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Chapter 5

OMIS 3710 Chapter Notes - Chapter 5: Mobile Computing, Cloud Computing, Software As A Service

Operations Management and Information System
Course Code
OMIS 3710
Henry Kim

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Chapter 5: Moore’s Law: Fast, Cheap Computing and What It Means for the Manager
5.1 Introduction
Moore’s Law
o Textbook definition: chip performance per dollar doubles every 18 months
o Wikipedia definition: the observation that the number of transistors in a dense
integrated circuit doubles approximately every two years… Intel executive David
House predicted that chip performance would double every 18 months (being a
combination of the effect of more transistors and the transistors being faster).
o From a strategic perspective, these trends suggest that what is impossible from a
cost or performance perspective today may be possible in the future. Fast/cheap
computing also feeds a special kind of price elasticity where whole new markets
are created. This fact provides an opportunity to those who recognize and can
capitalize on the capabilities of new technology. As technology advances, new
industries, business models, and products are created, while established firms
and ways of doing business can be destroyed.
o Managers must regularly study trends and trajectory in technology to recognize
opportunity and avoid disruption.
o Moore’s Law (and related advances in fast/cheap technologies in things like
storage and telecommunications) has driven six waves of disruptive, market-
transforming computing. The sixth wave involves embedding intelligence and
communications in all sorts of mundane devices. Some point to a future
“Internet of Things” where objects will collect and share data and automatically
coordinate collective action for radical efficiency improvements.
Key Terms
o Semiconductor
In a business context refers to ‘computer chips’ (e.g. The semiconductor
industry is the chip business)
o Microprocessor
The calculating brain of a computer. Intel dominates this market in pcs,
ARM (licensed) dominates smart phones
o Volatile memory
Requires a charge to hold its value (e.g. The RAM in your PC, which loses
data when the power is cut)
o Non-volatile memory
Retains value even when not charged (e.g. The flash memory in your
o Solid state
Electronics without moving parts (e.g. ‘chips’)
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