Significance of Information Technology - Trends of IT

Trends in IT

IT, as defined in this chapter, reflects the combination of three key technologies: digital computing, data storage, and the ability to transmit digital signals through telecommunications networks. Rapid changes in semiconductor technology, information storage, and networking, combined with advances in software, have enabled new applications, cost reductions, and the widespread diffusion of IT. The expanding array of applications makes IT more useful and further fuels the expansion of IT. Semiconductor Technology  Enormous improvements in the performance of integrated circuits and cost reductions brought about by rapid miniaturization have driven much of the advances in IT. See sidebar, "Moore's Law." A related trend is the migration of computing into other devices and equipment. This is not a new trend—automobiles have been major users of microprocessors since the late 1970s—but as semiconductor chips become more powerful and less expensive, they are becoming increasingly ubiquitous. Also, new capabilities are being added to chips. These include microelectromechanical systems (MEMs), such as sensors and actuators, and digital signal processors that enable cost reductions and extend IT into new types of devices. Examples of MEM devices include ink-jet printer cartridges, hard disk drive heads, accelerometers that deploy car airbags, and chemical and environmental sensors (Gulliksen 2000). Trends toward improvements in microelectronics and MEMs are expected to continue. See sidebar, "Nanoscale Electronics." Information Storage Disk drives and other forms of information storage reflect similar improvements in cost and performance.  As a consequence, the amount of information in digital form has expanded greatly. Estimates of the amount of original information (excluding copies and reproductions) suggest that information on disk drives now constitutes the majority of information (Lyman and Varian 2000). Increasingly, much of this information is available on-line. Computers, reflecting the improvements in their components, have shown similar dramatic improvements in performance. Due to improvements in semiconductors, storage, and other components, price declines in computers (adjusted for quality) have actually accelerated since 1995.  Networking  The third trend is the growth of networks. Computers are increasingly connected in networks, including local area networks and wide area networks. Many early commercial computer networks, such as those used by automated teller machines and airline reservation systems, used proprietary systems that required specialized software or hardware (or both). Increasingly, organizations are using open-standard, Internet-based systems for networks. As people have been able to interconnect and share information with each other, the value of IT has increased. See sidebar "Metcalfe's Law." The growth in networking has been enabled by rapid advances in optical networking. In 1990, a single optical fiber could transmit about 1 billion bits per second; by 2000, a single fiber could transmit nearly 1 trillion bits per second (Optoelectronics Industry Development Association 2001). The growth in networking is best illustrated by the rapid growth of the Internet. Worldwide, there were nearly 100 million Internet hosts—computers connected to the Internet—in July 2000, up from about 30 million at the beginning of 1998.  Networking is evolving in several ways: more people and devices are becoming connected to the network, the speed and capacity of connections are increasing, and more people are obtaining wireless connections. See sidebar, "Wireless Networking." Applications of IT  A fourth trend is the ever-increasing array of applications that make IT more useful. Computers were originally used primarily for data processing. As they became more powerful and convenient, applications expanded. Word processing, spreadsheets, and database programs were among the early minicomputer and PC applications. Over the past two decades, innovations in software have enabled applications to expand to include educational software, desktop publishing, computer-aided design and manufacturing, games, modeling and simulation, networking and communications software, electronic mail, the World Wide Web, digital imaging and photography, audio and video applications, electronic commerce applications, groupware, file sharing, search engines, and many others. The growth and diversity of applications greatly increase the utility of IT, leading to its further expansion. In the 1960s, computers were used primarily in the R&D community and in the offices of large companies and agencies. Over the past few decades, the expansion of applications has contributed to the rapid diffusion of IT to affect nearly everyone, not just the relatively few people in computer-intensive jobs. IT has become common in schools, libraries, homes, offices, and businesses. For example, corner grocery stores use IT for a variety of electronic transactions such as debit and credit payments, and automobile repair shops use IT to diagnose problems and search for parts from dealers. New IT applications are still developing rapidly; for example, instant messaging and peer-to-peer communication systems such as Napster are examples that have become popular in the past 2 years. See sidebar, "Peer-to-Peer Applications."   Moore's Law  The number of transistors on a chip has doubled approximately every 12 to 18 months for the past 30 years—a trend known as Moore's Law.  This trend is named for Gordon Moore of Intel, who first observed it. Performance has increased along with the number of transistors per chip, while the cost of chips has remained generally stable. These factors have driven enormous improvements in the performance/cost ratio. Moore's Law has become the basis for planning in the semiconductor industry. The International Technology Roadmap for Semiconductors (2000), a plan for semiconductor development prepared collaboratively by semiconductor industries around the world, is geared toward continuing improvements at approximately the rate predicted by Moore's Law. Kurzweil (2001) suggests that this trend is not limited to semiconductors in the last few decades but that calculations per second per dollar have been increasing exponentially since electromechanical calculators were introduced in the early 1900s. Nanoscale Electronics  As miniaturization proceeds, it may lead to the emergence of nanoscale devices (devices with structural features in the range of 1 to 100 nanometers). The International Technology Roadmap for Semiconductors (2000) projects semiconductor manufacturing to approximately 2010, at which time semiconductors are expected to have 0.1-micron (100-nanometer) structures. Beyond this, the principles, fabrication methods, and ways of integrating devices into systems are generally unknown. Potential applications of nanoscale electronics 10–15 years in the future include (National Science and Technology Council 2000): microprocessor devices that continue the trend toward lower energy use and cost per gate, thereby improving the efficacy of computers by a factor of millions; communications systems with higher transmission frequencies and more efficient use of the optical spectrum to provide at least 10 times more bandwidth, with consequences for business, education, entertainment, and defense; small mass storage devices with capacities at multi-terabit levels, 1,000 times better than today; and integrated nanosensor systems capable of collecting, processing, and communicating massive amounts of data with minimal size, weight, and power consumption. Such advances would continue to expand the cost effectiveness and utility of IT in new applications. Metcalfe's Law  Metcalfe's Law states that the value of a network grows in proportion to the square of the number of users (Metcalfe 1996; and Downes, Mui, and Negroponte 1998). Just as the value of a telephone to a user depends on the number of other people who also have a telephone, the value of being on a computer network depends on how many other people are also on the network. As a network grows, its value to each individual user increases, and the total value of the network increases much faster than the number of users. This is also referred to as "network effects." Technologies other than telecommunications also exhibit network effects. The value of owning a certain type of word processing software, for example, depends on how many other people use the same (or at least compatible) software to share files. A more widely used technology also becomes more valuable because more people are trained to use or service it. The more valuable a technology becomes, the more new users it will attract, increasing both its utility and the speed of its adoption by still more users. Metcalfe's Law explains why the adoption of a technology often increases rapidly once a critical mass of users is reached and the technology becomes increasingly valuable. Because many technology developers are now aware of this phenomenon, initially they often heavily subsidize technologies that exhibit network potential to attain a critical mass of users. The Internet has been the most dramatic demonstration of Metcalfe's Law. Many Internet-related services also exhibit network effects, and many companies have heavily discounted their services in hopes of later being able to capitalize on the value of the network they have created. The presence of network effects has implications for antitrust law. It implies that markets with strong network effects may tend toward monopoly, as the dominant technology becomes more valuable and the less widely used technology becomes less valuable (even if it is technically superior). It also may become more difficult for new entrants to become established if they need to compete with an established network. Wireless Networking  At present, most people in the United States connect to the Internet through wires. Much of the growth in Internet connections, however, is expected to be through wireless connections. Currently, more people around the world have mobile phones than Internet access.  Over the next few years, most mobile phones will obtain Internet access (Wong and Jesty 2001). By 2005, the penetration level of mobile devices (including phones) with data capabilities is expected to approach mobile phone user penetration levels in the United States, Western Europe, and Japan. It is expected that, by then, all mobile terminals will be data enabled and subscribers will be able to access data and Internet services via mobile phones. As a result, it is likely that in many areas of the world where there are more mobile phone users than personal computer users, more people will have access to the Internet through mobile phones than through computers. International Data Corporation estimates that the number of wireless Internet subscribers in the United States, Western Europe, Asia/Pacific, and Japan will increase from 5 million in 1999 to more than 329 million by 2003 (Wrolstad 2001). Mobile Internet usage is growing particularly fast in Japan, primarily because of the popularity of the relatively low-cost NTT DoCoMo "I-mode" phones, which are being widely used for e-mail and games. Because of the relatively small screen size, limited memory, and weak data entry capabilities of mobile phones, Internet access through mobile phones is qualitatively different from access through computers. Efforts are under way to determine what applications will work effectively over mobile phones. Successful mobile applications are likely to differ from typical computer-based applications. In addition to limited e-mail and Web browsing capabilities, mobile phones may also offer various location-based services, such as information on restaurants, shops, and services in the vicinity of the phone's current location. Peer-to-Peer Applications  A new class of applications known as peer-to-peer (P2P) services have become widely used. These applications take advantage of computing resources, such as storage, processing cycles, and content, available at the "edge" of the Internet, and include computers that are only temporarily connected to the Internet (Shirky 2000). In its early days, the Internet primarily connected computers at research institutions, and these computers shared resources on a fairly equal basis. Since the advent of the World Wide Web, the Internet has evolved into a client-server architecture, in which client computers connect to the Web primarily to download information. Many client computers are not permanently connected to the Web, do not have permanent Internet Protocol (IP) addresses, and thus are not available for other computers to access. P2P services provide a way for these computers to be available to others on the Internet. The most widely known of the P2P services is Napster. Founded in 1999 by Shawn Fanning, then an 18-year-old college freshman, Napster enables users to find and access music files that are available on other users' computers. By March 2001, the Napster service had grown to the point where it was accessed by more than 4 million individual users each day (defined by unique IP addresses) and consistently had up to 500,000 concurrently active users (Napster 2001). Because Napster made it possible for people to share and copy copyrighted information, it has also raised some substantial intellectual property concerns. As a result of litigation, Napster has been required to remove copyrighted material from its network. Many other less visible and less controversial P2P applications have been developed, including applications that let people access computer-based information across companies or government agencies, and applications that use idle computers to carry out complex scientific calculations (Ante, Borrus, and Hof 2001).