Modems Rev Up To 56K -- Despite its flaws, 56K is still the biggest bargain in town
Source: VAR Business
VAR Business via Individual Inc. : We really don't know how much of
our V.34 technology is incorporated in our competitors' 56K
products," says Bill Heimbach, manager of corporate development
for Motorola ISG. It is the morning after Motorola filed a V.34 patent
infringement suit against U.S. Robotics in U.S. District Court. The
timing seems a bit odd since V.34 technology has been around for a
long time. The truth is, V.34 is a secondary issue. Motorola's real
target is U.S. Robotics' next-generation 56K modems. It is the latest
round of escalation in a war that is about to spill over into the channel.
Says Heimbach, "If V.34 technology is used in a 56K product, then
that technology must be licensed by Motorola."
U.S. Robotics said Motorola's lawsuit came at the end of a period of
negotiation in which Motorola was unreasonable about both the
definition of its intellectual property and compensation. Coincidentally, on the day it
filed the suit, Motorola announced it had settled a similar
suit against Rockwell International Corp. The suit involved the use of
Motorola's patented V.34 technology in Rockwell's 56K modem
technology.
Divided They Stand
The U.S. Robotics suit is still pending. But the lawsuits illustrate two
significant things about 56K technology. The technology is breaking
down into two fairly hard-core camps. This is not the first time that a
new technology has divided the modem community. What is different,
though, is that one company, U.S. Robotics, is charting a very
different course. And it's backing that course up with a very
expensive marketing campaign that stresses that it will be able to
upgrade its prestandard modems through software. (Standards are
expected to be finalized by the end of the year.) That is a claim the
hardware- oriented Rockwell/Lucent group (the other camp) cannot
make.
The other major difference is 56K technology itself. Unlike earlier
innovations that promised higher speeds and greater efficiency
across the board, 56K technology requires a specific set of
conditions to operate effectively. Simply installing a 56K modem
guarantees nothing. It's a technology of accommodation and will be
an extremely spotty performer. For instance, it requires a digital
system on one end of the connection. It does not work in an
analog-modem-to- analog-modem connection. It will only work over
high-quality lines. It will not work over any link that has a second
analog-digital conversion nor with conflicting digital conversions. It
also will not work with a number of line conditionings, including certain
voice enhancers (such as AT&T's True Voice) and compression
techniques.
There is a lot at stake in this 56K war. For vendors, it's a war of
market share and control. For VARs, it is more like a strategic
skirmish, in which their credibility could be questioned. 56K
technology has performed poorly in beta tests. Some beta sites
have not been able to achieve or sustain 56K performance after a
month of trying. Even vendors are admitting, off the record, that they
have only been able to sustain 56K performance less than half of the
time.
Nevertheless, U.S. Robotics has been able to rally its VARs behind
56K technology. And vendors such as Motorola, Multi-Tech Systems
Inc. and Cardinal Technologies are warming to the challenge. Why?
What does the channel have to gain from a prestandard,
underperforming technology?
"At this stage of the game where performance is key, VARs like me
want to give our customers as much of an edge as we can," says
Chris Kendig, president of Indianapolis VAR CommNet Plus Inc.
"Yes, it is prestandard, but U.S. Robotics will upgrade to whatever the official
standard is. And we can make sure that our customers'
connections are such that we can achieve 56K performance."
CommNet is a 7-year-old network integrator that specializes in
network design and installation for Internet Service Providers. It is the
type of VAR that modem vendors are seeking. For VARs such as
CommNet, network performance is crucial; every last kilobit of
bandwidth that can be squeezed out of analog technology is well
worth it. Analog technology is still the least expensive computer
connection in the universe and, at speeds approaching some digital
technology, 56K is a bonanza for some VARs.
"It's a great differentiator right now, and with prices comparatively low,
it is something my customers must take advantage of," says Kendig.
U.S. Robotics plans to upgrade its current crop of 33.6K modems to
56K technology at a cost of roughly $60 per port.
U.S. Robotics has used its early lead to attract ISPs. At this writing,
the company has signed more than 420 ISPs ranging from larger
providers, such as MCI and AOL, to small regional providers, such as
Mindspring, an Atlanta-based ISP.
The 3Com Factor
No one knows for sure how U.S. Robotics' early lead will be affected
by its recent merger with 3Com, since 3Com is part of the K56flex
standard coalition led by Lucent and Rockwell. Many expect positive
outcomes in 56K technology from the marriage of 3Com's and U.S.
Robotics' joint development teams. Others believe the merger will
bring U.S. Robotics into the K56flex fold.
But on the future possibilities created by the 3Com/U.S. Robotics
merger, some VARs are decidedly lukewarm. 3Com VARs aren't
sure what they will gain from the merger since 3Com's product
portfolio already includes many of the U.S. Robotics products that
would be of interest to them. Many of U.S. Robotics' VARs, however,
already sell 3Com hubs and switches.
So while the product synergy between the companies undoubtedly
exists, there is some major overlap at the crucial low end of the
networking market. 3Com's recent small and midsize business push,
along with its focus on the "edge" network, closely resembles U.S.
Robotics' remote- and small-office access device strategy. U.S.
Robotics' recently introduced LANLinker 56 and 3Com's
OfficeConnect Remote 510 compete in the
remote-office/small-office space.
Credibility Lag
Analog modem technology has been a solid performer through the
years but with the last few rounds of innovation, the technology's
credibility has been questioned. High-speed modems have
underperformed, frequently falling back to slower connection speeds.
The cost of analog modems and phone lines has been low enough
that modem vendors have not suffered a significant negative market
reaction. But there has been a price to pay in terms of credibility.
"Modem vendors may be in danger of contaminating their buyers'
attitudes," says Tom Nolle, president of CIMI Corp., a Voorhees, N.J.,
technology assessment firm. "If buyers feel cheated, at some point
they will not go along with a paradigm shift because they don't feel
the necessary level of confidence."
Vendors acknowledge the underperformance of many of the more
recent high-speed modems, but they point to the telephone network
as the culprit. "The quality of the telephone system and the local loop
has not kept up with data communications technology, so we and
most other vendors offer up to 56K performance," says Motorola's
Heimbach. "We can't guarantee 56K performance until the local loop
is upgraded."
56K technology is probably the upper limit of analog performance.
Technically, it is not solely analog but a hybrid of analog and digital
technology. It is possible to push modem technology up to 64K with
more efficient use of this analog/digital hybrid, but that is at least a
year off in the future. At that point, it may be in the channel's best
interest to look at packetized digital technologies, such as ADSL.
In the meantime, 56K modems offer end users and VARs the best
available cost proposition. Until technologies such as ISDN and
ADSL become less costly and as ubiquitous as analog
communications, vendors will continue to squeeze more
performance out of the modem.
-Quick Scan
Cardinal Technologies Lancaster, Pa.(717) 293-3000,
www.cardtech.com
Micro Tempus Inc. Montreal, Quebec (514) 848-0803,
www.microtempus.com
Motorola ISG Mansfield, Mass. (508)261-4000,
www.mot.com\isg\modems
Multi-Tech Systems Inc. Mounds View, Minn. (800) 328-9717,
www.multitech.com
U.S. Robotics Skokie, Ill. (708) 982-5010, www.usr.com
Copyright 1997 CMP Media Inc.
<<VAR Business -- 04-01-97, p. 45>>
[04-12-97 at 09:46 EDT, Copyright 1997, CMP Publications, Inc.] |
