[More Intranet news from Financial Times]
<<<Intranets: Final call for human voice?
WEDNESDAY SEPTEMBER 10 1997
Internal web sites and electronic mail are greatly reducing companies'
reliance on the telephone, writes George Black. Why is this both good
news and bad news for the telecoms carriers?
The internet and the privately run intranet based on internet technology look set to replace telephone and mail services for a substantial part of business communications.
This new technology is a much cheaper way of conducting complex and
large-scale communications. It also makes it possible to ensure that most messages get through to addressees at the first attempt and that sizeable documents are easily delivered.
Unlike the internet, the intranet can, by using screening devices such as firewalls and proxy servers, filter out rogue information and offer business users greater confidentiality. Wholly under the control of the company using it, rather than being available to the public at large, it can also provide more manageable bandwidth. This makes it a serious rival to the telephone and to postal and courier services.
According to a report published earlier this year by the investment bank Durlacher and the market research company Romtec, the intranet will, in the next few years, become the primary means of business communication.
The volume of internet and intranet business traffic is expected to exceed that of voice traffic within five years. At least 40 per cent of businesses and perhaps as many as two-thirds will be running intranets by that time, a study by Prodata Partners estimates.
Intranet equipment will be outselling internet equipment by more than 10 to one by the year 2000, according to International Data Corporation (IDC).
Intra-company and inter-company communications alike will be carried
across networks that use internet protocols and procedures, particularly TCP/IP (Transmission Control Protocol/Internet Protocol).
Already many business people, tired of playing "telephone tag", have
realised that sending an e-mail across the internet is a more effective way of making contact. The spread of the intranet will greatly reinforce this trend.
Perhaps the biggest savings from the intranet will come from the
distribution of standard information throughout an organisation. The intranet is a tool to improve conventional communications, for example by acting as a platform for corporate information such as the internal phone directory, diaries and timetables.
Such information quickly becomes out of date. In electronic format,
however, it can - in theory, anyway - be revised as soon as a change
occurs and made immediately available to all staff through a browser.
This type of use of the intranet may represent a modest increase in
information technology and telecommunications budgets, but it promises a very sharp cut in expenditure on printing, transport, storage and costs in terms of staff time.
As intranets are increasingly extended into "extranets", encompassing
customers and suppliers as well as staff, voice traffic may be further
reduced. Phone calls to establish stock positions or confirm orders will be replaced by electronic messages.
What does this mean for the carriers?
As Mark Lillycrop, a director of the market research company Xephon,
points out, increased demand for bandwidth is good news for the
telecommunications companies, but increased competition from systems
integrators and internet service providers is threatening.
The intranet adds to the challenges that the carriers already face from deregulation. Convergence of telecommunications and computers is
creating many new competitors and is forcing the carriers into some
defensive alliances.
"The telecommunications companies need to beware of being bypassed
and losing control," says Mr Lillycrop.
The carriers have been slow to recognise the importance of the internet and intranets. Companies that are seeking to build extranets in order to get into electronic commerce now have a choice of suppliers.
Mr Ade Ajibulu, senior consultant at the research company, Analysys,
thinks that the carriers will face tough competition from systems integrators such as EDS, Andersen Consulting and IBM. New technology
partnerships such as that between Siemens and 3Com look set to increase the pressure.
BT has risen to the challenge by launching a range of intranet services with Microsoft, including intranet outsourcing contracts.
This was the first significant announcement of a complete intranet service by a carrier in Europe. Other carriers, including Global One (Deutsche Telekom, France Telecom and Sprint) and AT&T, are understood to be developing similar packages. BT will provide the network, Microsoft the software expertise for the service. Microsoft's Exchange groupware product will become part of the offering. The service will be based on Digital hardware and Cisco routing and switching devices.
Several other leading information technology companies, including
Andersen Consulting, Computacenter and SAP are collaborating with BT
and Microsoft on the technology and have undertaken to provide other
products and facilities on top of the standard service from BT and
Microsoft.
The initial target market is large corporations that either do not want to make a big capital investment in building their own intranets or do not have the resources to do so, especially given the pressures of the year 2000 date conversion and single European currency projects.
BT's intranet product manager Mr Wayne Donaldson says the market potential is so huge that BT decided a couple of years ago it could not ignore it. "We have no choice but to be in it," he says.
He believes the company has won credibility by developing a large intranet of its own.
Around 65,000 BT staff - about half of the total - are on the intranet, which is reckoned to have made around œ740m worth of savings in its third year of operation. On distribution of price lists to salesmen alone it is saving around œ18m a year, says Mr Donaldson. "As people get used to it they want to do more with it," he notes.
The BT chief executive Sir Peter Bonfield and other senior managers keep their schedules on the system, which means staff and secretaries do not have to spend time making telephone enquiries.
BT's intranet also has "sub-intranets" or closed user groups for people in the same area of work, such as engineers or sales staff. These operate as a cheaper form of groupware.
Thus BT will have a ready-made point of reference as it gears up to
compete in this huge and crucial new arena.>>> |
