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Questions - Fixed Networks: Section
5 - Question 13
Question 13: What role will the IT companies play?
The IT companies are involved primarily in Layers I, IV and V of the
new telecoms industry (see Industry Mapping ) They include both hardware and software companies such as
IBM, Microsoft, Intel, Fujitsu, Compaq, Dell and EDS. [Data networking
companies like Cisco, 3Com, and Ascend and Bay Networks acquired by Lucent and
Nortel respectively, while coming from a background in the computer industry,
have not been included within this category, but rather were dealt with in
Question 12 as specialist technology suppliers due to
their specialisation in networking.]
The IT companies play an important role in Layer I where they provide
equipment - such as PCs, servers and personal digital assistants – as well
as software like IT management and billing applications. In Layer IV they
provide middleware such as security products and electronic payment systems.
Many IT companies are also involved in Layer V providing applications such as
e-commerce products and services, while some also provide packaged content such
as Microsoft’s MSN which is a competitor to AOL.
In general, however, the IT companies have avoided the network layer,
Layer II. One exception was IBM which developed a global information network
for its own use and that of its customers but then sold the network to
AT&T. In Japan both Fujitsu and NEC are ISPs and provide their own
information services – Fujitsu’s Nifty Serve is the largest ISP in
Japan – but both companies depend on the network capacity of Japanese
network operators.
Do the distinctive competencies of the IT companies, and the constraints
on their ability to extend these, limit their participation in the industy's
various layers?
It is significant that computer hardware and software companies have
failed to participate in some of fastest-growing areas of the industry. One
example is data networking equipment where newcomers such as Cisco, Ascend, Bay
Networks, 3Com and Cabletron, entering from the mid-1980s have dominated.
Another example is the area of browsers, search engines and portals
where again new entrants such as Netscape, Yahoo, Lycos, Excite and AOL have
tended to dominate. Of course, Microsoft, using its strength in PC operating
systems, has struck back against Netscape with its Internet Explorer.
If you wish to express your views on questions such as these go to the
Workshop (Area 1or 2). To
compare your visions with those of others go to Vision Check.
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