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1998 Bellcore Forum Point & Counter-point with Bob Lucky Gordon Bell Microsoft May 5, 1998 The 1998 Bellcore Forum:* Competing in the Millennium: Vision,

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Presentation on theme: "1998 Bellcore Forum Point & Counter-point with Bob Lucky Gordon Bell Microsoft May 5, 1998 The 1998 Bellcore Forum:* Competing in the Millennium: Vision,"— Presentation transcript:

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2 1998 Bellcore Forum Point & Counter-point with Bob Lucky Gordon Bell Microsoft May 5, 1998 The 1998 Bellcore Forum:* Competing in the Millennium: Vision, Innovation, and Delivery *Audience response was used for this presentation, and the attendees from Bellcore, LECs, CLECs, IECs/IXCs, Cable companies, and equipment suppliers were polled. The %s indicate the results of these polls.

3 1998 Bellcore Forum Predicting future telecom services or lack thereof Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan* *Appended to the original talk.

4 1998 Bellcore Forum By January 2001 there will NOT be 1 billion people on the net. Bet: Nicholas Negroponte $1K Bet: Nicholas Negroponte $1K:$5K… it happens by 2002. Also $1 T of commerce by 2001. Bet: Me? 77% NN? 23%

5 1998 Bellcore Forum Why this is the keystone bet! It determines the market – for networks – for access devices… especially PCs It says something about the utility – commerce – communication – entertainment Increased network capacity & ubiquity enables – phones – videophones – television – serendipity

6 1998 Bellcore Forum Interneters growth Internetters PCs TVs & Phones World Population 10000 1000 100 10 95969798990001020304 1 Gp by 2000 Negroponte1 Gp by 2000 Negroponte

7 1998 Bellcore Forum Interneters growth 95969798990001020304 Internet Growth extrapolated at 98% per year World Population extrapolated at 1.6% per year 12000 10000 8000 6000 4000 2000 0

8 1998 Bellcore Forum

9 Growth in hype WWW Infoway addiction Infoway regulation lawsuits Data from Gordons WAG conferences books, newspapers Infoway promise: how great itll be (politicians, academics, etc.)

10 1998 Bellcore Forum Articles about security, privacy, & fraud versus commerce ($M) Data from Gordons WAG articles about risk and NOT doing commerce actual commerce pornography, crime, FUD, etc. articles

11 1998 Bellcore Forum Real growth in commerce?

12 1998 Bellcore Forum Capac. (svc & response) The Virtuous Cycle that drives the BW quest Application innovation User demand Internet (IP) ubiquity Excess capac. -->>BW

13 1998 Bellcore Forum Bob Lucky, Vice President Bellcore, 1995 If we couldnt predict the Web, what good are we?

14 1998 Bellcore Forum Exponentials change everything … you cant see em coming!

15 1998 Bellcore Forum Business Week even makes fun of Telecom… because you can see them coming

16 1998 Bellcore Forum Business Week doesnt know… Satellite isnt an a B/W option PhoneCATVSatellite…

17 1998 Bellcore Forum Why phone guys hate computer guys 0.Where would they be without the transistor, RJ11 and UNIX that you de-standardized? 1.Theyre nouveau rich were old money. 2.We brought ISDN to the party, nobody came. 3.Theyre IPing on us including phones! 4.Packets dont make links fatter or faster. 5.All they want is free, high bandwidth, 24 hour a day phone calls. Why do they need bandwidth? They have nothing to show. 6.Dont talk service. I reboot my PC every day. Ever have to reboot your phone? 7.Just wait till the governments get on their case.

18 1998 Bellcore Forum Agenda… predicting and forecasting Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan

19 1998 Bellcore Forum Lets look at Cyberspace

20 1998 Bellcore Forum Region/Intranet Campus Home Body World Continent Cyberspace: A Network of... Networks of...

21 1998 Bellcore Forum Cyberization: interface to all bits and process information Coupling to all information and information processors Pure bits e.g. paper, newspapers, video Bit tokens e.g. money, stock State of: places, things, and people State of: physical networks

22 1998 Bellcore Forum Platform, Interface, & Network Computer Class Enablers NetworkInterfacePlatform The Computer Mainframe tube, core, drum, tape, batch O/S direct > batch Mini & Timesharing SSI-MSI, disk, timeshare O/S terminals via commands POTS PC/WS micro, floppy, disk, bit-map display, mouse, distd O/S WIMP LAN Web browser, telecomputer, tv computer PC, scalable servers, Web, HTML Internet

23 1998 Bellcore Forum Everything will be in Cyberspace Is this a challenge? goal? quest? fate?… or Cyberization enables new computing platforms that require new networks to connect them – Infrastructure supports the content – Three evolutionary dimensions

24 1998 Bellcore Forum All the platforms we have and will inevitably build have to be totally interconnected to have Cyberspace. Thats your job! The price has to be right… you cannot count on voice revenue forever!

25 1998 Bellcore Forum Connecting all these plain old computers into Cyberspace… an opportunity

26 1998 Bellcore Forum Mobile videophone

27 1998 Bellcore Forum Honda Robot

28 1998 Bellcore Forum People surrogates

29 1998 Bellcore Forum Steve Mann in Cyberspace

30 1998 Bellcore Forum Medtronics Implanted Cardioplastic

31 1998 Bellcore Forum For openers… audio, pix, T, P, ECG, location… 1 GB

32 1998 Bellcore Forum Libretto,.5mm pencil PCS; Pilot Libretto PS, Ricoh Camera; Swiss Army Knife Compass; altimeter Not shown: ECG; GPS;

33 1998 Bellcore Forum Data Cyberspace: one, two or three networks? in 2005, 2010, 2020 Telephony Television

34 1998 Bellcore Forum CLEC Inet Phone Cable Inet ISP Broad- cast Cable PBX VCR DVD >97 xDSL TV IEC LEC DBS The Internet LAN Pvt. WAN Cable phone LAN PBX Game Cons. Wire- less Wire- less Television world Telephony world Datacom world The Worlds of TV, Telephony & Datacom a.k.a. Computing & Internet ITV? RADIO Inet RADIO Intranet Extranets

35 1998 Bellcore Forum Cyberspace: A spiraling quest in 3D real space Computation Communication Cyberization Programs, Content & messages

36 1998 Bellcore Forum Agenda… predicting and forecasting Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan

37 1998 Bellcore Forum On prediction…and betting why historically have we been right or wrong?

38 1998 Bellcore Forum I think there is a world market for maybe five computers. Thomas Watson Senior, Chairman of IBM, 1943

39 1998 Bellcore Forum Harvard Mark I aka IBM ASCC

40 1998 Bellcore Forum Predictions require some history. The computer hadnt been invented. Watsons prediction held for 10 years. You need history to predict.

41 1998 Bellcore Forum Moores Law vs Morons Law for prediction… differences in Cyberspace perception

42 1998 Bellcore Forum Moores Law 60%/yr. Memory -- 4 x size every 3 years 10 G 1 G 100 M 10 M 1 M 100 K 10 K 1 K 0.1 K 19701980199020002010

43 1998 Bellcore Forum Tera Giga Mega Kilo 1 1947195719671977198719972007 Extrapolation from 1950s: 20-30% growth per yearStorage Backbone Memory Processing Telephone Service 17% / year ??

44 1998 Bellcore Forum

45 Moron's Law (cf. Newton) the residual effects of regulation ensure that telecom carriers will never provide what the customer wants and … it comes five years too late. --venture capitalist Roger McNamee. Computer folks... fear that Moron's Law will trump Moore's and stunt the revolution's growth over the next 30 years.

46 1998 Bellcore Forum Newton's First Law. Bodies at rest... LECs, PUC and FCC are at rest, supplying assuredly profitable (by definition) local service. Cable TV raises prices to cash out CLECs and IECs cherry pick lucrative corporate (not consumer) local service LECs see reduced revenue and profit LECs, PUCs, and FCC raise prices LECs downsize to remain at rest, buy cable and CLECs to remain at rest & maintain monopoly

47 1998 Bellcore Forum Electricity and LECs to Merge Wires to the home … Guys and trucks Poles and holes… Same customers Geo-monopolies PUC interaction Core competency: lobbying

48 1998 Bellcore Forum Why computer guys hate phone guys 0.Ads say someday you will. Just do it! 1.All they give us is POTS to IP on. 2.Its not the price of bandwidth (that they said would be free) … its the availability 3.They wont buy packet switching. Computers let everyone be telecoms. Theyll pay. 4.The net is the net. Services are services. Content is content. Stop trying to own ALL. 5. Telephone quality is an oxymoron. With 64 kbps, we should be getting CD quality. 5.Name any monopoly that has love & respect 6.Its taken 35 years to learn that computer calls last 24 hours/day, not 5 minutes.

49 1998 Bellcore Forum

50 Why no one likes cable guys 0.But you just increased my rates 1.They dont even own the poles or holes. Theyre just schmucks in trucks. 2.They are too close to the broadcast industry and that eliminated logic. 3.Wed all like to be unregulated too then we can raise rates faster and do whatever we want.

51 1998 Bellcore Forum Telecom View of Cyberspace: We will tell you the services. The Network and all the Sevices you would ever want. Subscribers

52 1998 Bellcore Forum Silicon Valley View of Cyberspace: provide a switch and entrepreneurs will create the services Worldwide mostly IP Switch Subscribers All the Services you might or might not want

53 1998 Bellcore Forum Telecom Equipment Industry 1998 SolutionsApplicationsOSComputers Switching/ DSP AT&TAT&TNortelNortelSiemensROLMSiemensROLMNECNEC

54 1998 Bellcore Forum Applications Databases OS Switching Computers DSP Processors Microsoft, Delrina, many others Microsoft, Apple, Sun, Novell, LINUX Ericsson, Aspect, Nortel, Octel, others Dialogic, NMS, Rhetorex, others Ericsson, Nortel, Bay, 3Com, Fore, others Compaq, DEC, Dell, IBM, many others Intel, AMD, Motorola, others Informix, Microsoft, Oracle, Sybase, others Informix, Microsoft, Oracle, Sybase, others Future Telecom Industry

55 1998 Bellcore Forum Computer vs Telecom Proc. & mem 2x/1.5 yrAccess B/W 2x/4yr Trunk BW 2x/ 9 mos. Prices declinePrices increase Email, web, audio, etc. Voice, voicemail, fax Packet switching… Circuit switching... … will too, do voice! …is required for voice 64Kbps gives great audioTelephone Quality Voice … is an oxymoron IPATM, ISDN & POTS Fungible bits for Unique bits and phone fax data tv… ala carte pricing Connect & bits go free.Billing & lawyer costs Just give us any old net!We want it all: well compute the rest net, nodes, content Technology-based …itsLobbying-based … its Information Services Telecommunications Moores LawMorons Law

56 1998 Bellcore Forum The beginning of the end… or a new beginning? You have to separate the hype from the reality. We have customers, real customers paying hundreds of millions of dollars to us today. When you look at Level 3 and Qwest, how many customers do they have? ---- R C Notebaert, Ameritech Were not going to wake up and find our voice business is gone --- M Turner, US West

57 1998 Bellcore Forum A technology e.g. packet switching can come from nowhere and wipe you out! MOS memories and micros were introduced in 1972. By 1976, MOS memories wiped out core memories.

58 1998 Bellcore Forum There is no reason anyone would want a computer in their home. Ken Olsen President, Chairman and founder of Digital, 1977

59 1998 Bellcore Forum Equating yourself to the average user/buyer is risky... unless youre an average user.

60 1998 Bellcore Forum ISDN will be ubiquitous by 1985. Irwin Dorros, VP Long Lines ATT, 1981 Unfortunately were stuck with ISDN speed using POTS for the next 5 years. Gordon Bell, ACM 1997

61 1998 Bellcore Forum Network bandwidth becomes available slower than the most conservative prediction.

62 1998 Bellcore Forum AT&T will not have screwed up its purchase of NCR by 1996. Robb Wilmot, advising Robert Allen in 1992 ($100)

63 1998 Bellcore Forum We under-estimate the devastating power of companies & planners, lawyers & government, to foul up predictions. But to really foul up requires an econometric and market models!

64 1998 Bellcore Forum By 1997 Video-on-Demand will be available and operating in six cities Raj Reddy & Ed Lazowska 1992 (winners get fed) When will this happen? 2000 8%, 2005 46%, 2010 25%, never 21%

65 1998 Bellcore Forum Gordon Bell vs Jim Gray 1996 (one paper, loser gets fed) By April 1, 2001 videophones will ship in 50% of the PCs and be in 10% daily use. Will this happen by: 2001 25%, 2005 50%, 2010 18%, 2015 3%, never 4%

66 1998 Bellcore Forum Always bet against the optimistic researcher. They are wrong in the short term, but ultimately right.

67 1998 Bellcore Forum Build it and they will come Vision: Provide bandwidth and they will come to share supercomputers, do telemedicine, telescience, ship pictures around. Traffic continues to double. The web was serendipity! "A user... would build a process and launch it into the network... with explicit instructions about things to look for and what to do …."

68 1998 Bellcore Forum

69 If you do the right thing, serendipity works!

70 1998 Bellcore Forum NCs will NOT outsell PCs 9:1 by 2000.… NCs include those embedded in TV sets, phones, and used as PC alternatives. Bet with Larry Ellison, CEO Oracle: While the devices connected to the web (e.g. instruments, cameras, appliances, printers, phones, and television sets) may be greater than PCs, the number of personal access devices that are NOT PCs will be less than 9:1.

71 1998 Bellcore Forum Dont bother betting where the goal is just PR. It is safe to bet against Larry Ellison even if he has lots of money. Elllison bought Ncube. It failed as an MPP computer, failed again as a database engine, and finally failed as a video-on-demand server.

72 1998 Bellcore Forum Observations on predicting Existence proofs are essential, otherwise its faith and luck. Numbers and data are our friends to use. Bet against the optimistic researcher. They are ultimately right, while initially wrong. Bet on predictors who are grounded, intuitive, imaginative, and lucky. Because it could, doesnt mean it will. Its usually just the economics, stupid… look there first! Dont count of Newtons First Law… because greed (an outside force) usually beats fear (inertia).

73 1998 Bellcore Forum What percent of biz traffic by contacts, (not traffic) will be: Item Bell/Lucky19942000 Fax1110710 Voice15501530 Voice/Video confer221010 Overnite mail231.55 Snail mail20251025 Email50105630 Newspaper? Web? Television?

74 1998 Bellcore Forum Agenda… predicting and forecasting Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan

75 1998 Bellcore Forum Some of my recent bets! Would you bet with me?

76 1998 Bellcore Forum PC growth is not stalled... Bet: (Walt Mossberg, WSJ) There will be continued growth of PCs (I.e. things that run Windows, NT, or CE) at a double digit rate for until 2001. Bet with me? 87% With Mossberg? 13%

77 1998 Bellcore Forum Web will reach 50% of the U.S. households... Negroponte predicts 1Bp and $1T/yr of commerce by 1/2001. Bet: with Dave Nagel, AT&T one dinner The web will reach 400M world-wide users OR 50% of U.S. households by end of 2001. Do you bet with me? 57% Nagel? 43%

78 1998 Bellcore Forum One million people will access the web via TV sets... Bet:: At least one million users will access the web/internet via their television sets by the end of 2001. Via: phone line,16% xDSL19% cable modem17% settop box/cable 39% not at all 9%

79 1998 Bellcore Forum Average bandwidth to homes will not soon be huge… High bandwidth links are being delivered today in trials of 10K+ using cable & xDSL. Bet: The average bandwidth to all U. S. homes with PCs will be <56 Kbps in 1/2001. The availability of bandwidth coming to consumers and small businesses by 1/2001 via Cu twisted pair aka LECs or IECs will be comparable to ISDN today. 128Kbps 29%

80 1998 Bellcore Forum A gigabit net will not be in place for research users… Bet: Raj Reddy et al … fine food & drink 10K users at 10 sites of > 500 users/site in 3 states will NOT inter- connect through a gigabit path by the end of 2000. Do you bet with me? 65% Or with Raj? 35% Based on market need, this service will be available by: 2000 10%, 2005 53%, 2010 29%, 2020 5%, never 4%.

81 1998 Bellcore Forum Telepresentations will be a well-defined app by 2001. ACM97 aka its 50th on March 3-5, 1997 was the first telepresented conference with Mbone multicast and servers Bet with Denise Curruso, NY Times More people will view conferences that are made telepresent from Cyberspace than those attended it in meatspace by 2001. Note this bet was won within 6 months. Bet: Even this meeting will be telepresented by 2001 37%, 2005 35%, 2010 10%, never 18%

82 1998 Bellcore Forum ACM 97 (Mar. 1997) attendee poll… whats your opinion? By 2047 will the majority telecommute? (68% of ACM attendees said yes) Will representative democracy be replaced by electronic participatory, democracy by 2047? (ACM: 38% yes) TV, the internet and telephone will converge by 2002 (ACM)!… clearly optimistic and very wrong

83 1998 Bellcore Forum Lets poll (forecast) when certain events will (or will not) happen

84 1998 Bellcore Forum Forecast of Internet Telephony & Videotelephony IP will carry $2B of existing voice or fax traffic by: 2001, 2005, 2010 IP will carry 20% of existing voice or fax traffic by: 2001, 2005, 2010 IP will carry 50% of voice and fax traffic by: 2005, 2010, 2020, never *Note email can be used to carry fax traffic, but not visa-versa.

85 1998 Bellcore Forum Forecast of xDSL & CABLE of Internet to US Homes & Businesses xDSL use will cross-over ISDN installations by 2001 55%, 2005 37%, 2010 8% xDSL will deliver service to 10M by 2001 10%, 2005 69%, 2010 22% Cable will provide WWW to 1Ml by 2001 61%, 2005 31%, 2010 8% Cable will deliver WWW to 10M by 2001, 2005, 2010

86 1998 Bellcore Forum Forecast of convergence? The datacom network (IP) will carry Television programs by 1/2001, 2005, 2010, 2020, never There will be a single net to access the majority of telephony, data, and television sources by 2005, 2010, 2020, never

87 1998 Bellcore Forum Forecast of the access device One-half the homes with PCs will be always on by: 2001, 2005, 2010, 2020 The main (in units) web access device in 2001 will be: the PC, Telecomputer aka videophone, Set-top, TV, other The main web access device in 2005 will be the PC, Telecomputer, Set-top, TV, other The main web access device in 2010 will be the PC, Telecomputer, Set-top, TV, other

88 1998 Bellcore Forum Agenda… predicting and forecasting Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan

89 1998 Bellcore Forum Ten Niches to the IECs economic support base. Reducing voice revenue is the only avenue for changing the LEC-PUC-FCC controlled access infrastructure!

90 1998 Bellcore Forum Overthrowing bandwidth limiting incumbent IECs to get Internet access …ten, critical niches Plain Old Cellular replaces POTS 64 Kbps quality audio vs telephony quality Cable for Internet AND voice over IP CLECs aka Competitive LEC suppliers Newcos (e.g. Covad): IP service with xDSL Startup IP based telephony companies Large users by-pass LECs and use IXCs and IP for inter-organization telephony Fax services over Internet undermines base Bellcore plan for ISPs to provide telefony Maintain FCC support FCC for voice over IP without FCC/PUC interference

91 1998 Bellcore Forum Telephone Quality Voice is an Oxymoron! We can do better. Analog to digital transition must occur! E.g. a 6 Mhz TV channel can deliver about six higher DVD quality digital channels IECs use 64 Kbps channels to supply approximately 8 kbps, low-quality voice New channels can offer higher quality audio using >33 kbps. Datacom must drive to offer scalable audio bandwidths from 2 kbps-500 kbps

92 1998 Bellcore Forum Attack plan for ISPs to deliver voice According to the rules, ISPs cannot offer telephony if it looks like a telephone Thee ways that make IP telephony NOT be a telephone: Increased quality… use all the bandwidth that can be obtained e.g. 33, 56 or whatever to provide high, not telephone quality voice It is a videophone It is a computer and conference device

93 1998 Bellcore Forum How a New Player or ISP can Attack Incumbents e.g. LECs* Dial Me Up, Faster and Faster!!!! Voice over IP at 7.3 Kbps Using Modems LEC ISP+ Internet Backbone IXC Telafony Gateway *courtesy of Bellcore

94 1998 Bellcore Forum Plan for Pipes and Wires LECs are free pipe and wire access providers. IP over ATM lets competitors buildout a network LEC Network IP Routers ATM Switches

95 1998 Bellcore Forum FCCs 4/10/98 Report to Congress: How long will it remain? If you use IP to transmit and store information, including telephony (unless it looks like a plain old telephone call), its Information Services. If you use circuit switching (no storage) its Telecommunications (and FCC/PUC controlled) IP Telephony has to look different! Bet: This will hold until 1/2001.

96 1998 Bellcore Forum The end


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