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Technology Stocks : Compaq

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To: P2V who wrote (33844)10/5/1998 6:38:00 PM
From: John Koligman  Read Replies (1) of 97611
 
Ok everyone, thanks, I'll keep putting them up!! Here is another one, it's about the internet and how the Sprint CEO thinks it will change. The one paragraph I found interesting is where he talks about how fatter pipes may cause a backup on the server end. That sounds like more business for CPQ as ADSL and cable access ramp up...

John

Is the Net dead?
Sprint chief thinks so

By Tom Steinert-Threlkeld
10/05/98 04:07:00 PM
NEW YORK -- Is the Internet dead or dying? Maybe.

At least that's the view of William T. Esrey, chairman and CEO of
Sprint Corp.

Just as his company has begun to put large businesses onto its
well-publicized new data network for all kinds of communications --
from transferring files to making voice calls -- Esrey this morning
told a gathering of industry leaders at The Wall Street Journal
Technology Summit that it's time to prepare for life after the Internet.

"The Internet is going to be replaced by other nets. The Internet is
going away, as we know it," he said. "There will be a rationalization
of economics."

Access charges the reason
At issue: The charges that long-distance phone companies pay for
access to local phone networks when they want to complete phone
calls for customers.

Currently, such access charges amount to
about 45 percent of the cost of long-distance
calls, Esrey said. Meanwhile, with government
policy bent toward fostering the development
of the Internet "as we know it," data calls face
no such charges, even if the packets actually
are carrying voices.

"It makes no sense," Esrey said, because both voice and data calls
will use the same amount of resources, as communications
companies move toward some kind of packet-based network as
Sprint did with its new Integrated On-Demand Network. In his mind,
the "day of reckoning is right around the corner."

Metcalfe disagrees
Robert Metcalfe, inventor of Ethernet packet networking technology
and vice president of technology at International Data Group,
disputed Esrey.

"That idea is really not on [the mark]," he said after Esrey's talk.
Instead, he envisions "five to 10 next-generation networks," based
on different forms of exchanging packets at high-speed.

Some of those networks are expected to be based wholly on
Internet protocols. However, communications experts such as Bell
Communications Research Inc. Chairman Emeritus George
Heilmeier believe that, in the future, they also will handle such
packet technologies as frame relay and Asynchronous Transfer
Mode.

"This tends to confuse telephone people," Metcalfe said, "so the
answer [to them] is, the Internet is dead."

No extra charges
Data customers naturally will resist the addition of access charges
for Internet services, said John M. McQuillan, president of McQuillan
Consulting. That will put phone companies such as Sprint in a bind.
Sprint, Esrey noted, still derives half of its profit from local phone
services. If the Net starts handling significant amounts of traffic that
otherwise would be conducted as local phone calls, access charges
likely will have to be reduced, McQuillan said. This will squeeze the
bottom lines of conventional phone companies.

"That's not the Internet's problem," he said. "That's the local
telephone company's problem."

Bottleneck will change
Another key aspect of the Internet "as we know it" also will change
over the next few years, Esrey said. Concerns about the capacity of
the Internet and other data networks to handle rapidly escalating
demand will diminish. Instead, the new bottleneck, he contended,
will be software applications and application servers. Companies will
not be able to effectively handle the downpour of packets that will
result from the emergence of big communication pipes in data
networks.

In 1989, 24,000 simultaneous phone calls could be conducted on a
single pair of optical fibers. In 1998, that number is escalating to 2
million simultaneous calls. Next year, it will reach 33 million, Esrey
said.

Missing the point
Esrey is missing the point by "defining the Net in terms of the
number of phone calls" it can execute at one time, said Douglas E.
Van Houweling, president and chief executive officer of the
University Corporation for Advanced Internet Development. The
organization is spearheading the development of academia's
next-generation Internet 2 technologies. Instead, Van Houweling
said, he should be focused on videoconferencing, messaging and
other business applications that will dominate the new
internetworking of communications and computing.

"That's the net of the future," he said. "That's the Net where we're
headed."
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