Convergence is Coming! Convergence is Coming! Convergence is Coming!
From a current article in Fortune. See the following link ... note that there are two parts to the article:
pathfinder.com
Excerpts:
"The growing glut is proof positive that
Moore's Law has arrived in telecom, with
profound implications for carriers and their
customers. In the computer industry,
Moore's Law predicts that the
performance of computer chips will double
every two years. In telecom, performance
is rising and costs are collapsing even
faster, as improvements in lasers, fiber,
and software reinforce one another,
exponentially expanding the number of
calls a fiber can carry from 8,000 in 1985
to 1.5 million now. The result two years
from now will be a national phone
infrastructure with more than 80 times
the capacity it had three years ago.
.......................
As people say about comedy, though,
timing is everything. The trick for the
upstarts is to be ready with the added
capacity just as new applications arrive
to ignite demand. Right now they have a
problem: The bandwidth is almost here,
and the applications aren't, which means
that long-distance companies face a
deep trough, if not an abyss. Even if the
companies can invent new services, many
analysts remain skeptical that they can
inspire consumers and businesses to snap
them up. Forrester Research in
Cambridge, Mass., predicts that a
bandwidth glut will begin next year and
last at least until 2005.
...........................................................
Like the other new CEOs, Crowe dismisses
the possibility that demand won't keep
pace with supply. "With all due respect,
most of the analysts who say that failed
Economics 101," he says. He reels off
possibilities: Businesses will download
software from the Internet rather than
fuss with CD-ROMs; consumers will forgo
trips to Blockbuster, browsing movie
catalogs and ordering videos from the
family den; music lovers will download
symphonies from the Web directly into
the digital library on their hard disk.
As they spin such tales, Crowe and the
others aren't talking of ordinary change.
They are predicting a transformation on
the same grand scale as the
personal-computer revolution of the '80s.
None of these men aspire to make their
company the next AT&T, which they
equate with the hidebound IBM of the PC
era. Instead, they speak wistfully of
becoming the next Intel.
.......................
What the two camps share is a need for
bandwidth-eating applications. That is
good news for consumers, because it is
driving the companies to take on a vexing
problem: snail-paced connections to the
home. While big businesses are
connected to their long-distance
company with fiber, most residences and
small businesses are joined only by the
old-fashioned copper wires owned by
their local telephone company.
To break the jam, the locals are touting a
technology called digital subscriber line
(DSL), which can carry high-speed traffic
over copper. But they have been
frustratingly slow in rolling it out. So
long-distance telcos are taking matters
into their own hands. Sprint announced
that it would deploy DSL nationwide
beginning in May, linking customers
directly to its network and providing local
as well as long-distance service. "It's a
key driver to get control over our
destiny," says Kevin Brauer, president of
national integrated services. MCI
WorldCom and Qwest recently took
minority stakes in DSL startups. AT&T is
trying to crack the local market via cable
telephony, with its $48 billion acquisition
of TCI and its recent deal with Time
Warner to offer cable phone service to 20
million households.
Rather than go it alone, the long-distance
newcomers are pulling together suppliers
and partners in new kinds of relationships
to create demand for network services,
much as Intel, Microsoft, and PC makers
united to equip America's desktops with
computers and software. Qwest CEO
Nacchio calls this approach "telecom
keiretsu." In December he forged an
alliance with Microsoft to develop
electronic-commerce services. Qwest
also has partnerships with suppliers like
Cisco, Lucent, and Nortel, co-developers
like Netscape, and customers like Bear
Stearns, NBC, and Exxon.
This one could sneak up on all of us. In response to the question, "When will streaming and narrowcasting become household words?"...Dave Gardy said "one year". He would know.
Ed Perry |
