IP leads trends

Grid computing, computing as a utility, IP dial tone and pervasive or ubiquitous computing were cited as primary emerging trends pushing the drive towards Internet computing in Pricewaterhouse Cooper’s Technology Forecast: 2002-2004, Volume 2: Emerging Patterns of Internet Computing. The report was released in late November.

“Just as the Internet began as an effort to share computing resources among academic researchers, we can expect to see that businesses and consumers will seek out shared computing, storage, network and other information resources as a cost-efficient alternative to maintaining independent infrastructures,” said Terry Retter, director in the Strategic Technology Centre Menlo Park and contributing editor to The Forecast.

“We can expect that architectures such as grid computing, which is currently used only by experimental scientists analyzing large amounts of data, will eventually be used by enterprises.”

The combination of these technologies would result in pervasive or ubiquitous computing, according to The Forecast, where computers would become interwoven into our lifestyles – that is, they would become invisible to the user. And although this is where the industry is heading, according to PwC, it won’t be coming within the next five to seven years.

However, what will be happening within the next couple of years in the networking space is good news for networking equipment and network hardware companies. Although overall spending on IT hardware is predicted to decline, especially in North America, falling 8.7 per cent from 2001, as opposed to 2.8 per cent in Western Europe and 1.3 per cent in Asia/Pacific, the one area of exception is network equipment being purchased by telecom carriers. PwC predicts that spending will increase, not back to levels seen between 1998 and 2000, Retter said, but “we’re going to see a return to growth.”

“We’re going to see a continual rotation of circuit-switched to packet-switched,” he added, saying that one question that will have to be answered is who is going to do the supplying.

“Whether we’re going to see this continued rotation from the traditional telco suppliers to traditional data suppliers [remains to be seen],” he said. “It will be an interesting thing to watch.

According to The Forecast, spending on network equipment will grow at a compound annual growth rate (CAGR) of 8.3 per cent, reaching US$84.4 billion in 2006. Storage spending will grow at a CAGR of 7.4 per cent, reaching US$45.2 billion in that year.

As for PwC’s predictions in the storage arena, The Forecast predicted a move away from Fibre Channel technology towards storage-over-IP technologies, which allows SANs to be built using Gigabit Ethernet and TCP/IP.

“There was a big turnaround in computer rooms when we moved from device-specific storage to the fabric of storage servicing an array of servers,” said Retter. “This was done fundamentally through fibre channel, which is a proprietary protocol, and so there’s been a movement afoot lately to move towards more standard protocols.”

Alan Freedman, an analyst at IDC Canada Ltd. in Toronto, said he generally agreed with PwC’s predictions but said, “fibre channel has a large advantage as they are the incumbents in the majority of current implementations, and products and technologies are more mature than the storage-over-IP product set.”

However, Freedman said the one advantage with IP is that users “don’t need a separate network, and therefore don’t need a new set of management skills/resources.”

Other predictions in the networking space included fallout from the spread of public-access 802.11 wireless LANs (WLANs) that was, according to The Forecast, widely discussed in 2001 and 2002.

Retter said the spread of these WLANs could pose a threat to incumbents as they could cut into the telcos’ revenues. As an example, he said that a company in the U.S. implemented about 2,700 WLAN access points in locations of the Starbucks coffee chain across the country. Retter said that although these are niche competitors, if there was a significant amount of them, they could chip away at a telco’s revenue.

In addition, The Forecast stated that in the long term, the wireless industry is looking to apply ultra-wideband (UWB) radio and open spectrum to extract more bandwidth in the 4G wireless systems being developed.

Tim Fell, director of technology strategy for Telus Corp. in Edmonton, agreed that WLANs could pose a threat. He also agreed with PwC’s prediction that “wireline carriers are exploring ways of replacing expensive transmission equipment used in their fibre optic networks with approaches based upon commodity technologies such as Ethernet and TCP/IP routers, including metropolitan area Ethernet and Resilient Packet Rings.”

Fell said Telus is looking into Ethernet but not as much at Resilient Packet Rings because developers have yet to line up behind a standard.

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