Chapter 15

Question 1

The fixed cost to produce a software product is effectively zero. (T/F)

Answer 1

False; Unlike physical products assembled from raw materials, the marginal cost to produce an additional copy of a software product is effectively zero. Just duplicate, no additional input required. Fixed costs are expensive √± they’re the people cost for programming, debugging, testing, among other things.

Question 2

_____ refers to replacing computing resources, which could include hardware or software, with services provided over the Internet.

Answer 2

Cloud computing; Cloud computing refers to replacing computing resources, which could include hardware or software, with services provided over the Internet. Cloud computing is making it more common for a firm to move software to run on someone else’s hardware.

Question 3

Which software allows a single computer to function as if it were several different computers?

Answer 3

Virtualization software; Virtualization software allows a single computer (or cluster of connected computers) to function as if it were several different computers, each running its own operating system and software and helps consolidate computing resources and creates additional savings and efficiencies.

Question 4

______________ offerings—free alternatives where anyone can look at and potentially modify a program’s code.

Answer 4

Open source software; Open source software (OSS) offerings—free alternatives where anyone can look at and potentially modify a program’s code—pose a direct challenge to the assets and advantages cultivated by market leaders.

Question 5

Which of the following is considered to be the flagship open source software product?

Answer 5

Linux; Open source software is not only available for free, but also makes source code available for review and modification. The flagship OSS product is the Linux operating system, now available on all scales of computing devices from cell phones to supercomputers.

Question 6

In the context of open source software, the term “hardened” is used to describe:

Answer 6

technology products with particularly strong security features; Many OSS vendors offer security-focused (sometimes called “hardened”) versions of their products. These can include systems that monitor the integrity of an OSS distribution, checking file size and other indicators to be sure that code has not been modified and redistributed by bad guys who’ve added a back door, malicious routines, or other vulnerabilities.

Question 7

_____ is the ability to either handle increasing workloads or to be easily expanded to manage workload increases.

Answer 7

Scalability; Scalability is the ability to either handle increasing workloads or to be easily expanded to manage workload increases. Scalability allows a firm to scale from start-up to blue chip without having to significantly rewrite their code, potentially saving big on software development costs.

Question 8

In contrast to other major platforms, there has never been a major open source software security vulnerability. (T/F)

Answer 8

False; The Heartbleed incident represents one of the largest security vulnerabilities in recent memory.

Question 9

Those looking to share open source projects, contribute to these projects, or examine the code of projects (a great way to learn) should visit the site ___________.

Answer 9

GitHub; GitHub, where millions of projects are hosted and shared (coding students take note: today’s employers assume you’re GitHub savvy since this is a service many use for project collaboration).

Question 10

Which of the following is a customer relationship management software?

Answer 10

Siebel; Many open source products come with the installation tools, support utilities, and full documentation that make them difficult to distinguish from traditional commercial efforts. Siebel is a customer relationship management software that competes with Salesforce.com and SugarCRM.

Question 11

Which of the following is an open source e-mail software that competes with Outlook server?

Answer 11

Zimbra; Zimbra is an open source e-mail software that competes with Outlook server.

Question 12

Oracle, a firm that sells commercial ERP and database products, provides Linux for free, selling high-margin Linux support contracts for as much as $500,000. This is an example of:

Answer 12

firms using OSS to wean customers away from competitors; Many firms are trying to use OSS markets to drive a wedge between competitors and their customers. By giving out Linux for free, Oracle hopes to wean customers away from Microsoft-a firm that sells many products that compete head-to-head with Oracle’s offerings.

Question 13

Total cost of ownership is all the cost associated with the design, development, testing, implementation documentation, training and maintenance of a software system. (T/F)

Answer 13

True; Total cost ownership is all the cost associated with the design, development, testing, implementation documentation, training and maintenance of a software system. Complexity can raise the total cost of ownership (TCO) of Linux desktops, with additional end-user support offsetting any gains from free software.

Question 14

_____ is a form of cloud computing where a firm subscribes to a third-party software-replacing service that is delivered online.

Answer 14

Software as a service; With software as a service (SaaS), a firm subscribes to a third-party software-replacing service that is delivered online.

Question 15

With _______, firms get the most basic offerings but can also do the most customization, putting their own tools (operating systems, databases, programming languages) on top.

Answer 15

IaaS; With IaaS, firms get the most basic offerings but can also do the most customization, putting their own tools (operating systems, databases, programming languages) on top.

Question 16

Which of the following is true about SaaS?
It is considered to be a risky approach as startup costs tend to be high.
Its associated costs are treated as variable operating expenses rather than fixed capital expenses.
It involves longer deployment times compared with installed packaged software or systems developed in-house
It lacks scalability thereby making it difficult for firms to ramp up during periods of unexpectedly high system use.
It lowers the costs associated with software and hardware but increases maintenance and staff expenses.

Answer 16

Its associated costs are treated as variable operating expenses rather than fixed capital expenses; Firms that adopt software as a service never actually buy a system’s software and hardware, so these systems become a variable operating expense. This flexibility helps mitigate the financial risks associated with making a large capital investment in information systems.

Question 17

The ____ between the customer and the vendor usually specify the levels of availability, serviceability, performance, operation, or other commitment requirements.

Answer 17

service level agreements; The service level agreement (SLA) is a negotiated agreement between the customer and the vendor. Vendors frequently sign an SLA with their customers to ensure a guaranteed uptime and define their ability to meet demand spikes.

Question 18

Products and services designed to target a specific industry are known as horizontal niches.

Answer 18

False; Going direct also means that SaaS applications are available anywhere someone has an Internet connection, making them truly global applications. This feature has allowed many SaaS firms to address highly specialized markets (sometimes called vertical niches).

Question 19

The major concern regarding software as a service involves:

Answer 19

the high dependence a firm develops with its SaaS vendor; If a traditional software company goes out of business, in most cases its customers can still go on using its products. But if its SaaS vendor goes under, they have got all of the customers’ data, and even if customers could get their data out, most organizations do not have the hardware, software, staff, or expertise to quickly absorb an abandoned function.

Question 20

Which of the following observations regarding software as a service is true?

Radical changes in a SaaS system’s functionality might result in unforeseen training costs.
One of the advantages of using SaaS vendors is that the firm can eliminate security concerns.
Installed software systems are often accused of being less flexible than their SaaS counterparts.
A firm’s internal network is critical to running an SaaS system which uses processes involving data transfer.
SaaS offerings usually work well when the bulk of computing happens at the client end of a distributed system.

Answer 20

Radical changes in a SaaS system’s functionality might result in unforeseen training costs; Organizations adopting SaaS may find they are forced into adopting new versions. This fact is important because any radical changes in a SaaS system’s user interface or system functionality might result in unforeseen training costs, or increase the chance that a user might make an error.

Question 21

SaaS means a greater consumerization of technology, which is rarely, if ever, works out well for firms. (T/F)

Answer 21

False; The consumerization of corporate technology isn’t all bad. Employee creativity can blossom with increased access to new technologies, costs might be lower than home grown solutions, and staff could introduce the firm to new tools that might not otherwise be on the radar of the firm’s IS Department.

Question 22

_____ is a scalability solution that is usually provided as an overflow service, kicking in as needed.

Answer 22

Cloudbursting; Cloudbursting provides excess capacity during periods of spiking demand.

Question 23

_____ are unpredicted but highly impactful/spiking events.

Answer 23

Black swans; Cloudbursting is appealing because forecasting demand is difficult and can’t account for the ultra-rare, high-impact events, sometimes called black swans. Planning to account for usage spikes explains why the servers at many conventional corporate IS shops run at only 10 to 20 percent capacity.

Question 24

_____ are massive networks of computer servers running software to coordinate their collective use.

Answer 24

Server farms; Server farms provide the infrastructure backbone to SaaS and hardware cloud efforts, as well as many large-scale Internet services.

Question 25

The high customer costs of cloud computing raise the barriers to entry for startup technology firms seeking cloud services.

Answer 25

False; By lowering the cost to access powerful systems and software, barriers to entry also decrease.

Question 26

A server running _____ software can create smaller compartments in memory that each behave as a separate computer with its own operating system and resources.

Answer 26

virtualization; Virtualization is a type of software that allows a single computer (or cluster of connected computers) to function as if it were several different computers, each running its own operating system and software. The most sophisticated of these tools also allows firms to combine servers into a huge pool of computing resources that can be allocated as needed.

Question 27

Virtualization offers firms many advantages, but one disadvantage is that it requires firms to buy more server computers than if organizations had not deployed virtualization.

Answer 27

False; The key benefit is that this lets firms stop buying separate servers for each application they want to run. Rather, organizations can create many virtual computers on a single machine (or cluster of machines that provide a pool of capacity) so hardware is used more efficiently.

Question 28

________________ are a type of virtualization that allows for shared operating systems, more resource savings and faster execution.

Answer 28

Containers; There’s another term that’s increasingly appearing in the tech and business press, containers. This is a type of virtualization that allows applications to share an operating system, but it still lets resources be shuttled around from low-powered hardware to massive pools of servers if capacity spikes. Since containers don’t need their own separate operating system, they use even less resources and execute faster.

Question 29

When a firm runs an instance of a PC’s software on another machine and simply delivers the image of what’s executing to the remote device, it is said to be operating on a(n) _____.

Answer 29

virtual desktop; Virtual desktops allow a server to run what amounts to a copy of a PC—OS, applications, and all—and simply deliver an image of what’s executing to a PC or other connected device. This allows firms to scale, back up, secure, and upgrade systems far more easily than if they had to maintain each individual PC.

Question 30

iBeacon is:

Answer 30

a technology that apps can use to determine a user’s location; New offerings that leverage tools (such as the app-engaging, location-based technology, iBeacon) are allowing venues to guide consumers to deals, products, and even parking spaces.

Question 31

Which of the following is not considered advantages of apps over packaged software and browser-based alternatives?

Unlike browser-based alternatives, smartphone apps can integrate with the OS and send out direct message to users.
Most app stores provide localization efforts, translating content uploaded by developers into language systems offered in local app stores throughout the world.
Apps offer richer, more interactive interface options than simple web-based applications.
App stores are always open
Apps are distributed at a fraction of the cost of conventional packaged software.

Answer 31

Most app stores provide localization efforts, translating content uploaded by developers into language systems offered in local app stores throughout the world; App stores are always open. Apps are distributed at a fraction of the cost of conventional packaged software. Apps offer richer, more interactive interface options than simple web-based applications. Unlike browser-based alternatives, smartphone apps can integrate with the OS and send out direct message to users.

Question 32

App platforms lower the switching costs of software developers when compared to costs associated with developing browser-based alternatives. (T/F)

Answer 32

False; App development often requires programmers to create a package using developer tools provided by mobile device manufacturers, further deepening switching costs. Others lament the walled garden created within apps where data is more tightly controlled by a service provider and where firms must comply to the usage policies of the platform provided (e.g., Apple, Google, Amazon, or Microsoft).

Question 33

Most firms will opt for an IT configuration that is 100 percent in-house, packaged, or SaaS. (T/F)

Answer 33

False; For most firms, technology decisions are not binary options for the whole organization in all situations. Few businesses will opt for an IT configuration that is 100 percent in-house, packaged, or SaaS.

Question 34

Which of the following is usually not an option for firms relying on unique processes, procedures, or technologies that create vital, differentiating competitive advantage?
Developing proprietary systems
Deploying teams of employees to create customized software
Developing entire efforts in-house
Purchasing package software from a vendor to automate such efforts
Employing public clouds

Answer 34

Purchasing package software from a vendor to automate such efforts; Netflix and Dell both considered third-party software to manage inventory fulfillment. But in both cases, these firms felt that mastery of these functions was too critical to competitive advantage, so each firm developed proprietary systems unique to the circumstances of each firm.