Excellent article. carriers say atm has found its mainstream customers
May 28, 1998
BROADBAND NETWORKING NEWS via NewsEdge
Corporation --
Early in the year, BROADBAND
NETWORKING NEWS reported that ATM
equipment vendors were positively bullish on their
sales prospects in 1998.(See BNN, January 20,
1998) With the midpoint of the year approaching,
and the ATM Year '98 conference upon us, it
seemed appropriate to talk to the service providers
to see how their year is shaping up.
Word from the sales offices of the ATM service
providers we spoke with is universally good. Several
carriers claim three digit growth rates for their ATM
services. "Just looking at the sheer volume of ports
and revenue, we've seen the numbers double year
over year since we started offering ATM in 1995,"
says Claire Lewis, executive manager of ATM
marketing at MCI Communications [MCIC]. "There is
not a single bid for data I've seen in the last year,
that did not include an ATM component. That tells
me that even if they are not ready to implement
[ATM] right now, the customer is thinking ahead and
planning to implement," she adds.
Likewise, Tom Prost, ATM group manager at Sprint
[FON], reports that the size of the carrier's ATM
network more than tripled in 1997. "We've seen very
strong demand for ATM service, particularly in the
last year," he says. "My general impression is that
ATM is definitely still in the early growth stage of its
product life, [a growth stage] typically characterized
by a rapid upturn in demand."
...Excitement in the Air
"I'm more excited about ATM today than I ever have
been. Our ATM numbers have shown absolutely
huge growth," adds David Natho, director of data
product marketing at Worldcom [WCOM]. Natho
pegs last year's growth at 300 percent.
These buoyant reports seem to fly in the face of the
frequent funerals for ATM that were all the rage at
recent trade shows. Joe Lardieri, ATM product
manager at GTE Corp. [GTE], points out that the
adoption of ATM is simply following a classic
"S-curve." As he explains it, when ATM first
appeared, a few early adopters dived right in,
followed closely by a handful of high-tech companies
with advanced applications suited to ATM
networking. Once these two groups had deployed
ATM, the numbers began to fall off until ATM could
begin to penetrate the mass market. For the past
year or so, ATM has been in this slump, Lardieri
says. Today, the mainstream customer is just
starting to kick the tires.
"These organizations that have been holding off are
concerned with stability, reliability, and the proper
price points," he explains. " This end user typically
views wide-area networking as a means to an end,
almost a necessary evil. It is a requirement for how
they do their business [that is] more predicated on
stability and price points than an infatuation of one
technology over another.
"We found over the course of the last year a fairly
dramatic shift in those businesses that are now
considering ATM. Predominately, it is the more
mainstream customers that are adopting ATM.
Candidly, we are really heartened by that. It is
emblematic of a shift within the marketplace,"
Lardieri adds.
...Taking a Slower Road
While a strong customer interest in very high
speeds is not unexpected with services of up to
OC-12 (622 Mbps) available, a number of carriers
are reporting success with T-1 speed (1.5 Mbps)
ATM.
"A year and a half ago, it was predominately DS-3
with some OC- 3," says Sprint's Prost. "In the last
year, we've seen significant demand at a DS-1 or an
N-by-DS-1 level. A lot of this has to do with the
functionality of ATM. We have customers that are in
the process of changing out T-1 frame relay to T-1
ATM, primarily because of the inherent quality of
service and the ability to do voice, video, and data
on the same network."
"Our hope with the introduction of T-1 ATM, is that it
will find a more mainstream commercial customer
that is past the early adopter stage," says
Worldcom's Natho. "We are looking for that
customer that has been using a frame relay network
running pure data applications, and is ... starting to
understand what ATM is. They are running
production traffic but their executive has been
pushing them to do a little videoconferencing."
For Bell Atlantic [BEL], one of the best selling
points for ATM continues to be its ability to
consolidate multiple networks, and handle various
applications, on a single infrastructure, reports Bob
Deaven, product manager ATM cell relay. "When we
go out and speak to customers, we still see a lot of
'those are the voice guys, and we are the data guys.'
The data people have networks for legacy data. They
have another network for LAN connectivity, and one
for video. And then you have the voice people
running their own network."
MCI's Lewis reports another source of potential ATM
customers, companies that have stayed with private
lines and haven't made the leap to frame relay public
services. "The cost of private lines is going up
because the supply is short, and it makes people
look more at the public switched services. When
they are looking, they look at ATM," she claims.
"They can lower their costs by buying a PVC [to
carry] multiple types of services on those PVCs like
voice, data, and video," she says.
According to Lewis, frame relay broke the ice for
these private line customers. "It was a big mindset
leap to give up your network to some carrier, but in
the marketplace people have made that transition. If
not physically, they at least have made it in their
thinking. When people consider going from private
line to ATM. They are not sitting around for two to
three years waiting to make a decision," she says.
"Definitely I think the trust is there from frame relay,"
agrees Tim Whiting, senior product manager at
Ameritech [AIT]. But, with ATM it is a little bit
different because it is not just private line
replacement. You truly are going to be able to do
some things that were not technically feasible over
regular private lines. For some of the things, like the
need for greater speeds, ATM is a great solution,"
he says.
...It's a Good Story
Based on the story the service providers are telling,
ATM is working just the way the ATM Forum said it
would. "Admittedly, if you are talking to my peers in
the service provider market, they have some sort of
a vested interest in selling ATM," admits GTE's
Lardieri. "But, some new alternatives have emerged
from a scalability perspective - and purportedly from
a class of service and a quality of service
perspective as well. This has led to speculation that
ATM is dead.
"From a hardheaded business perspective, I always
say that revenues are the final arbiter of a
technology's success. And, those revenues are just
exploding," Lardieri adds. (Jean Medina, Ameritech,
312/364-2134; Ells Edwards, Bell Atlantic,
302/576-5340; Bill Kula, GTE, 972/718-6924; Claire
Lewis, MCI, 972/498-1453; Joey Morring, Sprint,
972/405-5345; Linda Laughlin, Worldcom,
918/590-5595)
[Copyright 1998, Phillips Publishing]
Copyright c 1998, NewsEdge Corporation No redistribution allowed. |
