Beyond Internet access

With prices for basic Internet access at an all-time low and the duration of on-line calls at an all-time high, the business of providing Internet access is a lot less lucrative than it used to be - and Internet service providers are eager to find new services that they can profitably deliver as quickly as possible.

To address these needs, several manufacturers exhibiting at Supercomm demonstrated Web site hosting products and equipment to support electronic commerce and voice service over the Internet. Others displayed new end user devices - including Internet phones, network computers and low-cost Web servers - designed to simplify Internet access and open the network to a broader range of users.

Southwestern Bell Internet Services touted its Web hosting and Web page creation services, as well as Internet access. The company has not yet begun to support Internet commerce but plans to add that capability, said David Malone, VAR manager for dedicated services at SBIS.

BellSouth.net announced that it was rated as one of the most reliable Internet access services by research firm Inverse Network Technology. BellSouth.net now has a total of 21 service offerings - up from two at the beginning of the year, said Charles J. Meyers, vice president of operations and finance. Offerings include Web hosting, as well as intranet and managed wide area network services.

The electronic cash register Because Internet use is becoming a commodity, carriers are moving into other areas. Web hosting is the area experiencing the greatest growth, said Bill Anderson, director of telecom industry sales and marketing for Microsoft. The majority of small and medium-sized businesses with Web sites will outsource those operations, he said.

Microsoft demonstrated its commercial Internet system, a set of Web hosting applications that supports advanced features such as cookies. Cookies are chunks of electronic data created by end users that contain customized information about their interests. When they log onto a Web site supporting cookies, the information is sent via the cookie to the server, which responds by sending back information about topics of interest based on the information contained in the cookie. Another key feature of the Microsoft system is streamlined content replication, enabling content residing on multiple servers to be updated from a single command.

Other vendors believe that the greatest potential is in offering users the ability to buy and sell goods over the Internet.

"We believe electronic commerce is the next large environment that will create a mass market in the Internet world and will be key to value-added [services for] ISPs and telcos," said Mike Tillman, director of business development for electronic commerce for Tandem Computers.

Tandem introduced Mercantec, a front-end system for ISPs that will enable them to offer customers a simplified interface for making purchases on-line. The desktop software includes a "shopping cart" application that lets users collect items they wish to purchase from several different vendors and pay for them in a single transaction. An additional opportunity for ISPs and telcos offering Internet connectivity is to serve as a clearinghouse for transaction processing, said Tillman.

IBM also is enthusiastic about Internet-based transactions. "The application isn't the Internet, it's what you do with it - and the core application to us is electronic commerce," said Michael Reene, IBM's general manager of telecommunications and media industries.

IBM's Cryptolope software supports the sale of data, text and other intellectual property over the Internet by encasing it in a secure "container." Potential purchasers download a description of the contents but cannot open the file until they pay for it by submitting their credit card number. IBM can process transactions for a fee, or an ISP can make arrangements to act as a clearing center, said Jeffrey Kay, IBM Cryptolope architect.

Beginning last month, users have been able to download the software for purchasing and opening Cryptolopes, as well as the software for creating them, from IBM's Web site. A target market for the Cryptolope creation software is consumers who have obtained 5 Mb of storage space from their ISP for personal Web pages, Kay said. Those users now will have the ability to sell content through their Web pages.

Bellcore also demonstrated software designed to simplify purchases over the Internet but with a different target market. The company's AdaptX software is designed for corporate use. A graphical user interface enables employees to point and click to view similar product offerings from multiple suppliers to compare prices and to place purchase orders electronically. Those orders are automatically sent to the appropriate vendors and logged to the appropriate cost center. Vendors do not require any special software to participate.

ECI Telematics is creating yet another niche for ISPs in electronic commerce. The company's Nevada mass dial-in multiplexer supports connections from point-of-sale terminals in existing retail establishments. It enables ISPs to offer retailers connectivity to transaction processing networks.

The Nevada multiplexer also supports analog modems and meets specifications typically required for installation in telco central offices, such as the ability to access all connections from the front. Bandwidth can be redeployed by time of day, with higher data rates allocated to point-of-sale connections during regular business hours.

New tricks for old dogs Internet-based services that are just beginning to emerge include voice over the Internet and services based on new end user devices.

While voice over the Internet has been available for several years, the requirement for a computer interface at each end has relegated it to being very much a niche application. Lucent Technologies hopes to broaden Internet telephony's appeal by offering a gateway that will deliver PC-initiated calls to a conventional telephone over the Internet. The Internet Telephony Server, scheduled to be available in September, will be used in trials with MCI and GTE, said Surendra Kashyap of Lucent's product management and marketing area.

A key component of Lucent's Internet telephony solution is the Internet Directory Server, which determines the appropriate gateway to which an Internet voice call should be routed. Available immediately, the directory server also supports applications that require large tables of information such as Internet-based Yellow Pages.

Oki Network Technologies, a division of Oki America, also demonstrated an Internet telephony system. Businesses with several offices can install Oki's Voicehub at each location. Each hub connects up to eight telephones or fax machines to the Internet or other Internet protocol-based network, enabling companies to avoid charges on voice and fax calls between company locations.

Currently, the product does not support direct connection to the public telephone network, but that capability is in the works, said Junji Yaya, Oki's director of marketing and business planning. Presently, however, a connection to the public network can be made through a PBX system attached to the Voicehub, which includes eight 10BaseT data ports.

Driven by potential new Internet-based applications, other Supercomm exhibitors are reinventing the phone itself. Cidco, an affiliate of InfoGear Technologies, demonstrated the iPhone, designed to access Web pages and e-mail as well as providing conventional telephone functionality. To support the device, carriers must install software from InfoGear on a centralized server.

The iPhone resembles a display phone but has a larger screen that is touch-sensitive. A pen used with the touch-screen provides the functionality of a mouse, and a built-in QWERTY keypad slides out when needed. The device also supports the analog display services interface.

The product will ship before the end of the year at a price less than $500, said Charles Gay, director of marketing services, adding that the company already has an agreement to supply product to Sprint.

Northern Telecom also expects customers to use the telephone to access the Internet, announcing Internet access capability for the company's PowerTouch 350 display phones. Using Nortel's Network Applications Vehicle, a multimedia platform, carriers can enable customers with the appropriate display phones to obtain text content over the Internet.

For people on the move, Absolu Technologies offers the telweb PayPhone, which enables users to access e-mail or other Internet applications and pay for this service using a credit card, calling card or smart card. The smart card also can store users' account information, simplifying the process of connecting to their regular e-mail servers.

The telweb PayPhone occupies the same space as a regular pay phone and includes a printer and fax capability. Quebec Telephone is using the product to deliver tourist information, according to an Absolu spokeswoman. Users can be directly connected by telephone to local retailers, who pay a fee to participate.

Oracle also sees a strong demand for e-mail access when users are away from their homes and offices, and the company also believes smart cards will play a key role in simplifying access. Rather than using a telephone-based device, however, users will continue to rely on computers, including simplified devices that use applications software downloaded from a remote server before each session, predicts John Black, Oracle's senior vice president of telecommunications.

"My next computer is going to be my credit card," said Black. "I'll put it in the computer that I'm visiting, and my office will be with me wherever I am. In the same way that an [automatic teller machine] gives access to your money, the smart card will give secure access to your data and programs.

Key to developing lower-cost computers that will rely heavily on intelligence in the network are new operating systems such as the one developed by Oracle's Network Computer affiliate that has been licensed to Acorn, Akai, Funai, Zenith and others.

Citing the 30% penetration rate of computers in U.S. households, Black sees an opportunity to increase the computer's appeal by offering a lower-cost device that eliminates the need for users to back up their data or install software upgrades. Products based on the network computer operating system have begun to appear, and more information about specific organizations using these devices will be available later this year, he said.

Sun Microsystems showcased its version of a network-based computer, the JavaStation. Compared with conventional personal computers, which cost $12,000 a year to administer, the costs to administer a JavaStation will be around $2500 a year, Sun officials said.

Cisco Systems also has focused on making the Internet more appealing by making it easier to use. The vendor's efforts, however, have centered on developing the MicroWeb server, a simple Web server that sells for less than $1000.

The product was inspired by research that showed that the majority of companies with 100 to 200 employees were not connected to the Internet and had no plans to get connected, said Mike Heller, Cisco's marketing director for the service provider market. The majority of those that were not connected either didn't see the value or didn't understand the technology.

Cisco encourages ISPs to offer the MicroWeb server - which has a built-in demonstration application - to small businesses so that they can "dip their toe in," said Heller. Initially, companies may use the server only for something as simple as a directory of employee phone numbers. Having their own server, however, gives business users the opportunity to learn at their own pace and gain direct experience, so that they will begin to see the value of the Internet. Ultimately, companies may outgrow the server and turn over Web site management to the ISP, he said.

Traffic report As higher bandwidth applications begin to appear and as Internet traffic continues to grow, the underlying infrastructure of the Internet is constantly changing.

One method of handling the bursty nature of Internet traffic is to use asynchronous transfer mode. And increasingly, ISPs are choosing that option, said John Fleming, executive vice president of sales and marketing for IXC, the "carrier's carrier" that offers transport services over its nationwide fiber network.

IXC has made a significant effort to educate customers about ATM and has had to overcome some misperceptions, Fleming added. Some customers, for example, initially viewed ATM as a volume discount for DS-3 service.

A new product from Xedia targets a different source of traffic delays - the business customer's access line. The company's Access Point access device is installed at the customer premises and supports data rates up to 155 Mb/s. When used with Xedia's Access View management system, the enterprise network manager or the ISP can dynamically adjust the amount of bandwidth provisioned for Internet connectivity as needed. Customers pay only for the bandwidth they actually use.

NetEdge Systems also displayed scalable access devices for use on the customer premises. A new class of ISPs focused on providing a higher quality of service to business customers is beginning to emerge, according to Jon Fjeld, NetEdge's vice president of marketing. The vendor's ATM Edge concentrators can be a key element of a strategy that targets the high-end business market, he said.

Cascade, which has a large installed base of frame relay equipment in ISP networks, recently introduced what it calls "priority frame" capability to enable frame relay equipment to support ATM classes of service and to interoperate with ATM devices. The most appealing aspect of ATM is its ability to support multiple classes of service, said Robert Machlin, vice president of marketing.

Machlin sees a significant opportunity for ISPs to carry corporate traffic for customers over virtual private networks. "The Internet today is about access to resources external to your company," he said. "The long-term gravy is to continue that trend. The trend and opportunity is to let MIS users dump the WAN portion of private networks.

Before information systems managers will move delay-sensitive corporate traffic to the Internet, however, they will want to verify that the service they are receiving is what they are paying for. Cascade is continuing to develop its network management systems to provide customers a network view with performance statistics to verify service levels, he said.

Ascend, which recently announced that it will acquire Cascade, may have been motivated to do so because the frame relay manufacturer had significant experience in building carrier-class devices. The ISP market is beginning to require features traditionally associated with the carrier market, such as hot swap capability, remote network management and support for telecom industry standards, said David Mayes, Ascend's director of business development. Although Ascend's products do not have many of these features now, they will be amalgamated as part of the integration of Cascade into Ascend, Mayes said.

Another company seeking to make ISP networks more reliable is NHC, which demonstrated its ShareIt switching system. ShareIt allows several points of presence to be managed from a single network operations center. If a communications server fails, the system can automatically make alternative connections so users perceive little or no reduction in service.