I guess "maybe" is the question. Knock, knock, Patriot come out, come out wherever you are.....
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
World View: Net, Set, Grow
July 19, 1998
A CT Report
As the borders between telecoms, computer, and services blur, the prospect of global e-commerce is reinforcing. Now varrying services (voice, data, video) can be transmitted over any kind of network (fixed, wireless, satellite) in a network-free way. Corporate-wide E-mail, an internet and a Web site have become de rigeur. Internet rules the IT markets, be it over larger issues like the spreading of commerce, or the immediate demand for more bandwidth, the consolidation of RISC and Intel server plattform, and the continued growth of Win Net.
BODY:
AÿAÿAÿCall 1997 the Year of the Internet. In previous years, the Net was viewed as a new entry point for existing customers into the sales cycle, although seen internally as a useful carrier for intra-company communication. As a result, companies that viewed themselves as Internet-aware generally had corporate-wide E-mail, an intranet and a Web site. By the end of 1997, however, these offerings were de rigeur, and companies that had not done anything more were in sudden danger of falling behind. Enter electronic commerce, the reason for this discrepancy.
E-commerce may be the "killer app" of the Net. Companies have understood that good Web sites are powerful magnets for new customers, andmore importantthat e-commerce can be more cost-effective than traditional sales process. It helped apple turn around, moves traditional bookstores to establish their Web presence, a la amazon.com.
This trend is likely to accelerate, fuelled in part by an increasing confidence in Net security. Although consumers still feel skittish about relaying confidential info over the Net, the dire predictions of frequent interception of customer passwords and payment information failed to come true in 1997. The next few years should see e-commerce move into the area of high-value sales transactions, especially in busness-to-business ones. Extranets, and to some extent new forms of electronic data-interchange (EDI), will drive the push, predicts the Price Waterhouse Technology Forecast for 1998.
The Password is Java
The Internet left its imprint throughout the infotech market, and its effects are likely to be felt for years. For example, software development saw the continued upswing in the use of Java, Sun Microsystem's portable programming language, as it evolved from its Internet orientation. The frequent Sun extensions such as JavaBeans have moved it from a pure development language into an execution platform, validating Microsoft's concern that it would become a viable alternative to the Windows family OSs. Sun also launched chips optimised to run Java-based business and embedded applications; and JavaOS, to run Java and Java devices (to be developed using the Java chips, maybe). According to an IDC survey, 48 percent of large firms were using or evaluating Java, as of October last year, up from 35 percent in July.
On another plane, as Microsoft, Hewlett-Packard and others bring out specific flavours of Java, it's being feared the language might not achieve uniformity, but suffer like Unix by fragmenting into vendor-specific versions.
War of the MS-DOJ
Desktop products also bore the imprint of the Internet and the Web. For example, all new releases of word-processors, desktop publishing packages, and document management tools saw added emphasis on Web-orientation. The seemingly stale browser-battle took on new life as Microsoft faced US government scrutiny over the bundling of its browser with Windows 95. The Sherman Act, the US Government's anti-trust law passed in 1890, was invoked by the Department of Justice (DOJ), USA, 20 US states, and the District of Columbia against the Microsoft Corp., saying that the latter's "choke-hold" on competitors and "anti-competitive and exclusionary practices" were denying consumers vital options about how they buy and use computers. Backwalled, Netscape announced its browser would be given free and that the source code for it would be available to developers. This is not the first suit that Microsoft has faced, and nor is it the only one to have faced anti-trust suits. Earlier, in October last year, the DOJ sought a $1-million-per-day fine from Microsoft for allegedly violating a July 1994 consent decree by forcing computer makers to use its Internet Explorer browser as a condition of selling Win 95.
The US Federal Trade Commission (FTC) has announced that it would investigate Intel Corp. for alleged abuse of monopoly power to cement its position in the market. Intel makes 80 percent of PC microprocessors. The FTC complaint alleges Intel withheld key technical information from leading computer makers such as Digital Equipment, Intergraph and Compaq Computer, in order to stifle competition and impede innovation. Sounds Microsoftian?
Blazing Trails of a Speedster
The deciding factor for Internet growth is access speed. In response to this challenge, a host of new technologies has arisen, and major vendors in the telephone, cable television, satellite communications, and utilities markets have formed a variety of alliances to compete actively to provide Internet access. Cable modems, xDSL, set-top boxes, and satellite communications are technologies competing to provide greater bandwidth to different market segments. Soon, 56K modems and ISDN would look like slow technologies, it seems. For network infrastructure, Fast Ethernet became firmly established in 1997, just as new technologies such as Gigabit Ethernet and ATM prepared to dislodge it. Even a year ago, the adoption of both these new technologies seemed much further in the future.
At the backbone, both ATM and Gigabit Ethernet have their following. ATM, forecast to be the technology for transporting multimedia data over high-speed links, did not quite reach its potential in corporate networks. A free fall in Ethernet switch prices, brought demand to a record high. Ethernet equipment is the networking industry's largest segment, accounting for as much as 21 percent of the total, as per Cahners InStat Group. With Gigabit Ethernet, the 1,000 Mbps version of the technology that controls about 80 percent of enterprise networks in the world, speeding its way through standardisation and destined to assume its role at the core of the corporate network, ATM looked almost dead in the enterprise.
Yet, the market for ATM-based switches for the LAN, where the technology speeds data at rates ranging from 25 Mbps to 655 Mbps, is expected to expand an average of 49 percent annually between 1997 and the year 2000, according to In-Stat Inc., a US research firm. In-Stat pegs the ATM enterprise equipment market in the year 2000 at $2.75 billion.
No Netgain for NCs
One Internet-derived technology that has not yet proven its viability is the network computer (NC), advocated by Sun Microsystems, Oracle, Netscape and IBM among others. The Gartner Group subsidiary and market-research firm Dataquest Inc. says network computer shipments reached just 144,040 units last year, despite its intensive hype as a low-cost replacement for desktop computers. It is unlikely that the market will reach economically significant levels before the year 2000, but a trend toward network-centric applications may have profound implications for the market.
Already, the advent of these devices has resulted in a new focus by none other than Intel and Microsoft on total cost of ownership for corporate computers, and the emergence of sub-$1,000 consumer PCs.
A survey by market research company Computer Intelligence (CI) says prices dropped a full 20 percent during 1997, following a fairly stable period in 1996. For vendors, the revenues were not as they were last year. Compaq Computer Corp. reported a 95-percent drop in revenue in the first quarter from the same period last year. The Asia-Pacific market turmoil was a major factor accounting for lower revenues. Shipments of computers in the Asia-Pacific region will fall by $49.42 billion from earlier expectations of $88.5 billion this year, analysts say.
Meanwhile, the semiconductor market is facing a slump. This is due to the Southeast Asian financial crisis, low PC demand and a market glut for memory chips, as per industry analysts. Intel's new chief executive officer Craig Barrett attributed the "blip" to lower demand in Asia and the rundown of manufacturers' inventories with the trend towards make-to-order computers.
In April, Intel warned that its first quarter results would be below expectations. In June, the company announced it plans to eliminate up to 3,000 jobs. National Semiconductor also cut short its workforce by 1,400 employees. Motorola may well report a second quarter loss and may lay off up to 15,000 workers in order to cut costs. South Korean cyber-giants Samsung Electronics Co. and Hyundai Electronics Industries Co. have planned to suspend chip production for a week, in response to the falling prices of microchips.
According to industry analysts, the $140-billion global semiconductor market may not return to its annual growth rate of 17 percent for at least another 18 months.
Intel In, RISC Shrinks
By far the most striking development in computing systems is the growing convergence between RISC and Intel segments of the server and workstation markets. Most major vendors of RISC-based servers have announced plans to sell Intel-based systems. Because of the increasing overlap of platform functionality, consolidation among vendors is a likely outcome. Evidence of this consolidation is already apparent: Compaq has acquired Tandem and Digital Equipment Corp. Gateway purchased ALR, a company known for innovation in its Intel servers; Silicon Graphics has started to make graphics workstations and servers based on Intel chips.
Intel Corp. acquired Chips & Technologies, a graphics chip manufacturer. C&T's graphics processors power at least half of all notebook computers. A neat entry for Intel into the graphics chip and mobile system segment.
National Semiconductor Corp. bought up Cyrix Corp. to develop what is called the "system-on-a-chip" technology, for entry-level personal computers , network computers, and other information appliances.
Beyond leading-edge products, what more can you offer your customers? Services. Computer Associates International Inc. planned to take the same route, by trying to buy out Computer Sciences Corp (CSC). However, CSC wasn't interested, even at $9.8 billion.
Who's Afraid of NT?
The changes in the hardware market have mostly been driven by the growing acceptance of Windows NT as a viable workstation and server productalthough the Microsftian has not yet made it big in the case of the most high demanding enterprise applications.
Last year, Microsoft announced Wolfpack, APIs that add clustering features to Windows NT. The Microsoft operating system, until then could scale up only up to four processor, a far cry from Unix systems capable of scaling up to 32 processors. Forthcoming 64-bit versions of Windows NT server will be based on DEC's Alpha chip and Intel's "next generation chip", Merced. DEC announced support for Windows NT 4.0 on the Alpha last year. Even so, Unix users did not feel the heat. Nick Earle, worldwide marketing manager for Hewlett-Packard's Enterprise Systems Group, points out that the Unix market presents an over $10-billion business with 1.3 million installations worldwide.
Despite industry predictions that Microsoft's Windows NT will usher in the demise of Unix, the executive believes that up until the year 2000, the Unix market will remain four times bigger than that of the Windows NT.
But at the lower level, Microsoft is eating into the Novell NetWare base. NetWare-related sites have between 60 to 70 percent of the installed base; but Microsoft is targeting the new sites. And what matters is it is getting them.
Journey to the Year 2000
The most significant issue for in-house applications lay away from all these concerns: It was the year business began responding in earnest to the Y2K problem. Europe faces the extra task of compliance with the 'Euro', to be launched in 1999, by the European Monetary Union.
Although IT managers will be distracted by these two issues for the next few years, they also will have to consider the greater embrace of e-commerce, the demand for greater bandwidth, the consolidation of RISC and Intel server platforms, and the continued ascendance of Windows NT. |
