A modern trend: The rise of new private networks
By Zatni Arbi
PHUKET, Thailand (JP): Back in mid-1987, when I was taking some courses in management information systems and data communications, the concepts of local-area networks and wide-area networks were the topics du jour.
Today, we take networks for granted but back then, they were a really big thing.
That is not surprising because in those days, networks were still very difficult to set up and even more difficult to manage. If you knew how to make the computers talk to one another and keep them on speaking terms, you would have had a very high paying job and a healthy savings account in no time.
In the beginning, LANs and WANs were used to organize company data and put them under the administration of the management information system department.
This would include data from the sales department, accounting department and so on.
The WANs, which covered a wider area, as the name indicates, were constructed to connect remote offices and branch offices.
They also provided remote access to data so that a salesman at a customer's premise would be able to check whether the goods his customer wanted to order were indeed in stock.
Remote access would also allow him to get the latest updates on volume discounts that he could offer the customer he was visiting. At that time, the WANs connected the LANs via dedicated lines leased from public network providers.
There were also talks about strategic information systems, a system that put the companies that used it in a very strategic position.
One of most used examples was an international bank that placed terminals on the desktop of their major customers. This enabled customers much more control over the management of their funds.
These terminals were considered part of the bank's strategic system, since it help lock in its customers.
At that time, when computer literacy was not as pervasive as it is today, the executives had to spend a fair amount of their precious time learning to use the system.
So, when the bank's competitor approached them with a more user-friendly system or better rates, they would be hesitant to migrate.
Well, just last week we talked about Internet banking. Banks have interfaced their internal systems with Internet and put their services online, much like the bank did.
However, the services are accessible to everyone, not only to the executives. With Internet banking, the banks can easily serve hundreds of thousands of clients instead of just a dozen. What is happening?
Virtual
"We are now moving from private networks to virtual private networks," said Desh Deshpande, the executive vice president of the California-based Ascend Communications company.
He was addressing a roomful of executives of ISPs and carriers from the Asia-Pacific region last week, organized by his company here in beautiful Phuket.
In the past, LANs and WANs were built and managed by the internal management information system departments. But as many big corporations have long found out, managing the networks could become very costly and very challenging.
Many of these organizations ended up having to shed a huge amount of dollars and employ personnel for maintaining the wide area networks. Worse, the investment would immediately multiply as the number of sites to be connected increased.
In the last 18 months or so, Desh observed, there has been a profound change.
Thanks to the proliferation of the Internet, people have suddenly found a better way to build corporate internal and external networks.
Subsequently, we now hear the word Intranet and Extranet. Intranet refers to a network that is internal to an organization but uses Internet technologies, including Internet browsers.
The Extranet, as you would easily guess, connects the Intranet with the suppliers, customers, business partners and remote workers, also using the technologies of the Internet.
Why the move to Internet?
First and foremost, it provides an opportunity to build a virtual private network that causes companies fewer headaches and costs less, said Desh,
Internet service providers in the U.S. and other advanced countries have found out that it is also more profitable to serve big businesses than just individual subscribers.
With the advent of the Internet, the older protocols such as Internetwork Packet Exchange (IPX) have been gradually abandoned and Internet Protocol (IP) has been adopted.
That is why we are also seeing convergencies between carriers and ISPs. One of the clear examples has been WorldCom, a company that provided frame relay and ATM services and operated infrastructure.
Horrendous
WorldCom then merged with UUNet, an ISP with quite a sizable subscriber base.
By relying on the Virtual Private Networks, in which segments of the private networks are safely and securely shared with other users of the same infrastructure, companies can free themselves from the horrendous task of managing their own WANs.
The network service providers (NSPs), use the latest technologies, including frame relay and Asynchronous Transfer Mode (ATM), as the infrastructure for transmitting data, thereby providing efficient services to their customers.
It's understandable if you have never heard of Ascend Communications.
Ascend is not a consumer brand, and, therefore, not many people know about them despite the fact that they have actually been in the Indonesian market for two years.
One of their leading products is the Max. To explain what this particular box does, envision for a moment the bulletin board systems that were so commonplace back in late 1980s.
Each of these basement-based systems would consist of servers and stacks of modems.
In the beginning, each of the modems handled one connection, and to be able to accommodate 10 subscribers at the same time, 10 modems would be required.
Now, with a Max, such as Max 4000 used by three of the leading Indonesian ISPs, up to 72 subscribers can be handled at the same time.
Last July, Ascend acquired Cascade Communications, a company that made frame relay, ATM and IP switching products, and strengthened its position in the ISP and carriers market.
There were several important messages that we could bring home from the forum in Phuket.
First, it is becoming more obvious that the public network providers in every country should now be prepared for a shift in the way people communicate.
As the accompanying chart that I obtained from the forum shows, the amount of international data traffic is going to exceed the amount of international voice call traffics.
While the amount of voice traffic will continue to increase at 3 percent to 4 percent rates, the data traffic will increase at an exponential rate.
In some countries, carriers have even confirmed that the point has been reached and passed. Although this will not necessarily mean that telephone services will die, it will certainly mean that the stronger growth will not be in the voice calls, but data traffic that may also carry voice as well.
One of the technologies currently being pushed by Ascend is Voice over IP, and we've been hearing more and more about Internet telephony.
Therefore, our own public network providers should also be aware that soon people will be using the Internet as the pathway for their calls instead of the conventional telephone networks.
New technologies such as the Voice over IP will enable Internet users to make phone calls through the Internet, where costs will be much lower than conventional calls.
Another important piece of news was that Ascend intends to setup their representative offices in Thailand, Indonesia and the Philippines but has not succeeded in finding the right person to man these offices.
They've been looking for a capable person in Indonesia for six months to no avail. The importance of this fact is not that you can apply for this highly paying job, but rather that, today, it's no longer sufficient just to be good at building and maintaining LANs and WANs.
Today, you also need to know a lot about the Internet, data communications, public networks and the latest technologies in telecommunications.
If you happen to be a student majoring in computer engineering, you should do your best to enrich your portfolio with the knowledge in these areas as well.
As many insiders have told me, the industry is, at the moment, strangled by lack of qualified engineers with up-to-date expertise in the new public networks. If you can fill these gaps, you'll be guaranteed an extremely extraordinary salary.