back debts. This is the traditional thought about deflation and since it hasn’t been in the economic headlines for decades, much thinking about its contemporary causes and effects are ongoing. But there’s another possibility that might be worthy of consideration, which contributes pressure to deflation.
As the economy has seen percentage improvements in productivity over the last several years, brought on by the absorption and execution of technology and process benefits, the increased productivity benefit typically shows up as more profit in a company’s bottom line. With several companies making similar gains in productivity within and across industries over the last several years, however, it’s possible that this is allowing companies to lower prices while still maintaining profits and wages. Lower prices expand markets and can result in temporary, competitive differentiation.
Today, the fences are still down. Some of the rubble remains, so much so that the frontrun- ners of the “telecommunications land run” often stumble and trip over the residue. Yet com- petition has increased in all segments; service variety is better than ever; technology has no shortage of futurists and tinkerers; and communications policy should wobble its way through continuous improvements. Market opportunities still exist, but not in the context of the late 1990s. The negative posture of the industry, born in the early 2000s, will turn out to be temporal, with lessons learned layering new wisdom upon old fundamentals. Com- mon sense will return to common practice. The telecom sprinter will catch his breath, and retrain for the developing endurance race ahead.
As the initial gold rush becomes a long and grinding journey for some, it’s clear that the communication landscape will witness significant change, both nationally and internation- ally. No longer pressed by coastal boundaries, the 1997 passage of the World Trade Organization’s Agreement on Basic Telecommunications Services extends competition opportunities to about 90 percent of the globe. That’s a lot of free-roaming territory. With the seemingly galactic Internet very much alive and growing in usage year after year, IP, optical, and wireless will continue as technology propellers for the next-generation of services growth opportunities that are still there, somewhere.
Technological Winners
Communications technology is everywhere and anywhere that you look today. The hunger and thirst for increasing productivity, saving time and labor, enhancing recreation, extend- ing lifespans, and most interestingly, profiting from a technological winner are at the heart of every innovator.
Often, new technology is successful on its own merit when nothing like it has existed before. Sometimes a new technology is a reassembly or unique packaging of existing technologies much like a technical version of Scrabble. When a technology can be enhanced, yielding a 10x improvement in price, performance, or time value over the technical roots from which it sprang, it has an excellent chance of widespread adoption.
Many times, a new technology is the missing link in a chain, which suddenly bonds with other technologies or services to form a new, breakthrough solution.
Most telecommunications service providers are still technology-based, and clear, techno- logical winners will remain at the foundation of new offerings. IP, optical, and wireless technologies contain inherent service values that help providers service-orient their offer- ings, deriving even better service from provider technology.
IP Everywhere
During the 1970s and 1980s, the most abundant form of networking protocols and network- ing revenues centered around the IBM protocols. Both asynchronous and synchronous data transmission were used with the most popular becoming the BiSync and Synchronous Data Link Control (SDLC) protocols within the IBM Systems Network Architecture (SNA). IBM SNA was an umbrella of integrated software platforms that formed a powerful and reli- able data network communications system, which became the primary networking thread among large enterprises. At that time, IBM’s SNA was the most pervasive data communi- cations protocol in American and international business.
On a particular late 1980s day in Tulsa, Oklahoma, an IBM customer’s meeting was in pro- cess where one of the customer’s Chicago-based employees was speaking evangelistically about a new communication device that connected this to that, bridged front to back, and seemingly translated circles into squares. The customer was talking about a Cisco MGS series router. As he expounded further, this router required no raised floor or glass rooms, could be configured on-the-fly, and was multilingual with IP, Internetwork Packet Exchange (IPX), and AppleTalk as primary language skills. Those IBMers in attendance that day silently puffed up inside with immediate jealousy, not only at hearing about a serious, non-IBM communications competitor, but also at the revelation that there was an extensive technology and computing world beyond IBM’s meadow where they were born and bred. During the 1990s, as it would turn out, Cisco developed a strategy for supporting the IBM SNA protocols via TCP/IP and acquired many of the SNA architects and designers from IBM Raleigh’s communications division stronghold; and TCP/IP began its run as the new networking protocol of choice in business.
Today, the Internet Protocol, or its more colloquial reference of IP, is everywhere. The Internet Protocol suite, as it is commonly referred to in official standards documents, became the protocol engine of choice for networks worldwide because of IP’s ability to be implemented on disparate computer systems. By allowing these diverse computers and their networks to interoperate with each other, information sharing was nimble and quick using the simple, yet powerful capabilities of IP. Many benefits led to IP becoming the
de facto standard of networks and computer communications around the world. IP is
inherently connectionless and distributed, reducing restrictions on network design, adding reliability through seamless flow across multiple communication pathways, and providing low overhead.
Technological Winners 13
IP is a scalable and extensible protocol suite, bringing flexibility and investment protection, which are key requirements of designers and decision makers. For example, you can extend the protocol’s default, connectionless, best-effort orientation by combining IP with a Layer 4 protocol such as TCP. This layering or stacking of TCP with IP or TCP/IP, adds connection-oriented, reliable data transport capabilities to IP communication with ancillary flow, congestion, and duplicate data-suppression controls. This allows IP to be a suitable alternative to many computer manufacturers’ proprietary network protocols, typically designed for and supported only on the manufacturer’s computer platforms.
Perhaps the most appealing benefit is the openness, mutual development, and control that the Internet Protocol suite enjoys. With all application and networking developers having access to the same information regarding the IP protocol structure, research and develop- ment efforts become collaborative and self-perpetuating. From a grass roots beginning, the open nature, flexibility, and affordability of IP led to its pervasiveness. The pervasiveness and distributed architecture of IP across multiple computer platforms positioned IP as the unifying protocol of choice for enterprises and the connected Internet. The service-oriented nature of the connected Internet provided service pull, which rapidly led to IP’s ubiquity. Because of these enablers and the Internet, IP is now everywhere.
According to the Gartner Group, IP grew so fast that by the end of 2001 more than 98 per- cent of all corporations were using it as part of their networking architecture.8 So rapid was the growth that a January 2000 Internet Domain Survey by the Internet Software Consortium (http://www.isoc.org) counted over 109.5 million hosts using the current version 4 of IP, or IPv4.9 With a 32-bit addressing scheme that can support up to 4.3 billion IP hosts, it would seem that plenty of space remains: but with the popularity of consumer PC Internet use and the desire for all handheld devices and cellular phones to be Internet addressable, IPv4 addresses will one day border on exhaustion. Not to mention that globally, the IPv4 address shortage is more evident. Some individual U.S. universities have more registered IPv4 address space than the entire continent of China. Many countries have been lagging tech- nologically and economically and as a result have come up short on publicly registered IPv4 addresses. Once again, as a testament to mutual cooperation and the extensibility of the IP protocol suite, an IETF standard (RFC 2460 and others) for a next generation of IP known as IPv6 is available.
IPv6 increases the address scheme from 32 to 128 bits, ensuring the availability of IP addresses into the next few decades. In addition, IPv6 improves networking efficiency through prefix routing, better traffic distinction, built-in security, and co-existence and compatibility with IPv4. Many service providers have already applied for and received registered IPv6 address space. The initial implementation of IPv6 is much more prevalent outside of the United States due to the aforementioned shortage of IPv4 addresses and the rapid uptake of mobile teleputers. IPv6 most likely will grow from different regional net- works and over time spread both nationally and globally. In addition, IPv6 is a streamlined addressing architecture that better supports mobile IP. With wireless mobility devices requiring IP intelligence, the need for unique IP addresses, as well as seamless IP roaming across networks, is paramount to IP mobility.
As IP increasingly moves into mobility devices such as pocket PCs and cellular phones, IP mobility support will allow a mobile device to maintain the same IP address, known as its home address, wherever it attaches to a network. This is conceptually similar to the way your cell phone works today when you are traveling or roaming beyond the reach of your wireless provider’s cellular network.
So far in the new century, IP is still rapidly growing despite an economically soft start. According to the Internet Software Consortium’s (http://www.isc.org) January 2005 Internet Domain Survey, the number of DNS-advertised IP hosts accessible via the Internet reached approximately 317.6 million, compared with approximately 14.3 million hosts recorded in January 1996.10 These numbers don’t include the IP host addresses that are resident in enterprise and service provider networks or in consumer PCs that don’t advertise to a domain name server, and don’t even include the hosts that use private IP addressing space. This is evidence that growth in both numbers of IP hosts and usage of IP-based applications continues to accelerate.
IP is the dominant Layer 3 networking protocol among local, long, mobile, and global inter- networks. The emergence of IP networking has decoupled network services from their dependence on transmission media at the physical layer. IP is capable of leveling the telecommunications playing field. Regulation is an exercise in wealth distribution, but IP provides anyone the same tools with which to craft new opportunities. Those who champi- on expertise in IP networking will dominate.
IP will increasingly be used as internetworking finds applications beyond today’s networks into tomorrow’s household, automobile, personal communications, and health monitoring devices. Much like the Internet, the IP acronym is rapidly approaching name recognition at the consumer and household level. Because of the Internet, IP technology has successfully integrated into a service-valued product model that effectively pulls users and their trans- actions. Thanks to the Internet, IP is vaulting the continents as an internationally global, perhaps one day universal, communications language. IP, unlike any other protocol, is uniquely positioned as the central theme in the new era of networking.