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To: RocketMan who wrote (23367)	8/26/1998 6:23:00 PM
From: Rick Jamison	Read Replies (2) \| Respond to of 50264

Another interesting article I want to pass along. Something to lose. Hoopla. $800 billion worth of global telecommunications pie is up for grabs. Growth of datacom traffic outpaces voice tenfold. Router folks woo telephone companies. Circuit switch makers scramble to inject circuit-switch determinism into packet switching. Internet enthusiasts cackle about the takeover of telephone networks. "Who Knows?" and "Who Wins?" are grist for dozens of Hitchcock-esque articles. Get a grip. It's more obvious than the self-proclaimed gurus let on. by Ed Margulies (edm@ctexpo.com) July 1998 Consider the happy noise we call telecommunications. There's makers of gear and software and folks who provide service. At present, switches are circuit-based (PBXs, Central Offices, etc.) or packet-based (routers, bridges, etc.). Service folks either bang voice traffic around or route data bits. Is there crossover? Sure. Always has been. The real question that brings clarity: "Who has the most to lose?" Bellwether Telco Local and long distance telephone companies have the most to lose. By proxy, their chief suppliers, the so-called traditional circuit switch makers do, too. Telcos have been digging trenches, running wires and pushing voice and data down pipes for 100 years. They've got the biggest investment in outside plant, facilities and switching. They've got the most demanding customers. When we go offhook, we want dialtone. We expect incoming calls to happen real time. We take it for granted that calls sound good and connections stay up. By any measure, these are the same folks who ship your data bits over the Internet. Both at the dial-up level and on the backbone. Whose wires and fiber do you think all your e-mail messages are pumped through, anyway? Telcos have taken their hits and survived. The Carterphone decision opened up the equipment market in the U.S. The '80s gave birth to equal access and took them out of the content business for time and weather. Enter a plethora of common carriers and 976 and 900 Information Provider services. The Baby Bells were left to grab dollars on transport, billing and collection. Now worldwide deregulation of the PTTs pushes them all into the same arena. And Internet Telephony spooks some of the telcos with the specter of "free phone calls." But the Internet and all its traffic is still fair game for anyone who can add value. The same is true of private networks. From a supplier standpoint, the traditional circuit-switch manufacturers have the most skin in the game. If they continue to keep telco customers happy, telcos will continue to be loyal to them. The traditional switch makers know the ins and outs of the CUCRIT (Capital Utilization Criterion), the way telcos amortize capital expenditures over 10 years. They've been working the angle a long time. Legacy of Innovation And who's been in the background through each incarnation of networking and deregulation? Take SNA and private packet switching networks and fiber optic muxes and microwave and digital cellular technology. It's been the likes of Nortel, Ericsson, Motorola, Rockwell, Lucent and AT&T Bell Labs. Don't write these folks off too quickly. Here's why: It doesn't matter if a telephone switch is a PBX, Central Office, MTSO or tandem. They are all computers. Big computers. They have program store, RAM, I/O, keyboards, CPUs, power supplies and operating systems. All the trappings of a PC or communications server. The difference? The I/O devices are specifically designed to support switched or nailed-up circuits. Phone calls. Reliable phone calls. These are the folks who invented hot standby redundant CPUs and the fault-tolerant software to run them. What about packet switching? Ask Nortel. Their SL-10 packet switches were at the heart of modern data networks when I worked at Continental Telephone (now GTE) in 1982. Our data center in Missouri was crammed with switches, routers, muxes and modems from AT&T, Nortel and Rockwell. Today's router makers owe a big debt of gratitude to the traditional telecom makers. They were doing circuit and packet switching before you had a PC. Before the Internet. Been there. Done that. Twenty years ago, there was more money in developing fault tolerant OSs, applications and hardware for circuit switching. It's what telephone companies wanted. It's what we wanted. Sure, they worked with small datacom companies to build data-only networks, too. But the real money and growth was in voice traffic. The Obvious The investment circuit-switch makers put into reliable switching for voice will pay-off in the medium term. It'll be a lot easier for them to port their knowledge and fault tolerance to packet switching than for data-only makers to go the other way. 1.The Adjunct Era. Brooktrout, Dialogic, Natural MicroSystems and other core technology makers will supply the likes of Inter-Tel, VocalTec and NetSpeak with PSTN/Internet Gateway components. Already, both ISPs and Telcos (new and old) are clicking these boxes into their networks. 3Com, Bay, Cisco and others will invest, OEM and otherwise embrace these computer telephony players and suck out as much black magic telecom stuff as they can. Or merge or buy companies in CT -- lock, stock and barrel. 2.Skunkworks No More. Companies such as Nortel and Lucent have dozens of internal packet/circuit merger projects going on for years now. Because the telephone companies said they would start to buy. With the Internet going full blast, these projects are advancing on to the front burner. They're teaming with the likes of Sun Microsystems and other Internet-savvy software players to work on the next generation OSs for networking. They'll make or buy hardware, but put most of their resources into software. They're concentrating on adding the reliability and predictability of circuit switching to packet switching. Meanwhile, they'll sell their switches with adjuncts. 3.Full Circle. After incorporating CT gateway smarts into their routers, the top datacom players will become OEM suppliers of packet/circuit gateway cabinets to the circuit switch makers. The top switch makers will add higher-level networking software to the cabinets' low-level software. The "traditional" switch makers will merge with or buy a few router makers. They have the lead and the relationships with the telcos. Their pre-eminence will keep them in the lead. End of the big hoopla mystery.