Chapter 5: IT Infrastructure and Emerging Technologies

Information technology infrastructure is defined as, "the shared technology resources that provide the platform for the firm’s specific information systems application. IT infrastructure includes investments in hardware, software, and services-such as consulting, education, and training.” (Laudon 165). The infrastructure extends beyond just the number of desktops and printers a company owns but instead incorporates all of the equipment, software, application, buildings used to house the servers, telecommunications, extra education and trainings, research and development, and much more. Companies spend trillions of dollars on new infrastructure as well as updating old infrastructures.

It’s important that the new systems work with the old systems, often referred to as legacy systems. There are five stages in the IT infrastructure evolution including the mainframe era, the personal computer era, the client/server era, the enterprise computing era, and the cloud and mobile computing era.

My favorite out of the five is the most current, cloud computing. It essentially means that companies are able to purchase or rent software, storage, and networking over the Internet. There’s no need for constantly updating your hard drive to the next available gigabyte or terabyte but instead you use the Internet to store your files. I use iCloud which is the same concept as cloud computing, only for personal use. Now you can safely store millions of pictures, videos, and personal files online instead of worrying about your computer crashing and losing your valuable content. You can also access this information from any type of computer or device as long as you have Internet.

This concept has revolutionized the way we are able to do business by providing on-demand network access from anywhere in the world. The best part for companies is that this type of infrastructure is not as expensive as owning all of the hardware and storage. The company is buying into a service and therefore does not have to make large investments.

Choosing how to invest in the IT infrastructure of a company is an important and challenging decision for managers. What will an IT manager do when the company downsizes and they still have large investments from previous IT purchases or expensive subscription fees to maintain? Managers have a critical decision when debating between renting or buying the IT assets. If they spend too much, the firm’s finances will be tied up and inaccessible but if they spend too little, the firm won’t be able to provide all of the services that their competitors will be able to. Managers can use the total cost of ownership (TCO) model to evaluate the costs associated with the technology and determine whether it is best to rent or buy.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010.