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To: djane who wrote (45410)4/27/1998 2:52:00 AM
From: djane  Read Replies (2) | Respond to of 61433
 
PC Revolution Sweeps China

Excerpt: "If the Chinese government changes the policy and the
local phone company offers a flat rate, the ISPs will
follow," H-Lines' Luo said. "And when that happens,
the Internet in China will explode."

techweb.com

(04/26/98; 11:58 a.m. ET)
By Richard Wallace, EE Times

Nine years after government tanks rolled into
Tiananmen Square to crush a nascent revolution,
another powerful grass-roots movement is sweeping
China as its citizenry embraces the personal computer.

Encouraged by China's political leaders, who consider
the PC an essential modernization tool, ordinary
Chinese citizens have joined influential customers in
government and industry to create a huge and thriving
market in OEM and retail PC hardware and software.
Indeed, China has proved a bright spot in a dim year
for the PC industry as the sales numbers here have
bucked the West's downward trend.

Nowhere is the PC boom more in evidence than in
Beijing's bustling Zhong Guan Can electronics district, a
frenetic hub that epitomizes the uniquely Chinese OEM
business model of on-the-spot manufacturing. Reports
from other such centers in Shanghai, Guanghou, Tianjin
and Shenzen suggest that PC fever is a nationwide
phenomenon.

Bounded on one end by Pizza Hut and on the other by
Dunkin' Donuts, Zhong Guan Can makes Tokyo's
bustling Akihabara district look staid by comparison.
Throngs of buyers seeking equipment for business or
personal use crowd the strip's hundreds of stalls and
larger shops, which proffer the latest microprocessors,
motherboards, disk drives, SIMMs, graphics cards,
monitors, keyboards and modems.

Indeed, virtually any PC component or add-in available
in today's market - and every known brand-name in
computerdom - can be found at Zhong Guan Can.
While the components aren't manufactured here, expert
assemblers and system builders can configure virtually
any customized system while you wait - usually for
about 10 percent below Dell's best price. And huge
3Com and Cisco billboards attest to the rise of an
attendant business in networking hubs and routers,
characterized by the same cash-driven, turnkey
approach to system integration.

Though there's an official 17 percent customs tax on PC
parts imported into China, sources here suggest
government enforcement is casual at best. "The small
PC assemblers have found ways of avoiding the tax,"
one source said, noting that the cost savings let the
build-it-on-the-spot shops operate with margins that the
likes of Dell, Compaq and HP can only envy. Lacking
the credit infrastructure of the West, and with telephone
sales and electronic commerce virtually unknown in
these parts, cash-for-merchandise bargaining is as
spirited in Zhong Guan Can as elsewhere Beijing.

Old - and new - Shanghai
In Shanghai, the CVIC Center, a large, modern
computer emporium in the heart of downtown, lacks
Zhong Guan Can's colorful atmosphere but rivals its
activity. The center comprises six floors of computer
stores, ranging from large enterprises with flashy
displays of brand names to hundreds of tiny shops with
stocks of parts and handwritten price sheets.

Also in Shanghai - on the city's historic Bund, where
Europe set up shop after the Opium Wars - is the new
Wai Tan Computer center, now operating in phase one,
with phase two to open next month. Wai Tan's small
shops specialize in selling components, which buyers
assemble into PCs .

Whether located in a clean, modern venue or off a
dusty alley, the importance of small PC stores as a
major channel in China is undeniable. Intel Corp. has
said that about half its CPU sales in China are
channeled through the no-name shops.

Like China's small retailers, local PC makers are
winning market share with a no-frills approach that
stresses low price and a flexible feature mix. And the
largest Chinese PC makers, such as Legend Group,
Great Wall Computer Co. and Shanghai Computer
Co., are rapidly establishing their brand names.

Legend is China's leading PC OEM. The company
reportedly sold more than 500,000 units last year,
topping Compaq with a market-leading share of roughly
11 percent, said Peter Liu, chairman of WI Harper
Group, a venture-capital concern that has helped fund a
number of PC-related enterprises in China. Tontru,
another popular local brand, sold more than 200,000
units last year.

The price differential between the established brand
names and the built-on-the-spot machines can be
cavernous. At Shanghai's small shops, less than $800
will buy a Pentium 233-MHz MMX multimedia system
with 32 Mbytes of DRAM, a 15-inch monitor, a
2.5-Gbyte hard drive, a 24x CD-ROM drive, graphics
and fax/modem cards. Similar systems from NEC, IBM
and Acer run about 50 percent more.

The disparity is even more pronounced for Pentium II
systems. The Chinese assembly shops offer Pentium II
multimedia systems for as low as $913. Pentium II
packages are commonly found for $1,100. Foreign
brands of similar systems can cost up to 74 percent
more.

China's computer frenzy is expected to reach a new
level next month, when Intel chairman Andrew Grove
arrives for a company-sponsored multi-city tour. Intel is
also reportedly lobbying the Chinese government to
liberalize its Internet-connect policies and has been
been trying to develop the local software market.

Local sources said that Intel has set up a PC-software
incubation center in Shanghai and that it is working
closely with small and midsized OEMs to push adoption
of the Pentium II as the base processor for new
systems.

Such relationships could prove critical as China exerts
widening market influence. From a 1991 base of only
2,000 units, China's PC market has expanded at a clip
that finds brand-name suppliers, local OEMs and
one-man assembly operations scrambling to keep pace.
Last year, according to estimates published by China's
newly formed Ministry of Information Technology,
roughly 1.4 million PCs were sold; this year, is
expected to top 2.6 million.

The freewheeling PC trade has the government's
blessing; indeed, the IT ministry may be the market's
most vocal cheerleader. Some call the government
posturing propaganda, but it's paying off in spades.

Recently formed via the merger of China's electronics
ministry and its Ministry of Post and
Telecommunications, the IT mega-ministry encourages
PC adoption as a means of "readjusting and upgrading
China's industrial structure," in the words of Tu Deyong,
an official with the old Ministry of Electronics Industry
who spoke at a SEMI-China briefing in Shanghai last
week.

Part and parcel of that upgrade and readjustment is an
embracing of the digital revolution. As Tu put it, "If we
still keep analog products, we'll all be out of business."

The IT policy is also aimed at "deepening our reform of
scientific and technological systems to improve R&D
and includes "close ties to companies and universities,"
Tu said. "We need to update traditional industries and
use IT to boost national economic growth." Toward
that end, the ministry is promoting "golden projects,"
including efforts in CAD/CAM and CIM.

"China has done a much better job than Japan in getting
computers into business operations," said Dwight
Nordstrom, GM for Three-Five Systems, a local
manufacturing startup. "Every one of our 200
employees knows how to use a computer."

He added that he believes China's one-child-per-family
population-control policy has fueled the
home-computer boom, as parents seek to give their
offspring every possible advantage, even if it means
laying out three months' salary for a computer. "Home
use will be huge," predicted Nordstrom, who has spent
the past eight years helping U.S. companies set up
Chinese manufacturing operations.

Harper Group's Liu concurred with Nordstrom's
assessment. "The PC's emerged as a trendy product.
With only one child, Chinese parents will do anything to
help their children's education and to help them have a
better job," he observed, adding that the most
successful OEMs have been those that have been
flexible in localizing their products.

Liu estimates that more 850,000 PCs will be sold in
China this year and that by the year 2000, "the total PC
market in China will be 7 million to 10 million units."

Joseph Luo, vice president of H-Line Public Relations
(Beijing), which represents a broad mix of primarily
U.S.-based companies, predicted that computer sales
to the home market will grow more than 66.7 percent
this year over 1996 levels. "PC OEMs are very
aggressive and think they will double sales from this
year to next," he added.

Luo said a huge market also exists in China for all types
of add-in peripherals. Handwriting input devices are
particularly big sellers.

According to Liu at Harper, the Chinese government
has issued over 130 licenses to PC OEMs in China
over the past several years. Nonetheless, the number of
significant players has been winnowed to a handful, with
Legend in the lead.

Liu's venture-capital firm bankrolls companies that
demonstrate novel approaches for breaking into China's
PC market. Network security, for instance, represents
a major opportunity for those seeking to serve
businesses that routinely navigate the government's
labyrinth of ministries and bureaus. By working with PC
OEMs, the government and VARs with customizable
solutions for the Chinese market, Liu's VC group can
exert considerable leverage in establishing de facto
standards.

Liu has this warning for OEMs and others eyeing the
lucrative business of customizing PCs for China: "It
takes a lot of patience and a lot of handholding" to be
successful. But he said he is also looking at
opportunities beyond the PC-assembly business, noting
that China needs to focus not only on hardware but also
on software development.

Another trend that promises opportunities is the surge in
local Internet use. Internet-service providers currently
serve 870,000 users in China. But connection charges
are pegged to a government rate structure that charges
0.2 yuan a minute.

The IT ministry could wield some influence over rates.
Some observers think the per-minute rate structure may
soon be replaced by a flat-rate structure.

"If the Chinese government changes the policy and the
local phone company offers a flat rate, the ISPs will
follow," H-Lines' Luo said. "And when that happens,
the Internet in China will explode."


Additional reporting by Mark Carroll

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To: djane who wrote (45410)4/27/1998 3:02:00 AM
From: djane  Respond to of 61433
 
**OT** Microsoft Investor article on H&Q Conference.
"It's Woodstock for Tech Stocks"

investor.msn.com



To: djane who wrote (45410)4/27/1998 3:19:00 AM
From: djane  Read Replies (2) | Respond to of 61433
 
Level 3 IP start-up draws big $$
[Didn't the recent BARS report say Level 3 would be a big ASND customer?]

By Kimberly Weisul, Inter@ctive Week Online
April 24, 1998 2:28 PM PDT

zdnet.com

Level 3 Communications Inc., a start-up telecom company, successfully
issued the largest junk bond offering of the '90s on April 23, raising $2 billion.

The massive money grab highlights two key facts: First, the high ambitions of Level 3,
which plans to offer long-distance and local services of all types; and second, the high
cost of building new telecommunications networks.

Level 3 plans to use the $2 billion it recently raised, as well as $2 billion already on
hand, to build a nationwide network based on Internet Protocol. Although demand is
heavy for long-distance services now, Level 3 expects that demand for an
Internet-based network will rise as more Internet services become available.

Level 3 will also benefit from a well-respected management team and a market
capitalization of roughly $10 billion. James Crowe, the head of Level 3, was the brains
behind MFS Communications Co. Inc., which pioneered the competitive local access
industry.

He later teamed up Peter Kiewit Sons' Inc. - a construction company - which took
Level 3 public earlier this month.

The company's construction plans are estimated to run up an $8 billion to $10 billion
tab, which accounts for not only equipment but auxiliary costs such as rights of way
and labor. Kiewit's help should go a long way here.

Kiewit has laid conduit before and has experience in "getting the rights of way,
trenching it, the nitty-gritty nuts and bolts of getting a nationwide network," said Tim
Caffrey, a director in Standard & Poor's ratings group. Level 3's strategy runs counter
to that of some of its competitors, which have been building local networks with plans
to later link them into a national presence.

Level 3 will be able to offer some services before its own network is completed,
thanks to a leasing agreement with Frontier Corp.

In its recent round of fund-raising, Level 3 benefited from a favorable market
environment featuring a glut of investors hungry for telecom deals, Caffrey notes. "This
is a better deal than some in this market," he said. "If you're going to invest in a
start-up telecom company, you could do worse than Jim Crowe and his company."

The bonds were rated single-B by Standard & Poor's, and single B-3 by Moody's
Investors Services.

Copyright (c) 1997 ZDNet. All rights reserved. Reproduction in whole or in part in any form or medium without express written
permission of ZDNet is prohibited. ZDNet and the ZDNet logo are trademarks of Ziff-Davis Publishing Company.

For magazine subscription savings, risk-free trial issues, newsletters, and more, click here!



To: djane who wrote (45410)4/27/1998 3:49:00 AM
From: djane  Respond to of 61433
 
4/98 tele.com article. Internext: This Revolution will Be Televised
[Good article on plans of many ASND customers. One specific ASND reference related to UUNet and UUCast.]

teledotcom.com

By Peter Lamber, Senior Writer

OC-3. OC-12. OC-48. OC-192. OC-192 with WDM. And
on and on. Bandwidth multiplicity is the obvious answer to
keeping the Internet one step--or maybe it's a half-step--from
being overtaken by the volume of its success. At least it's the
answer that most service providers are relying on now to stave
off disaster. Yet even as they plot out exponential growth
plans for Internet capacity, leading network builders realize
that someday they are going to lose the race--unless they do
something to change how the race is run.

"It's getting to the point where I need not to just believe in
miracles but to rely on them." That's what Vint Cerf,
acknowledged sire of the Internet and senior vice president of
Internet architecture and engineering at MCI Communications
Corp., told fellow Internet builders at a technology conference
in February. Cerf's prognosis: Without those miracles the
Internet could be in for a major brownout by year's end. The
scary part of Cerf's prediction is that today's traffic volumes
are almost nothing compared with what will literally come
down the pipe in the next few years.

The kind of video content now broadcast over the air and
over cable TV infrastructures will dominate the world's
telecommunications networks by 2005. Content providers like
The Walt Disney Co. are moving ahead with R&D that will
enable them to deliver any number of video services to any
number of subscribers over the public network. Their ultimate
goal is to obliterate today's barriers--such as the geographical
limits of over-the-air broadcasting and the economic limits of
dealing with cable providers--that separate them from a truly
global mass market.

That begs one enormous question: How can network
infrastructures deliver infinite content if they can't even keep
pace with the relatively puny amounts of traffic coursing
through the Internet today? Which leads to another question:
Are folks like Vint Cerf really putting their fate in the hands of
divine intervention? Not quite. Even as they continue to
hammer more capacity into their backbones and send silent
prayers to the cybergods, Internet providers are taking real
steps to redefine exactly what the Internet is, how it works,
and what it will deliver to the masses. Over the next few years,
these efforts will manifest themselves into something that may
be as unimaginable today as the World Wide Web was a
decade ago: the Internext, a network resource that could
make today's Internet data networking's equivalent of two tin
cans and a string.

Some of the technology and network design components that
will enable the Internext already are off the drawing board and
ready for deployment in the real world (see "Internext Building
Blocks"). Effectively drawing a blueprint of these Internext
components, new entrants into the Internet business, including
the eventually IP-based cable industry, have begun to plot out
a new public network architecture from scratch. In terms of
fundamental physical design, that blueprint begins with the
decentralization of Internet content, using intelligent database
replication tools to push copies and updates outward to data
center server farms and closer to users in every locality. The
plans also include implementation of mature but long-dormant
IP multicast routing protocols, laying the groundwork this year
and next for a network that can broadly support not only the
one-to-one unicast transmissions that drive almost all 'Net
traffic today but also one-to-millions multicast transmissions.

Redesign is being carried out beyond the backbone as well.
Local service providers are deploying cable modem and digital
subscriber line (DSL) access technologies that are not only
high speed but also "always on," pointing the way to new
categories of real-time, anytime services. To control traffic
patterns and congestion, leading internetworking vendors are
starting to deliver a tangle of competing, currently proprietary
quality of service (QoS) routing protocols that, in two to five
years, could make the 'Net intelligent enough to accommodate
each unique class of application with a unique level of
transmission quality assurance.

Finally, the grand design for the Internext points to a
communion of intelligent signaling, directory services, and
object-based application management technologies that
promise to link users, service providers, and content more
flexibly and seamlessly than ever.

The first manifestations of the Internext already have started to
appear. For example:

* Cable Internet providers At Home Corp. (@Home,
Redwood City, Calif.), US West Media Group (Englewood,
Colo.), and Time Warner Cable (Stamford, Conn.) are
overbuilding dial-up IP service networks with networks that
deliver more bandwidth at the edge than in the core, replicate
content in dozens of local markets, and try to solve Internet
congestion and performance limits by turning today's
bandwidth-to-storage spending ratios on their heads.

* UUNet Technologies Inc. (Fairfax, Va.) is overbuilding its
own unicast Internet backbone with a discrete multicast
dial-up backbone to support one-to-millions services.


* GTE Corp. is building a national IP network employing QoS
routing intelligence that GTE believes will provide performance
good enough to overbuild not only the Internet but also the
public switched telephone network in one swipe.


* US West Inc. has made deals with the biggest names in
computer application, database, and directory services
software both to spawn "network-resident" applications and to
extend the public switched network's intelligent signaling and
service provisioning systems into the Internet.

Internext pioneers are sweating the details now not just to
survive short-term but also to create completely new business
models and revenue streams. A multicast IP infrastructure
would allow Internet service providers to multiply the breadth
of entertainment and information channels, just as cable TV
multiplied broadcast TV's breadth, creating a true mass
market for interactive video services at last. A distributed
infrastructure that supports a chain of global, national, and
local product distribution partners could replace the current
kings of commerce with new wholesale and retail royalty--a
vision in which ISPs take over the clearinghouse role, but with
the advantage of delivering any number of services to any
number of customers. An infrastructure intelligent enough to
allocate its resources one user and application at a time would
enable ISPs to steal premium customers not only from media
and commerce giants but also from the 150-year-old public
switched telephone network as well. A directory-enabled,
object software-enabled infrastructure will create an entirely
new role for the ISP as application storage house for business
communities of interest to share. Indeed, after years of
industry preoccupation with technology, the business interest
horse may finally be moving in front of the cart.

The trouble today

Today's grim reality for Internet backbone builders is that even
the exponential bandwidth increases promised by
wavelength-division multiplexing (WDM), gigabit or terabit
Ethernet, and other technologies won't keep today's 'Net from
melting down. Cerf projects that the number of Web hosts
may more than triple this year alone, to some 100 million
machines, and that the number of Internet users may reach
300 million by midyear, up from 70 million in January.


Conventional PC-based Internet usage is just the tip of a huge
iceberg: International Data Corp. (Framingham, Mass.)
projects that 89 million non-PC devices, including TV
set-tops, screen phones, and mobile assistants, will be
connected to the Web by 2001. Throw bandwidth-hungry
multimedia applications together with user, device, and host
growth, and the pressure on the legacy Internet infrastructure
multiplies geometrically.


More bandwidth alone will soon become insufficient to keep
service providers afloat. MCI doubled its backbone capacity
last year, but Cerf told attendees at February's IP Multicast
Summit in San Jose, Calif., that bigger backbones are no
magic bullet. "I'm getting nervous about the router side of it,"
he said.


In fact, it's the changing nature of Internet traffic that has
planners spinning into white-knuckle mode. "First it was simple
ASCII files, then Netscape brought HTML graphical files, and
then it was streaming audio and now video, each step adding
pressure to bandwidth and servers," says Robert Bowman,
director of backbone engineering for Exodus Communications
Inc. (Santa Clara, Calif.), a provider of distributed content
colocation and Web hosting services. "Even providers of
e-mail are coming out with feature after feature, like
multimedia attachments. As an end-user, my experience is
getting better and better. As a network engineer, I see the
pressure on the infrastructure."

Neither faster switches and routers nor WDM are enough to
meet projected increases in backbone capacity demands, says
Milo Medin, chief technology officer for @Home. The
answer? "Get away from dumb pipes and build a smart
network," Medin says.


Ultimately, that smart network will do much more than cope
with Internet traffic as we now know it. It's also going to
reshape the role of data networking in general, a reshaping that
will alter the very business models on which service providers
are now based, says Martin Hall, chief technology officer for
Stardust Technologies Inc. (Campbell, Calif.). Stardust
manages the IP Multicast Initiative (IPMI), a consortium of
vendors and ISPs supporting the implementation of IP
multicasting transmission standards.

First-generation ISPs sold basic connectivity, Hall explains,
while second-generation providers are distinguishing
themselves with services like Web hosting and IP faxing. "The
third generation is about a business perspective shift to selling
content," Hall says. "ISPs are realizing they're in the content
distribution business, so they need to look at broadcast, cable,
and satellite distribution models, leveraging subscription and ad
revenues and eventually electronic commerce."

If that sounds a lot like the old rationale for interactive TV,
that's no accident. "The Internet has actually made interactive
TV viable," says Scott Watson, chief computer scientist for
Walt Disney Co. Research and Development (Burbank,
Calif.), which serves ABC TV, The Disney Channel, and other
divisions of the media giant. "Internet broadcast will do to
cable what cable did to broadcast, except this time it's 5,000
channels. It's important to begin arguing through the business
models and their infrastructure implications now."

The fun starts

Those arguments are in fact heating up among service
providers and their suppliers. "We are clearly moving beyond
the world of point-to-point to a world of point-to-multipoint
communications," said Ed Kozel, outgoing chief technology
officer at Cisco Systems Inc. (San Jose, Calif.), to IPMI
members in February. "The endgame is multimedia to millions
of people. This is the market we're targeting through our
technology developments and all our partnerships."

To get there, Kozel insists, infrastructure providers will have to
change the ways they move information. Last year, new
entrants and specialist ISPs began to implement a half-dozen
such fundamental changes, such as decentralization of content
storage, experimentation with service classification and tiered
service routing mechanisms, deployment of multicast router
and access device software, and creation of multimegabit
residential connections and always-on residential Internet
connections.

One of the most fundamental changes now under way is the
decentralization of Internet content storage. Leading this
charge are the cable ISPs, which aren't burdened by legacy
internetworking gear. Since 1996, @Home, US West's
MediaOne Express, and Time Warner's Road Runner have
been building (and, rumor has it, could soon combine) their
own Internet backbones linking dozens of regional data
centers. Servers in each data center house copies of regularly
updated popular content made accessible to local cable
modem users.

Over the past year, the same local storage model has come to
rule network designs among ISPs specializing in content
colocation and hosting, including Exodus Communications,
GTE Internetworking (Irving, Texas), Globalcenter Inc.
(Sunnyvale, Calif.), and Digex Inc. (Beltsville, Md.). Three of
these ISPs have been acquired by telcos in recent
months--GTE Internetworking used to be BBN Planet Corp.,
Globalcenter was bought by Frontier Corp. (Rochester,
N.Y.), and Digex is now owned by Intermedia
Communications Inc. (Tampa, Fla.). Last month, Sprint Corp.
unveiled its own distributed IP Web hosting service, further
confirming industry consensus that these ISPs are moving in
the right direction.

The new distributed networks correct a key shortcoming of
the legacy Internet by placing content closer to users. That
distribution cuts delay, improves other performance factors,
and minimizes use of precious backbone capacity by allowing
millions of users to travel only down the street, rather than long
distance, to visit Web sites. "Bandwidth is cheaper and
performance is better when you make it local," says Bowman
of Exodus Communications. "A London user coming all the
way to California for a Web page is silly."

Medin of @Home says the distributed architecture breaks
with old Internet thinking. "It uses a lot more processing in
storage, rather than more bandwidth," he says. Translation:
Internet providers can rely on the steadier, proven technology
advances in computing power than on less predictable
exponential increases in network bandwidth. "We decided to
follow the computer curve rather than the telecommunications
curve," he says.

The result for @Home is a network design that's diametrically
opposed to the Internet. "@Home actually has the most
bandwidth at the edge, less regionally, and even less in the
backbone," Medin says. "The network itself must decide
which data is available locally, and we can do that because of
intelligence at every layer."

The Internext's intelligence extends beyond distributed content
to include increasingly intelligent protocols for discriminating
among classes of applications and allocating network
resources on a session-by-session basis. Cisco, Bay
Networks Inc. (Santa Clara, Calif.), and other network
equipment makers have begun to offer IP QoS mechanisms in
their router software. Those mechanisms, which operate both
within and above the network layer (Layer 3) of the Open
System Interconnection (OSI) model, include the ability to
define high, middle, and low classes of service and to "color"
or "tag" each IP packet with a priority classification. Routers
then recognize a packet by its priority color bit, effectively
recognizing the application in the packet for the purposes of
special treatment.

A cast of millions

The endgame for all this activity is to figure out a way to
virtually limitless quantities of data--including interactive video
services--to the mass market. There's absolutely no question
that today's Internet is a technological dead end--witness the
performance problems caused by last year's killer application,
push technology. Compared with the envisioned interactive
video services, push amounts to a single drop in the demand
bucket.

The very real threat of traffic overload is prodding Internet
builders to revisit and deploy the IP multicasting protocols
developed a decade ago by the Internet Engineering Task
Force. IP multicasting utilizes UDP/IP, instead of the dominant
TCP/IP unicast protocol, to transmit a single file or stream to a
list of network destinations. Guided by a complete list of
subscribers' IP destinations, the single stream leaves a server,
then splits itself repeatedly wherever a router table confirms
that down this or that tributary lies at least one recipient on the
list. Current implementations can reach several hundred
thousand addresses with a single transmission, and vendors
promise to reach millions this year--a process a million times
more bandwidth-efficient than delivering a separate unicast
from one server to each of a million users.

The MCI Real Broadcast Network venture with streaming
media software provider RealNetworks Inc. (Seattle) uses
multicasting to distribute streaming media to local servers for
on-demand, rather than live, access. "In the next year or so,
there will be a huge explosion of 100- to 500-kbit/s content,"
says Martin Dunsmuir, general manager of software for
RealNetworks. Only multicast networks can scale to handle
such traffic, he says.

One such network is UUCast, announced late last year by UUNet Technologies. UUCast uses multicast-enabled Cisco
routers and access concentrators from Ascend
Communications Inc. (Alameda, Calif.) to deliver a single
multicast stream to up to 300,000 dial-up Internet access
ports.
America Online Inc. (Dulles, Va.), AudioNet Inc.
(Dallas), and Microsoft Network (Redmond, Wash.) are
among early UUCast users, primarily for entertainment and
distance training applications. Multicasting also is making its
way into corporate networks, via technologies from
companies like StarBurst Communications Corp. (Concord,
Mass.), Starlight Networks Inc. (Mountain View, Calif.), and
Precept Software Inc. (Palo Alto, Calif.), which is being
acquired by Cisco.

Applications--whether they're entertainment for the masses or
multimedia corporate offerings--ultimately will become the
stake driven through the heart of the Internet as we know it.
Hammering that stake will be low-cost, mass-market,
appliances--slim clients designed not to imprison applications
in boxes outside the network, but to borrow them from inside
the Internet itself.

Tele-Communications Inc. (TCI, Englewood, Colo.) may
have delivered the first stroke in December, when it
announced deals with General Instrument Corp. (Hatboro,
Pa.), Sony Electronics Inc. (San Jose, Calif.), Microsoft
Corp., and Sun Microsystems Inc. (Mountain View, Calif.) to
take shipment of 5 million to 11 million OpenCable digital
TV/cable modem set-top boxes over the next five years. The
OpenCable architecture is multicast-friendly, since cable
modems provide "always on" connections.

"Always on" is destined to be the mantra for content providers
determined to blow away today's Internet service business
models. "We've been trained by TV to get entertainment,
leave it on, and incur no usage tariff," says Disney's Watson.
"The appliance attached to the TV and the notions of the
network computer and device-independent applications are
fundamental to the new IP services vision."

With huge companies like Sony and Microsoft sharing TCI's
market-creation risk, much attention is being paid to the
potential of OpenCable's open architecture to draw mass
development of applications for blending digital TV and IP
content. But the larger implications of "thin," low-cost,
consumer-friendly Internet appliances like the OpenCable
set-top and Microsoft's WebTV may be not only new
consumer services but also a radical increase in how much
content and application management responsibilities ISPs must
embrace.

"In the OpenCable world, everybody who watches digital TV
gets an e-mail address by the end of 1999 or early 2000,"
says Adam Grosser, product development vice president for
@Home. "This is about ubiquitous information into the home,
which might translate to an Internet-connected kitchen recipe
pad. You create a different set of motivations for potential
customers." Grosser believes that such a model also reduces
consumer inertia toward getting connected by no longer
forcing consumers to understand how to install PC software,
respond to application error messages, or manage network
connections.

And there's the rub for ISPs: The network must take over
those application management jobs from the client. That means
having a protective layer of application execution middleware
residing in the customer box. Rather than physically installing
applications via disk or CD-ROM at the box, the consumer
will rent an application--say, a parental control content filter or
tax return program--from the network itself. The application is
downloaded from servers to network appliance memory for as
long as it's needed and is executed by a middleware virtual
engine, such as Sun's Java Virtual Machine.

In this brave new world, the ISP must now manage not just
content, but also applications, stored and managed by the
network. Internext pioneers are now getting ready for this day.
"The distribution chain is the absolute core of @Home,"
Grosser says. "It's about creating new distributors, replacing
Blockbuster video stores with video on demand or Barnes &
Noble with amazon.com. We've built the tracking and billing
infrastructure to do that."

Translation: The Internext isn't just on the horizon. Pieces of it
are already here.

All use of this service is subject to the Terms and Conditions of Use.
All Rights Reserved.

Copyright c 1998 tele.com, The McGraw-Hill
Companies, Inc.
All Rights Reserved.
Website designed by COMPUGRAPHIA
Home page designed by Dennis Ahlgrim.
Last Modified: 10-Apr-98



To: djane who wrote (45410)4/27/1998 3:56:00 AM
From: djane  Respond to of 61433
 
tele.com article. The carrier is the computer
[More info on plans of many ASND customers]

By Carl Weinschenk, Executive Technology Editor, and
Peter Lambert, Senior Writer

teledotcom.com

Providers of local and long-distance telephony services
showed up to the Internet party late and empty-handed. That's
the general perception, and for the most part, that reputation is
deserved. But a few carriers now appear convinced that the
next several years offer a window to leapfrog, rather than
follow, those who have so far led the packet data network
revolution.
Indeed, while data-centric service providers
portray telephone carrier legacy circuit-switched networks as
a barrier to data network building, carriers led by US West
Inc. and the Bell Emergis unit of Bell Canada (Toronto) are
starting to show that their legacies are an asset for creating
next-generation Internet infrastructure. Like Internext pioneers
in the cable and ISP worlds, these carriers are building
infrastructure based on the principles of localized content
storage, multicasting, class-of-service bandwidth management,
and high-speed, always-on access. Going several steps
further, they're starting to use their experience operating the
world's biggest, most intelligent networks to bring unique
assets to the IP party. In particular, Bell Emergis (Montreal)
and US West are now building strategies that translate the
architecture and mechanisms of their proven advanced
intelligent network (AIN) telephony services to the world of
IP. The result, they say, will allow them to use integrated
knowledge about users, applications, services, and network
resources to turn their carrier networks into a massive but
supple computer platform for creating new applications and
businesses virtually in real time.

In terms of IP network building, the plans of some carriers
belie their reputation as camp followers (see "Internext
Pioneers: The Carriers"). GTE Corp. sees enough promise in
IP as a delivery mechanism for voice, data, and multimedia
that its goal is no less than to replicate the public switched
telephone network with a nationwide IP network, says Chris
Brickler, director of enhanced IP service for GTE's business
development and integration group. Reading from the same
playbook, Bell companies US West and Ameritech Corp. and
new long-distance providers like Qwest Communications
International Inc. (Denver), Level 3 Communications Inc.
(Omaha, Neb.), and Williams Communications Groups (Tulsa,
Okla.) are setting out to overbuild both the Internet and the
public switched network with abundant fiber optics,
distributed data centers, and state-of-the art internetworking
technologies.


However, the most ambitious Internext plans drive toward a
vision of IP service providers as content distributors, as well
as connectivity providers. Those plans include not only fast,
intelligent fiber optic and routing equipment but also
object-oriented software, application servers, content servers,
and directory services databases. This service-layer
infrastructure, complete with AIN service provisioning
know-how, is already being built by carriers that say it will
carry them beyond the role of passively providing pipes and
into the businesses of attracting, hosting, managing,
distributing, renting, selling, and maybe even owning
repositories of content, applications, and services from the
virtual center of their networks. In concert with several unique
business communities, Bell Emergis may already have
achieved the blueprint for the carrier as master of the
network-resident application business.

Community spirit

Bell Canada is grounding its Internext strategy in the idea that
community-based, network-hosted services eventually will
extend to consumer markets through tools like Internet
appliances. But rather than rush headlong into the mass
market, Bell Canada is testing its model in vertical business
segments. One of those projects, launched in the middle of last
year, involves bringing next-generation Internet capabilities to
Canada's national health care system.

The immediate aim of Bell Emergis's Canadian Workman's
Compensation Network is to boost productivity for Canada's
national health care network. Promising shared administrative
resources, reduced paperwork, and streamlined processes,
the network is designed to cut administrative costs, which
comprise approximately 70 percent of overall claims
management dollars. The network links insurance companies,
government agencies, employers, hospitals, and other
interested parties together to manage claims. Each participant
brings its own sets of software applications and business
practices, as well as pharmacological, legal, employee history,
and other types of information, to the network. "This is a
community that requires a common repository of information
and constant updates to that information," says Jim Tobin,
president of Bell Emergis.

To develop that repository, Bell Emergis is providing not only
secure virtual private network (VPN) connections over Bell
Canada's networks but also an application development and
hosting architecture that steps beyond the extranet model of
mutually accessible but separate information, servers, and
applications. "Much thinking still falls prey to pure client-server
thinking, which won't do the job in the long run," Tobin says.
"More personalization means easy repurposing of applications
from one device to another, so you'd look for more modular
and distributable application code."

In other words, you'd look for object-oriented software like
Java, the language developed at Sun Microsystems Inc.
(Mountain View, Calif.). Developers can define software
objects, or small chunks of code, to represent any item or
function. An object might represent a small application, or
"applet," containing information about a user or information
about a component or link or circuit in a network. For easy
distribution around networks, objects tend to include far less
code than the kinds of programs that run on PCs or
workstations.

Consequently, applets lay a foundation for service providers to
become the repository of applications--that is, the hard drive
for programs that can be distributed over the network to be
run on end-user machines. In the consumer market, the
coming of network computers and other Internet appliances
likely will become the leading marketplace force that pushes
responsibility for the storage and management of applications
out of the client and into the network.

Like Bell Emergis, US West is volunteering for that duty. Its
February announcement that it will embed its network with
Java was a key endorsement of the approach, as was the
decision by Cable Television Laboratories Inc. (CableLabs,
Louisville, Colo.) to include Java in the forthcoming
OpenCable set-top device. US West says it will give
certification to any developer offering 100 percent
Java-compliant applets, which, by design, will run on any
network device employing a Java Virtual Machine (JVM) or
any server employing Java.

With this move, US West is telling developers that to sell
applications to the carrier's customers, developers must write
those apps to US West's platform, and that platform requires
Java. In the bargain, theoretically at least, developers will have
to write their applications only one time for that platform. This
completes the magic of the network-hosted applications
model: The carrier hosts all applications in one programming
language, then delivers them to any user device employing
virtual machine software designed to run that language.

Sun says Java licensees have developed more than 1,000
applications, many of which were demonstrated over a host of
network computer, Internet TV screen phone, mobile phone,
kiosk, and smart card devices incorporating the JVM during
last winter's Consumer Electronics Show in Las Vegas.

"In the consumer space, Grandma and Grandpa may not want
to deal with a PC and application error messages, so we
propose a market for light versions of software programs,"
says Kel Jones, telecommunications business development
manager for Sun. Those ease-of-use benefits will extend to
business customers for operations like software control and
distribution, whether to disseminate the latest workgroup
software or to update Java-enabled cash registers, he adds.
"US West could now host all of that for you," Jones says.

Even more promising for the carrier is the prospect for
collaborating with developers and device makers to create
unique services, says John Charters, vice president of Internet
services for US West !nterprise Networking. "We've been in
discussions with consumer electronics makers, because some
differentiation may be accomplished at the device to allow us
to deliver unique applications that interact with the services
resident in the network," Charters says. It's a model that puts
the carrier in the position of riding herd over a community of
applications built to attract and hold a common set of users. In
other words, own the right applications, and you may better
own the customer.

Object objectives

Perhaps even more important than the ability to distribute an
application to any authorized user, object software can further
enable users to retrieve and aggregate applications to create
custom programs on the fly, says Tobin of Bell Emergis.
Another Emergis community-of-interest hothouse for
developing such possibilities is the Jazz Media Network,
which now links 15 film studios, special effects companies,
and postproduction houses in Los Angeles, Montreal, and
Toronto. A turnkey operations center managed by Emergis
handles all Jazz Media Network applications. Those
applications--including digital media transfers, online chat and
collaboration software, knowledge management (including
push news), and network load management--are written
almost entirely in Java. While the film and video content itself
resides in customer databases, Emergis hosts all the network
applications, different combinations of which users may access
from day to day.

Emergis's goal is to enable each film studio and production
house to combine and recombine media transfer,
collaboration, or other applications resident in the network
based on specific, momentary needs. The media-serving
infrastructure can "learn" to improve its services, Tobin says.
Incorporating "background recording" of user behavior, the
network's intelligence will be able to create increasingly
efficient workflow applications.

"That's a high priority for a community like this," Tobin says.
"The network determines what patterns are occurring and then
automates the patterns. It can then create a new release with
refined functions on a monthly basis or generate real-time
pricing changes based on usage."

Combined with personal profiling and filtering tools, the model
also could enable individuals and companies to search and
discover communities based on the presence in those
communities of unique network-resident applications.
Advertisers and other third parties could target communities of
interest with preferential pricing or support for services and
products, Tobin explains. "Your search agents can pursue
those opportunities for such treatment," he says. For example,
the companies that are supplying Emergis with application
development technology--Sun, Cisco Systems Inc. (San Jose,
Calif.), Silicon Graphics Inc. (Mountain View, Calif.), and
Apple Computer Inc. (Cupertino, Calif.)--are preparing to
package access to the Jazz Media Network with their
equipment and could target equipment discounts to network
users.

Intelligent edge

The extensive work required to develop these virtual private
communities promises a hard-to-displace position for service
providers. After all, who wants to leave a repository of
applications created and customized especially for them? But
the community-of-interest model also puts the onus on those
providers to get to market first with community-based
media-serving infrastructures. In that race, US West, Bell
Canada, and other carriers believe they enjoy one mighty
advantage over smaller Internet service providers: experience
with AIN services and the Signaling System 7 (SS7)
communications that provision AIN in the public switched
telephone network. This AIN/SS7 combination comprises
essentially a shadow infrastructure--one that, behind the
scenes, knows all about the user and network-resident
services and that can respond to each authorized user request
by signaling the network to provision the resources required
for each session between user and service.

"Banks and other businesses are excited about IP, but they
won't give their businesses over to an ISP that doesn't have
carrier experience," says Tobin of Bell Emergis. "They instead
will say to carriers, 'We want in IP what you give us in the
switched network.' So the challenge is applying carrier-grade
performance to data networks."

AIN experience will apply particularly to the tasks of
managing massive information about who is authorized to
access which services and of provisioning those services when
access is requested. In the voice network, established AIN
applications include intelligent call routing, visitor location
registration, virtual number service, voice-activated dialing,
voice response, speech recognition, text-to-speech
conversion, prepaid calling, voice mail, instant callback,
paging, voice mail, fax on demand, and broadcast fax. The
analogous services in the IP realm might include remote
corporate network access, unified message forwarding,
multipoint collaboration service authorization, multicast
distribution authorization, or smart card digital money
transaction processing.

Such processes are absolutely essential to creating a network
that's smart enough to handle the kinds of applications
envisioned for virtual private communities, Charters says. "The
SS7 logical voice network model provides a common
directory that looks up and proves that, yes, you are Joe
Smith, and here are the 10 services to which you subscribe,"
he explains.

Those functions in the switched network are virtually identical
to the functions of directory services in IP data
internetworking. In both AIN and directory services, customer
and service information reside not in switches or in router
tables but in the databases and the signaling devices that link to
those switches and routers. Further, both AIN and directory
services are software-based, so upgrades can be made
without replacing equipment. AIN and directory services
software developers, such as Novell Inc. (Provo, Utah), are
now working in object-oriented languages like Java to make
such AIN/directory software easily portable through the
network.

Tobin agrees that experience with AIN in the switched
network will be a big advantage for carriers as they try to build
Internext infrastructure. "Our next-generation networks will be
primarily IP-based, but a lot of the know-how will come out
of SS7 for conditional access and session management," he
says. "It will be directories plus mechanisms that approach
bandwidth on demand."

Similarly, Us West envisions what Charters calls "a tightly
integrated, directory-enabled network" that will authenticate a
user, authorize access, then actually manage the routers,
switches, and other network devices needed to provision and
manage each session. "The directory contacts the network
element and provisions the connection on a per-session,
per-user basis," he says. Indeed, according to the specific
requirements of each session, directory-enabled intelligence
could extend to very specific network resource provisioning
tasks, such as activating quality of service mechanisms in a
router for delay-sensitive applications.

To build a directory-enabled network, US West is looking to
combine the very similar functions and architectures of AIN
and directory services. When it announced its selection of Java
application support in February, US West also announced
several other deals with software leaders. Microsoft Corp. will
develop Windows NT server applications and services, such
as IP voice, collaboration, and Web commerce hosting.
Oracle Corp. (Redwood Shores, Calif.) will help develop and
deploy mission-critical applications, such as manufacturing
supply chain management, for businesses. Digital Equipment
Corp. (Maynard, Mass.) and Hewlett-Packard Co. (Palo
Alto, Calif.) will deliver service integration and management
applications.

Underneath all that, Novell will provide its object-oriented
Novell Directory Services (NDS) to tie any user to any
application and to the bandwidth and resources required to
deliver the application. In addition to objects that encapsulate
user and service information, US West's NDS library of
objects will encompass physical devices, such as routers,
modems, and servers; intranet and Internet links; operating
systems, including Java, Windows NT, and Unix; applications
that run over the network; and relationships among all those
objects. New objects can be added, moved, or dropped via
click-and-drag user interface.

That broad library of user and application objects lays the
foundation for a single sign-on for all users to all network
services--a competitive factor that will become increasingly
important with always-on services, Charters says. "For a
family of four, where Dad and Mom and the kids may have
authorization to access different sets of providers, you want a
single log-in for access to multiple networks, not a log-out,
log-in process for every network," he says.

The network device management reach of the object library
also lays the foundation for accomplishing a longstanding
dream of large enterprise network administrators: a single
point of administration for all network components, segments,
and management services. With support of NDS, as well as
Java, NT, and Unix, in place, US West expects scores of
developers to write applications for network administration
and services management, as well as for end-user applications.

How far will such applications go in the network-hosted,
object software world? Imagination probably presents the only
real limits to what value propositions might spring from the
carrier network as a repository for infinitely combinable
applets.

"You'll see a proliferation of applications that focus on utilizing
the Internet as a way of managing not just information but also
tools people use every day," says Lew Wilks, president of
business markets for Qwest. "If I want to turn on the Jacuzzi
before I leave the office, I have a mechanism to activate it
remotely. Or when the doorbell rings, the Internet device pings
me back at the office. I click on the video to find out who's at
the door or talk to them to find out why they are there.
Literally everything becomes active."

What that means is that the carrier, not just the network,
becomes the computer. In the cyclical context of historical
telecommunications industry hype, such wild visions will raise
some skeptical eyebrows. And in that context of hype, those
skeptical eyebrows should be raised. But the components of
the Internext vision, including virtual private networking,
per-session provisioning, portable application software,
network computers, and AIN signaling, are no longer dreams.
And some carriers are figuring out the power of pulling those
pieces together.

All use of this service is subject to the Terms and Conditions of Use.
All Rights Reserved.

Copyright c 1998 tele.com, The McGraw-Hill
Companies, Inc.
All Rights Reserved.
Website designed by COMPUGRAPHIA
Home page designed by Dennis Ahlgrim.
Last Modified: 10-Apr-98