SIGNIFICANT TRENDS IN GLOBAL NETWORKING - A NEW WORLD OF STRATEGIC POSSIBILITIES By Steve Leaden, Leaden Associates, Inc.   The Beginning of A Revolution We have entered the new millennium, and we are witnessing a new era, one that is revolutionary. We are beginning to see the revolution that will dramatically change the way we do business - this transformation taking place is the new global economy, and the key markets it will impact include the service industries and telecommunications. You can see the evidence around us, including the development of international alliances in major industry groups. The regulatory restrictions we are used to experiencing in other countries will, in the near future, transform into getting "local access as usual". The term "global information highway" will evolve and create new infrastructures that will provide unwavering flexibility on a global level. Round the clock trading and market transactions will become reality. Time, cost, and geography as we know it will slowly and subtly become seamless and extraneous. This revolution is causing specific, focused trends in the telecommunications arena. What are some of these specific trends and how can you position your firm to take advantage of these trends? The trends developing and evolving center on several major areas, including: The development and provision of new network offerings on global level currently used on a domestic level, The development of strategic alliances among international carriers, The "deregulation" of local access within many industrialized countries, The lowering and repackaging of international pricing from the carriers, The longer term development of a global super information highway.     A Myriad of Offerings - Today Until recently, discounts to other countries have been the main thrust of existing, basic service to other industrialized countries. The needs of the marketplace, however, are considerably ahead of the global industry's ability to deliver. Recently, however, carriers began to announce and introduce new services the user community can truly take advantage of. The trend here is clear: to provide on global level the offerings we have come to accept as standard on a domestic level. Some of these offerings provided today include: Virtual Networking - users currently experiencing the advantages of domestic carrier virtual networks are now being offered virtual networking services on a global level. The virtual network, commonly depicted by 5-7 digit intra-company dialing, is typically designed around one company (or companies). Another basic requirement is to be "on-net" in some manner, so as to be directly connected to the network rather than dialing in. Features of the virtual network offering generally include: Low cost voice traffic on-net - the virtual network concept offers a lower rate per minute than an off-net traditional dial offering and does not require the user to pay the typical flat fees associated with traditional private networks. Faster connect times on-net - Similar to existing private networks in place, on-net virtual networks offer a faster connect time than off-net. The major advantage is in the trading business environments where seconds can make a major difference in the number of calls/trades completed in any given day Uniform dialing plan on-net - users within a particular company or "family" can dial one another via 5-7 digit dialing as if they were one location. This could include intra-company and inter-company users defined as a particular "virtual" private network. There are switch manufacturer and software release considerations and logistics to make this concept work, many of which are already implemented and in use in the market. Network Management - Management of the virtual network is performed by the network provider, relieving the end user and telecommunications department of that task. The Competitive Local Loop - Deregulation in specific countries is allowing competitive global carriers to enter the local markets and compete with the local telephone companies. Fiber optic and dial services are being delivered all the way to the customer demarcation point. Frame Relay - Frame relay is slowly replacing X.25 as the packet switching vehicle of choice because of its efficiencies, and is now being offered by most major carriers, and is in great demand. Videoconferencing - Videoconferencing is now beginning to emerge on a global, desktop level. Videoconferencing commonly offered on a private network basis is now being made available on ISDN and 56KB dial up applications. International 800 Service - International 800 or "Free" service continues to become more available depending on the country service is originating from. Wireless Communications - As in the United States, wireless services are beginning to be offered in specific world markets.   Near Term and Longer Term Offerings Not Far Away On the horizon are other offerings that will again create more applications and business services for the user community. They include: Voice And Data Integration - Typically offered on separate circuits and as separate services currently, voice and data services will shortly be integrated over one pipe to the customer premise. Bandwidth-on-demand for on-net customers - On-net customers will be able to take advantage of an on-net T-1/E-1 termination via "like" multiplexers on either end. Both voice and data services are applicable here, including virtual voice networking, point-to-point private lines, hoot-and-holler circuits, market data lines, fax/modem low speed lines, and dedicated data lines for dedicated data access and wide area network applications. Customers will be able to change the bandwidth configurations or work with carrier personnel to change the bandwidth depending on the particular user application(s). Automatic Number Identification (ANI) - Users can identify in name or number who is calling them on-net. ANI will be used as the basis for creating new virtual network applications and be integrated with mainframes and databases for Computer Telephony Applications (CTI) applications for customer call/profile identification and on-demand predictive dialing applications. Expansion of the Internet On A Global Basis - The Internet will continue to expand, now more so on a global level, and will now be touted at the Global Information Superhighway. Asynchronous Transfer Mode (ATM) - Asynchronous Transfer Mode (ATM) will be offered to fully complete the concept of multimedia to the desktop on a global level and other high speed data applications and high resolution video and imaging applications. This vehicle is a longer term strategy and application but is already in use on a limited specific application basis. SDH (Synchronous Digital Hierarchy), SONET's (Synchronous Optical Network) international version, will also be deployed to support higher bandwidth applications.   Strategic Partnering As We've Never Seen It The major carriers including AT&T, MCI, Sprint, and others have formed alliances with PTTs on a global level to help create this new seamless environment. Some alliances are "friendly" joint ventures, while many are designed around investment in each other's firms and acquisition of stock accordingly - the creation of new companies is a third wave in the alliances trend. Such alliances should create carriers with single source global account responsibility. Currently, billions of dollars are being funneled in the development of these partnerships with specific targeting in mind, including: Global international data, voice and video services Traveler card services globally Carrier's carrier services, providing transport services for other carriers. As strategic partnering unfolds, and as more carriers enter the marketplace, pricing competitive strategies will surface. Deregulation of the local government-owned local phone companies will also evolve. Standards will begin develop globally. The telecommunications world on a global level, as we know it today, will change forever.   Strategies For You In your global network planning and strategy, be sure to consider the following: Be flexible and stay with month-to-month offerings or short term volume discount agreements. As the competitive element of the new global market gears into full swing, vendor pricing strategies and applications will likely move into a period of real competition. The vendor you subscribe to today may or may not offer the best "fit" for your company in the longer term. If signing for any volume discounts be cautious not to sign for a minimum volume commitment close to your company's normal volume - as prices will likely fall, your company's volume may or may not meet the minimum needed to avoid penalties depending on the volume you commit to. Watch the evolving market closely and look at your own short and long term country calling demands and look to the carriers that will best service you in those countries. In developing your global corporate "internetwork/intranetwork" and carrier(s) of choice, keep these key elements in mind: ensure that the carrier and offering you choose provides uniformly high service quality, availability and redundancy while optimizing your cost savings. Plan for these new global applications now as part of your corporate technology strategy. Invest in the hardware switching technologies as your needs become real and as these new services become available. Make sure that the hardware switching technologies you are buying today can grow with you at least in the short term. Consider security issues - potential security leaks always become an issue, especially with the advent of global applications. Consider encryption and other electronic security media to protect your network. Consider physical security issues as well as virus, hacker, and toll fraud issues. Develop a corporate global strategy that will include these new global applications short and long term. Incorporate this corporate strategy in your corporate business and marketing plans. Your strategy should move toward a longer term objective, which ultimately should include offering complete information services to all personnel, regardless of their geographic location. The changes in the telecommunications market today are of global proportion and will virtually revolutionize how we will do business on a global level. It makes sense, therefore, to look seriously at this evolving global trend and plan to make use of the new technologies for strategic corporate applications accordingly. Since information flow is key to corporate business, look to these global trends as strategic business tools to improve the speed and information flow to key personnel and clients.