Voices from the Vortex: Day one

By JOHN GALLANT
Network World, 05/26/99

Vortex 99 - Bob Metcalfe's annual convergence confabulation - got under way today amidst the crashing of the waves and the slice of golf balls, the courting of the VCs and the din of the deal making. (Not to mention the deepening feeling among the sworn-to-silence journalists chatting up the self-made multimillionaires in the room that they had chosen unwisely among the career paths that lead through this exploding world of networking.)

Today's veteran industry speakers focused on the explosion in new and diverse networked devices, the need to simplify networking for the masses and help service providers find new revenue opportunities in the converged world, and the virtualization of networking. Today's mystery: Why did the small plane tailing the www.newbridge.com banner buzz golfers and other Vortex-goers? Was it showboating? An unusual executive recruitment tactic? Attention-getting for an M&A partner? Or payback for some perceived slight?

The following are some of the thoughts and ideas of the Day One speakers:

Metcalfe kicks it off

Dr. Metcalfe, inventor of Ethernet and founder of 3Com, kicked off his convergence soiree with a call for community building among the executives representing the Internet, telephone and television industries. After banning loose talk about customer-centric solutions for the here-to-stay-Internet, Metcalfe laid out some of the key issues he hoped would be explored during this second installment of Vortex.

Among those issues:

Deployment of broadband facilities, particularly to the residence
Home networking
The evolution of ISPs and co-opetition in that industry segment
The structure of the converged industry
Quality of service concerns
The shape of the next-generation Internet
When the Internet stock bubble will burst (didn't that happen earlier this week, Bob?)

McQuillan: The Internet is the medium

Reprising his lead speaker role from last year, Dr. John McQuillan, president of McQuillan Ventures, put a stake in the ground with his assertion that the Internet has evolved not into simply a mass medium, but the mass medium. Not just a network, but the network - one that can overcome whatever technical limitations are facing it through the concerted efforts of technologists, entrepreneurs and others who see those limitations as business opportunities.

Saying the Internet has reached the end of its beginning phase, McQuillan focused on the impact of virtualization on our future, citing such advances as:

Virtual trunking and routing in the network
The emergence of virtual mail (unified messaging) and virtual communities
The power of virtual addressing to help consumers find information more easily
The emergence of virtual Web sites and virtual business (a.k.a. e-commerce)
And the possibilities of virtual audio communities

Hundt: Politics matters

On McQuillan's heels, Reed Hundt, senior advisor of information industries for McKinsey & Co. and former Federal Communications Commission chairman, drove home a message that many in the high-tech community would rather not hear: Politics trumps economics and technology as a shaper of the IT revolution. Hundt touted the wisdom of the Democratic administration's policy of championing data over voice, saying it had generated dramatic gains in productivity, which has enabled the U.S. economy to enjoy rapid growth without the bugaboo of inflation. Hundt pointedly, though subtly, raised the question of whether a Republican administration would maintain the data-over-voice policy or favor incumbent power-holders in the telecom race. It's a timely question given the upcoming presidential election and that Vortex audience's strong feeling that Texas Republican George W. Bush will prevail in 2000.

Benhamou: The home market will explode

3Com CEO Eric Benhamou took the stage next to blue-sky the expanding boundaries of networking, an appropriate topic as the networking company founded by Metcalfe nears its 20th anniversary.

Benhamou spoke of the growing diversity and number of devices with which customers are accessing the network from the home and office. He also emphasized the importance of simplicity, ease-of-use and reliability in these network devices. He devoted special attention to the prospects for rapid growth in home networking, which is being driven by the incredible adoption rate for sub-$1,000 PCs and the number of multi-PC homes, fewer than 1% of which are networked today. What is the killer application that will drive home networking? Not access to new entertainment options or home automation, but rather shared access to broadband network resources. What is the leading technology for home-area networks? Phone-line Ethernet, at least for now - but expect wireless to come on strong.

In addition to discussing 3Com's partnerships with Microsoft and Siemens, Benhamou talked about the work 3Com is doing with content providers to deliver a rich array of information to Palm computer users.

Koll: PC software has to change radically

Speaking of Microsoft, Thomas Koll, vice president of the recently renamed Network Solutions Group, opined on how PC software will have to evolve in the time of convergence. Koll also cited the growth in new devices with intelligence, citing such things as industrial controllers, wall PCs, tablets and Web-ready phones. All these systems will want to connect to the Internet and software makers will have to create new tools to help them do that - legacy software won't cut it. For example, Microsoft is working on extending Windows to new devices with initiatives such as Windows CE, embedded Windows for devices such as printers, micro-browsers even Windows smart cards. Koll also emphasized the importance of home networking - what he called the extra mile.

Clague: U.S. only the start for Siemens

Next up, Martin Clague, CEO of Unisphere Solutions. Clague focused on the formation of Unisphere Solutions by Siemens, which built the unit with the help of acquisitions such as Redstone, Castle Networks and Argon. Clague called the formation of Unisphere a bold move, both culturally and financially, that was aimed at helping Siemens expand beyond its traditional circuit-switching area and take advantage of the rapid growth in data networking in the U.S. He claimed, though, that the U.S. is merely a launching pad for Unisphere's global data ambitions. Is Unisphere a $1 billion start-up? No, Clague says, it's a jump-up that will focus on IP, however and wherever it will be used.