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202 Part Two Information Technology Infrastructure

Figure 5.4 illustrates the relationship between number of transistors on a
microprocessor and millions of instructions per second (MIPS), a common
measure of processor power. Figure 5.5 shows the exponential decline in the
cost of transistors and rise in computing power. For instance, in 2012, you can
buy an Intel i7 quad-core processor on Amazon for about $355, and you will be
purchasing a chip with 2.5 billion transistors, which works out to about one ten-
millionth of a dollar per transistor.
Exponential growth in the number of transistors and the power of processors
coupled with an exponential decline in computing costs is likely to continue. Chip
manufacturers continue to miniaturize components. Today’s transistors should no
longer be compared to the size of a human hair but rather to the size of a virus.
By using nanotechnology, chip manufacturers can even shrink the size of
transistors down to the width of several atoms. Nanotechnology uses individ-
ual atoms and molecules to create computer chips and other devices that are
thousands of times smaller than current technologies permit. Chip manufactur-
ers are trying to develop a manufacturing process that could produce nanotube
processors economically (Figure 5.6). IBM has just started making microproces-
sors in a production setting using this technology.

The Law of Mass Digital Storage
A second technology driver of IT infrastructure change is the Law of Mass
Digital Storage. The amount of digital information is roughly doubling every
year (Gantz and Reinsel, 2011; Lyman and Varian, 2003). Fortunately, the cost
of storing digital information is falling at an exponential rate of 100 percent a
year. Figure 5.7 shows that the number of megabytes that can be stored on mag-
netic media for $1 from 1950 to the present roughly doubled every 15 months.
In 2012, a 500 gigabyte hard disk drive sells at retail for about $60.

FIGURE 5.5 FALLING COST OF CHIPS

Packing more transistors into less space has driven down transistor costs dramatically as well as the
cost of the products in which they are used.
Source: Authors’ estimate.

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