Aggressive networking start-up readies debut product
AOL struggles with delayed DSL service
Bell Atlantic in talks to put cell phones in new GM vehicles
Go2Call.com receives $3 million investment
PhoneFree.com kicks-off national advertising campaign
Dialpad.com's 2 million subscribers generate over 100m minutes in 12 weeks
Transmeta gets ready to unveil Crusoe
Trouble ahead for cable modems
Will copper gigabit take off in 2000?
Compatibility key to wireless Internet's success
Cutting through the lip service of Voice Over DSL
Designing Bluetooth connectivity into portable products
Gateway plans North American network
The race is on: Linux vs Windows

A networking start-up established by former Ascend Communications executives is taking strategy lessons from some of its much-larger competitors.  Zhone Technologies next week plans to unveil "gateway" equipment that connects data networks to traditional voice networks. Later this year, the company plans to introduce gear for uniting many kinds of networking technologies.  Although the company is entering a highly competitive market dominated by giants Cisco Systems, Lucent Technologies and Nortel Networks, analysts say a substantive bank account and an acquisitive business strategy just may help it survive.  Mory Ejabat and Jeanette Symons formed Zhone following Lucent's $24 billion acquisition of Ascend in June 1999, incorporating the same month that the ink dried on the largest merger in the history of the networking industry.

Yet so far the duo has handled building a start-up with aplomb. Zhone has amassed $500 million in funding from the likes of Kohlberg Kravis Roberts & Co., Texas Pacific Group and New Enterprise Associates. The amount is believed to be the largest private placement of funding ever.  The start-up has taken that cash and used it to buy companies and their networking talent--a novel approach in an industry used to upstarts serving as technology "feeders" for acquisitive firms like Cisco.

Zhone offered to buy struggling telecommunications equipment provider Premisys Communications this past October and closed the deal in December. In November, the company also plucked Westlake, Calif.-based CAG Technologies, a firm that specializes in subsystems for networking gear.  The former acquisition could pay off sooner rather than later. Premisys already has $60 to $80 million in expected annual revenue from current products, according to Zhone executives.  Moreover, the new gateway product Zhone plans to ship by the end of the month began development at Premisys. Its introduction is intended to help Zhone win new accounts with communications carriers.

Striking an aggressive course, Zhone plans to focus on technologies for the "local loop," the ring of networks that connect residential and business users to sprawling nationwide network systems. Symons said the company hopes to simplify the current combinations of network technologies like cable, digital subscriber line (DSL), wireless and fiber through a single connection point, consolidating several types of technology into one box.  But others remain skeptical of Zhone's strategy to deliver a single product for networks that vary widely in size, scope and capacity. They also say the expectations of the company could wither in a cutthroat environment with little patience for a start-up, no matter how rich.

One year after America Online inked a landmark venture for high-speed Internet access with Bell Atlantic, the Net leader has yet to offer widespread consumer service.  The Internet giant had also signed a similar agreement with SBC Communications and other local phone companies to offer digital subscriber line (DSL) services to AOL's more than 20 million customers nationwide.  Yet AOL and its local telephone  partners have only introduced the service in a few test markets since the original deals. And in a move to complete its broadband strategy, AOL this week agreed to merge with Time Warner, the nation's largest cable company. That deal will allow AOL to offer high-speed Net services over Time Warner's extensive cable networks.

AOL has spent much of the last year looking for ways to pipe its content over high-speed networks, as more consumers demand faster and cheaper Net access. Earlier in the year AOL agreed to offer service over Hughes Electronics' DirecTV satellite system. But overall, AOL has focused the most attention on trying to win access to cable networks.  Despite this week's cable deal, AOL says it's still committed to DSL but wanted to test the services extensively to make sure consumers won't be frustrated with difficult installations or other problems.

Yet the delays highlight general problems the big local phone companies have had making broadband Net services as widespread or popular as cable modem services like Excite@Home. Analysts and recent studies say that cable Net access leads DSL, both in deployment and subscriber rates.  DSL allows existing phone lines to carry high-speed Net traffic and voice calls simultaneously. A low-end service offers data transfer speeds more than 6 times faster than the fastest dial-up modem.

Part of the difficulty has been that each phone company uses a slightly different--and incompatible--version of the high-speed DSL technology. Thus AOL can't simply provide its users, whether they live in New York or Los Angeles, with a single DSL upgrade kit.  Executives say that once these technological issues are ironed out, the service will be launched across Bell Atlantic territories as planned. AOL's proposed merger with Time Warner won't eliminate AOL's desire to also reach Bell customers, the local carrier said.

But AOL may have other motives. A study jointly released by McKinsey & Co. and Sanford C. Bernstein said telephone companies were still well behind cable companies in deploying broadband services.  Cable modem services were able to reach about 52 percent of U.S. households, compared with just 23 percent for telephone companies. Cable services claimed about 1.6 million subscribers, compared to about 225,000 consumer DSL users.  Part of the disparity is the lead cable claims as first-to-market for deployments and consumer marketing. Leading Net-over-cable service Excite@Home sold itself as a fast and easy way to surf the Net in late 1996. Only last year did Bell firms begin to ramp up their marketing efforts.

General Motors is in talks with Bell Atlantic to put cell phones in millions of new cars and trucks, part of the automaker's strategy to link drivers to the Internet and generate revenue after a sale, people familiar with the plan said.  General Motors said it will install as many as 1 million phones in vehicles this year but wouldn't say which telecommunications company it was talking to. An agreement with the No. 2 U.S. local phone company may come as early as next week, the people said. The companies declined to comment.

An alliance would advance GM's effort to offer online entertainment and personal services to motorists via its OnStar system, which uses satellites to track cars and cell technology for communication. The system gives GM a way to keep making money after a car leaves a dealer lot. America Online, the biggest online service, this week agreed to help provide content.

To succeed, GM's services will have to displace the cell phones that millions of Americans already carry in glove compartments. That will be hard, but not impossible as safety concerns over handheld cell phones grow, Lobaccaro said. U.S. highway safety regulators concluded in a 1998 report that the use of cellular phones probably increases the risk of automobile crashes.  GM started offering OnStar in late 1998 on all Cadillac Escalade sport utility vehicles as a dealer-installed option. GM expects to install OnStar in 3 million vehicles in the next few years, up from 100,000 now.  OnStar lets drivers contact a 24-hour service center for directions or help in an emergency. Cadillac started offering an option this month in which the OnStar service center will place a cellular call to any phone designated by the driver with the touch of a single button, Cadillac spokesman Chris Preuss said.  Eventually, GM will link this service to a handheld unit that drivers can carry with them when they leave the vehicle. "Like any other option, it will eventually trickle down to the entire lineup," Smith said.

Go2Call.com receives $3 million investment
Source: iLocus

First Analysis Venture Capital has made a $3 million equity investment in Go2Call.com, an educational and comparison destination for PC-to-Phone.  The investment highlights the level of interest among venture capitalists in PC-to-Phone market.

Go2Call.com delivers free online tools enabling callers to research and select best available tariffs. The company also acts as an e-commerce site for accesories for PC-to-Phone calling such as the headsets, the microphones etc.  "We see tremendous growth potential for the Internet telephony market. Go2Call.com is positioned as a resource to help users take advantage of the enormous consumer benefits that Internet telephony offers, particularly for international users," says Mark Koulogeorge, Managing Director with First Analysis.

PC-to-Phone company PhoneFree.com, has kicked-off of its national advertising campaign. The first part of a multi-million dollar, multi-media campaign produced by the firm Hampel/Stefanides, will run nationally during PhoneFree's sponsorship of the NFL Playoffs and Super Bowl broadcasts on Westwood One radio network.  The campaign will also appear in markets representing over half of all Internet households in the US.

PhoneFree provides interactive voice and video communication over the Internet with free PC-to-PC voice and video calls and conferencing, reduced rate phone-to-phone calls and low monthly flat rate Web-to-phone calls.  PhoneFree also has one of the Internet's largest White Pages listing and a Personal Communications Center, where users can easily keep in contact with friends, family and other PhoneFree users with just a simple click.

Dialpad.com, a new phenomenon in PC-to-Phone industry, reports the registration of its 2 millionth subscriber in the first twelve weeks of operation.  Since the company went live Oct. 18, 1999 its subscribers have generated a massive call volume of near about 100 million minutes - a significant milestone given that DialPad.com hasn't started any formal marketing yet.  The company expects to spend $5 million in advertising and PR over the next 6 months to build brand awareness through online, radio, and outdoor promotional activities. It is engaged in discussions with over 250 different Internet companies for licensing and co-marketing.  Subscribers, who can call any US number for free, are reporting a good call quality.

DialPad.com's proprietary technology splits call control from voice streaming, leaving the more complicated functions on its servers and allowing the user to operate a very thin, lightweight Java applet on their PC.  DialPad.com is a spinoff of a Korean company Serome Technologies. It's business model is based on advertising and sponsorship revenues.

Can the world’s most secretive technology company change the world? The Transmeta Corp. thinks they can, but their not talking until Wednesday January 19th, when the company will lift its veil of secrecy and reveal details behind its mysterious new processor named Crusoe.  The biggest mystery, however, is how Transmeta’s new technology will change the landscape of computing — although it is safe to say Transmeta intends to shake things up.
       
A not-so-secret message, embedded in the HTML code of the company’s Web site, proclaims that “Crusoe will be cool hardware and software for mobile applications. Crusoe will be unconventional, which is why we wanted to let you know in advance to come look at the entire Web site in January, so that you can get the full story and have access to all of the real details as soon as they are available.”

Crusoe, therefore, should include a number of whiz-bang technologies. But for all intents and purposes those technologies should exist under the hood and be completely transparent to end users, who should simply see an inexpensive and fast device. That appears to be the goal.
       
Before Wednesday, the easiest way to figure out what Transmeta is up to is to sift through its technology patents. The patents, including No. 6,011,908, granted Jan. 4, describe a technology that pairs a processor, known as the morph host, and software, called code-morphing software.  However, the processor is different from chips such as Intel Corp.’s Pentium III in that it will likely have many fewer transistors. Instead, it will be optimized to work with software, including attributes such as large memory buffers, which speed performance of the code-morphing software.  Combined, the two would allow a chip to translate instruction sets not designed for it, such as Intel’s x86, into its own native code. Crusoe is expected to be the first implementation of this technology.

If Crusoe works as Transmeta’s technology patents suggest it might, the devices using it would run a wide range of applications, including Java applications, Windows applications and even those written in PostScript.  This flexibility would grant buyers of Crusoe mobile devices the ability to run Windows or Java applications without any fuss. Device makers and software developers would benefit as well, because they would not need to worry about writing new applications or porting older applications to a new device.  A device maker could use Crusoe in any number of products, because in theory it would work the same in a PC running Windows as it would in a set-top box running a Java-based OS. However, it does not appear likely that Crusoe will be aimed toward desktop or notebook PCs.  Instead, it more likely will be aimed at cellular phones, Internet appliances, and possibly handheld devices such as Microsoft Corp.’s Pocket PC.
       

Trouble ahead for cable modems
Source: Comsoc

Cable modems' sales growth is about to see a substantial slowdown, predicts Cahners In-Stat Group in a new report that notes that the unit sales growth rate dropped from 478 percent in 1998 to 171 percent the following year. The report expects the compound annual growth rate between this year and 2004 to drop to 9 percent, due largely to DSL and other competing broadband services. More set-top boxes and voice and residential gateways will also reduce standalone cable modem sales. The report also said subscriptions to cable TV are growing relatively slowly and that cable broadband services are expensive, especially where consumers must pay hourly Internet rates. In some places and countries, broadband services through the phone lines are preferred, particularly where the cable infrastructure is owned by a national telephone company. Also, some countries have many small cable companies without the ability to bring broadband cable service to the market. Motorola still had the top market share in 1999's first half, with 33 percent, and Nortel Networks remains the runner-up with 18 percent. 

Will copper gigabit take off in 2000?
Source: Comsoc

Gigabit Ethernet over copper may become more popular this year. Alteon WebSystems recently introduced a new adapter for gigabit over copper. Dell'Oro Group predicts that 4.4 million Gigabit Ethernet ports will be shipped this year and that gigabit over copper will comprise 30 percent of the total. Using the technology for 1 Gbps speeds over existing wiring allows IT managers to avoid the cost of upgrading to fiberoptic wiring. In recent years, Gigabit Ethernet has emerged as a favorable LAN backbone technology for high-speed server links. The technology's popularity has been the result of its cost and ease of deployment. Although the technology is viewed favorably, measuring its market position is difficult since the number of units shipped to date has yet to be determined. 

 
Compatibility key to wireless Internet's success
Source: Comsoc

If a carrier wants to offer mobile Web access, it must be sure that its technology is adaptable to different types of wireless devices such as cell phones and PDAs. To ensure compatibility between operator systems and wireless equipment, companies such as Oracle and Riverbed Technologies are creating new software offerings. Oracle's Portal-to-Go deciphers Internet information for wireless products. The technology is placed on top of wireless networks and is capable of translating the numerous markup languages of different browsers. Oracle plans to market the technology to telcos to help them offer extra data features to subscribers. Similarly, Riverbed Technologies has developed its ScoutWeb application, which reprograms Internet content to make it readable for wireless devices. The technology uses a different protocol for each wireless product; the protocols are put onto carriers' servers. ScoutWeb can modify content and determine how it will be displayed. 

Cutting through the lip service of Voice Over DSL
Source: Comsoc

VoDSL, a hot topic in the telecom industry, provides carriers with a more effective tool for serving small companies. The convergence of voice and data also allows for a reduction in costs that could lead to lower customer churn, according to John Reister, Copper Mountain's assistant vice president of technology planning. Cahners In-Stat Group estimates that the market for VoDSL service will reach $1 billion by year's end. Tollbridge, CopperCom, and Jetstream are the most prominent suppliers of voice gateways, which link circuit-switched voice with the DSL network. While each of the companies is similar, Jetstream said it was the first, CopperCom argues that it boasts the best toll-quality voice, and Tollbridge says it offers the best quality over existing systems. 

However, they all believe VoDSL has its advantages for telcos. The suppliers say they have been tapped by numerous carriers to provide their equipment. But few carriers have revealed deployment plans. The market will not really become active until the latter half of this year, according to Beth Gage, TeleChoice's director of broadband consulting. 

Designing Bluetooth connectivity into portable products
Source: Comsoc

Many firms have shown interest in using Bluetooth for short-distance wireless data exchange. The most widely anticipated Bluetooth standard is the one the Bluetooth Special Interest Group (SIG) presented in 1998 that utilizes the 2.45 GHz ISM band. Bluetooth offers flexible integration of many product types and systems, writes Terry Bourk of Silicon Wave. For example, wireless phones can link up with PCs and laptops or a PDA can connect to the Web via a wireless handset. Bluetooth can provide e-mail, voice connections, and image transfer functions. 

Bluetooth components search for nearby Bluetooth-equipped products, investigate the connection options, determine service functions, and join to form a network. To avoid mixing with other radio frequencies, Bluetooth utilizes fast frequency hopping spread-spectrum (FHSS) transmission technology in the 2.45 GHz band. In the corporate environment, Bluetooth can function as a modem, a module with HCI Interface, a radio/baseband module, or a RMC (radio modem controller). The cell phone industry can especially benefit from the second and third Bluetooth uses. 

Gateway plans North American network
Source: angustel 

This week, Gateway Telecom, a Competitive Local Exchange Carrier based in North Bay, Ontario, will announce the launch of "a North America next generation network."

The race is on: Linux vs Windows
Source: ZDnet

With a month to go until Microsoft Corp. officially launches Windows 2000, some Linux stalwarts are realizing there's not much time left to capitalize on a golden PR opportunity.  Linux enthusiast Deepak Saxena is attempting to rally the troops to create some alternative publicity on or around Microsoft's Feb. 17 launch date. Saxena has created a Web site where corporate sponsors, Linux User Groups and other interested parties can link up and organize.

"We're not trying to say Microsoft/Bad; Linux/Good," says Saxena. "This is more about showing that there's an alternative. Especially for small businesses - we want to show them they have a choice. Many people have heard about Linux but haven't seen it in action."  The Linux demo site calls Feb. 17 "Linux Demo Day Y2K." The site lists a number of "corporate sponsors," who have agreed to supply interested Linux backers with brochures and other literature to hand out at any Windows 2000 counter-events they may organize. Among these sponsors are Caldera, LinuxCare, Red Hat, SGI and TurboLinux.

On the site, Saxena notes that, like Windows 2000, Linux is targeted at the server operating system space.  "For large enterprises, making the switch from NT to Linux is not an easy decision and would take several months of planning," Saxena acknowledges. But "small and medium sized businesses, on the other hand, could easily switch over to Linux for use as a file or static content web server with very little overhead."

But the Linux backers will have to make a lot of noise to counter the myriad Windows 2000 launch events that Microsoft and its partners have been planning for the past year. The main launch event is slated for Feb. 17 at the Moscone Center in San Francisco during the Windows 2000 Conference & Expo. Microsoft also is planning simultaneous events at local Microsoft sales offices throughout the U.S.

Microsoft's various OEM partners are free to begin preloading the product any time they feel they have sufficiently tested it, according to Microsoft officials. Microsoft says it delivered the final gold code to OEMs on Dec. 15, 1999 - the day that the company released the product to manufacturing. Microsoft delivered earlier this month the final Windows 2000 product to its U.S. and Canadian Select volume-license customers, as well as to customers that participated in its Joint Deployment and Rapid Deployment programs, Microsoft officials say.