The IP generation

It's January, the month when columnists like me are expected to make predictions. I have one, although I must admit that on first blush I'm not sure if it will disappoint or not.

There has been a lot of talk about the Internet and specifically Internet protocol in the pages of this magazine over the last year. Well, my fearless prediction is that this IP talk will continue-with a twist.

Over the past year or so, most of the IP talk has focused on the changing nature of telephony, and how IP will begin to make it easier-or, in some cases, force-telcos to start thinking in terms of full-service communications carriers. Not just voice, but data, video and even e-commerce.

That's the old story.

In 1999, there will be a new wrinkle on that old story-and a host of new questions-that may prove just as interesting. The focus will shift from what IP can enable telcos to do to who they will rely on most to do it.

IP is about to show off its ability to do magic: In 1999, IP will turn companies we now think of as Internet partners into bloodthirsty competitors.

The hazy future I'm talking about is coming into focus in a dramatic way. Microsoft is upping its interest and investments in carriers. It's no real news that Microsoft has eyed business relationships and partnerships with Internet service providers. But to me there's a noticeable uptick in this trend.

Now, Microsoft is courting big-ticket carriers like MCI WorldCom and Qwest Communications, with core mega-backbones built with IP. There's even word that Microsoft may bid for two of BT's cable TV franchises.

If so, we could see the competition for "end-to-end" services get very brutal in 1999. Not among carriers, per se, but among the technology companies that want to provide them technologies. This puts Microsoft squarely in the ring with more traditional telco and cable backbone providers like Cisco Systems and Lucent Technologies.

If you have doubts, look at IP this way: I've said before on these pages that IP is the "great equalizer." I mean that with IP we will see a dramatic leveling of the communications playing field. Once, telcos could pride themselves on highly resilient and responsive networks built from semi-proprietary pieces. They were expensive to build and maintain, but tough to duplicate.

No longer. IP is a robust communications standard that can handle voice, data, video and who knows what else. Further, it's an open standard, which means that the IP family of protocols are public and cheap to introduce into products and services. And most telco customers will demand IP-based solutions because they're cheap and easy to implement.

The genie is out of the bottle. With IP a common core technology for most-if not all-carriers eyeing Internet-based businesses, the fight will be among vendors looking to provide the best, cheapest and easiest to manage value-added services.

I'm not saying that Microsoft will get into the high-end router and terabyte switching business. But Microsoft software (especially NT-based server software) provides some interesting data security, video streaming and e-commerce alternatives to software add-ons that Cisco and Lucent are trying to add to their core products. After all, those are businesses Microsoft wants to be in, and these days they know as much about the limits of IP as anyone.

The goal for carriers is not to just get on the Internet train. They want to equip their networks with a plug-and-play capability for users with an infrastructure smart enough that on-line users can simply dial up or plug in and be connected to a smarter, higher-performing and more secure Internet. That kind of message is something that Cisco and Lucent have used to great advantage, bundling add-ons to products to provide such features.

I admit it's an open question in 1999 just how far Microsoft, a telco outsider, can penetrate the mindsets and spending habits of telco engineers who have already picked Cisco, Lucent or another favorite hardware vendor to get them on the Internet.

But brace yourselves if you're one of these harried professionals. In 1999, it's a question that Microsoft will force you, or your boss, to ask.