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IN THIS ISSUE:
Welcome to the BBH Report
Heard on the Net
A View From the Valley
Broadband Track Wrap-up
Spring 2000 VON
pulver.com 2000 Calendar
Upcoming VON conferences
A Personal View
The Teger-Waks Quasi-Broadband Home
Broadband Home Summit 2000 - June 5-7
San Jose, CA
Welcome to the first issue! Our goal is to help you stay tuned to the latest news about people, companies and technologies Enabling The Broadband Lifestyle(tm).
What will The Broadband Lifestyle look like? We suspect we'll "know it when we see it". Whatever your specific vision, we all want to communicate better with our friends and family and to have useful and entertaining new services. At the same time, we'd like our lives to be simpler, more convenient and hassle free. And of course, we expect The Broadband Lifestyle will create profitable new business opportunities for many companies -- including yours.
The ingredients are all happening: "always-on" broadband connections; PCs, TVs and new "appliances"; home networks and gateways; broadband content and applications. Over the next few years some companies you know and some you've never heard of will try to mix up successful recipes for combining the elements and serving them to consumers.
We've observed that some folks in the industry seem to be expending more energy in fighting religious wars than in working together to make this happen faster. We see the need for collaboration between the many sectors of the Broadband Home Industry to fully realize the potential of the Broadband Home. This newsletter aims to promote that collaboration -- without taking sides.
To learn more about the sectors and companies involved in Enabling The Broadband Lifestyle(tm), please visit us at http://TheBroadbandHome.com.
pulver.com and System Dynamics Sponsorship
The Broadband Home Report is written by Sandy Teger and Dave Waks of System Dynamics Inc. (www.system-dynamics.com). It's brought to you jointly with pulver.com. We're sending this issue to The Pulver Report subscribers and industry colleagues. To continue receiving the report monthly, visit http://www.TheBroadbandHome.com/report/4.html.
Those who have been to the VON conferences have probably met us at the broadband sessions we've organized over the past three years. To those we haven't met, we look forward to the opportunity.
The Broadband Home Conferences: San Jose Summit
We're planning a series of conferences focused on The Broadband Home. The first will be a limited attendance Summit in San Jose, CA on June 6-7. It will include thought leaders from "the big guys" and introduce you to some new players. We'll talk about how the pieces might fit together; the issues in providing services that use diverse access and home networks and gateways; the devices and appliances to which they'll be delivered; and how the products and services will be useable for real families -- not just "geeks".
The Summit will be small and focused on getting everyone talking to each other, especially across the many sectors involved in the broadband home industry. For more information on the industry, visit our Web site http://TheBroadbandHome.com
For more information on the Summit, see the detailed description at the end of this Report. Visit http://TheBroadbandHome.com/Summit for an updated list of participating companies, schedule, registration and hotel reservations.
In addition, stay tuned for details on the follow-up conference we're planning in Silicon Valley in early October.
Here are a few of the people who have changed companies or jobs over the last few months. Look for some of them at the Broadband Home Summit in June.
(Please email firstname.lastname@example.org to report a change in your position.)
3Com - The day before we visited with 3Com in Santa Clara, they dropped the second shoe on their growth plans. In early March they IPO'd their Palm unit. Their March 20th announcement pointed to the three markets in which they will invest their resources -- consumers, commercial customers (especially small and medium locations) and network service providers. We'll be watching to see if there are more shoes waiting in the wings. For more on 3Com's focus on the Broadband Home, see A View From the Valley, below. (http://www.3Com.com)
Excite@Home - News also came from Excite@Home -- just before we visited with them in Redwood City. AT&T gained control of the company, a move focused on improving their competitive position against AOL-Time Warner. AT&T extended its partnership with Excite@Home through 2008, although promising to open its network to other ISPs in 2002. The change marked the end of a management structure burdened with differing priorities from Cox, Comcast, AT&T and Excite@Home's own management. Comcast and Cox extended their deals with Excite@Home through 2006, but can terminate their exclusive agreements in June 2001. Stay tuned to see what AT&T decides to do about the Excite (content) portion of the business. (http://www.excite.com) (http://home.net)
MoreCom and Peach - The acquisition rush has reached the ITV market, with rekindled interest focusing on interactive TV-based applications. Until recently, four independent companies were focused on providing ITV to basic digital set-top boxes. Three have now been acquired by two of the big guys.
The most recent development was the sale of MoreCom, founded by Ami Miron (ex General Instrument), to Liberate for $561 million. (Liberate earlier acquired interactive TV technology from Source Media and Insight Communications.) In February Microsoft purchased Peach Networks, an Israel-based company headed by Ofir Paz. These purchases help Liberate and Microsoft extend beyond advanced digital set-tops to the large installed base of basic digital set-tops. That leaves long-time player ICTV still independent -- at least for the moment. (http://www.morecom.com) (http://peach-networks.com) (http://www.liberate.com) (http://www.ictv.com) (http://www.sourcemedia.com)
Sega.com - After visiting our daughter and future son-in-law (Jeremy) in Mountain View last week, we weren't surprised by the April 4th announcement by Sega of its new company, Sega.com. (Full disclosure here: Jeremy is one of the architects of their multi-player online gaming network.) Sega.com is positioning itself as a "triple threat": multiplayer game delivery and ISP (SegaNet), consoles (Sega Dreamcast), and content (game titles).
SegaNet's U.S. launch is scheduled for September 7, 2000. Their rebate program incents consumers to sign up for the service and get a free Dreamcast. Current Dreamcast owners signing up for SegaNet get a $200 check and free keyboard; PC users of SegaNet will get a free Dreamcast and keyboard. (Sounds a lot like the cell phone model, doesn't it?) The national and local access for SegaNet will come from GTE internetworking (formerly BBN), which has been actively testing their concepts for the Broadband Home (GTE's name is "the Connected Family"). (http://www.sega.com) (http://www.bbn.com)
One of the first decisions we had to make was where our first conferences should be held. As East Coast US residents, we hate to admit the obvious, but Silicon Valley does seem to be the epicenter of activity (and we don't mean just for earthquakes). Thus our June Summit and October conference will both be hosted there.
While we were in San Jose to moderate the Broadband sessions at Spring 2000 VON, we visited with a few of the companies participating in the June Summit. Here are some thoughts from those visits.
A few days after 3Com announced the divestiture of their analog modem and LAN/WAN enterprise businesses, we visited Niraj Jain, Director of Business Development for the Residential Connectivity Group (RCG). Niraj shared the RCG story of how 3Com intends to play a major role in the "Consumer Digital Lifestyle" business.
3Com is re-tooling its image in the consumer market. No longer content to provide "point products" like analog and broadband modems, NICs and hubs, they are determined to provide consumer solutions, not just products. This involves a major shift from being a company driven by technology to one driven by customer needs. It also involves building an ecosystem of company relationships so that 3Com can leverage both its own strengths and complementary strengths of partners. Those of us who have tried to make that transition know that the words are easier than the implementation.
3Com's recent analyst presentations describe how they will provide solutions including wired and wireless LANs, PCs and new Internet Appliances (IAs) and connections to the outside world over cable, DSL and other emerging broadband pipes. The applications they intend to address involve not only communications but also entertainment and security, for both family and work-at-home situations.
Clearing the deck of the older mature businesses should provide sufficient bandwidth so that 3Com can focus on the consumer market. When we asked if the old horse can learn new tricks, Niraj emphasized that the entire management team from Bruce Claflin (the President) to Julie Shimer (newly hired from Motorola to run RCG) is on the same wavelength. We'll be watching to see how well 3Com does in executing this major shift. http://www.3com.com)
2Wire: Big Aspirations From a Small Company
Looking at the backgrounds of key company managers is usually a good clue to whether that player is worth tracking. In the case of 2Wire, we see some impressive track records. CEO Brian Hinman was one of the co-founders of Picturetel, moved on to found Polycom and make its Soundstations (those curvy, sexy looking conference room speaker-phones) and build the company into a videoconferencing leader. In 1997, before many of us were paying much attention to residential gateways, Brian founded 2Wire, with funding from several major players. 2Wire's VP of Marketing, Roy Johnson, comes from a substantial role in the personal networking group at 3Com. The Director of Business Development, Ted Fagenson, has experience at both AT&T and Polycom.
Our discussions with 2Wire were notable for the scope of the company's aspirations. Their initial HomePortal 1000 product combines many features -- DSL modem, home networking hub, router, Web server, firewall and simple user interface -- into a small consumer-packaged box. Although this product is based on DSL and HomePNA, we expect they'll work with other forms of broadband access and home networking in the future.
We had conceived of their product as a "portal" in the physical sense of bringing broadband connectivity and network functionality to all rooms of a house. However, their intent is also to be a portal in the Internet application aggregation sense. Ted Fagenson's analogy was that of a "digital refrigerator" -- the place where you keep the household calendar, messages, emergency contacts, photos, grocery list and also the entrance to shopping in the on-line world. We suspect that 2Wire will provide a more complete view of these directions at Supercomm in June. (http://www.2wire.com)
We stopped by to visit with Sarosh Vesuna, Senior Director of Business Development at Symbol in south San Jose. Dave first met Sarosh at Spring VON '99 in Las Vegas and saw what role wireless LANs might play in the broadband lifestyle. Sandy missed their demos and wondered whether this was just the latest toy Dave wanted to play with in our quasi-broadband home (see below).
Our real understanding came when Sarosh loaned us two wireless LAN cards and a base unit to connect to the ADSL modem at our daughter's house in Mountain View (where we stayed during our visit to the Bay area). You really have to use untethered PCs with cable or DSL to appreciate how important this is to the digital lifestyle. Installation was painless. We wrote the draft of this report on a PC connected through the wireless LAN, and were able to move around the house as freely as with a cordless phone. (We've brought the setup home and will report later on how it changes our habits in a house that's already fully wired with CAT5.)
Symbol is a publicly held company based in New York and has been around since 1975 - forever in Internet time. They're leaders in providing solutions built around bar code readers and wireless data communications. Among their claims to fame: a substantial fraction of all NYSE trades go through their wireless network. Their equipment is also part of the infrastructure of companies like UPS and FedEx. Recent noteworthy items include a recent $100 million Intel investment in Symbol and a five-year exclusive deal to use the Palm OS in devices with built-in bar-code scanners.
Symbol's technology isn't limited to business applications and wireless LANs for home PCs. Sarosh really got Sandy's attention when he showed her a prototype of a small bar-code scanner with a wireless LAN and a Palm user interface. Sandy has been thinking about a really useful application to scan empty packages so an on-line grocer can provide "just in time" delivery. Sarosh described exactly the same application with the scanner velcroed to the refrigerator!
Symbol is actively partnering with many companies (as their relationships with Intel and Palm illustrate) in order to focus their technology on consumer solutions. Although their distinctive expertise is in wireless, they don't take a "religious" view of the world, recognizing that wired and wireless solutions each have an important role in creating the Broadband Lifestyle. (http://www.symbol.com)
Taiwan -- Companies Behind the Products
During our Bay area stay, the China External Trade Development Council (CETRA) put on a half-day seminar showcasing 10 high tech Taiwanese companies with major broadband products. Most of these companies are not household names in the US (or perhaps anywhere), yet many provide OEM products and components branded by heavy-hitters like Cisco, HP, Nortel, Panasonic and Alcatel.
The impact of broadband products first appeared in Taiwan's "top ten" list in 1999. Although analog modems, hubs and LAN cards were the leading 3 communications products in both 1998 and 1999, cable modems appeared as #10 on the list for a first time in 1999 and are moving up fast. All ten companies at the seminar are moving toward high growth areas like cable and DSL modems, digital set-top boxes, VoIP and home networking and gateways.
Our personal favorite at the seminar and demos was the line of wireless WebPAD tablets from Tatung. Despite its lack of name recognition, Tatung is a huge player with 1999 sales of US $5.5 billion. Their small, lightweight WebPAD sits on a keyboard base and moves wirelessly from kitchen to bedroom to patio, making unconstrained access to content and services a part of everyday life. (Alan Pan of Tatung promised he'd bring some to show delegates at the Broadband Home Summit in June.)
The companies we visited in the Valley last week are primarily focused in areas other than broadband access, services and infrastructure. For those of you who missed the Broadband Track sessions at Spring 2000 VON, we'll fill in the access picture by including some highlights from those sessions.
In "Cable Dialtone Grows Up: Security, Reliability and More" panelists from CableLabs (Nancy Davoust), Broadband Access Systems (Mitch Auster) and System Dynamics (Dave Waks) focused on specifically how the cable industry is working toward providing IP services over cable that are as secure and robust as today's switched telephone network. The good news is that considerable energy is going into many of the required pieces. The not-so-good news is that some pieces still need to be implemented to reach the goal.
In "Watch Cable Enable: Making It Real" panelists gave some perspective on the "voice over IP over cable" interoperability testing and market trials which are now underway and which will (in some places) soon become actual rollouts. This session worked through the value chain from specifications and testing to product vendors, to service providers using the products. We started with CableLabs (Glenn Russell) talking about their programs with vendors to implement standards and test interoperation; then moved to Cisco (Mark Bakies) which is making products being rolled out now by operators like Videotron; finally we got the perspective from Comcast (Steve Craddock) on current trials and future plans.
The third session (Broadband Choices for the Last Mile) gave perspectives from other providers of broadband access and services. Sprint (Evan Conway) talked about how they will be rolling out high-speed data and are thinking about second-line telephony over MMDS ("wireless fiber"). DSL was represented from two perspectives: Bell Atlantic (David Young) as an incumbent LEC and Northpoint (Mike Borsetti) as a CLEC focused not just on high speed data but also on the opportunities provided by voice over DSL. There continues to be a renewed push from the DSL camp to overtake the initial lead gained by cable modem rollouts. Our personal observation is that the DSL community seems to be fostering substantial innovation from entrepreneurial companies and garnering funding from the venture capital community, which may help them catch up to cable.
On a related note, Alex Best, CTO of Cox Communications, gave an industry perspective talk about what Cox has done to position itself as a leading cable provider of telephony services. Cox has been rolling out with circuit-switched telephony and has not committed to when they might change over to IP. Alex presented a detailed picture of their current costs and the capabilities of today's systems (supplied by Arris Interactive). He challenged the IP telephony community to provide equivalent or better service at equal or lower cost than today's systems. It will be interesting to see how the vendor community responds to the challenge.
Thanks to all the speakers who made these sessions so interesting! Any of you who missed them can get copies of the slides by visiting http://pulver.com/von2000 .
We will be organizing and moderating the Broadband track at several upcoming VON conferences. (See the complete calendar at http://pulver.com/conference )
VON Europe 2000 - June 19-21, Stockholm, Sweden ( http://pulver.com/europe2000 )
Fall 2000 VON - Sept 11-14, Atlanta, GA
When Sandy left AT&T four years ago and joined Dave in System Dynamics Inc., we decided to set up separate home offices for each of us. We were consulting for cable operators and telcos rolling out advanced broadband services, so Dave proposed we "walk the talk" and learn first-hand what's involved in creating a Broadband Home. We'll share our thoughts on the benefits and headaches of this on-going project, with full understanding that we're only a sample of one.
Implementation problem number one was that neither our cable operator nor our telco could provide broadband. This is still true today - neither cable modems nor DSL are available to us --and we didn't follow Jeff Pulver's lead in opting for T-1's. Although our home in NJ is 30 miles from New York and 8 miles from AT&T corporate headquarters, ISDN was the best we could do. Whatever flavor of broadband connection becomes available first is the one we'll select.
Given the choices four years ago, here's what we decided to do (somewhat simplified):
Without intending any gender stereotyping, it's only honest to admit that the "we" who decided to do all this was Dave - the same person who ran advanced technology at Prodigy and likes to be "hands-on" with new technology. Sandy, despite a degree in math and considerable technology savvy, just wanted the results, plus reliable, hassle-free use.
The benefits of this implementation include:
The downsides include:
One goal of our conferences, newsletter and Web site is to encourage the industry to work together to create easier to use, affordable and hassle-free systems that let others gain the benefits we've enjoyed without the associated negatives. Wireless LANs, like those that are increasingly coming to market for 11Mbps home connectivity, are clearly a step toward that goal. Residential gateways also appear to be a piece of the puzzle.
Once we get true broadband, we'll also be looking for exciting broadband content and useful services that do more than just the same things faster. The promise is here -- it's up to the industry to make it real.
The Broadband Home Summit 2000 ("BBH Summit 2000") will take place June 6-7 at the Doubletree Hotel in San Jose, CA.
At BBH Summit 2000 you will listen to the senior executives responsible for driving this industry forward, and will have a great opportunity to meet with these players and take advantage of unique business and personal networking opportunities.
Seating will be limited. If you're interested in taking advantage of our special "early bird" prices, we suggest that you register early ( http://TheBroadbandHome.com/Summit/2.html ). If you'll need a hotel room, you should make your reservation now ( http://TheBroadbandHome.com/Summit/5.html ).
The conference will start with a reception for delegates and participants on the evening of June 5. This will be a great opportunity to network so we suggest that you plan to arrive on the evening of the 5th.
The conference will have a series of roundtable discussions covering the following topics:
Participating companies and organizations include:
Visit the conference Web site ( http://TheBroadbandHome.com/Summit ) for an updated list of participating companies, schedule, registration and hotel reservations.
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