databases and contain customer buying habits

2.The presence of computers in every household


using technology to determine who gets what advertisements and electronically sending those

advertisements to only those people.

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GATHERING GATHERING COMPETITIVE COMPETITIVE INTELLIGENCEINTELLIGENCE

Many organizations use IT networks to gather competitive intelligence. For example,...– By accessing external databases that might have information about their competitors– By accessing competitors’ Web sites to read about upcoming product releases


information about the internal workings of your organization as well as the external market

surrounding your organization.

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INTRANETINTRANET

An intranet is simply your organization’s version of a private Internet. The special security software that protects against outside access is called a FIREWALL. If you provide outside access to your Intranet, you have an EXTRANET - a special application that

allows other organizations and people access to information published on an intranet.

Internal Electronic Commerce

an internal organizational Internet that is guarded against outside access by special

security software. (See Figure 6.25 page 244)

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WHAT’S SO GREAT ABOUT WHAT’S SO GREAT ABOUT INTRANETS?INTRANETS?

Intranets support the concept of virtual organizations. Intranets look just like the Internet (complete with

Web sites). Most all organizations have intranets (or plan to have

them). Most importantly - like the Internet - intranets are

platform independent. So, you can use an intranet to connect your entire organization.

Internal Electronic Commerce6-42

TELECOMMUTINGTELECOMMUTING

Telecommuters form two groups:1. Those people required to work outside the office because that’s where the real work is.

2. Those people who can work away from the home office because it doesn’t matter where they perform work.

In 1996, over 9 million people telecommuted. How many telecommute today? Telecommuting is only possible because of network technologies.

Internal Electronic Commerce

using communications technology to work in a place other than a central location.

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HOW ELECTRONIC COMMERCE HOW ELECTRONIC COMMERCE WILL AFFECT THE BUSINESS WILL AFFECT THE BUSINESS

WORLDWORLD Individualized Electronic Advertising Will Require

More Focused Market Information

Intranets Will Become the Standard for Communicating Internal Information

Telecommuting Will Allow Everyone to Stay at Home More

Electronic Commerce6-45

NETWORK PERFECT SERVICENETWORK PERFECT SERVICE

Network Reach - where the customer wants it (location)

Network Range - how the customer wants it (form)

Network Responsiveness - when the customer wants it (time)

Network Perfect Service

occurs at the customer’s moment of value. So, network perfect service includes...

See Figure 6.28 (page 252) for reach, range, and responsiveness in network perfect service.

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NETWORK REACHNETWORK REACH

Will the network be limited to a single location? Will the network support people and business processes across all domestic operations? Will the network support international activities? Will the network support customers, distributors, and suppliers?


addresses the people, organizations, and business processes that your network should

include.

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NETWORK RANGENETWORK RANGE

Does your network need to support only basic communications such as e-mail? Does your network need to enable shared information access? Does your network need to support computers that process transactions

independently? Does your network need to support computers that process transactions in

cooperation?


addresses the information and transactions that must travel across your network.

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NETWORK RESPONSIVENESSNETWORK RESPONSIVENESS

Does your network need to support information processing and communications that do not require an immediate response?

Does your network need to support information processing and communications that require an immediate response?

Does your network need to support on-demand responses to information processing and communications?


addresses the level of service - speed, reliability, and security - your network must provide?

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NETWORK PERFECT DELIVERYNETWORK PERFECT DELIVERY

24-hour-a-day availability may not be necessary. But, then again, it may be. Always understand your business needs and let those needs drive your network perfect

delivery requirements.


the extent to which your organization can meet the where, how, and when characteristics and

the extent to which your organization can guarantee those characteristics.

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TO SUMMARIZETO SUMMARIZE Networks (collections of IT components) support the

concept of telecommunications - the electronic movement of information.

Client/server networks:– are the emerging blueprint for all networks– separate local and global information, software, and processing

power– support 5 implementation models that differ according to where

presentation, logic, and data management software are executed.

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TO SUMMARIZETO SUMMARIZE Network-enabling technologies and concepts include:

– Types of networks– Communications media– Communications processors– Communications methods, standards, and protocols– Communications service providers.

Electronic commerce addresses the use of IT as an essential enabler of business. This includes both internal and external electronic commerce.

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TO SUMMARIZETO SUMMARIZE External electronic commerce includes:

– Ordering products and services– Moving money without handling it– Reaching the exact customer– Gathering competitive intelligence

Internal electronic commerce includes:– Intranets– Telecommuting

Network perfect service involves providing network capabilities where, how, and when the customer wants it.

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Documents

CHAPTER 6 NETWORKS Technologies for Electronic Commerce