Upcoming Developments in Data Communications

Forecasts for 1986: Upcoming Developments in Data Communications

Chuck Newton

The year 1985 was one of significant technological achievement in some respects, but, for many suppliers, data communications markets did not develop to the extent that had been forecast earlier.

Reasons for the slowdown in sales growth of data communications equipment and services tend to parallel the reasons given for the slowdown in the computer industry itself. These include spotty economic growth, brand proliferation, failures of products and services to meet user expectations, lack of understanding the specifics (including cost/benefit tradeoff) of alternative approaches to data communications, and, importantly, “indigestion” from an oversupply of computer-related equipment and services resulting from purchases made earlier in this decade.

For data communications industry suppliers, however, there are three important “other” factors to consider. The first is the gap in user/buyer understanding of data communications principles, caused, at least in part, by having too-little assigned central authority and responsibility for control over data communications decisions. For decades now, DP/MIS organizations have relied on the supplier community to structure most of the user organization’s data communications solution. As often as not, each such “solution” is specialized, put in place for specific applications with no thought given to it eventually meshing into a corporate-wide data communications network.

During this same time, telecommunications professionals in much of “corporate America” were relegated to a minor role in data communications decision making, compared with their DP/MIS counterparts.

In 1986, the sheer volume of work to be done will force companies to recognize that it’s the movement (the communication of information) not the processing of data that’s now the more-important and more-vital activity to receive top-management attention and that’s in need of urgent redevelopment. This desirable objective can only come about through insistence on adequate staffing, funding and education for the telecommunications organization, and a power-sharing role in strategic and tactical decision-making authority, to be equivalent with the DP/MIS organization.

In one way or another, both telecommunictions and DP/MIS organizations must come to be on equal footing in this Information Age, since both groups are so essential to the efficient collection, storage, dissemination and use of information-based assets of major corporations.

Much of our firm’s research into data communications usage trends reinforces the view that 1986 will be a pivotal year for data communications users and suppliers alike, a year that will help the industry springboard into an era of increased data communications market activity. While 1986 will be a good year for the industry in general, so much in the way of corporate preparation and commitment has yet to be finalized in the data communications area that it will be well into 1987 before a major new period of industry growth will get under way.

Among the more-important developments affecting the telecommunications professional that are likely to occur in 1986 are:

Development of an Industrial LAN–Probably emanating from a consortium of industrial firms and suppliers, such a LAN will be real-time, high-speed, high-bandwidth, and will come to be viewed as an applications-specific equivalent to a new-generation local-area network.

Communications-Oriented Applications-Software Packages–The development of “one-on-one” applications software has certainly matured to the point where it’s stable. What has yet to develop to any real extent is applictions software that can be used as truly “device-independent” or is “conversant” as far as communications is concerned. The change to begin being observed in 1986 will be a move away from separate software packages for applications and for communications (often from separate suppliers) to software technology that’s more integral, more “friendly” and that processes data and communicates information between and among a variety of devices.

Gearing Up for Sales of Hybrid Network Services

Public Data Communications Services–Clearly, the large VAN/PDN suppliers such as Telenet, Tymnet, Uninet and others are gearing up for new sales of hybrid network services, as these become more cost-effective for more American firms (below the top 500) to consider. The focus on hybrid approaches to data communications network solutions appears to make very good economic sense to both users and suppliers, and has been working effectively in scores of corporations for several years.

As in so many other areas of data communictions activity, there is no “black-and-white” (public or private) solution possible for most firms, at least on an organization-wide basis.

After several years of somewhat-illusory market activity, satellite-based services, typified by RCA Cylix, will become increasingly cost-effective. What has been the missing element for the satellite services providers, to this time, is a viable equivalent to the “bulk-breaking” middleman organization, a service that would purchase bulk transmission capability from satellite services providers and in turn offer smaller parcels to a much-broader secondary marketplace than exists for the primary service available today. I believe that 1986 will see the availability of such service providers in other than a beta test.

Remote-Computing Services Survivors–There will be additional new services announcements from the “traditional” suppliers of remote-computing services, as firms like GEISCO, BCS and McAuto move more and more into direct competition with established VAN suppliers. The IBM Information Network will continue its quiet but rapid accumulation of new business in both remote-computing and data-transmission markets. In 1986, we may see the first ongoing, toe-to-toe competition posed by IBM to other entrenched suppliers of both remote-computing services and value-added network services.

We look for several of the most-important developments likely to come from IBM in 1986 to be centered on that company’s new-product efforts and its evolving role in the data communications equipment and services marketplace.

Data Communications Expenditures–Data communications budgets for many large corporations are projected to grow at nearly a 25-percent clip over the 1985 figures. One of our recent studies on buyer intentions indicated a solid climb of 30 percent over 1985 budgets.

Data Communications Equipment Purchases–On a relative basis, the installation of time-division multiplexers are planned to increase rapidly over the 1985-1987 period. Impressive gains are also likely for intelligent multiplexers and for front-end processors. Survey respondents to our studies have indicated plans to more than double the numbers of installations for several classes of modems, including the 2400-b/s and 14.4-kb/s modems and RF/microwave models.

Change in the Usage Mix of Data Transmission Services–According to our data, AT&T accounts for about 46.1 percent of the total voice and data budget today. This percentage is expected to drop to about 43 percent by 1987. Common carriers and public data networks are going to benefit by picking up most of the loss in business from AT&T and from the local telcos.

COPYRIGHT 1986 Nelson Publishing

COPYRIGHT 2004 Gale Group