""dre"" wrote in message [EMAIL PROTECTED]">news:[EMAIL PROTECTED]... > ""nrf"" wrote in message.. > > > > What ATM did was simple. It gave customers a circuit that was > > almost good as leased while still providing for multiplexing, and > > the cost-savings associated with that, to the provider. In short, > > providers could now provide leased lines without actually having > > to provide leased lines. > > Back when we rolled out ATM networks, especially on Internet > backbones, I got this feeling of, "why are customers paying for > this when they could be doing this themselves?". I feel the same > way about today's networks, only moreso. In Japan, building networks > into and out of the country doesn't work. In Japan, a lot of > business doesn't flow right. It's because they have too many > middle-men. All the long-haul circuits across the Pacific go to > Singapore. Why? No middle-men.
Without knowing much about Japan, I would say that from what you just told me, it would make perfect sense for a Japanese customer to purchase network services from somebody else rather than do it themselves, because the customer doesn't want to deal with the headache of all these middlemen. Let the provider deal with it. But again, since I know little about Japan, I will have to withhold judgment. > > > Proof of the power of that is simple - look at the tremendous > > profit that ATM generates, both natively and as a basis for the > > other 'semi' leased line, FR (which is usually carried by ATM). > > I agree, Service Providers make money off of voice. They make ok > margins off of ATM and/or FR overlays (you're right, most FR is ATM > Interworking). They lose money on Internet. But some businesses > do make money on selling Internet. It's not universal like you > say. It's not universal. But by and large most businesses lose money on the Internet. And those that actually do make money are those who have Internet "end-products". They certainly aren't carriers, who have been losing money hand-over-first providing Internet transport. Let's face it. Internet transport is a commodity with little (at least so-far) value-add to be offered, and it's extremely difficult to profit from a commodity product. Will somebody be able to figure out how to generate such profit in the future? I hope so. But it hasn't happened yet, not consistently anyway. > > > Uh, what? Legacy support is an unbelievably good reason to do > > something. What's the biggest reason that is stopping all the > > carriers in the world from jumping to IP? The fact that they got > > billions of dollars of installed base that they obviously don't > > want to write off. > > > > The fact is, carriers are looking for something that allows them > > to transition to an IP future without forcing them to write off > > their massive legacy infrastructure. Any technology that extends > > the life of their ATM gear while giving them a smooth path to the > > future is what they're really after. > > And all-optical gear doesn't do this? Regular IP routers don't > help extend the life of an ATM network? All this stuff interconnects > fairly well. You don't require MPLS to extend ATM or any legacy > technology into the future. Uh, no, none of these technologies cleanly provides a smooth technology glide path to each other. Today, a typical ISP has to deal with essentially 3 different infrastructures - transport (optical/TDM), legacy ATM, and IP - and usually with 3 different network teams, 3 different management tools, etc. etc. MPLS allows for at least a merging of ATM and IP, and via GMPLS through a merging of all 3. Consider this. The same ISP can, through a fully-baked version of MPLS (and GMPLS) finally be able to fully integrate and manage its entire network as one. If a customer wants to order wavelength services, if they want to order an ATM PVC, if they want to order simple Internet transport, if they want to order an IP VPN - it can all be provisioned through one management interface and one team of people. No need to mess around with different tools, different people, etc. The entire network has essentially been 'virtualized' by MPLS. > > I already argued some points you may have missed... sure you can > sort of "Interwork" MPLS and ATM. But do we even need the benefits > of ATM? 1) Traffic Engineering - Solved, 2) CoS - Don't Need/Want, > 3) Network Management - Unanswered? Am I missing anything else? You're not missing anything, except that you're not looking at the problem in the same way that I am. Sure, if there was no ATM today, there would be little reason to invent it. But that's not the point. The point is that there is a substantial amount of ATM in the world today that nobody is going to willingly throw away because it works and it makes money. Carriers know full well that their future is not ATM, but they aren't just going to walk away from something that makes money today in return for something else that may or may not make money tomorrow. Ideally what they want is some new technology that provides 'investment-protection' for their legacy infrastructure so that they can still make money now while providing the features that allow them to offer future services. Carriers would prefer a drop-in replacement for their ATM switches, rather than something that requires a traumatic overhaul of their whole network. MPLS may well be that technology. > > One serious problem with that line of thought. Simple question. > > Which one makes profit for the carrier - the Internet, or X.25/ATM? > > I rest my case. > > What makes more profit for the Enterprise or any customer? Outsourcing > simple networks to a Service Provider, or determining the rate of > returns and building their own network? Most customers already > *have* networks today. They either have Internet access, private > networks, or both. They aren't looking to add a new network, unless > it's their own. New businesses need networks today, hence outsourcing. > But I haven't seen too many of those recently... do you want to > start a business that requires an expensive network in this economy? > Will you even get funding? On the other hand, those enterprises who are leasing circuits from providers are not really stopping. FR/ATM/X25 VC revenue has remained steady and has actually increased (slightly) despite the bad economy. More importantly, to the carrier, FR/ATM/X25 VC's are profitable - much more profitable than Internet access. Carriers are not going to willingly walk away from a business that makes them money in return for a business that (so far) doesn't. > > > See, that's what I'm saying. Everybody can talk about how powerful > > the Internet is. Indeed it is very powerful. On the other hand, > > how many carriers can actually demonstrate a profitable business > > model from their Internet operations? You and I can talk about > > how the Internet is great and how it is going to evolve and all > > that till we're blue in the face, but the fact of the matter is > > that the Internet right now is an operation run by businesses, > > and just like any business operation, it is subject to business > > considerations like profit/loss. And the fact of the matter is > > that the Internet on the whole has been nothing but an unbelievable > > dollar loss for the carriers as a whole. Look at all the dying > > ISP's. How many carriers are actually making money from their > > Internet operations? > > How many carriers are going to lose their voice profits when > interested parties find out that SIP can save them money, and they > can do it over their existing networks? The point I'm driving at, > is that I don't think carriers or service providers are going to > continue to make the money that the telecom or cable industries > have in the past. It would be like this for the Energy industry > if we suddenly discovered a new energy source and suddenly there > was a burst of engineers and amateurs capable of supporting/exploiting > this new power. I'm not doubting that the carriers see that traditional voice, especially long-distance consumer voice, is in for a slow decline. They all see this. Heck, that's why AT&T performed all these gyrations the last few years. But again, the real issue is what are they going to do about it. For at least the next few years, voice will continue to be the carrier's cash cow. Sure, in the future this will not be so, but for right now, the cash comes from voice. Wouldn't it be nice for a carrier to have a technology that allows them to milk as much money they still can from voice while offering them a smooth transition to a platform that allows them to provide future services? That's what they want. MPLS could be this technology. I'm not saying it will, I'm saying it might. > > You're exactly right. The Internet is run by businesses (not JUST > service providers). It's also run by amateurs. It's also run by > military and educational institutions (oh wait, yeah, that's where > it came from). All of these people understand profit/loss to some > large or small degree. But more importantly, all of them can buy > some dark fiber (on the cheap, thanks to the fiber glut), waves, > or cheap Layer-3 IP transit (or peering, even cheaper!) and make > returns and hurdle rates so rapid and on-the-money, that almost > anyone in their right mind (or at least someone that understands > Technology) is going to go for it and roll-their-own. Looks like you're basically saying that there is going to be a massive drain of capital out of the carriers as people essentially create their own network and provide their own network intelligence. If that is the case, then I would say that that is an unbelievable threat to the way telecom is run today. If carriers have no money, then who is going to maintain all these waves/dark-fiber/cheap-L3-transit when it breaks? If ISP's die off, then who is going to have the clout to maintain the peering agreements that make the Internet actually work? If IXC's and RBOC's are massively threatened financially, then who is going to step in and make sure that phone calls are actually handled reliably? Please please please don't say the government. > > I'm not saying Carriers/SP's are going away. But, yes, they are > going to have to market, sell, and create new ways of turning profit. > They are evolving, too. > > > I simply have to ask - if carriers cannot find a way to make > > money off the Internet (and again, hardly any have done so) , > > then why would they and why should they continue to invest in it? > > Do they just spend money 'for fun'? The harsh reality is that > > the Internet has basically been a giant transfer of wealth from > > the carriers to the consumers, which is great for the consumer, > > but is also unsustainable. Please somebody inform me - if you > > think that Internet buildout is going to continue to continue, > > then where is the money going to come from, and why exactly would > > carriers perform this buildout (or if not the carriers, then who > > is going to do this buildout, and why?)? > > The fiber is already laid. The airwaves (2.4GHz and 5GHz especially) > are free, as well. Networks will be built and will be pieced > together like puzzles. Building a network will be as hardwired as > turning on a TV for the future generations. You seem to be speaking of a utopia where networks will just be available for the taking. But again, even in a world of greater decentralization of networks, the laws of business still apply. If something is unprofitable, then there is great disincentive to do it. Networks will not be built out/maintained/fixed if it is not profitable to do so. I can envision a situation where the masses do indeed build out their own huge networks but things like the greater Internet suffers from periodic brownouts because it is nobody's responsibility (at least financially) for making sure it runs - a classic case of a tragedy of the commons. Or, even worse, brownouts of the PSTN, because carriers do not make profit off PSTN services and therefore have little incentive for making sure it works. > > dre > > BTW: thanks for the discussion, this is really warming up to be > almost too interesting ;> Hope I'm not wasting time/bandwidth. Hardly. It's really too bad that these kinds of discussions weren't held by the telco higher-ups a few years ago. Maybe if they were, the industry wouldn't be in the mess it is today. 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