SPRING 2012Team Members :1. Ganbat T2. Riri K3. Teshome W4. Tri A

The New ICT Ecosystem : Architectural

Structure

ITTP750:ICT Economics & Management , Professor : Myeong-Cheol Park

Content

IntroductionBasic ICT Ecosystem (The Six Layer)New ICT Ecosystem (The Four Layer)Conclusion

Introduction

An Ecological community interacting or aggregating together withits environment functioning as a unit

ICT industry

Ecosystem

The sector of economic activity operated based on Information and Communication Technologies(ICT)

The interaction of different units or systems of the technology, business, service etc, in an ICT industry interacting within one unit of working environment

The ICT Ecosystem Layer Model (ELM)

Model of the global ICT sector that is developed in order to assist the analyses of the sector, and to help inform the development of appropriate corporate strategies and government policies.

A Qualitative model that views the entire ICT sector as a system

Basic ICT Ecosystem

A layer of ICT Ecosystem consists of 6 layers (The Six Layer of ELM)

ELM : Description of ICT Industry

Final consumption

Content, application, and services

Middleware, navigation, search & innovation

platformsConnectivity

Network Operating

Networked Element

Layer 1 : Networked Elements

• Increasing tendency, this sector to be integrated into networks

• Telecom equipment• Consumer electronics• Computers• Semiconductors, etc• System software

Examples

Layer 2 : Network Operating

• Integrating elements in Layer 1 to Information & Communication Networks

• These integrated elements run by network operator

• Telecom operators• Cable TV Operators• Satellite operators• Broadcasting operators

Examples

Layer 3 : Connectivity

• New firms were able to enter layer 3 & provide internet connectivity

• Some incumbent player in layer 2 also entered layer 3

• France Telecom• Deutsche Telekom• A.O.L

Examples

Layer 4 : Middleware, Navigation, Search and Innovation Platforms

• The demand for search function

• Function to navigate through many hosts on the WWW

• Browsers• Search engines• Security software

Examples

Layer 5 : Content, Application, and Services

• Content : – A commonly used term regarding to the Internet

and other electronic media (e.g. television and DVDs),

or :– A Material, which is inserted to users, such as

textual information, images, music, and movies.

Layer 5 : Content, Application, and Services

• Application : program or group of programs designed for end-users.

• It could be software programs in case of applications software.

>>> In this course, the term ‘application’ is also used to include functionalities, such as electronic commerce provided by new Internet companies such as eBay and Amazon.com.

Layer 6 : Final Consumption

• The Consuming from layers 1 – 5.• Drawing attention to the importance of the

intermediate demand and intermediate markets that exist between layer 1-5.

Interaction Between Layers

• The services referred to in layer 5 refer to services for final consumers/users not for intermediate consumers/users.

• Example : – New entrant telecom companies purchasing local loop access

services from incumbent telecoms operators under LLU regulations are conceived of as making an intra-layer 2 transaction in the access market located in layer 2.

– However, in using local loop access to provide Internet access to final users (such as households) they are conceived of as making a market transaction involving layers 2 and 6.

Interaction Between Layers Con’t…

• Intermediate demand and supply relationships (and therefore markets) exist both within and between layers.

• Example : – In layer 1 systems producers (such as the producers of PCs

or mobile phones) demand semiconductors and other devices from component producers.

– Telecoms operators in layer 2 demand telecoms equipment from telecoms equipment suppliers located in layer 1.

New ICT Ecosystem(The 4-layer Model)

Relatively loose, open and qualitative armework to think, and act about individual’s technologies, social and economic issues. (Frans MA).

The new immerging of the basic ICT Ecosystem,

Formulated due to the merge or convergence of some layers in the basic layer systems,

It aims to offer a conceptual vehicle to analyses and strategize about unfolding change in the digital landscape and support decision making in: Organizations, firms & Government. Generally, the conceptualization of the new ICT ecosystem into a four-layer model (equipment, networks, services and content) (Didier Lombard,CEO)

Layer 6 : Final consumption

Layer 1 : Networked element

Layer 2 : Network operating

Layer 3 : Connectivity

Layer 4 : Middleware, navigation, search, and innovation platform

Layer 5 : Content, applications, and services

Layer 3 : Contents, applications, services, middleware, navigation, search, and innovation platform

Layer 2 : Network operating

Layer 1 : Networked element

Layer 4 : Final Consumer

The Six-Layer ELM Model

The Four-Layer ELM Model(New Model)

Why The Four-Layer ELM Model ?

• The first aggregation : Connectivity has been vertically integratede.g.: Telecoms operator incumbents vs independent ISP

• The second aggregation :Activities such as navigation (typified by Google offering) which were in layer 4 of the six-layer ELM model – are intimately connected with the provision of content, application and services.

Layer 1

Cont. & App. Providers

Converged Networks

Finalconsumer

Layer 3

Layer 2

Networked elements

Networked element providers

Network operators

Platform, content & applications providers

Final consumers

Architectural Structure

Key Points considered for the emergance of new Ecosystem,

Emergence of new Technologies some layers become complimentary The term convergence is often used for this phenomenon.

For example, layer 1&2 in the basic ICT Ecosystem were separated functionally, but with the new system, they become interconnected, and their service is getting to be substituted.

This brought vertical integration, or merger. The advent of internet had contributed for the impact on the structure of

the new Ecosystem. TCP/IP facilities the movement of packets of information across different

networks, allowing them to become interoperable, and sometimes substituted.

Key Points Con’t…….. This has facilitated the emergence of the process of convergence. Different firms give the same service, this may bring on the firms to merge

or compete. TCP/IP has another equally profound effect facilitated the emergence of

new layers consisting of new functionalities (Layer 3-5). It has allowed the technical separation of layer 1&2 from the upper layers This brings the entry of new players into the new ICT ecosystem, providing

new functionalities. The aggregation of layer 4(Middle ware, navigation, search & innovation

platform) & 5(Content, Application & Service in the 6 model to get layer 3 in the 4-layer model.

The reason for this aggregation is that: Middle ware products are increasingly being provided by firms involved in navigation, content, application & services.

Conclusion

System & Devices substituted each other,

Convergence from Heterogonous System to simplified (single )system,

Allowing firms to vertically integrated (merged),

Competition between firms increase QoS for buyers,

A step forward for Anywhere & Anytime service,

New ICT Layer Model

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