Trucking Technology Report - July 6
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Distributors Bet the Shop on a Web Alliance
A Pa.-based startup is helping to level the playing field between independent distributors and major players such as Graybarlectric and Grainger. Affiliated Distributors Chairman and CEO Bill Weisberg started operating supplyForce.com last fall, funded by a total of $87 million from independent distributors and venture-capital firms. Last year, industry giants such as Grainger and Graybar commanded sales of $4.5 billion and $4.3 million, respectively, and are developing their own online spinoffs.
SupplyForce.com plans to top these competitors by harnessing the collective power of regional independent distributors, who claim $16 billion of the parts, tools, and building materials market.
Last fall, 240 companies registered with supplyForce.com, looking to widen their customer base and boost efficiency. The site provides a means for cash-strapped local distributors to expand online and nationally. Affiliated Distributors' 17 years of industrial supply and construction distribution experience, combination of distribution and high-tech experts onboard, and geographic scope bolsters supplyForce.com's prognosis. All Philadelphia-area general contractors will be able to sign up for the site in July. Philadelphia Inquirer (07/03/00) P. C1; Steinriede, Kent
Tech Firm Builds Secret Tunnels on Internet
Israel-based Check Point Software Technologies has claimed the lead in the growing field of virtual private networks, which provide security for public networks that run through the Internet. Check Point dominates its competitors, owning 50% of a market that will grow 180% this year, according to Infonetics Research. Check Point's estimate revenue for this year is over $300 million and that is projected to increase to nearly $500 million in 2001. But Check Point is not content with this success.Industry analysts claim that 93% of the market for virtual private networks remains untapped, so the company is branching out from its big-business customer base and now caters to smaller businesses as well. Within a few years Check Point will offer services to individuals who want security for their wireless Web connections.
Check Point has no choice but to continue expanding its markets and developing new technology, as well-known companies including Nortel and Cisco are beginning to catch up. Investor's Business Daily (07/06/00) P. A12; Alva, Marilyn
Diversity Within Convergence: The Wireless O&M Challenge
Service providers will soon confront operations and management challenges resulting from the transition of present networks to third-generation technologies. The wireless market will soon be flooded with an abundance of 3G telecom gear and services. The main concern of O&M is how to integrate a large variety of services with differing network systems and other wireless-based technology.To provide services for both 2G technology and 3G technology, two networks will be created by most operators. But companies adhering to O&M principles will apply the same management structure for both networks. In order to accomplish this, the company's O&M system has to be able to integrate and mediate both networks to avoid any potential crisis.
As 3G technologies become available, O&M may arise as the most important factor for various fixed and wireless networks. A number of technologies to be used with 3G operating systems, including Terrestrial Radio Access Network (UTRAN), indicate the importance of unity at the O&M level. An additional role of O&M will be to keep costs low as the network expands. Telecommunications (06/00) Vol. 34, No. 6, P. 120; Dietermann, Andreas
Trading Exchanges Aim to Reinvent Parts Procurement
The Web is revolutionizing manufacturing by changing the efficiency with which raw materials and services are procured. Case in point: the oil industry's purchasing cycle will go from three weeks to 30 seconds with today's launch of the Oil, Gas and Petroleum Industry Exchange. The exchange is expected to save purchasing, standardization, and process efficiency costs, as well as eliminate administrative costs and create price stability.This Internet revolution has transformed the global marketplace has become just that – a marketplace, argues trading exchange expert Robin Bloor in the Electronic Bazaar. Bloor, who calls e-procurement the largest marketplace revolution since paper money's appearance in the 1600s, likens the Internet to an "electronic bazaar," where buyers and sellers can bargain. Bloor says that paper money "separated the activity of trading from settlement. But the Web removes the time lag and trade and payment take place at the same time."
AMR Research reports that the number of independent trading exchanges exceed 600, but predicts that fallout will reduce the number to two or three per industry, ranging from information-only to supply-chain exchanges. Financial Times – Information Technology (07/05/00) P. 14; Manchester, Philip
AOL Purchases a Stake in SpeechWorks
AOL has agreed to invest $5 million in voice-recognition software maker SpeechWorks International, in a move aimed at entering the expanding voice portal market. The deal will give AOL access to SpeechWorks software to create voice portals for AOL's online services, SpeechWorks says. Web firms are increasingly offering voice portals as a way to blend the Internet's interactivity with the phone's availability and ease of use.Companies such as TellMe Networks offer voice portals that provide access to stock quotes, traffic updates, and other information through verbal commands. AOL's entry into the voice portal market could increase acceptance of the technology, experts say. Wall Street Journal (07/06/00) P. B6; Wingfield, Nick
E-Marketplaces: B2B for Direct Merchandise is an Awakening Giant
Online marketplaces are rapidly becoming integral to good supply chain management in the consumer packaged goods industry, due to the way they help lower operating costs, wholesale prices, and, eventually, retail prices. GlobalNetXchange, eCPG.net, and the Worldwide Retail Exchange (WRE) are the three largest players to enter to the market so far.GlobalNetXchange, founded by Sears, Carrefour, Kroger, METRO, Sainsbury, and Oracle, will service only its founding members for now, but plans to open its doors eventually. The founding companies purchase over $140 billion in goods annually.
Another group of retailers accounting for $175 billion in expected purchases, including Kmart, Target, CVS, Safeway, Tesco, and Royal Ahold, has formed the WRE, while eCPG.net is the work of the Grocery Manufacturers of America, and it expects to host $200 billion worth of business every year. Consumer Goods Technology – Supplement (06/00) P. 30
Millions Phoning Online, Finding Price Is Right Even if Quality Isn't
Although the quality of phone calls over the Internet is imperfect, consumers are increasingly attracted to Internet telephony because of the lure of free or extremely cheap calls. About 15 million Americans now use Internet-based voice communication, up from 5 million a year ago.As the market grows, about two dozen companies have begun offering online voice communication. Internet telephony is relatively simple, requiring an Internet hookup, headphones, and a microphone. After signing up with an Internet telephony provider, users can make local or long-distance calls to people with any type of phone.
However, since voice transmissions are carried over the Internet in small packets in the same manner as data transmissions, conversations are often subject to delays. Without a high-speed Internet connection, the quality of an Internet call can be very poor.
However, companies are working to improve the quality of Internet telephony. Within five years Internet telephony will represent at least 15% of long-distance traffic in the U.S., compared with about 1% currently. New York Times (07/06/00) P. C1; Romero, Simon
Rush of High Speed Services
Broadband technologies are quickly gaining popularity as consumers demand high-speed Internet access and multimedia offerings.Over 27 million users in the U.S. will have high-speed access by 2003, creating $8 billion in revenues, according to Forrester Research. Meanwhile, broadband access will represent half of all access revenues in Europe by the end of 2004, says International Data. Broadband technologies include cable modems, digital subscriber line (DSL), and fixed wireless access.
Satellites offer another means of high-speed access, and Hughes Network Systems will soon launch a new version of its satellite Internet service DirecPC that will provide two-way interactivity. Hughes expects that the 8.6 million users of its DirecTV satellite TV service will help DirecPC succeed, as customers upgrade to a combined TV and broadband Internet service.
Meanwhile, AOL is targeting the broadband market through its pending merger with cable giant Time Warner. AOL-Time Warner plans to offer broadband services that will provide multimedia content to 13 million cable households. Cable seems to be emerging as the dominant broadband technology in the U.S. as well as Europe, although DSL is also a strong contender. Financial Times – IT Review (07/05/00) P. 9; Nairn, Geoffrey
Leap Wireless International to Buy Lucent Technologies
Wireless service provider Leap Wireless International announced yesterday that it is acquiring roughly $900 million of infrastructure equipment and services from Lucent Technologies. Leap had already made a $330 million purchase of equipment and services from Lucent last September. The company said it hopes the agreement will further its plans to enhance its network's capacity and increase coverage to include new markets. Lucent is one of the leading manufacturers of phone equipment throughout the world. New York Times (07/06/00) P. C4Pillows & Ports
New hotels are providing rooms with high-speed Internet access at T-1 rates. In addition, current hotels are equipping their rooms to handle demand for Internet access. Greater Internet usage by business travelers has spurred the need for high-speed Internet connections. While several hotels in key areas already provide high-speed Internet access, service will be even more widespread in a few years, said Bobby Bowers, a Smith Research lodging expert.Currently, Marriott is one of the most Internet-ready hotel chains. The company recently started deploying broadband Internet connections in several of its guest rooms, meeting rooms, and business centers. Its Internet access service allows guests to browse the Web and use the phone simultaneously.
Hilton, which introduced broadband service in 1996 via its Telesuite video-conferencing network, has begun deploying its new OverVoice broadband system. Other chains, including Choice Hotels International, are choosing in-room PC/Internet links provided by companies such as GuesTech. GuesTech's SuiteLink offering is being deployed in 50,000 hotel rooms across the country, and is free to users.
Although it looks as though every hotel is being equipped with high-speed Internet access, there is still a long way to go, according to Mark Haley, customer relationship management director at hotel technology-services firm hsupply.com. He says the premium lodgers currently have to pay for online usage will impede hotel Internet connectivity. Entrepreneur (06/00) Vol. 28, No. 6, P. 50; Elliot, Christophero
Oh, Say Can You OC-768?
Although the majority of service providers are just getting a handle on OC-48 and OC-192, OC-768, which offers 40 Gbps wavelength, is beginning to grab some attention. Suppliers, service providers, and analysts believe the market for OC-768 will be established about a year from now. However, some equipment providers are seeking to get a head start on the market.Qwest Communications is conducting trials of Nortel Networks' 40 Gbps offering, and WorldCom is testing Lucent Technologies' OC-768 point-to-point solution. Lucent and Nortel intend to proceed with testing this year and expect carriers to begin deploying the platforms next year. However, deployments will be restricted as a result of manufacturing issues, including the accessibility of photonics products and components that can support OC-768.
Qwest's trial, which used DWDM to propagate four 40 Gbps signals along 700 km, was successful, according to Qwest's network engineering director, Al Vanthilt. Qwest performed the trial using an OC-768 version of the Nortel OPTera long-haul platform. Although the test was successful, carriers and vendors may still encounter some problems when using such high speeds with exact signal requirements. Telephony (06/26/00) Vol. 238, No. 26, P. 68; Miller, Elizabeth Starr
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