Article from PC Magazine on the future of Wide Area Networks
The following article is from June 9 edition of PC Magazine. Today, the model is a leased line and your own routers. In the future, you will trade up front equipment purchase costs for higher monthly charges. If this is true, what will be the impact on companies like Bay, Cisco, Fore or companies like Lucent, or Northern Telecom?
Wide Area Networks
At this moment, the powerful regulated carriers, primarily RBOCs (Regional Bell Operating
Companies), are winning the regulation battle by outmaneuvering the proponents of competition. These regulated carriers simultaneously charm Wall Street with promises of earnings growth, cow state public-utility commissions and the FCC with reports of financial problems, and alarm public factions with warnings of loss of service and huge price increases. Their court activities defy simple description.
The outlook for the delivery of innovative WAN services from the regulated carriers or their
unregulated subsidiaries is dim. Generally, it's fair to say they talk about innovation and practice
stagnation.
Innovation in the WAN market in 2001 and beyond will come from
special contracts with carriers using shared frame-relay networks to
displace leased lines and locally provided routers, firewalls, and
intranet servers. The contracts deliver services outside regulated
tariffs. The best WAN plan in the next decade will be to use
customized frame-relay services to drive around the dead zone of regulation. Today, we call this
emerging business VPN provisioning or outsourcing. In 2001, it will be the common way of doing
things.
Today, you can save 20 to 30 percent of your annual leased-line connection costs by contracting for
replacement frame-relay services. By the millennium, the savings should be higher, because the real
unregulated costs will be much lower. Public data networks delivering a menu of services are clearly
the preferred alternative for year 2001 WANs.
But there's a long list of catches. In today's model, leased-line pricing is distance-sensitive and
traffic-insensitive. Public data networks are just the opposite, so you'll have a whole different traffic
model to consider. Today, when you create your own WAN with leased lines and your own routers,
you know what you pay for options such as added security or management. When you buy a package
of services, you get a bottom-line quote with little detail broken out. You will trade today's up-front
equipment-purchase costs for higher monthly charges. Comparing different bids for integrated services
will involve analyzing the offerings carefully and then weighing the value of some arcane differences.
The WAN 2001 we envision is a linear progression from today's. Differences in magnitude will come
only from unexpected breakthroughs provided by innovative, competitive carriers.
WAN Watchwords
CLEC
Competitive local exchange carrier. This category includes companies that compete
with the franchised local telephone companies. Carriers such as AT&T compete as
CLECs in some areas, as do power companies and many others.
Frame relay
A data-carrier technology that uses shared switches and wide-bandwidth connections.
For a monthly fee, a frame-relay service offers reliability, flexibility, and economy.
ISP
Internet service provider. The smaller ISPs--there are thousands in the U.S.--typically
lease circuits from other carriers and add features such as e-mail as well as Web-site
hosting and domain-naming services.
IXC
Interexchange carrier; a long-distance carrier that moves traffic between LECs.
LEC
Local exchange carrier. There are more than 100 such franchised local telephone
companies in the U.S.; the biggest are the RBOCs plus GTE.
RBOC
Regional Bell Operating Company; any one of the LECs spun off from the original
AT&T Bell system.
VPN
Virtual private network; a network that seems to be dedicated to one user but really
rides over shared public services.
From the June 9, 1998 issue of PC Magazine
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Copyright (c) 1998 Ziff-Davis Inc.
From the June 9, 1998 issue of PC Magazine
TOP
Copyright (c) 1998 Ziff-Davis Inc.
From the June 9, 1998 issue of PC Magazine
TOP
Copyright (c) 1998 Ziff-Davis Inc.
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