PwC: telecom will change, mainframes will remain

According to PricewaterhouseCoopers’s Technology Forecast 1999, increased data traffic and deregulation of the telecommunications industry will lead to many dramatic changes in that sector.

“Telecommunications is beginning down the path that computing has been travelling for the past 30 years — a path characterized by a host of new providers, accelerating technology innovation, and a blizzard of new products and services,” the study stated.

The study forecasts an emergence of four or five global “supercarriers” in the industry by 2002, with about 4,000 national and regional niche players.

Terry Retter, one of the study’s authors and a principal consultant with the Strategic Technology Services Group at PwC’s Technology Centre in Menlo Park, Calif., said data traffic will exceed voice traffic by 2001 or 2002. He explained that data traffic patterns are not well-suited to circuit switching because they are characterized by many very short, sub-second data flows rather than longer, minutes-long calls.

For this reason, Retter said the Technology Forecast is predicting that packet switching will replace circuit switching, and that the first signs of this are new packet-based networks delivering traditional telco services using voice over IP.

Retter explained this will constitute a major shift in focus for the telecom industry because the phone network is currently intelligent with “dumb” endpoints (phones), while the Internet is a simple network with intelligent end devices (computers).

Even with the Internet itself being a simple network, Retter said some bold plans to make it accessible anywhere on the planet, any time, are already being implemented. He said Teledesic has plans for an “Internet in the sky” of 288 low-earth orbit (LEO) satellites that are expected to provide a stationary broadband service of 64Mbps downlink and 2Mbps to 64Mbps uplink. This service is expected to start in 2003.

But today, Retter said slow networks are still inhibiting the growth of content-rich Web applications.

“Today’s modems…even 56Kbps…are too slow for interactive applications,” Retter said. He said faster networks are needed before users can really make good use of Web applications such as electronic commerce.

Retter said the future will find all sorts of things networked in order to facilitate dynamic management and pricing. For example, he said pop machines that are currently checked daily to be filled could notify the distributor that they are still full, saving the time to visit that machine. Furthermore, on hot days, the pop company could raise the price on the machines, and lower it again on cold days.

But new hardware and networks will not necessarily push out the old, the study found. The mainframe will remain the “super-server” of business computing, said the study, as long as mainframe suppliers double the processing power every 18 months while maintaining the same price point.

Retter said RISC/Unix servers are continuing to gain mainframe characteristics, while Windows 2000 and Intel’s Merced chip are expected to challenge RISC/Unix once they arrive.

Architecturally, the study found greater interest in thin clients and server-centric computing than in past years, with network computing via thin clients as the latest incarnation of the client/server model. Retter said there has been a greater emphasis on application servers because of their scalability and manageability.

Trends in corporate applications lean towards ERP applications becoming more modular and forming the enterprise software backbone, Retter said. The study found a greater focus on front-office applications such as sales force automation and customer care.

According to the study, the classic PC remains predominant in business and consumer markets, and prices are still falling. Meanwhile, new devices are gaining importance, such as hand-held computers, personal digital assistants, smart phones, auto PCs and other small computers.

“Cars will soon have 25 to 30 processors hooked up on a LAN, and the LAN will talk to drivers to alert them to problems,” Retter said.