Chapter 5 Moore s Law Fast Cheap Computing and What It Means for the Manager 5 1 Introduction Moore s Law the phenomenon of faster cheaper computing chip performance per dollar doubles every 18 months Microprocessor brain of a computing device the part of the computer that executes the instructions of a computer program Random access memory RAM the fast chip based volatile storage in a computing device o Volatile memory storage that is wiped clean when the power is cut o Nonvolatile memory storage that retains data even when powered off from a device RAM down hard disk DVD storage Flash memory nonvolatile chip based storage often used in cameras phones and MP3 players aka flash RAM slower than conventional RAM but holds its charge even when the power goes out Solid state electronics semiconductor based devices solid state components often suffer fewer failures and require less energy than mechanical counterparts because they have no moving parts RAM and flash memory and microprocessors are solid state devices hard drives are not better for jogging Semiconductors a substance such as silicon dioxide used inside most computer chips that is capable of enabling as well as inhibiting the flow of electricity Optical fiber line a high speed glass or plastic lined networking cable used in telecommunications Price elasticity the rate at which the demand for a product or service fluctuates with price change highly elastic price drops demand spikes technology is highly elastic 1 byte one keyboard character 1 kilobyte 1000 bytes Key Takeaways o Moore s Law applies to the semiconductor industry The widely acceptedmanagerial interpretation of Moore s Law states that for the same money roughly eighteen months from now you should be able to purchase computer chips that are twice as fast or store twice as much information Or over that same time period chips with the speed or storage of today s chips should cost half as much as they do now o Nonchip based technology also advances rapidly Disk drive storage doubles roughly every twelve months while equipment to speed transmissions over fiber optic lines has doubled every nine months While these numbers are rough approximations the price performance curve of these technologies continues to advance exponentially o These trends influence inventory value depreciation accounting employee training and other managerial functions They also help improve productivity and keep interest rates low o From a strategic perspective these trends suggest that what is impossible from a cost or performance perspective today may be possible in the future This fact provides an opportunity to those who recognize and can capitalize on the capabilities of new technology As technology advances new industries business models and products are created while established firms and ways of doing business can be destroyed o Managers must regularly study trends and trajectory in technology to recognize opportunity and avoid disruption 5 2 The Death of Moore s Law Fab semiconductor fabrication facilities the multibillion dollar plants used to manufacture semiconductors Silicon wafer a thin circular slice of material used to create semiconductor devices If the pathways are closer together electrons travel shorter distances Size heat and power are threatening to slow down Moore s Law o The smaller the processor the more tightly packed the electrons which will heat up a chip Multicore microprocessors microprocessors with 2 or more typically lower power calculating processor cores on the same piece of silicon 2 150 men doing work and exerting less energy than 1 300 man Transistor are the super tiny on off switches in a chip that work collectively to calculate or store things in memory Key Takeaways o As chips get smaller and more powerful they get hotter and present power management challenges And at some point Moore s Law will stop because we will no longer be able to shrink the spaces between components on a chip o Multicore chips use two or more low power calculating cores to work together in unison but to take optimal advantage of multicore chips software must be rewritten to divide a task among multiple cores o 3 D transistors are also helping extend Moore s Law by producing chips that require less power and run faster o New materials may extend the life of Moore s Law allowing chips to get smaller still Entirely new methods for calculating such as quantum computing may also dramatically increase computing capabilities far beyond what is available today 5 3 Bringing Brains Together Supercomputers computers that are among the fastest of any in the world at the time of their introduction Massively parallel computers designed with many microprocessors that work together simultaneously to solve problems Grid computing a type of computing that uses special software to enable several computers to work together on a common problem as if they were a massively parallel super computer Think of multicore chips as having several processors in a single chip Think of massively parallel supercomputers as having several chips in one computer and think of grid computing as using existing computers to work together on a single task Software as a service SaaS a form of cloud computing where a firm subscribes to a 3rd party software and receives a service that is delivered online Cloud computing replacing computer resources either an organization s or individual s hardware or software with services provided over the internet Server farms a massive network of computer servers running software to coordinate their collective use provide the infrastructure backbone to SaaS and hardware cloud efforts as well as many large scale internet services Key Takeaways o Most modern supercomputers use massive sets of microprocessors working in parallel o The microprocessors used in most modern supercomputers are often the same commodity chips that can be found in conventional PCs and servers o Moore s Law means that businesses as diverse as financial services firms industrial manufacturers consumer goods firms and film studios can now afford access to supercomputers o Grid computing software uses existing computer hardware to work together and mimic a massively parallel supercomputer Using existing hardware for a grid can save a firm the millions of dollars it might otherwise cost to buy a conventional supercomputer further bringing massive computing capabilities to organizations that would otherwise never benefit
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