Chapter 4 Data Communications and Networking 1 of 40 .docx

Chapter 4: Data Communications and Networking
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ACCOUNTING INFORMATION SYSTEMS: A DATABASE
APPROACH
by: Uday S. Murthy, Ph.D., ACA and S. Michael Groomer,
Ph.D., CPA, CISA
Data Communications and Networking
Learning Objectives
After studying this chapter you should be able to:
• identify the five components of a telecommunications
network,
• distinguish between terminals and workstations,
• explain the various types of transmission links, including
physical and “through
the air” links,
• differentiate between alternative transmission methods such as
analog and digital
transmission, circuit switching and packet switching,
• describe in general terms the functioning of line sharing

devices and switches,
• explain the role of network architecture and standards,
• explain the OSI telecommunications model,
• distinguish between local area networks and wide area
networks,
• describe alternative computer network configurations
including ring, star, and bus
networks,
• understand the various types of wide area networks, including
the options for
centralized data processing networks and distributed data
processing networks,
• explain the concept of a client/server system,
• understand the architecture and functioning of the Internet,
• distinguish between the Internet and Intranets,
• describe the operation of electronic data interchange
arrangements between
organizations,
• explain the concept of e-business and its emerging importance
in the global
economy.
The dramatic technological advances that swept the computer
industry in the seventies
and eighties resulted in the development of extremely fast and

powerful personal
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computers. These personal computers made it possible to
maximize individual
productivity. However, most current hardware and software
technological developments
have been aimed at maximizing group productivity.
Increasingly, personal computers
are networked together to enable communication between users
and to facilitate
sharing of data and resources. This chapter is aimed at
providing a basic understanding
of a range of telecommunications concepts including local area
and wide area networks.
We also discuss some recent communications technologies
affecting business such as
client/server systems, the Internet, and electronic data
interchange. Almost all
computer systems in organizations today are networked, and
these networked
computer systems invariably house a wealth of accounting
information. It is therefore
important for accountants to have a working knowledge of data
communications and
networking concepts.
Telecommunications concepts
Telecommunications refers to the electronic transmission of
information from a point of
origin to a point of destination. A telecommunications network

is composed of five
components: (1) terminals and workstations, (2) transmission
links, (3) transmissions
methods, (4) nodes and switches, and (5) architecture and
standards. Each of these
components is now discussed in some detail.
Terminals and workstations
User interaction with a network is almost always via a terminal
or a workstation. As
shown in the following figure a terminal is a device with a
screen and a keyboard but
usually does not have any data storage or processing capability
independent of its
connection to the network. For this reason, such terminals are
referred to as dumb
terminals. Such terminals are adequate in some settings, for
example in banking,
where no independent storage and processing capability is
needed.
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Workstations on the other hand do possess data storage and
processing capability
independent of the network connection. The term “intelligent
workstation” is often used

and the device is invariably a personal computer, as shown in
the figure below. Even a
point of sale cash register could serve as an end-user
input/display device in a network.
Terminals and workstations are the devices the user interacts
with. At the sending end,
these devices convert text, graphics, and speech into electronic
signals. These signals
must eventually be reconverted from electronic form back to the
original form (text,
graphics, speech) if the destination is another user. If the
destination is simply a
computer or a server, then the signals remain in electronic form.
Regardless of whether
a terminal or a workstation is used, a network interface card
(NIC for short) is required
to physically connect the terminal or workstation to the
network. In personal computers
(the most common type of workstation), a network interface
card is an expansion board
that works with the network operating system to control the
flow of information over the
network.
Transmission links
Transmission links, the next component of a
telecommunications network, are the
links that actually carry the electronic transmissions and can be
either physical or

“through the air.” Twisted pair telephone wire, coaxial cables,
and fiber optic cables are
examples of physical transmission links. The figure below
shows these cable types.
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Twisted pair wire is the copper wire used to connect telephone
devices. The wire is
twisted to enhance signal transmission relative to straight wire.
Twisted pair wire can be
either shielded or unshielded. Shielded twisted pair permits
higher data transmission
speed and is less susceptible to interference, but is also more
expensive than
unshielded. Unshielded twisted pair is more common in homes
and
businesses. Coaxial cables (or simply coax) are used for cable
television and to
connect a video cassette recorder to a television. Coax cables
comprise a number of
insulated wires inside a thick (usually black) insulated
sheathing. Relative to twisted
pair, coax cables are capable of far higher transmission speeds
and are also less
susceptible to electromagnetic interference. Fiber optic cables
carry only digital signals
and can carry signals at very high speeds. Data transmission on

fiber optic cables is in
the form of light pulses. Fiber optic cables can transmit data at
very high frequencies
thereby providing much larger transmission capacity, or
bandwidth, than twisted pair
wire or coax cables. Since transmissions along a fiber optic line
occur using pulses of
light, this medium is essentially impervious to interference from
electromagnetic
sources. However, fiber optic cables are more fragile than
twisted pair and coax cables
and are usually more expensive.
In contrast to the above physical transmission links, wireless
transmission represents
a more recent option for carrying electronic transmissions
“through the air.” The
categories of wireless transmission include infrared, microwave,
satellite, the so-called
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“Wi-Fi” protocol for wireless networking of personal
computers. The first of these
wireless transmission links is infrared transmission, which
involves the movement of
extremely short wavelengths in a straight line. Infrared
transmission, so called because
its range is below the visible spectrum, is the transmission
technology used for remote
control units on audio and video equipment. As you may have
experienced, infrared
waves have a very limited range and cannot penetrate solid

objects. Whereas infrared
transmission is used only for very short distances, microwave
and satellite transmission
are used to cover long distances. The figure below depicts
microwave and satellite
transmission.
Microwaves are very high frequency (above 1 gigahertz) radio
waves that travel along
a “line of sight” path. Since microwaves travel in a straight line
(hence the term “line of
sight”), repeater stations must be placed every 50 miles or so to
relay the signal from
one point to the next. Microwave transmission is also very high
bandwidth and carries
over half of all telephone and television traffic in the U.S. The
final “through the air”
transmission link option is satellites. Radio signals are sent
from ground stations to
satellites, which then transmit the signals to other ground
stations at distant locations.
The satellites are usually in a geosynchronous (or
geostationary) orbit which means that
they rotate at the same speed as the earth's rotation speed such
that they always
appear above the same point relative to the earth's surface. One
communication
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satellite in a geosynchronous orbit can cover about 30% of the
earth's surface.
Needless to say, leasing time on a satellite link can be very
expensive due to the high
cost of launching and operating a communications satellite.
Commonly known as “Wi-Fi,” IEEE 802.11 refers to a family of
specifications used in
wireless LAN technology. Developed by the Institute of
Electrical and Electronics
Engineers, 802.11 specifies an over-the-air interface between a
wireless client and a
base station or between two wireless clients. There are three
variants of 802.11 that you
should be aware of, each with distinct advantages and
disadvantages: 802.11b,
802.11a, and 802.11g. The 802.11b protocol was issued the
earliest and it operates in
the 2.4 GHz frequency range, providing a throughput of up to
11 Mbps. Released later,
the 802.11a standard operates in the 5 GHz frequency range and
provides a maximum
data transfer rate of 54 Mbps. However, devices using the
802.11a and 802.11b
protocols are not compatible with one another, since they
operate in different frequency
ranges. The 802.11g protocol has since superseded both
802.11a and 802.11b and is
the protocol in most widespread use nowadays. Operating in
the 2.4 GHz frequency
range, the 802.11g protocol provides data transfer rates in
excess of 20 Mbps. Devices
conforming to the 802.11g protocol are backward compatible
with those using the
802.11b protocol. The most recent specification in the 802.11

family is the 802.11n
protocol. This protocol operates in the 2.4 GHz to 5.0 Ghz
frequency range and is
capable of data transmission throughput of 144 Mbps.
One more technology that is worth some note is Bluetooth
technology (named after
Harald Blatand--a 10th century king of Denmark; the name
Blatand roughly translates to
blue tooth). Bluetooth wireless technology is an industry-
standard protocol that
provides short-range wireless connections between Bluetooth
devices, such as cellular
phones, headsets, keyboards, mouse products, printers, and
computers. Because
Bluetooth wireless technology uses radio transmission, data is
transmitted quickly.
Bluetooth wireless technology helps ensure that interference is
minimal and that data
transmission is secure. However, compared to Wi-Fi, Bluetooth
provides lower
bandwidth and requires that the devices be in close physical
proximity.
Transmission methods and modes
Transmission methods consist of either analog or digital
transmission using either
circuit switching or packet switching. Analog transmission is
used for voice transmission
by continuously varying an electrical signal to correspond with
the variation in the sound
wave produced by the speaker's voice. In digital transmission, a
signal has only two
states—0 and 1. Thus, all that is needed is a mechanism for
distinguishing between 0s

and 1s, and this is accomplished by sending a positive voltage
for a 0 and a negative
voltage for a 1. In analog transmission, speeding up the signal
results in distortion of the
voice signal, much like fast forwarding an audio tape results in
a “squeaky” voice. Digital
transmission in contrast results in no such distortion when the
transmission speed is
increased. Analog and digital transmission are depicted in the
figure below.
http://wi-fi.org/
http://www.bluetooth.com/bluetooth/
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Networks typically use either circuit switching or packet
switching to transmit messages.
In circuit switching, the method used for placing telephone
calls, the signal is routed
through various nodes from the point of origin to the point of
destination, and the
selected path is fixed during the duration of the session. The
path is also dedicated—
once a session (phone call) is initiated then there can be no
other users (callers) on the
channel connecting the sender and receiver. In packet switching
information to be
sent is divided into small blocks called packets. Each packet is

coded with the
destination address and is sent separately over the network.
Different packets can take
different routes through the network to reach the destination
node. As each node
receives a packet, it checks the destination address on the
packet and either accepts
the packet or sends it further along if it is intended for another
recipient. Upon arrival at
the destination, the packets are assembled together in the
correct order and presented
at the receiver's terminal. Unlike circuit switching, packet
switching does not tie up a
channel since there is no dedicated path from the sender to the
receiver. Packet
switching thus results in more efficient use of a network than
circuit switching. Note that
the foremost “public” wide area network—the Internet—uses
packet switching for data
transfer. When you send an email message over the Internet, the
message is formed
into packets and sent from node to node until it reaches the final
destination.
For the transmission methods discussed above, the transmission
mode can be either
synchronous or asynchronous. In synchronous transmission, a
timing signal is used
to keep the sending and receiving unit synchronized to one
another. Synchronous
transmission requires expensive equipment but usually results in
faster data
transmission. In asynchronous transmission, the sending and
receiving units are not
synchronized to one another. Although asynchronous
transmission is cheaper (no

expensive timing devices are needed), data transmission is
slower. Most PC to
mainframe communication is conducted in asynchronous mode.
Line sharing and switching devices
The fourth component of telecommunications networks are line
sharing and switching
devices whose function is to receive signals from sending nodes
and efficiently direct
those signals to the intended destination. These devices can be
thought of as airline
hubs or highway interchanges where traffic from all directions
gets routed appropriately.
Line sharing devices include multiplexers and front end
processors. Switching devices
include bridges, routers, and gateways.
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A multiplexer (MUX for short) is a line-sharing device that
bundles small streams of
slow-speed traffic together and places them on a single high
capacity high-speed line.
At the receiving end, another multiplexer unbundles the traffic
so that individual
messages can be delivered to the appropriate locations. The
sharing of a single line
between many users results in cost savings since the multiplexer
obviates the need for
separate lines from the point of origin to the point of
destination for each user. All that is
needed is a separate line from each user to the multiplexer

which then uses a single
line to transmit messages originating from multiple sources. In
this manner, multiplexers
permit the efficient transmission of a series of messages while
maintaining a separation
between each of the messages. If a company has thousands of
employees that need to
be connected to the Internet, multiplexers can be used to reduce
the number of physical
connections directly to the Internet—many users may simply be
connected to the
Internet through a multiplexer.
Two common multiplexing methods are frequency division
multiplexing (FDM) and time
division multiplexing (TDM). FDM is used with analog systems
(rather than digital
systems). Signals from multiple devices are modulated using
different frequencies and
then stacked together for transmission over the single line.
TDM is used with digital
systems. In TDM, signals from each device are divided into
one-bit time frames. These
time frames from all devices are then interleaved together such
that the individual
signals are merged into a single multiplexed signal.
A front-end processor is a device that connects the multiplexer
to the mainframe
computer or server that is at the receiving end of the messages.
While the multiplexer
simply separates the bundled signals so that messages can be
distinguished from one
another, the front-end processor performs error checking and
control functions that
would otherwise have to be performed by the computer or

server. Packets of data can
be checked for errors, with messages that fail error checks being
logged and stored in a
separate file. The front-end processor can ensure that access to
the computer/server is
being gained only be authorized users. Finally, messages can be
stored in a buffer until
the computer/server is free and requests input of the messages.
In essence, the front-
end processor relieves the computer or server from performing
these functions. The
following figure depicts multiplexers and a front end processor.
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Switching devices are hardware components that direct traffic
over the physical network
transmission links. They include bridges, routers, and gateways.
A bridge is a device
used for interconnecting local area networks (to be discussed a
little later in the chapter)
so that they can exchange data. Bridges can connect networks
even if they do not use
the same wiring or networking protocols. Imagine a large
organization with several
departments, with each department having a local area network.
Bridges between the
departmental networks will enable users in different

departments to communicate with
one another. A router is an intelligent connecting device that is
used to move data from
a source to a destination. Routers can connect networks that
use either the same
protocol, or dissimilar but compatible protocols. As the name
suggests, a router selects
the most efficient path to the destination by looking up routing
tables of all possible
paths between the origin and destination networks. Routers are
thus more intelligent
than bridges because they can search for the best path from
source to destination.
A brouter is a combination of bridge and router—it performs
both tasks. A gateway is
needed to connect networks using dissimilar protocols that are
not compatible with one
another. The gateway handles the task of protocol conversion
thus enabling
communication between the sending and receiving networks.
Gateways are thus more
complex than routers because of the transformation that needs
to be performed to the
messages as they move across incompatible architectures.
Architecture and standards
We have already briefly introduced the concept of a protocol or
a communication
convention. The final component of a telecommunications
network is its architecture
and standards. This component addresses the transmission
protocols used and the
specific network architecture around which the various
components are organized.
A protocol defines the procedures to follow when transmitting
and receiving data. It can

be thought of as a “common language” for computers to talk to
one another. Protocols
define the format, timing, sequence, and error checking
mechanisms that allow
telecommunications to occur.
Open Systems Interconnection (OSI) model
While many hardware and software vendors have attempted to
promote their own
protocols, the International Standards Organization (ISO) has
set forth a reference
model for networking called the Open Systems Interconnection
(OSI) model. The OSI
model consists of seven interconnected layers, as shown in the
figure on the next page.
http://en.wikipedia.org/wiki/OSI_model
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The application layer is the highest layer in the OSI model and
is what the user sees
(at both the sending and receiving ends of the communication
network). It defines the
way the user's application program interacts with the network.
The application program
could be either electronic mail, database management, or a
terminal emulation program

(for connecting to a mainframe computer system). It is in the
application layer that the
user's message is converted from human readable form to
computer readable form with
the message header indicating the sender and intended receiver
of the message. The
presentation layer defines the way that data is formatted,
presented, converted, and
coded. In essence, the presentation layer ensures that the
message is transmitted in a
language that the receiving computer can understand (often
ASCII—American Standard
Code for Information Interchange). If necessary, or as directed
by the user, the
message is also compressed and encrypted at this stage. The
session layer
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coordinates communication between the sender and receiver. In
essence, this layer
maintains the session for as long as it is needed, performing
security, logging, and any
administrative functions that are needed. It is in the session
layer that the mode of
communication is established—either full duplex where both
parties in the
communication can send and receive messages simultaneously,
or half duplex where
the parties must take turns communicating. All of these details
are recorded and placed
into a “session header” for the session.

The transport layer, layer 4, defines protocols for message
structure and supervises
the validity of the transmission by performing error checking.
In effect, the transport
layer protects the data being transmitted. The protection comes
from checksum tests—
mathematically calculated sums based on the contents of the
data being sent. The
“transport header” records each segments checksum and its
position in the message.
The third layer, the network layer, defines protocols for data
routing to ensure that the
data arrives at the correct destination node. It is the network
layer that essentially
selects a route for the message, using protocols such as TCP/IP
(transmission control
protocol/internet protocol), or IPX/SPX which is the protocol
for Novell networks.
Routers, discussed above, are used at the network layer. The
data are formed into
packets and a header is added that contains the sequence and
number of packets and
the network address of the destination. Layer 2, the data-link
layer, validates the
integrity of the flow of data between nodes. This validation is
performed by
synchronizing blocks of data and controlling the flow of data. In
this manner, the data-
link layer supervises the transmission. It confirms the checksum
and then addresses
and duplicates the packets. The data-link layer keeps a copy of
each packet until it
receives confirmation from the next point along the
transmission route that the packet
has been received. Bridges, discussed above, are used at the

data-link layer. Finally,
the physical layer, is the actual transmission hardware or link
along which the
messages physically pass. It is only along layer 1 that messages
physically move from
the origin to the destination. If phone lines are being used, then
it is the physical layer
that actually converts the digital signals into analog signals so
that they can be carried
on the phone line. Intermediate nodes along the transmission
path verify the checksum
and might reroute the message in light of congestion in the
network.
At the receiving end, the message passes through the same
seven layers, in reverse.
The physical layer reconverts the analog signals into digital
form (bits). The data-link
layer recomputes the checksum, confirms arrival, and logs in
the packets. The network
layer recounts each packet for security and billing purposes.
The transport layer again
recalculates the checksum and rebuilds the message segments.
The session layer
holds the parts of the message until the message is complete and
then sends it to the
next layer. If the message was compressed, the presentation
layer expands it, and if the
message had been encrypted it is decrypted at this stage.
Finally, the application layer
reconverts the bits into readable characters and directs the data
to the appropriate
application (e.g., email).
A few comments about the seven layer OSI model are
appropriate. First, each layer is

independent allowing protocols for each layer to be defined and
developed independent
of other layers. Second, communication is possible only
between adjacent layers. Layer
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3 can communicate only with layer 2 and layer 4. Finally, the
model makes a distinction
between data communication tasks and data manipulation tasks.
Layers 1 through 4
(physical through transport) perform data communications tasks
which interact primarily
with hardware devices. Layers 1 and 2 interact only with
hardware devices, whereas
Layers 3 and 4 interact with both hardware and software
devices. For data
transmissions over the Internet, it is layers 1 through 4 that
handle the necessary tasks
for physically transmitting packets of data over the Internet. As
we will see a little later,
there can literally be hundreds of “intermediate nodes” that
come into play when data is
transmitted over the Internet. Layers 5, 6, and 7, which perform
data manipulation tasks,
interact primarily with software—the operating system and the
specific application
program being used. Thus, when you use a Web browser such as
Mozilla Firefox or
Internet Explorer, layers 5 through 7 are responsible for the
necessary translations
between the network transmission (e.g., TCP/IP), the operating

system (e.g., Windows
Vista), and the browser (e.g., Mozilla Firefox or Internet
Explorer).
Network types
Let us now turn to a discussion of the broad categories of
networks—local area
networks and wide area networks. It should be noted that
networks—both local area
and wide area—can be either private or public and can carry
either voice or data or
both. Given our focus on computer-based accounting systems,
we focus only on data
oriented local area and wide area networks, although the
concepts also apply to voice
networks.
Local area networks
When two or more computers in close physical proximity are
linked together using
physical connectors, the result is a local area network (LAN).
The main components of a
LAN are (1) computers and other devices such as printers, (2) a
relatively powerful
computer which functions as the network “server,” and (3) a
communications channel
connecting the computers and devices. Each computer and
device to be connected on
the LAN must have a network interface card (also referred to as
an adapter). The three
main types of cable physically connecting the computers
together are coaxial, twisted
pair, and fiber optics. As the name suggests, a server is any
node on the network that
provides a service such as shared access to a printer, a disk
drive, or other devices

such as modems.
Network topologies
The three network topologies are bus, ring, and star. Bus
networks, in which each
device is connected to a common “backbone,” are by far the
most popular. The actual
connection is by means of a “tap” which allows the device to
listen to the transmissions
along the bus. Bus networks use the ethernet protocol which is
capable of transferring
data at the rate of 10 megabits per second (mbps) to 100 mbps.
Devices connected via
ethernet links use a technique called carrier sense multiple
access/collision detection
(CSMA/CD) to communicate. This convention allows multiple
access to the bus network
such that any node can essentially broadcast a message over the
bus to another node.
Every node constantly monitors the bus to detect messages
intended for itself (hence
the terms “carrier sense” and “multiple access”). If two nodes
attempt to transmit
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messages simultaneously to each other or to the same node, a
collision occurs. The
nodes involved in a collision wait for a random period of time
until one of them tries to
send the message again. A bus network is depicted in the figure
below.

In a ring LAN, each device is connected to a common circular
loop (cable). The physical
connection to the ring is by means of a “repeater,” as depicted
in the figure below. The
ring network is somewhat like a circular rapid transit system in
which the train arrives at
each station along the ring, dropping off and picking up
passengers at each station. In
similar fashion, each node in a ring network is polled to
determine whether it has any
messages to send. Messages typically move in one direction
around the ring. When a
message arrives at a node it is checked to determine whether it
is intended for that
node. If it is not intended for that node the message is simply
regenerated and passed
on to the next node. When the message reaches the node it is
intended for, it is
accepted and not passed any further. Since messages are
regenerated at each node,
ring networks can cover greater distances when compared to bus
networks. This
process of passing messages is called “token passing” and such
networks are
commonly referred to as “token ring networks.” The node that
originates a message
creates a “token” which is what gets passed from node to node
to the ultimate recipient
of the message. A node that also has a message for the recipient
of a token can simply
add to the message and modify the token to indicate that an
addition has been made.

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When the token reaches its final destination the receiving node
returns the token to the
sender thus signaling that the message was received intact.
The final LAN configuration is the star in which one computer
acts as the “host”
computer to which all other computers and devices are
connected. The central host
computer is also referred to as the “hub.” All messages are
routed through the host.
Messages are channeled by the host to the intended node in a
process referred to
as network switching. Star networks use a significant amount of
cable since each
node must have its own direct connection to the central host
computer. The most critical
link in a star network is the central host computer; if it breaks
down then the entire
network becomes inoperative. By contrast, bus networks are the
most fault tolerant
because a defective device does not cripple the entire network.
Depending on the
location of the defect, a ring network may become partially or
completely inoperative.

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Two very popular local area network operating systems (NOS)
are Novell Open
Enterprise Server and Windows 2012 server. Both of these NOS
are high-performance
scalable operating environments that provide the powerful,
reliable processing for
services such as file and print sharing. An advantage of
Microsoft’s latest NOS,
Windows 2012 Server, is that it comes with Internet, intranet,
and communications
services built in. In this manner, the Windows 2012 Server NOS
makes it easy to
integrate the Web right into an organization's local area
network. You are encouraged to
visit these Web sites to further explore the features of these
network operating
systems.
The three LAN configurations are summarized in the following
table. As noted earlier,
bus networks are by far the most popular and star networks are
the least popular.
However, hybrid networks, combining two or more of the above
topologies are often the
norm. For example, a large network could combine star and bus
topologies, with several
bus networks all connected to a central mainframe in a star
configuration.

http://www.novell.com/products/openenterpriseserver/
http://www.novell.com/products/openenterpriseserver/
http://www.microsoft.com/en-us/server-cloud/windows-
server/default.aspx
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Local Area Networks
LAN Description Message passing
Ring
Each device connected to
two other devices with no
central host.
Token passing, with each
device passing a token to
the next device.
Star Each device connected to a central host computer.
Networking switching; all
messages must pass
through the host computer.
Bus Devices connected to a bus channel, typically Ethernet.
Carrier sense multiple

access/collision detection;
each device can “broadcast”
a message to another
device on the bus.
Wide area networks
As discussed above, local area networks involve computers that
are in close
geographical proximity. In contrast, networks that connect users
over vast geographical
distances are referred to as wide area networks (WAN). The
communication links
connecting nodes in a wide area network are either physical
lines (phone lines, cable
lines, fiber-optic lines), microwave links, or satellites. For a
computer to communicate
with another computer over a physical line, a device called a
modem is required. Early
generation modems converted the computer’s digital signals
into analog signals for
transmission over phone lines (a process called modulation).
The modem at the
receiving end reconverts the analog signals back into digital
signals that the receiving
computer can understand.
For the last several years, most WAN connectivity occurs using
what are called
“broadband” connections. The most common broadband
technologies are (1) DSL
(digital subscriber lines) provided by phone companies, which
uses ordinary copper
telephone lines, (2) cable modems provided by cable TV
companies which use coax
cables described earlier, and (3) router/modems provided by the
phone company

using fiber optic lines (e.g., Verizon FiOS).
Typical downlink (downloading) speeds for DSL vary between
512 kbps and 3 mbps,
while the uplink (uploading) speed is typically 128 kbps. Cable
modems offer download
speeds much higher than DSL: up to 10 mbps downlink and up
to 768 kbps uplink.
Fiber-optic communications offered primarily by Verizon as the
FiOS service are even
faster than cable modems. A fiber-optic line provides download
speeds of 10 to 50
mbps, but also provides fast upload speeds of up to 10 mbps.
Note that the Verizon
FiOS service can also include phone and TV service via the
fiber-optic line. Both cable
modems and fiber optic routers/modems provide a constant
connection to the Internet
(i.e., they are “always on”).
The discussion above has focused on the uploading and
downloading speeds for
modems, DSL, cable modems, and fiber-optic lines. As a point
of comparison, it is worth
http://www.verizonfios.com/
17 of 40
noting that a dedicated connection to the Internet can be either a
T1 or a T3 link. A T1
link has an uploading and downloading speed of 1.54 mbps,
whereas a T3 link has a

capacity of about 45 mbps. Most internet service providers
(ISP) have one or more T3
links, more than sufficient to handle Internet traffic for
hundreds of concurrent users.
Types of wide area networks
There are two broad types of wide area networks: private and
public. Companies can
set up their own wide area networks by leasing transmission
lines from one of the
providers of these lines (e.g., MCI or Sprint). It should be noted
however, that it can be
extremely expensive to set up a proprietary wide area network.
The second option is to
simply use a public wide area network. The Internet is in
essence the world's largest
public wide area network. We will first discuss the options for
private wide area
networks, after which we will discuss the Internet.
When computer networking first became feasible, larger
organizations
established centralized data processing networks, where several
remote data entry
terminals (dumb terminals) were connected to a single
centralized host computer. All
data processing was done at the central location; the remote
terminals were used
simply to input data and retrieve information. The remote
terminals could be connected

to the central computer via one of three options: (1) point-to-
point lines, (2) multidrop
lines, and (3) multiplexed lines. These three options are
depicted in the following figure.
Communications Technologies
Technology Description
Modem
Modulator demodulator. Older technology using
conventional phone lines provided relatively slow
speeds of about 33.6 to 56 kbps.
DSL
Digital Subscriber Lines. Emerging as an
alternative to ISDN, with downloading speeds up to
6 mbps. Requires proximity to phone company
switching station.
Cable modems
Constant Internet connection; speeds up to 10
mbps for downloading and up to 768 kbps for
uploading. Requires cable TV connection.
Fiber-optic lines
Constant Internet connection; speeds up to 20
mbps for downloading and up to 10 mbps for
uploading. Not universally available, since fiber
optic lines have to be fed to each user location.

18 of 40
Point-to-point lines represent the most expensive option since
each remote terminal
must have its own direct connection to the central computer.
However, each terminal
has its own connection and will therefore experience faster
response times. Moreover,
failure in any one line affects only one remote terminal.
Multidrop lines involve several
remote terminals being connected to the central computer using
a single line. This
option is less expensive than point-to-point lines. However,
response times are slower
because of the sharing of the common line. Each remote
terminal must contend with the
other terminals for use of the shared line—there can be only one
terminal connected at
any time. Further, if the shared line fails then all remote
terminals suffer. The third
19 of 40
option, multiplexed lines, represent an improvement over
multidrop lines because of
the use of a multiplexer. As already discussed, a multiplexer
combines signals received
from several terminals and transmits them over a single line.
Using multiplexed lines,

the remote terminals do not have “wait their turn;” they can
simultaneously transmit data
since the multiplexer is capable of handling multiple messages
received
simultaneously.
The second major type of WAN is a distributed data processing
(DDP) network. As
the term suggests, in a DDP network, data processing is
distributed throughout the
network. In contrast, the centralized networks discussed above
concentrate all data
processing at one central location. With the decreasing costs
and increasing power of
workstations and personal computers, DDP networks are
becoming increasingly
feasible even for relatively small organizations. DDP networks
have several advantages
over centralized networks. First, they are more responsive to
local user needs. Since
some of the data processing can be done locally, a remote node
does not always have
to rely on the central host computer for its local data processing
needs. Second, a DDP
results in lower data communication costs. Again, since part of
the data processing
tasks are handled locally rather than over the network, the
extent of data
communication (and hence the costs of data communication) is
reduced. Third, a DDP
network is more reliable than a purely centralized network. The
reliability stems from
the presence of multiple processors and the connectivity among
the nodes in the
network. If one node loses its processing capability, then the
processing burden can be

shifted to another node in the network. In contrast, a centralized
network is rendered
useless if the central host computer fails. Finally, a DDP
network is more flexible than
a centralized network since additional nodes and processors can
always be added in
the event that the processing capabilities are found to be
insufficient.
DDP networks do have some disadvantages relative to
centralized networks. First,
security concerns are heightened in a DDP environment, given
the presence of
multiple processing locations. In contrast, in a centralized
network, all control and
security can be centralized—there is only one critical link in the
network (the central
host computer). Second, as DDP networks grow, the complexity
of the network
represents a significant problem from a network management
perspective. There are
simply more network components that could potentially fail in a
DDP network relative to
a centralized network. Despite these drawbacks, DDP networks
are extremely popular.
DDP networks can be configured either as bus, ring, or star
networks. These topologies
have already been discussed and will not be repeated. One
special type of DDP
network is the client/server system which is discussed next.
Client/server systems
The term “client/server” has a variety of connotations and its
definitions abound.
Client/server is an architecture that distributes processing in a
networked environment

between clients and one or more servers. Any node in a network
requesting data or a
service is considered to be a client, and any node or device
providing a service is
considered to be a server. Clients are simply the end-user
computers requesting
information while running an application. Servers have access
to data repositories and
make the information available. In a client/server network, the
client computer can
20 of 40
perform certain local processing tasks such as handling the user
interface, while a
server at a remote location performs the more data intensive
tasks such as searching
and retrieving data from large corporate databases. Thus,
processing tasks are shared
across the client/server network—not all tasks are handled by
the server alone or the
client alone. The following figure contrasts the older mainframe
to dumb-terminal
communication with the more modern server to workstation,
i.e., client/server
communication.
As shown in the column to the right above, the most typical
implementation of a

client/server system is the “three tier” architecture, consisting
of the presentation layer
(workstation), the application layer (application server), and the
database layer
(database server). In such an architecture, the “presentation
layer” is the software on
the client workstation—typically a Windows client PC. The
“application layer” is a server
on which the application software—such as SAP—resides.
Finally, the “database layer”
is typically a separate server on which the actual database—
typically Oracle, DB2, or
SQL Server—resides. Such a three-tier client/server system can
be distinguished
from the older mainframe oriented approach, shown to the left
in the above figure.
Under the mainframe approach, sometimes referred to as the
“file server” approach, a
dumb terminal made a request and all of the processing was
done at one large
computer (i.e., the mainframe). Thus all of the processing must
be performed at the
mainframe, including the task of formatting the output for
presentation. The processed
and formatted data is simply delivered to the client where it is
displayed on the dumb
terminal. By contrast, in a three-tier client/server system, a
workstation (client) makes a
request, an application server processes the request, the
database server actually
21 of 40

delivers the data, and the client workstation actually formats
and presents the
processed data to the user.
The Internet
The options discussed above involve organizations setting up
their own private wide
area networks. A phenomenally popular public wide area
network is the Internet—a
global network of networks which communicate using the
transmission control
protocol/Internet protocol (TCP/IP). The origins of the Internet
date back to 1969 and
the ARPANet. The Defense Department's Advanced Research
Projects Agency (ARPA)
sought to develop a fault tolerant wide area network that could
withstand a nuclear
attack. Thus, the TCP/IP protocol is designed to automatically
search for alternative
paths from the origin to the destination in the event that
intermediate nodes in the
network are disabled (as discussed earlier, packet switching
involves forwarding
packets from node to node from the sender to the receiver).
Initially used mainly at
educational and government institutions, the Internet is now
touching virtually all
aspects of our daily lives, from shopping to entertainment to
banking and investing. As
of June 2012, it is estimated that there are well over 2.4 billion
people worldwide with
Internet access—that is about 34% of the world’s population.
(Source:
http://www.internetworldstats.com/stats.htm).
To access this book, you are using the graphical component of

the Internet—the World
Wide Web (WWW or Web for short). The key technology
behind the Web is hypertext
which allows links to be established from one “page” to another
page which can literally
be on a computer on another continent. Using a Web browser
like Netscape or
Microsoft's Internet Explorer, even novice users can access a
variety of information
simply through clicks of a mouse button. In fact, the popularity
of the Internet in the last
two years can be attributed to the Web’s ease of use and the
tremendous amount of
(mostly free) information available on the Web. There are now
over 634 million Web
sites worldwide, as indicated at the Royal Pingdom site. This
site at Yahoo provides a
number of links regarding demographics and statistics related to
the Internet.
Apart from the Web, there are a number of other popular
Internet applications. The
single most popular application is electronic mail, or email for
short. In addition to
simple text messages, most electronic mail software packages
also permit binary files,
such as word processing and spreadsheet files, to be attached to
the mail message.
File transfer programs, or FTP for short, allow users to transfer
both binary and ASCII
files over the Internet. Note that binary files can only be read
and/or executed by certain
specific programs (e.g., a Microsoft Word or Microsoft Excel
file) whereas ASCII files
(ASCII = American Standard Code for Information Interchange)
are text files which can

be read by any text editor such as the “Notepad” program in
Windows. Telnet is an
application that allows users to log in to remote computers over
the Internet. This
application is used primarily to log in to remote Unix computers
with command line
interfaces (as opposed to graphical interfaces). Other programs
like Internet Relay Chat
(IRC), which permit real-time discussions across the Internet,
USENET newsgroups,
which are discussion groups focusing on specific subjects, and
multi-user dungeons
(MUD) which facilitate role-playing games over the Internet
have also contributed to the
immense popularity of the Internet. Of course, the emergence of
social media such as
http://en.wikipedia.org/wiki/Arpanet
http://www.internetworldstats.com/stats.htm
http://royal.pingdom.com/2013/01/16/internet-2012-in-numbers/
http://dir.yahoo.com/Computers_and_Internet/Internet/Statistics
_and_Demographics/
22 of 40
Facebook and Twitter have dramatically increased usage of the
Internet. There are
over 1 billion Facebook users and 500 million “tweets” per day!
While the Internet is inherently a public network with all
information freely available, a
recent phenomenon is the development of corporate “Intranets.”
An Intranet comprises

information made available using similar technology as the
Internet but only to
authorized users. Through user accounts and passwords,
information published on
such Intranets is shielded from the general public. For example,
AT&T has an Intranet
which its 300,000 employees can use to find each other.
Employees can use a Web
page interface to a database of employee phone numbers,
addresses, titles, and
organizational information. Booz Allen & Hamilton, one of the
foremost consulting
companies in the world, uses Intranet technology to bridge
islands of information among
consultants. Their intranets include a company wide knowledge
repository, an expert
skills directory, employee collaboration, and employee
directories. Another example is
Home Box Office (HBO). One use of Intranet technology at
HBO is to roll out new
marketing campaigns. Salespersons log on to the HBO intranet
to find information about
new marketing campaigns. Providing such information on the
intranet eliminates the
substantial costs associated with printing, videocassette
duplication, and distribution.
Jakob Nielsen, a pioneer in the field of Internet usability, has
published a “Ten best
Intranets of 2013” list, where you can read examples of good
corporate Intranets
(among the ten best for 2013 are AT&T and American
International Group). Most large
companies have employed Intranet technology for internal use.
An emerging variant of the “intranet” is the extranet. Whereas
the intranet is typically

used within a company, by its employees, an “extranet” allows
controlled access to the
corporation's Web site by customers. CyberText Publishing's
Web site is an example of
an extranet since access to the Web site is restricted to
customers—students and
instructors—who have valid accounts. Another example of an
extranet is Columbia/HCA
Healthcare. An extranet is used to advertise surplus medical
equipment to Columbia-
affiliated facilities who are provided access to Columbia's
restricted Web site.
Electronic data interchange
Electronic data interchange (EDI) is the electronic exchange of
business transaction
information between organizations. Consider a typical business
transaction between
Company A, the buyer, and Company B, the seller, as depicted
in the figure on the next
page. The purchases information system of Company A issues a
purchase order which
is sent via conventional mail to Company B where it is
manually entered into the sales
information system. The sales accounting system of Company B
then generates a sales
invoice which is sent via mail back to Company A. Company A
must then manually
enter the seller's invoice into its accounts payable system.
Thereafter, Company A's
disbursement system will print out a check which is then mailed
to Company B, where
the check is manually keyed into the cash receipts system. The
check must be manually
deposited into Company B's bank account.

http://www.facebook.com/
http://www.twitter.com/
http://www.nngroup.com/articles/intranet-design/
http://www.nngroup.com/articles/intranet-design/
23 of 40
What the above scenario makes clear is that process is slow and
error prone.
Documents are sent between organizations via the postal
service. With the exception of
facsimile transmission, every other mode of document delivery
results in at least some
delay in communication between the selling and purchasing
organizations. The most
problematic aspect of the typical conventional business scenario
described above,
however, is that critical business information about purchases
and cash collections is
manually entered into the accounting system. Such manual data
entry often introduces
errors and irregularities into the accounting systems of both
organizations.
In an EDI environment, the selling and purchasing organizations
establish electronic
links between their accounting systems, either directly or
through a value added

network (VAN). An EDI equivalent of the above manual selling
and purchasing scenario
between Company A and Company B is depicted in the figure
on the following page.
Company A sends the purchase order information electronically,
Company B sends the
sales invoice information electronically, and payment is also
made electronically via
electronic funds transfer (EFT). Of course, the merchandise
must still be physically
delivered. EDI thus results in electronic billing on the part of
the seller and electronic
payment on the part of the purchaser.
24 of 40
As can be seen, the advantages of EDI are that business
transaction information is
transmitted almost instantaneously. Since transaction
information is exchanged
electronically between the seller's and purchaser's accounting
systems, errors in data
entry are essentially eliminated. Apart from speed and
elimination of potential errors,
there are other benefits of EDI. The “just-in-time” (JIT)
manufacturing technique would
be extremely difficult, if not impossible, to implement without
EDI. Since EDI facilitates

JIT, it permits the organization to reduce inventory thereby
reducing working capital
requirements. Since much of the clerical work involved in
mailing transaction documents
and manually entering them into accounting systems is
eliminated, EDI also permits a
reduction in the organization's work force resulting in further
cost savings.
Although the concept of EDI would appear very appealing, there
are a number of
barriers which must be overcome. The initial cost of setting up
EDI can be extremely
high. The payback from EDI, in terms of the benefits described
above, is usually
realized over several years. Smaller firms may not have the
resources necessary to
convert to EDI and may thus lose their business conducted with
larger firms making the
switch to EDI. In fact, organizations converting to EDI typically
reduce the number of
vendors they deal with simply because of the inability of
smaller vendors to offer EDI.
25 of 40
EDI standards
A critical problem in EDI is in determining the format of
electronic transmissions

between organizations. It is infeasible for organizations to
negotiate with each customer
and each vendor to determine the exact format of EDI
transactions between them. The
solution is the Accredited Standards Committee (ASC) which
has a subcommittee
dedicated to the task of establishing standards for EDI
transactions. This subcommittee,
referred to as the ASC .X12 subcommittee, has established
standard EDI transaction
formats for a variety of business transactions including
purchase orders and sales
invoices. Organizations need only refer to and conform to the
.X12 standard without
having to negotiate a transaction format with each EDI customer
and vendor.
VANs vs. Internet-based EDI
As depicted in the figure above, there are two means by which
companies can adopt
EDI technology. The first and more expensive approach would
be to establish separate
EDI links with each vendor and each customer that an
organization does business with.
However, such separate links can prove to be prohibitively
expensive even for very
large organizations since each link is essentially a form of a
private network. The
second approach is to use value added networks (VAN) like
Sprint and MCI. A VAN
adds value in two main ways. First, it allows a company a single
connection and
communications protocol, rather than the many that would be
needed for direct
connects. Second, it provides electronic mailboxing which
allows a trading partner to
send and receive data without regard to its many partners'

schedules. Periodically,
companies access their electronic mailbox and retrieve their
transactions stored there
by all their trading partners. Thus, the company has only to
establish an EDI link to the
VAN and not to each one of the customers.
Although VANs represent a lower cost option relative to
establishing separate
communication links to each vendor and each customer, the cost
associated with using
a VAN are still very high. For smaller businesses that cannot
afford the cost of VANs, a
recently available option is Internet-based EDI. Rather than
using a VAN, companies
can simply send and receive electronic transactions via email.
Like a VAN, EDI using
the Internet allows a single network connection which is the
connection between a
company and its Internet service provider (ISP). Unlike the
VAN model, e-mail software
handles mailboxing at (or near) the network endpoints.
Electronic transactions
accumulate not in a mailbox at the VAN's location but in the
company's own email
mailbox.
EDI over the Internet is appealing in several ways. VANs
charge $.15-$.25 per
kilocharacter to both senders and receivers. The cost per
kilocharacter is significantly
lower with Internet-based EDI. Also, the VAN architecture
introduces an inherent delay
as data sits in mailboxes at the VAN's location. Transactions do
not get automatically
forwarded to the intended recipient. The model is not “store-
and-forward,” it is “store-

and-wait.” The major concern with Internet-based EDI is one of
security. By its very
nature, the Internet is open and insecure. The solution is to
encrypt EDI transmissions.
Although encryption does not prevent the transmissions from
being intercepted, it is
virtually impossible to decrypt an appropriately encrypted EDI
transaction without the
http://www.x12.org/
26 of 40
correct decryption code. Some vendors providing EDI software
include Sterling
Commerce (acquired by IBM), Embassy Software, and Liaison.
E-business
You have undoubtedly heard the terms “electronic commerce”
and “e-business” on
several occasions. In its initial incarnation, e-business was
referred to as electronic
commerce (EC), which comprised transactions between parties
that are conducted
electronically. A simplistic definition of EC is that it
encompasses any business
transaction in which the parties interact electronically rather
than by physical exchanges
or direct physical contact. In other words, “doing business
paperlessly” is what EC is all
about.
E-business, however, has come to mean much more than
electronic transactions.

Unlike EC which deals only with transactions between parties,
e-business encompasses
all exchanges between parties. Just what is an “e-business”? In
an “e-business,”
customers, internal operations, and suppliers are all connected
online using the
Internet. Moreover, the e-business adopts a number of internet-
based business
practices that fundamentally change the way business is done.
An e-business can thus
be thought of as a new Internet-based environment for
communications, interactions,
and transactions. This environment spans entire value chains,
enhances existing
relationships, and creates new economic value. It impacts new
“dot coms” as well as
established “brick and mortar” companies. In fact, one e-
business model involving
traditional companies engaging in Internet-based commerce has
been labeled “click and
mortar.”
In an e-business, all business processes are “e-enabled”—from
marketing, sales, and
procurement—to manufacturing, supply chain, and service—to
financial operations,
project management, and human resources—to business
intelligence systems. In
essence, the e-business leverages the power of the Internet to
improve efficiency,
reduce costs, expand its markets, and retain customers. Success
at e-business
requires companies to fundamentally rethink their entire
business strategy, from the
relationships with vendors and customers to the way economic
results are measured.
Thus, e-business moves well beyond simply having a web site

that disseminates timely
information. It is also much more than simply taking sales
orders and allowing
customers to interact with product databases in real-time over
the Web.
There is no standard or well-accepted categorization of e-
business variations. The
following categories of e-business are presented in terms of the
parties interacting or
connecting electronically.
Web presence: Business organizations can very easily achieve
this initial level of e-
business, and almost all businesses in developed countries
already have. At this basic
level, the Web is used to disseminate information to a range of
information consumers.
The information presented is static and must be periodically
updated to remain current.
The web site is often used as a conduit to enable users to obtain
contact information or
even provide feedback to the organization via Web forms.
http://www.sterlingcommerce.com/
http://www.sterlingcommerce.com/
http://www.embassysoft.com/
http://liaison.com/
27 of 40
Business to consumer (B2C): At this level, the organization
uses the power of the
Internet to transact business and provide a range of services to

external users via the
Web. B2C thus refers to the retailing side of “doing business on
the Web,” and is
essentially what is commonly referred to as electronic retailing.
There are literally
thousands of instances of companies selling goods and services
directly from their Web
sites (CyberText being one example). Companies like
Amazon.com (books, music),
Barnes & Nobles (books), Dell (computers), and Apple iTunes
(music) are but a few
examples of B2C. While electronic retailing is now well
established, electronic banking
and investing over the Internet have also exploded over the past
year. Companies like
Charles Schwab and E-Trade allow individual investors to buy
and sell securities over
the Internet. The main advantage of Internet-based trading in
securities is the low
transaction cost and the accessibility—the number of
individuals with access to the
Internet is now well over 200 million. Virtually all banks now
offer online banking; visit
the web sites of Bank of America, Wachovia, and Wells Fargo
to view the variety of
banking services available on the Internet. In addition to
electronic paying of bills, these
banks also allow individuals to view balances, transfer funds
between accounts, and
download activity statements directly from a Web browser into
personal finance
software such as Quicken.
Beyond electronic retailing, investing, and banking, B2C also
refers to customer self-
service and similar applications that provide users with browser

based access to
internal (back-end) systems. Such functionality allows users to
query organizational
databases to obtain up-to-the-minute information. For example,
most overnight delivery
companies allow customers to track packages on the Web. As
another example, some
manufacturers allow customers to track the status of their order
as it moves through
various stages of the production process. At this level, e-
business involves connecting
external users to internal systems and providing valuable
services that are easily
accessed over the Internet.
Business to business (B2B): Moving beyond B2C, business to
business electronic
exchanges can encompass a wide range of business processes.
According to the U.S.
Census Bureau E-Stats report, e-commerce shipments for 2011
were as follows:
manufacturing $2.7 trillion (about half of all shipments),
wholesale $1.6 trillion (24.3% of
the total), retail $194 billion (4.7% of total sales).
The major B2B players can be grouped into two broad
categories: (1) B2B enablers,
i.e., providers of trading systems, software applications (B2B
technologies), hardware,
hosting services or connectivity for exchanges, and (2) B2B
hubs—companies that
bring multiple buyers and sellers together in one marketplace.
In the first category—B2B enablers—are companies like Ariba
and Bravo

Solution
.
These companies sell technologies that enable a wide range of
business-to-business
transactions, most commonly procurement. These technologies
enable companies to
use the web to purchase commonly needed maintenance, repair,
and operating
supplies. This process is now called e-procurement and is the
initial B2B step
undertaken by most companies. Moving beyond e-procurement,
online B2B ventures
can involve buying supplies and parts through online auctions.
Business to business
exchanges can also involve electronic trading of digital goods,
i.e., information in
http://www.amazon.com/
http://www.bn.com/
http://www.dell.com/
http://www.apple.com/itunes/
http://www.schwab.com/

http://www.etrade.com/
http://www.bankamerica.com/
http://www.wachovia.com/
http://www.wellsfargo.com/
http://www.quicken.com/
http://www.census.gov/eos/www/ebusiness614.htm
http://www.census.gov/eos/www/ebusiness614.htm
http://www.ariba.com/
https://www.bravosolution.com/cms/us
28 of 40
various forms (text, audio, music, video, graphics). As you are
experiencing, using this
online book, such electronic trading of digital goods opens up a
whole new realm of
possibilities in the 21st century. In essence, B2B is the
exchange of products, services,
or information between businesses rather than between
businesses and consumers.
The second category comprises public “e-marketplaces” as well

as private B2B
exchanges or “hubs.” These hubs create value by reducing
information search and
transfer costs, standardizing systems, and improving the process
of matching buyers
with sellers. The two types of hubs are vertical hubs and
horizontal hubs. Vertical hubs
serve a particular market or industry focus. Examples of such
vertical hubs are GCI
(telecommunications bandwidth) and Plasticsnet (plastics).
Horizontal or functional
hubs provide the set of goods and/or services to different
industries. Examples of such
functional hubs are Grainger (maintenance, repair, and
operating supplies) and ADP
Employease (human resource management).
The ultimate goal is for such an “e-business” concept to be
deployed throughout an
entire industry's supply chain, linking manufacturers,
assemblers, distributors, marketers
and customers. In such a scenario, one press of a button (a
customer ordering a
product at a company’s web site) automatically triggers
processes throughout the chain

(initiating a series of business processes within the company
and also at the suppliers
of materials and services required to make the product).
eXtensible Markup Language and eXtensible Business Report
Language
The transfer of information across the value chain would be
facilitated by emerging
languages such as XML (eXtensible Markup Language). XML
is the direct result of
the knowledge gained by experiences with both SGML
(Standard Generalized Markup
Language) and HTML (Hyper Text Markup Language). SGML
is very complex, but it is
the de facto standard for the interchange of large, complex
documents of all sorts.
SGML has proved too complex for wide adoption and use on the
internet. On the other
hand, a derivative of SGML, that is HTML, allows the quick
and easy construction of
pages and documents of information on web-sites. This printed
page or the page you
are viewing on the CyberText website was created using HTML.
Although HTML has

structure, the markup and structure are for formatting
information on Web pages, not for
describing it. XML overcomes this weakness by providing ways
to describe the content
of information on Web pages in a standardized way, as defined
by the World Wide Web
Consortium (W3C). This link on the W3C web site provides a
brief 10-point description
of XML.
The key point to remember regarding XML is that it allows
users to create their own tags
for exchanging information over the Internet. Unlike HTML,
which comprises a series of
predefined (unchangeable) tags for displaying text on web
pages, such as <B> for bold,
XML allows the creation of a tag like <employee> to indicate
that the text enclosed
within the opening and closing tags is the name of an employee.
The basic syntax used
in XML is as follows: <name
attribute="value">content</name>. Thus, using XML, the
“employee” tag would be used as follows: <employee
id=”12345”>John
Doe</employee>. Another key point to remember regarding

XML is that the consumer
of XML information is rarely a human being (unlike HTML,
where the formatting tags
http://www.gcicom.net/
http://www.gcicom.net/
http://www.plasticsnet.com/
http://www.grainger.com/Grainger/wwg/start.shtml
http://www.employease.com/
http://www.employease.com/
http://en.wikipedia.org/wiki/Xml
http://www.w3c.org/
http://www.w3c.org/
http://www.w3.org/XML/1999/XML-in-10-points
29 of 40
define how web pages look to the human eye). Thus, a
computer system, smartphone,
tablet computer, or other device can interpret the “John Doe”
text enclosed within the
opening and closing <employee> XML tag as intended by the

designer: “John Doe is an
employee with an employee ID of 12345.
XML documents have a file extension of “.xml” and must
conform to a set of strict rules.
These rules are indicated below:
1) The XML document must have one “root” tag at the very top
of the document,
indicating that the document is an XML document and the XML
version being
employed.
2) All XML elements must have start and end tags. Thus, the
opening <employee>
tag must be closed with a closing </employee> tag.
3) Element names must not start with a number, a punctuation
character, or “xml”.
Legal names are <employee>, <startdate>, <category>; illegal
names are
<xmltype>, <1way>, and <!type>.
4) Element names can not contain a space. Thus, <employee
name> is not a legal

tag, whereas <employee_name> or <employeename> are legal
tags.
5) Elements can have different content types (including “empty”
content) and can
have attributes. The content types can include dates, numbers,
currency, or just
plain text. As in the example shown earlier, elements can have
attributes:
<customer num=”567123”>XYZ Company</customer> -- this
usage of the
“customer” element also shows the customer number using the
“num” attribute
within the “customer” element name.
6) Element attribute values must be wrapped with quotes (single
or double quotes).
Thus, the 567123 customer number attribute in the above
example must be
enclosed in single or double quotes.
7) Elements must be properly nested. Consider a “customer”
record that comprises
customer name (<customer> element with customer number as
an attribute),

street address (<streetaddress> element), city (<city> element),
state (<state>
element), and postal code (<zip> element). Proper nesting
means that the
“customer” element must be closed before the “streetaddress”
element can
begin, which must in turn be closed before the “city” element
can begin, and so
on.
8) Element names are case sensitive. Thus, the element
<employee> is not the
same as <Employee>. An opening tag <employee> cannot be
closed with
</Employee> (note the upper-case ‘E’ versus lower-case ‘e’).
30 of 40

Shown below is a sample XML document that conforms to all
syntactical rules.
<? xml version="1.0"?>
<professionals>
<employee id=“444-33-9876”>
<name>Tom Jones</name>
<rank>Manager</rank>
<phone>813-555-1212</phone>
<specialization>Tax</specialization>
<datehired>2001-02-04</datehired>
</employee>
<employee id=“555-09-7654”>
<name>Johnny Cash</name>
<rank>Partner</rank>
<phone>813-555-4455</phone>
<specialization>Consulting</specialization>
<datehired>2000-07-22</datehired>
</employee>
</professionals>
An XML Document

Unlike HTML, XML is very unforgiving regarding errors. If an
XML document does not
conform to all the aforementioned rules, it will simply not
open—the application reading
the XML document will indicate that there is an error and the
document cannot be
opened. An XML document that conforms to all the syntactical
rules is considered to be
a well formed document. A related concept is that of a valid
XML document. An XML
document is considered to be “valid” with reference to a schema
that defines (1) the
legal element names for that document and (2) constraints
regarding data types and
values that can be specified within the document. An XML
schema file (extension
“.xsd”) is also specified using XML syntax. By referencing the
schema for an XML
document, applications can verify if the correct element names
are used and if the data
conform to all the constraints specified within the schema. For
example, an XML
schema for the “professionals” document above can specify that
the “date hired” field

must be a valid date after 2000-06-30 (perhaps the date the
company was formed).
A key point to note regarding XML is that it is extensible: a
given XML schema can be
extended for use in a slightly different context. A developer
could take an existing
schema and add new elements that have meaning in the
developer’s context, thereby
“extending” the original schema.
XML is already revolutionizing business-to-business
information exchange. Closer to
home, XML is poised to revolutionize financial reporting.
XBRL (Extensible Business
Reporting Language) is an XML schema designed specifically
for the financial
community. It provides a standards-based method to prepare,
publish in a variety of
formats, reliably extract and automatically exchange financial
statements of publicly
http://www.xbrl.org/

31 of 40
held companies and the information they contain. You are
encouraged to visit the
official XBRL website at www.xbrl.org. Demonstrations of
XBRL can be viewed at this
link on the XBRL site. In the U.S., the Securities and Exchange
Commission (SEC) has
been in favor of XBRL, which it refers to as “interactive data
reporting.” In March 2005,
the SEC issued a ruling strongly promoting its use; see SEC
ruling 33-8529 XBRL
Voluntary Financial Reporting Program on the EDGAR System.
In April of 2009, the
SEC issued a final ruling regarding XBRL. This ruling, with an
effective date of April 13,
2009, mandates that publicly held companies in the United
States file their annual
financial statements in XBRL format. This final ruling is
available at the following link:
http://www.sec.gov/rules/final/2009/33-9002.pdf. In particular,
note section D “Summary

of adopted amendments” on pages 20 to 28, which indicates that
most domestic and
foreign large companies (“accelerated filers”) were required to
report in XBRL format for
fiscal years ending on or after June 15, 2010. The SEC now has
a dedicated XBRL
section of its website. A live feed of XBRL data filings
(referred to as “interactive data
filings”) is available at this link on the SEC site.
The most immediate benefit of XBRL is that distributing
financial information will be fast
and easy. Further, XBRL will eliminate the need for rewrites of
financial reports to
accommodate incompatible accounting systems. In addition,
some of the advantages
of XBRL include the following:
-
formatted file are
tagged and related information is linked - say, fixed assets to
balance sheet and
depreciation - more than half the job of conducting a search for
specific
information is already done.

-down feature. If you prepare a search query properly,
you can drill down to
the data source and even to the related authoritative literature
that supports the
data, such as Accounting Trends and Techniques. This feature
also will be
available in XBRL-tagged financial statements.
information will need to be
keyed in only once, reducing the risk of data-entry error. Also,
because the
information already is XBRL-formatted, users won’t need to
reformat it when
preparing it for any number of presentations.
will not be required to
report more information than it wishes. Users will still control
what they report.
XBRL templates can be scripted to follow any existing
accounting standard.
A few companies have already made their financial statements

available in XBRL
format. Microsoft, 3M, and General Electric are three
examples. The EDGAR search
engine at the SEC site allows users to locate 10K and 10Q
filings of public companies in
a number of formats including XBRL (again, referred to as
“interactive data”). To create
XBRL financial statements, options include systems like
SmartXBRL and Rivet
Software. Rivet Software’s Crossfire software for XBRL
tagging integrates with
Microsoft Office products including Excel and Word.
http://www.xbrl.org/Demos/
http://www.xbrl.org/Demos/
http://www.sec.gov/rules/final/33-8529.htm
http://www.sec.gov/rules/final/33-8529.htm
http://www.sec.gov/rules/final/2009/33-9002.pdf
http://xbrl.sec.gov/
http://xbrl.sec.gov/
http://www.sec.gov/Archives/edgar/usgaap.rss.xml
http://www.sec.gov/edgar/searchedgar/companysearch.html
http://www.sec.gov/edgar/searchedgar/companysearch.html
http://www.secpublisher.com/smart-xbrl/

http://www.rivetsoftware.com/
http://www.rivetsoftware.com/
http://rivetsoftware.com/solutions/crossfire/
32 of 40
Beyond XBRL, XML is expected to have a major impact on
many aspects of business
and computing. As mentioned in the previous chapter,
Microsoft’s .NET initiative is
intended in part to leverage the capabilities of XML. Indeed,
Microsoft describes .NET
as its “platform for XML web services.” According to
Microsoft, XML Web services allow
applications to communicate and share data over the Internet,
regardless of operating
system or programming language. The Microsoft .NET platform
includes a family of
products, built on XML and Internet industry standards, that
provide for each aspect of
developing, managing, using, and experiencing XML Web
services. XML Web services

will become part of the Microsoft applications, tools, and
servers already in use today by
individuals and businesses. There are five specific areas where
Microsoft is building
the .NET platform today, namely: Tools, Servers, XML Web
Services, Clients, and .NET
Experiences. For more details regarding Microsoft’s .NET
framework, please visit this
web page on the Microsoft site.
Business to government (B2G): This category of e-business
involves business to
government electronic exchanges. Since the last few years,
businesses and individuals
have been able to file their tax returns electronically, using the
IRS e-file initiative.
Moving beyond electronic filing of taxes, business to
government EC could involve a
range of transactions such as electronically filing 10K and 10Q
statements with the
SEC, transmitting tax withholding payments electronically, and
electronic filing of reports
to regulatory agencies such as the EPA and OSHA.
Other categories: An emerging category of e-business is labeled
“B2E,” for business-

to-employee exchanges. More specifically, the term “B2E” is
frequently used to refer to
the company’s employee portal, which is a customizable
starting Web page for all
employees within the organization. Such a portal is similar in
concept to an intranet, but
it is different in that it is a customizable entry point rather than
a generic “one size fits
all” approach of an intranet. The B2E portal should be designed
in such a way that the
employee can access everything typically found on an intranet
(company directory,
benefits information, etc.) but also any personal information
and links that the employee
might want (such as the performance of the employee’s
retirement portfolio, weather
and traffic information, etc.). The intention of such B2E portals
is not just to improve
efficiency but also to boost employee morale and develop a
sense of community within
the organization. The three distinguishing characteristics of a
B2E portal are (1) a single
point of entry for everyone in the organization, (2) a mixture of
organization-specific and
employee-defined components, and (3) the ability to be highly

customized to suit the
needs of an employee.
While not strictly an “e-business” activity, individual to
government exchanges are also
possible using the Internet as a medium. Beyond electronic
filing of tax returns, welfare
and social security payments could also be made electronically.
Electronic voting
machines are already commonplace in many jurisdictions;
perhaps individuals will
eventually be permitted to vote on the Internet sometime in the
future! Visit the ACE
Electoral Knowledge Network for information about “e-voting”
(Internet voting).
For more information about alternative e-business models and
strategies, you can find a
wealth of information about e-business at the e-commerce lab at
Vanderbilt University
and the MIT Center for Digital Business.
http://www.microsoft.com/net/
http://www.microsoft.com/net/Overview.aspx
http://www.microsoft.com/net/Overview.aspx
http://searchsmallbizit.techtarget.com/sDefinition/0,,sid44_gci2

12810,00.html
http://aceproject.org/ace-en/focus/e-voting/
http://aceproject.org/ace-en/focus/e-voting/
http://elab.vanderbilt.edu/
http://ebusiness.mit.edu/
33 of 40
Issues and concerns in e-business
There are a number of issues and concerns that need resolution
before e-business can
achieve its full potential. They are (1) the mode of the
payment, (2) security of the
payment transaction, (3) privacy of individuals, (4)
authentication and non-repudiation,
and (5) jurisdictional and legal issues.
Payment mode: Regarding the mode of the payment, the most
common method for
businesses is electronic funds transfer (EFT) through traditional
banking channels. For
individuals, the most common method is credit cards. A number
of electronic payment

systems have evolved over the last two years as alternatives to
using credit cards. The
foremost among them is PayPal. Used extensively on eBay
(which now owns the
company), PayPal enables any individual or business with an
email address to securely
send and receive payments online. Users of the PayPal system
link their PayPal
account with a credit card and/or a bank account. PayPal is one
of the major providers
of online payment solutions with 230 million account members
worldwide in over 100
countries. You are encouraged to visit the PayPal web site for
further information about
this payment option for online payments.
Security of payments: Many individual consumers are wary of
using their credit cards
over the Internet. Credit card numbers, and any other sensitive
information for that
matter, should not be transmitted “in the clear” over the
Internet. Recall from the
discussion earlier in the chapter that the mode of transmission
over the internet is
packet switching. Packets containing credit card information

can easily be intercepted
by a hacker. Fortunately, mechanisms are in place to encrypt
information before it is
transmitted over the internet. Thus, even if the packets are
intercepted, they will be
useless to the hacker since he/she will not have the means to
decode the encrypted
credit card information (it is estimated that a powerful super
computer would be needed
to break a modern encryption scheme). The foremost among
encryption mechanisms is
Secure Sockets Layer (SSL) technology, known more generally
as Transport Layer
Security. The Wikipedia entry for SSL and TLS provides more
detailed information
about how these mechanisms operate. An emerging
development is Secure Electronic
Transaction (SET)—a protocol being jointly developed by Visa,
Mastercard, Microsoft,
Netscape, and IBM. SET does not use conventional credit card
numbers. The SET
specification incorporates the use of public key cryptography
from RSA Data Security to
protect the privacy of personal and financial information being
transmitted over the

Internet. Software residing on the cardholder's personal
computer and in the merchant's
network computer will handle the necessary encryption and
decryption of information.
The main advantage of SET is that the seller does not actually
see the buyer's credit
card number. In addition, the seller is assured that the buyer is
the legal owner of the
credit card and that it is not a fraudulently obtained card.
Privacy: As an individual, if you walk into a store, pick up
some merchandise, and pay
cash for that merchandise you have left no trace of your
transaction (other than the fact
that the merchandise was sold). By contrast, if you are
shopping online, you leave a
trace of your activity even if you do not purchase anything. As
you click from one link to
another on a merchant's web site (say Amazon.com) you are
providing information
about your tastes and preferences. The trace of your activity on
a merchant's web site
https://www.paypal.com/
http://www.paypal.com/

http://en.wikipedia.org/wiki/Transport_Layer_Security
http://www.rsa.com/
http://www.amazon.com/
34 of 40
is called your “click stream” and represents valuable marketing
information for the
merchant. If the merchant also has information about who you
are, then a very real
concern is whether the merchant will sell that information to a
third party without your
consent. You may have read CyberText's privacy policy when
you set up your account.
The policy clearly states what the information will be used for
and also that the
information will not be sold to a third party. Whenever you are
asked to provide any
information about yourself on the Internet, you should verify
the merchant's privacy
policy stating what the merchant could do with the information
you provide.

Trust: authentication and non-repudiation: An advantage of the
Internet is its global
reach and the ability of entities to provide information
anonymously and individuals to
access information anonymously. However, this anonymity can
be a significant
impediment to e-business. When individuals are attempting to
transact with an Internet
merchant, they have no assurance that the merchant actually
exists and can be trusted
to deliver the goods or services the individual wants to
purchase. As you are probably
aware, the cost of setting up a Web site is trivial (under $100).
In response to the need
to provide some level of authentication of merchants that
operate on the Web, various
organizations have begun offering “certification” services for
web sites. One such
service is offered by the Better Business Bureau Online
(referred to as BBBOnline).
According to BBBOnline, participants in the program
“...demonstrate their commitment
to honest advertising and customer satisfaction by agreeing to
strict BBB standards.”

Merchants that meet the BBBOnline standards, and subject
themselves to verification
by their local Better Business Bureau, are permitted to display
the official “BBBOnline
logo” on their web site. The AICPA is also entering this arena
of online assurance.
Upon completion of the necessary training, CPAs can offer a
similar service called
“WebTrust.” The program involves verification of an online
vendor's policies and
practices. Online merchants who meet certain standards and
pass certain tests, as
verified by a CPA authorized to render the WebTrust service,
can display the
“WebTrust” seal on their web sites. In both instances—
BBBOnline and CPA
WebTrust—consumers can click on the logo displayed on a
merchant's web site to
verify that the merchant is legitimately displaying the logo. You
are encouraged to visit
the BBBOnline and CPA WebTrust web sites for further
information about these
programs.
From the merchant's perspective, there is no assurance that the

individual ordering
goods or services over the Internet is a legitimate consumer who
will not deny the credit
card charge. However, this authentication is virtually
impossible to obtain with
certainty. In Europe, there has been a movement towards
“smart cards” that individuals
can “swipe” onto a smart card reader attached to a computer,
thereby verifying their
authenticity. There are also a number of biometric
authentication systems such as
retinal and iris scanners, speech authentication, fingerprint
authentication systems.
However, these systems are much too expensive to implement at
the individual
consumer level. Thus, authentication of all parties involved in
an e-business exchange
is a critical issue that must be resolved to establish trust on the
part of all parties
involved in the exchange.
http://www.cybertext.com/forms/privacy.html
http://www.bbbonline.org/
http://www.cpawebtrust.org/

http://www.cpawebtrust.org/
35 of 40
Non-repudiation is a related issue. What this simply means is
that businesses and
consumers should not be able to deny (repudiate) a transaction.
In traditional
commerce, when paper documents are exchanged before goods
and services are
delivered, it is very difficult for either party to deny a
transaction. In contrast, the
transaction trail in an e-commerce transaction is simply a series
of bits and bytes. Such
an electronic transaction trail can be somewhat more difficult to
establish and verify
relative to a conventional paper trail. Thus, when doing
business over the Internet, non-
repudiation of transactions can be a significant concern when
the merchant and the
consumer are essentially “out of sight” doing business
paperlessly.

Jurisdictional and legal issues: Related to the above concerns of
authentication and
non-repudiation, are concerns of jurisdiction and legality of
transactions that can occur
anywhere on the planet. Taxation authorities are grappling with
the issue of whether,
how, and to what extent e-business activity should be taxed.
Consider the issue of
sales tax. Assume that you live in New York and you purchase
a product over the
Internet from a vendor in California. However, the vendor's
web site is actually located
in Texas. And the goods that are delivered to you are actually
stored in Illinois.
Moreover, when you transmitted the order over the Internet, it
actually passed through
six other states (recall the packet switching protocol of the
Internet). In which states, if
any, do you owe a sales and/or local tax? If there is a dispute
regarding this
transaction, which state has legal jurisdiction over the
transaction? There are no clear
answers to these questions. A host of government and non-
government institutions are

attempting to resolve these issues, for it is critical they be
resolved in the near future if
e-business is to achieve its true potential.
SUMMARY
This chapter began by discussion a variety of basic
telecommunications concepts. The
five components of a telecommunications network were then
discussed. The first
component, terminals and workstations, are what the end user
interacts with. The
second component, transmission links, includes physical links
such as twisted pair wire,
coax cables, and fiber optic cables, as well as “through the air”
transmission links such
as infrared, microwave, and satellite links. The third component
is transmission methods
which comprises either digital or analog transmission involving
either circuit switching or
packet switching, with packet switching being the method used
for Internet transmission
using the TCP/IP protocol. Nodes and switches represent the
fourth component and
include hardware such as multiplexers, front-end processors,
bridges, routers, and

gateways. The final component is network architecture and
standards. The Open
Systems Interconnection (OSI) model was discussed in some
detail. Next, local area
networks (LAN) were described, including the three most
common LAN topologies—
bus, ring, and star. Wide area networks were then discussed.
Alternatives to modems
used over conventional phone lines were presented. The various
types of wide area
networks, as well as distributed data processing networks, were
also discussed. The
basics of the client/server architecture were discussed. Finally,
the chapter concluded
with a discussion of the Internet, electronic data interchange,
and electronic commerce.
36 of 40

Key Terms
Analog transmission
Bandwidth
BBBOnline
Bridge
Brouter
Bus network
Circuit switching
Client/server architecture
Coax cables
CPA WebTrust
CSMA/CD
Digital transmission
DSL
EDI
Fiber optic cables
Front-end processor
Gateway
Infrared transmission
Internet
Intranet
ISDN
LAN

Modem
Multiplexer
Network interface card (NIC)
Network switching
OSI model
Packet switching
Protocol
Ring network
Router
Star network
TCP/IP
Terminals
Token passing
Twisted pair wire
VAN
WAN
WATS
Workstations
http://www.cpawebtrust.org/consumer/index.html

37 of 40
Key Web Sites
• The TechWeb site devoted to networking – an excellent
starting point
• Novell—Producer of networking software.
• Microsoft Windows 2012 server page – a leading network
operating system
• Linux.org – a site about the Linux operating system
• Unix.org – a site about the Unix operating system
• HP Networking—a vendor of a variety of networking products
including network
interface cards
• SMC—another vendor of networking products such as network
interface cards
• An explanation about the OSI model from the “How Stuff
Works” site

• US Robotics—a leading manufacturer of modems and related
networking
products
• Verizon —one of the foremost providers of physical Internet
links
• Sprint—the other major provider of physical Internet links
• Microsoft’s .NET initiative
• Netscape AOL—a player in the browser / webserver market
• Ariba – a leading provider of ecommerce software
• Perfect Commerce (formerly Commerce One) – another
leading provider of
ecommerce software
• eMarketer.com – a provider of statistics and research reports
on e-business
• Vanderbilt University e-commerce lab
• MIT Center for Digital Business

• Business2.com – the web site of the leading magazine of the
new economy
(Business 2.0 is now part of CNNMoney)
http://www.techweb.com/tech/network/
http://www.novell.com/
http://www.microsoft.com/en-us/server-cloud/windows-
server/default.aspx
http://www.linux.org/
http://www.unix.org/
http://h17007.www1.hp.com/us/en/networking/index.aspx#.UhJa
Ij_3O5I
http://www.smc.com/
http://computer.howstuffworks.com/osi.htm
http://www.usr.com/home.asp
http://www.verizon.com/
http://www.sprint.com/bizpark/products/internet_services/10002
/
http://www.microsoft.com/net/default.asp
http://netscape.aol.com/

http://www.ariba.com/
http://www.perfect.com/
http://www.emarketer.com/
http://elab.vanderbilt.edu/
http://ebusiness.mit.edu/
http://money.cnn.com/magazines/business2/
http://money.cnn.com/
38 of 40
Discussion Questions
1. Identify the five major components of a telecommunications
network.
2. Distinguish between terminals and workstations.
3. Briefly describe alternative physical and “through the air”
transmission links.
4. Distinguish between circuit switching and packet switching.
5. What is the function of a multiplexer?

6. What services does a front-end processor provide?
7. Identify and briefly describe the major types of switching
devices and their
function.
8. What are the components of a local area network?
9. What do you understand by the term “network protocol”?
Explain.
10. Briefly describe the OSI telecommunications model and its
seven layers.
11. Distinguish between bus, ring, and star networks in terms of
their configurations
and their message passing conventions.
12. What is a modem? What are alternatives to conventional
modems?
13. Describe ISDN and DSL communications technologies.
14. Distinguish between a centralized data processing network

and a distributed data
processing network. Indicate the advantages and disadvantages
of each.
15. What are the alternative configurations of a centralized
WAN? Discuss the
advantages and drawbacks of each configuration.
16. What is a client-server system? Compare and contrast
client-server and file-
server (mainframe—dumb terminal) systems.
17. Distinguish between the terms “internet” and “intranet.”
18. What are the advantages of EDI over conventional business
transaction
processing between organizations?
19. What are the three connectivity options for businesses
considering establishing
EDI links between their trading partners?
20. What are the four major categories of electronic commerce?
What are the major
issues that could potentially impede the growth of electronic

commerce?
39 of 40
Problems and Exercises
1. Consider the seven layer OSI telecommunications model.
• Layer 7: Application
• Layer 6: Presentation
• Layer 5: Session
• Layer 4: Transport
• Layer 3: Network
• Layer 2: Data link
• Layer 1: Physical
Required:
Indicate the layer(s) associated with each of the following tasks
or features.
a) Performed by hardware components: __________________

b) Data manipulation tasks: ____________________
c) Performed by software components:
______________________
d) Defines the way data is formatted, presented, converted, and
coded:
_________________
e) Defines protocols for the message structure:
___________________
f) Validates the integrity of the flow of data between nodes:
________________
g) Data communications tasks: _______________________
2. Consider the following diagram of a wide area network.
Required:
Fill in the blanks below:
a) The above network is in a _____________ configuration.
b) Nodes A, B and C are _________________________.
c) Node D is a ___________________.

40 of 40
d) Nodes E and F are _________________________.
e) Node G is called the _____________________.
3. Ms. Jane Smith is the manager in charge of the local Pizza
Queen chain of
restaurants. There are four Pizza Queen restaurants in the city.
Currently, each location
has a personal computer that handles all the sales processing
needs of that location. At
the beginning of every day, the manager of each restaurant
delivers a disk to Ms.
Smith's office providing details of sales transactions during the
previous day. An auditor
in Ms. Smith's office is responsible for reconciling the disk
reports to the cash register
tapes at each restaurant. This reconciliation is done weekly, so
errors and irregularities
can remain undetected for several days. Ms. Smith is
considering establishing a
network connecting all four restaurants to the central
administrative office and seeks

Chapter 4 Data Communications and Networking 1 of 40 .docx

Chapter 4 Data Communications and Networking 1 of 40 .docx

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Chapter 4 Data Communications and Networking 1 of 40 .docx