February 7, 2000

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IT At The Speed Of Light
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These rollout schedules may be frustratingly slow to IT managers looking to benefit from optical metro service now, but they can take comfort from one thing: The larger service providers will get into the game--eventually. "We have no choice," says Ben Peek, a senior fellow at GST Telecommunications Inc.

At this point, IT managers would be forgiven for asking: If metro optical networking is so hot, why isn't it happening right now?

There are a couple of reasons for the delays. First, the equipment itself is new (read "incomplete and possibly bug-ridden"). Cisco says 200 customers have its equipment installed. But its current product is a low-cost, easy-to-install Sonet box that doesn't support the ATM and IP capabilities that will enable true multiservice provisioning. As for the others, many of their products are still in the labs (or on whiteboards). It will take time to work out the kinks.

Once that happens, plenty of providers will be ready to buy. "I just wish that Siara and its competitors were in beta now so I could deploy the technology today," says Sean Doherty, president and CEO of Urban Media. He may be keen to dive in, but some of the incumbents will hold off because it means tossing their old equipment.

Even if the equipment were available, another hurdle is lack of fiber, or the shortage of fiber between metro optical rings already installed and the fiber backbones within enterprise office buildings. "It's a quintessential problem: You've got fiber running under the street, and you've got fiber in the building, but the pipe between them is made of copper and it's turtle-slow," says Drew Lanza, senior VP of marketing at Mayan Networks. Laying new fiber to connect the two can cost as much as $300,000 per building, GST says. Most service providers aren't going to spend that much until they're sure the equipment works.

Sweden is far ahead in rolling out optical access services because of the widespread availability of low-cost fiber. Many city councils laid their own fiber and offer it cheaply to service providers to drive down telecom costs and encourage economic development.

Even so, Swedbank's Gullqvist isn't happy. Only 50 to 60 of his 1,000-plus branch offices will be within range of the initial rollouts of optical networking technology being planned by startup carriers. Gullqvist is dividing Swedbank's contract into two parts--one covering areas where optical access services are available and one where Sweden's incumbent carrier, Telia AB, is the sole provider. Telia will be under pressure to match the optical offerings or lose Swedbank's business.

Though it's possible to get a relatively clear idea of what the effects of optical networking will be in the next three years, it's less clear beyond that. If industry experts are to be believed, dramatic changes are on the way.

Some of these experts foresee a time when networks become so fast that bandwidth and latency effectively cease to be impediments to the flow of information. "Network transparency will enable a totally new business model," says O'Donnell, who predicts that businesses connected to fiber could feel the first effects of transparent networking within five years.

What he's describing is nothing less than the infrastructure of a true digital economy. The combination of on-demand service provisioning, high bandwidth, and low latencies could enable workgroups of experts from around the world to be created and dismantled for temporary projects, which might last for a matter of days. The location of staff in these workgroups becomes unimportant as they interact in virtual office space--the new factories of the digital economy. The ability to do this could have far-reaching consequences, possibly rendering obsolete the whole idea of big companies with private networks and corporate information systems.

If that sounds far-fetched, consider this: Call centers already are becoming location-independent. "When India is zero distance away in terms of data, there are a lot of things you can do, like hiring the experts you need without knowing or caring where in the world they're located," O'Donnell says.

One thing is obvious, says Peter Tierney, president and CEO of Millennium Optical Networks Inc.: "We're only scratching the surface of optical networking's potential."

Stephen Saunders and Peter Heywood are editors at Light Reading (www.lightreading.com), which provides analysis of optical networking.

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Illustration by Campbell Laird

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