MBA 703 Management Information Systems
– Dr. Harshali Sadhya
College of Business

Module 2 IS Component (Hardware)
Read the following chapters –
ISBB Chapter 2: Hardware
ISMG Chapter 5: Moore’s Law: Fast, Cheap Computing and What It Means for the Manager
ISMG Chapter 6: Understanding Network Effects
www.lsus.edu College of Business

ISBB Chapter 2 What is Hardware?
• Hardware: Physical parts of computing devices – those that you can touch• Digital devices • Binary – bits and bytes• CPU, motherboard• RAM VS hard disk and SSD’s• Input vs output devices• IoT• Portable computing• Commoditization of the PC
www.lsus.edu College of Business

ISMG Chapter 5 Moore’s Law
• “Chip performance per dollar doubles every eighteen months” • Microprocessor is the brain of a computing device • Five waves of computing• Fifth wave – IoT, smart devices• Limits of Moore’s Law – size, heat and power• Solutions – multicore processors and stacked or three-dimensional semiconductors• Supercomputers, grid, quantum and cloud computing• Drawbacks of the law – massive piles of e-waste
www.lsus.edu College of Business

ISMG Chapter 6 Network effects
• “Network effects = “Metcalfe’s Law” / “Network Externalities”
• “The value of a product or service increases as the number of users grows”• The value derived from network effects comes from three sources: exchange, staying power,
and complementary benefits• One-sided vs two-sided markets• Same-side vs cross-side benefits• Fierce competition, monopoly (winner-takes-all), oligopoly (market dominated by small
number of powerful sellers)• Technological leapfrogging in such markets is difficult• Does network effects only apply to tech products or services?• Does it suppress innovation?
www.lsus.edu College of Business

ISMG Chapter 6 Strategies for Network Effects• Move early• Subsidize adoption• Leverage viral promotion• Expand by redefining the market• Alliances and partnerships• Establish distribution channels• Seed the market• Encourage the development of complementary goods• Leverage backward compatibility• Rivals: Be compatible with the leading networks• Incumbents: Close off rival access and constantly innovate• Large, Well-Known Followers: Preannouncements
www.lsus.edu College of Business

Next week: Module 3 / Week 3
IS Component (Software)
www.lsus.edu College of Business

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