November 2000

It's A Gusher!

BY RICH TEHRANI

I have to say, there's something about Texas that drives home the story of rapid and even recklessly enthusiastic growth: rough origins and an undisciplined race for riches, succeeded by an evolution towards a sophisticated industry and the realization of a grand vision -- a vision even grander, perhaps, than any dreamt of by the industry's pioneers. And this story, I must emphasize, could just as easily be the story of communications. The exciting thing, however, is that the story of communications isn't in the past, trapped inside dusty books and grainy pictures. The story of communications is happening right now. And, of course, it's not happening just in Texas, although Texas does illustrate the trend at least as vividly as anywhere else.

SILICON PRAIRIE
We've all heard about Silicon Valley. And some of us have heard about the Silicon Parkway (a cluster of communications companies in New Jersey). And then there's Route 128 in Massachusetts. But what about Texas? What about the Silicon Prairie?

During my brief stay in Texas, I visited communications leaders Alcatel, Nokia, Nortel Networks, and Texas Instruments. Surely, with stalwarts such as these, Texas can be considered one of the cradles of communications technology. I see no reason why even more communications technology companies shouldn't establish a presence in Texas. Everywhere I looked, I saw new bridges, new corporate headquarters, new houses and condos -- all being constructed on a grand scale.

There is also a huge amount of land that is untouched, and most of it is located extremely close to freeways and tollways, meaning that Texas can support a tremendous amount of growth. Better yet, the prices for land are ridiculously low compared to California, Boston, or New York, meaning that Texas may well attract more than its share of the next generation of communications technology powerhouses.

GIANT, GIANT II, GIANT III
Let's get back to what's really inspiring about Texas -- it's big. It revels in everything that is big. Big thick juicy steaks. Big sedans ... long and slung low to the ground. Big cowboy hats -- you know, the ten-gallon kind. I mean big, as in loosen your-belt-and-belly-up-to-the- barbeque big.

Only Texas could be the setting of a film such as Giant, in which a giant of ranching becomes a giant of oil. Perhaps if they made a sequel, they'd show the giant of oil become a giant of communications technology. In any case, in communications nowadays, in Texas and elsewhere, there is a strong feeling of succession, of a new dynasty in the making. That new dynasty is in the realm of communications solutions, succeeding the earlier dynasties of traditional telephony and the Internet.

Chew on your tobacco, partner, and squint at the horizon. Take in the big picture. Listen for a spell while I explain how elements of these earlier dynasties are being incorporated into the new dynasty -- the next-generation, multimedia, multiservice network.

Ever notice how the communications field progresses much like the datacom and computer fields? Well, there is one big difference. In the communications field, the trends are played out much more quickly. And, even more impressive, the amount of time communications takes to emulate datacom is decreasing dramatically.

A Horizontal Orientation
One example of communications emulating (and, in a sense, surpassing) datacom concerns the transition from mainframe to client/server computing. The computer field was accustomed to the mainframe model until PCs, introduced in the early 1980s, gained popularity. The PC enabled client/server computing which slowly eroded the importance that mainframes and minis played in our lives. But now, consider how quickly innovations such as the PC-PBX and IP telephones are remaking the communications space. The traditional PBX, the mainframe of telephony, can't afford to be complacent. Indeed, many analysts warn that we're fast approaching an "inflection point," a time of transition in which those who cling to the old way -- that is, the proprietary, vertically integrated model -- are doomed to niche status, while those who embrace the new way -- packet telephony -- jockey for leadership position.

Broadband Access
We all hear a lot about the World Wide Wait and the frustrations people have over slow dial-up connections. So, it's no surprise that innovations such as cable modems and xDSL should be welcomed as ways to gain faster Internet access. Well, that's only half the story, and not even the more interesting half. What's really interesting is that broadband access isn't just about the Internet. It's about communications solutions that encompass both the Internet and telephony. While the demand for faster Internet access is driving the buildout of better access infrastructures, the rollout of enhanced telephony services is what makes the buildout profitable.

The Hosted Model
Originally quite data-centric, the Applications Service Provider (ASP) model is now acquiring a telephony or communications spin. Already, it is becoming commonplace to hear of TASPs (Telephony ASPs), CASPs (Communications ASPs), and ATSPs (Application Telecom Service Providers).

Microsoft recently announced that it will spend $2 billion on its services strategy, Microsoft.Net. Almost in lockstep, the telecom market has also become ripe for outsourcing as vendors begin to shift into the ASP market. Telecom hardware will indeed continue to become commoditized and standardized, and we will eventually purchase shrink-wrapped telecom software. Suitably, shrink-wrap implies packaging, and the majority of the market will still rely on hardware in their offices to run the new telecom software. As time progresses, a rapidly growing contingent will purchase the new software or lease it from communications ASPs.

Service Provider Equipment
There's another way to look at the hosted model; however, it requires that we look a bit further back, to the traditional telephony dynasty. There was a time when equipment residing on the customer premises was leased from the phone company -- the phone company. Alternatively, businesses could arrange for the phone company to provide for services off of a Central Office (CO) switch -- the Centrex model.

All that changed with the advent of the private branch exchange, or PBX. With the PBX model, equipment residing on the customer premises was owned by the customer. Now, however, it appears we've come full circle. Now, many companies are considering the advantages of IADs, or integrated access devices. IADs are owned and maintained by the service provider, and deliver broadband data access as well as sophisticated telephony services. In addition, IADs may prove to be the crucial link between businesses and the growing community of communications ASPs.

Next-Gen Signaling
In the traditional Public Switched Telephone Network (PSTN), we long ago created a signaling plane, distinct from the transport or media plane. The key was, and is, Signaling System 7 (SS7), a network protocol that allows the sharing of caller-ID functions, 800 number functions, and other services. The holy grail of IP telephony is the ability to be able to work seamlessly with SS7 protocols and to ultimately surpass the functionality of SS7 with IP-based protocols that are faster, cheaper, and easier to understand for developers and service providers.

Signaling is being pursued energetically, as is clear from the loud debate over such developments as SIP (session initiation protocol), H.323, and MGCP. Whatever differences are expressed in these debates, it is encouraging that the players at least recognize the importance of promoting interoperability, and this in a market once characterized by proprietary solutions.

Browsing Standards
The success of the Internet can be attributed in large part to its ability to rapidly adopt open systems on a grand scale, exposing development challenges to armies of users and developers. Standards such as XML, which are extremely data-centric, have quickly been adapted to telecom, and many ASPs are leveraging XML to allow them to easily open up their solutions to Internet developers. Of course there's the example of VXML, an open telecom standard that allows voice browsing by phone.

Being Connected, Being Collaborative
The Internet has given us a framework for how all devices need to work in the future. Never before has the emphasis on being connected been greater. Technology devices today must connect to each other to be taken seriously. No longer can a gadget or office machine be an island, but rather we expect newer devices to interconnect seamlessly together over a variety of protocols and standards, such as Bluetooth, USB, IP, and others.

A BIG CHALLENGE
If, as many hope, communications solutions are to surpass traditional telephony and the data-centric Internet, then all the talk about openness will have to be more than, well, talk. Just what are the prospects for openness in the field of communications solutions? Can we expect platforms from Cisco, Nortel, Lucent, and Avaya to run the same applications without modification?

If we look at datacom for an answer, that answer is somewhat mixed. That is, we will probably see openness "to a degree." Certainly, databases can all be accessed by common commands, but vendors, in an effort to differentiate themselves, do supply proprietary languages. Most office applications are able to work together seamlessly, yet different applications have their own macro and configuration languages. Just look at the router market. Using datacom as a guide, I'd say we will see heightened levels of interoperability, but not the wholesale platform portability that we would like to see across all hardware designs in the telecom space.

TAPPING DEEP RESERVES
As I finish this column, I read on Bloomberg.com that President Clinton will authorize releases from the strategic oil reserves. While the announcement alone is credited with lowering the price of crude oil by as much as 5.6 percent, many point out that the reserves are not all that impressive. They would satisfy no more than a day or two of the nation's fuel needs.

Fortunately, in the communications space, we have much deeper reserves. The entrepreneurial energy, the developmental talent, the enthusiasm of investment -- all of these could scarcely be more impressive. That's what makes communications so exciting. That's why we're so busy at this publication, keeping up with all the innovations, product and service introductions, and the many deployments and network upgrades. My recommendation is that you keep your eyes on this space, as we chronicle the industry's progress, and exhort it to ever greater achievements, so that it may yield successes that would make an oil baron blush. 

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