The NetSuds™ Report ©

The April 1, 2002 Issue:

Re-sending of this newsletter to any number of colleagues is encouraged provided you also cc: report@netsuds.com.  In return, we will invite recipients to subscribe.  Any other unauthorized re-distribution is a violation of copyright law.

Subscribe to this report by subscribing to the NetSuds Monthly Report (HTML or Text) at http://mailman.netsuds.com/  You can get the web version of this report at http://www.netsuds.com/report/2002/april.htm

Definition:  "com and .com" = Telecom, Datacom, IT or Internet

In this Issue:

        1.0  Heard on the Net
        2.0  Jobs in the "com and .com" Market
        3.0  NetSuds and MedicalSuds Calendars
        4.0  Tidbits
               4.1 Entrepreneur Skills Workshop - April 11
               4.2 VoIP in the Enterprise
               4.3 NetSuds on Tour - Prism Software Solutions
               4.4 Behold, The Mouse
               4.5 DirecTV and Worldcom - More DSL for MN
               4.6 BOB is Here - April 30 Debut
               4.7 Venture Capital Investing
               4.8 Giving Back
               4.9 SPVC Ranks 9th Worldwide
               4.10 A Couple Comments On Politics
        5.0  Calendar of Events
        6.0  Minnesota Venture Capital Conference &
                     Bleeding Edge Technology Showcase
        7.0  Strictly Business Expo
        8.0  Location-Based Services - Switzerland
        9.0  ADC CEO Is Wrong
        10.0 Is your Data Center Facility Up to Par?
        11.0 Guest Writers for this Report

1.0 Heard on the Net

1.1 People on the Move:

Please email:  people@netsuds.com to report a change in your job status if you are moving from or to a company in the "com or .com" space. 

Charles Berkowitz has joined Onvoy as its Chief Marketing Officer.  You may reach Charles at charles.berkowitz@onvoy.com.

NetSudser Alex Dietz has re-joined ADC in the VoIP Telephony Test Group.  Alex had been down-sized from ADC in 2001.  You may reach Alex at alex_dietz@adc.com. 

NetSudser Tom Kieffer is back as CEO of Agiliti, after a 6-week leave when Steve Giese was CEO.  Steve is believed to have taken the job as CEO of World Data.

Fourth Generation acquired Catapult Technologies on March 20.  Fourth Generation is a custom software development company.  Catapult Technologies is also a custom software development company specializing in mobile and wireless platform development, e.g. Palm and cell phones.  For more information, contact Bob Musselman at either 651.767.8450 or bmusselman@fourthgen.com or visit http://www.fourthgen.com/news_032102.html

2.0 Jobs in the "com and .com" Market

Please email:  jobs@netsuds.com to report job openings in the   "com and .com" Market.  In the body of the message, give the name of the company and a URL link to the job postings.

*    ObjectFX - http://www.objectfx.com/joblist.asp
*    ADC - http://www.adc.com/Careers/index.jsp
*** alwaysBEthere - http://www.alwaysbethere.com/jobs/
*** CNT - http://www.cnt.com/careers/opportunities.asp

People who view the calendar will view it for free.  For those who want an account so that they can post their events or press releases, the service will cost $100 for 2002 for each calendar. 

Those who now have an account for posting their events to the Calendar include:

Oh, the calendars.  You can use the calendars right now by clicking here or on the word calendar below.

Take me to the Calendars now!

4.0   Tidbits

5.0  Schedule of Events

You can also try our new online calendar by clicking here.

5.1 - Minnesota               

5/8-9  Minnesota Venture Capital Conference - Minneapolis
          http://www.mnvcc.com/

5/8     NetSuds Evening Gathering - Minneapolis
          http://www.netsuds.com/netsuds/

6/12   MedicalSuds Evening Gathering - Golden Valley Country Club
          http://www.medicalsuds.com/eg/

5.2 - Outside Minnesota

4/11    NetSuds Evening Gathering - Raleigh, NC
           http://www.netsuds.com/rdu/eg/

4/30    NetSuds Evening Gathering - Pleasanton, CA
          http://www.netsuds.com/sv/

5.3 - Non-NetSuds Events

4/10   American-Swedish Chamber of Commerce Luncheon - Minneapolis, MN
         Guest Speaker - Matt Noah, NetSuds - "Innovation Beyond Geography"
         http://www.sacc-minnesota.org/luncheon.html

John M. Morrison Center for Entrepreneurship, house on the Minneapolis campus of the University of St. Thomas, offers a number of special outreach/lifelong learning programs with Just-In-Time information.  Visit http://www.stthomas.edu/entrep/programs for a calendar of events.

6.0  Minnesota Venture Capital Conference

The MNVCC/BETS is being held in conjunction with the Strictly Business Expo - www.strictlybusinessexpo.com being held at the same place at the same time. For those companies wanting to exhibit at the Strictly Business, contact me. All exhibit space which is referred by NetSuds for the Expo qualifies for free exhibit space at a future NetSuds event.

7.0  Strictly Business Expo - May 8-9, 2002

8.0  Location-Based Services - Switzerland

From the pulver.com Location-Based Services Report.  To subscribe to the Report, visit http://pulver.com/lbsreport/subscribe.html or email lbs@pulver.com

The Orange Switzerland LBS venture was launched on the December 18, 2000. It is WAP based and uses cell ID location technology. There is no extra charge for LBS usage. Revenues are generated from the additional airtime that subscribers use to access these services. The web access to the services is available at http://wap.orange.ch.

9.0  ADC CEO Is Wrong

By Matt Noah

{Note:  I invited ADC CEO Richard Roscitt to co-author a point-counterpoint article with me but the ADC PR department declined the offer.}

ADC CEO Richard Roscitt wrote an opinion piece in the March 4 Minneapolis Star-Tribune entitled "Broadband - Adrenaline for an anemic economy."  I found it very self-serving, short-sighted and ... just plain wrong.  The truly frightening aspect of it is that it may actually get adopted as public policy because it caters to the powerful lobbying interests of Washington, D.C. and the overbloated and antiquated former Regional Bell Operating Companies (RBOCs).  It would help the BOCs, the equipment makers like ADC and the politicians who would benefit from the steady stream of campaign contributions for their re-election campaigns.  All at the expense of taxpayers who would get the short end of another DC deal.

It's tough to dispute what Mr. Roscitt laid out without actually quoting him here and writing a rather lengthy article.  I'll quote his comments in italic and place mine regular font.

The promise of broadband -- to transform our nation's communications for greater productivity, efficiency and enjoyment -- hasn't changed. But according to the industry analyst group Kinetic Strategies, fewer than 10 percent of Americans benefit from broadband service today. Sadly, the promise of broadband technology remains largely just that, a promise.

OK, I'll agree but also point out it was the anti-competitive practices of the RBOCs who killed many of the DLECS and CLECs through their non-compliance with the 1996 Telecom Reform Act.

The tortoise-like deployment of broadband might be merely a curiosity were the technology not critical to the country's continued growth, prosperity and international competitiveness. But broadband clearly is crucial. If its potential is fully realized, historians someday may rank broadband among our nation's most transforming technologies, in league with electricity, the interstate highway system and the automobile.

Oh my.  Broadband is nice and useful but CRITICAL to our country's growth, prosperity and international competitiveness!  Face it, nearly 100% of businesses can get broadband today if one defines broadband as T1 or higher.  Cost may be an issue but it is available.  It's in the residence that it is not widely deployed because of cost and availability.  If you ask anyone on a street corner what is CRITICAL to our country's growth, prosperity and international competitiveness, Rick Roscitt may be the only American who answers "broadband".

If its potential goes unrealized, broadband will represent a missed opportunity of grand proportions. According to the Brookings Institution, widespread adoption of true broadband could have a potential $500 billion impact on the U.S. economy. Already, its delay is denying U.S. businesses potential productivity and efficiency gains at a time when growth and cost-containment are their most pressing priorities.

What is the $500 billion impact?  The money which would be made by service providers like the RBOCs, the equipment vendors like Cisco, Lucent and ADC or some other entity?  Or is the tax incentitives John Q. Public would have to pay to subsidize the telecom industry so they can make profits?

In recent months, leaders of our country's top technology and telecommunications companies have joined in a single pursuit: to boost the deployment of broadband. On Wednesday, I will join other CEO members of the industry advocacy group TechNet group in Washington, D.C., to call on President Bush and the nation's chief policy-makers to make broadband deployment a national priority. In those meetings, we will outline national policy that could spur broadband's installation.

There is reason to seek government intervention but that intervention should be to break up the RBOCs in to at least two entities; (1) a local loop company that deals only with connectivity and (2) a service provider company which has fair access to the custeromers at the end of that loop but no greater access than any other service provider, e.g. Onvoy, Enventis Telecom, Allegiance, XO Communications, Integra Telecom, etc.

But for an ADC, Cisco or Lucent CEO to suggest that would be to make an enemy of its major customers, the RBOCs.  That is why none of them are brave enough to speak the truth.  But if ALL of them were to speak the truth, and the RBOC-saturated lobbyists and elected officials were to admit the truth, everyone would benefit from the true competition which would ensue.  More on this later.

Timing is crucial

Without steps to quickly deploy broadband, the United States could be at a disadvantage globally. Almost all other developed nations are racing ahead to provide high-speed links. Japan's next-generation broadband capability is expected to reach every home and business by 2005. In South Korea, broadband penetration stands at 96 percent, according to a December report in CIO Magazine. And China has adopted a $151 billion, five-year investment in telecommunications focused on extending high-speed connections.

The "scare".  Give us the money or the country gets hurt.  I'm personally not too concerned about South Korea surpassing us as a global economic power.  And if the USA were in a race to deploy broadband to every home, I want fiber, not the cable, wireless or copper products which ADC currently provides.

Yet here at home, broadband capability may not be widely available until well after 2010, according to industry projections. Next-generation broadband, featuring even faster speed and more capacity, isn't expected to reach most Americans for perhaps decades. Without a concerted effort on the part of the telecommunications industry and government to extend broadband's reach -- a man-on-the-moon type of effort -- the United States could be seriously handicapped in an ever-more-competitive global marketplace.

How would the USA be seriously handicapped?  Seriously.

So what's the holdup?

Pared to its core, the delay is tied directly to the current and long-term outlook for profitability of the cable and telephone companies that control most of the broadband market as well as the wireless and digital satellite companies that look to become major providers. Without profitability, these carriers will be hard-pressed to build out and service their broadband networks, much less keep pace on next-generation technology.

Bingo!  If people wanted broadband at the prices the RBOCs and MSOs (cable) were currently charging, deployment would happen without government subsidies.  But most RBOCs can't figure out how to cost-effectively deploy DSL to residences.  And they are absolutely terrified by IP Telephony over broadband; as well they should.  IP Telephony over broadband allows residential customers to easily choose a different service provider.  But the MSOs are racing to provide digital cable, IP Telephony over cable and all manner of voide, video and data over cable.  Perhaps when more people choose cable for their telephone seervice, the RBOCs will "get it".

Industry losses during the past two years and massive devaluations of some of the key players have been anything but ordinary, leaving a number of them bankrupt and making it difficult for survivors to muster the capital and shoulder the investment needed to extend broadband's reach. For advocates of its rapid deployment, the timing of the telecommunications industry's implosion could hardly have been worse.

The taxpayer's should not be forced to bail out Qwest, Verizon, SBC or any other telco when those same telcos have driven dozens of CLECs and DLECs from the market.  Bailing out the stumbling Goliaths of an industry makes them less efficient and burdens the taxpayers.

Given broadband's critical importance to the economy and the industry's currently dismal circumstances, unusual measures are required if we are to soon see the technology deployed. Those measures center on ensuring carrier profitability through an unprecedented level of cooperation and collaboration on two fronts: government and the industry -- and among the service carriers and their equipment and software suppliers.

Broadband's critical importance has not gone unnoticed in Washington. Senate Majority Leader Tom Daschle, D-S.D., has declared that making "broadband service as universal tomorrow as telephone service is today" will be one of his top economic priorities. Just last week, the House of Representatives passed the Tauzin-Dingell bill, which now will go to the Senate. This bill attempts to relieve carriers of some of the rules that currently hinder broadband investment. As of yet, however, the United States lacks a national broadband policy of the type adopted by Canada and South Korea that has been cited for advancing those nations' high-bandwidth deployment.

Sen. Daschle has no idea how much money would be required to back up his words.   I know he likes to spend other people's money but I thought he didn't like to line the pockets of "Big Business" such as "Big Telco".  I would like to know the laws or rules which need to be modified so that broadband investment will not be hindered.  Are these the competitiveness laws which tend to encourage competition?

Important points

Here are the issues that policy-makers and the Federal Communications Commission (FCC) must address to hasten the rollout of broadband services:

• The United States should encourage new investment in broadband networks through tax incentives, especially for deployment of broadband to under-served communities and to accelerate development of next-generation services. Tax incentives for broadband, for example, would immediately aid carriers in moving ahead with deployment. Each of these incentives should be tied to deployment schedules and only paid out when those schedules are achieved. Longer-term, the payback would come as business expands through its use of more efficient broadband service.

• We urge policymakers to continue to exercise regulatory restraint with respect to broadband applications and services. The applications and services emerging for the broadband environment are just beginning to take shape. We should not limit this innovation by unnecessary and stifling regulation in this formative stage. For example, TechNet recommends that new telephony-company broadband investments and new advanced cable services such as voice over Internet protocol be subject to minimal regulation. We also support industry efforts to unleash digital content, increasing the availability of music, high-definition video and movies via the Internet.

• In setting a national policy, government should recognize that competition will come from several sectors, including cable, DSL, wireless and digital satellite. We should move toward creating a level playing field of cable, telephony, wireless and other service providers -- all of which now are subject to vastly different sets of rules and regulators. Recent actions by the FCC and Congress are helpful. However, we are a long way from achieving a regulatory climate that will encourage investment in broadband and also recognize the role that competing cable, wireless and telephony technologies will play in bringing consumers choice and competitive prices.

• We ask that states and localities promote streamlined laws and regulations that encourage broadband deployment. Too often, state and local governments are obstacles to rolling out broadband. In Minnesota, there are significant portions of the state, both rural and metro, where opportunities for economic development and education are being missed and where regulatory reform could prove beneficial.

A "tax incentive" is a reduction in the taxes paid.  Mr. Roscitt advocates tax breaks for service providers.  I'm sure the service providers like the idea of a government subsidy to ensure profitability.  I think Ralph Nader calls it corporate welfare.  In his second point, I think Mr. Roscitt makes good sense with a hands-off approach to the taxation of IP Telephony and other forms of new service.  I also agree with his third point in treating the local loop access methods equally.

In addition to regulatory reform, the Ventura administration is working on a Broadband Access Availability Act and a Minnesota Internet Initiative that seek to spur broadband deployment in Minnesota. While there should be a healthy debate about the specifics of such proposals, I applaud the administration for leading on this issue and seeking a solution.

• Finally, national broadcast spectrum policy should ensure that wireless thrives in the market and extends broadband services to rural communities. The full potential of wireless technologies will not be reached until the United States develops spectrum-management policies that make spectrum available for broadband services. We strongly advocate the use of market-based approaches to allocate spectrum to the highest-value commercial applications.

No comment on what the Ventura administration is doing.  They might not be around come January 2003 and this is policy which extends beyond that by quite a bit.  I also agree with Mr. Roscitt on wireless spectrum.

Broadband's potential is all about economic growth, jobs, global competitiveness and social development. Our international competitors already are moving fast to implement broadband, and the United States risks industry, education and jobs if we fall behind. The president and our national policymakers should move quickly to establish a national broadband plan that includes tax incentives for broadband deployment, more limited regulation and a level playing field for cable, wireless, telephone and satellite service providers.

Stop the scare tactics and let's get to the heart of the matter.  ADC needs more sales and tax subsidies for its major customers - the RBOCs - might help ADC sales.  Broadband is very cool and I am one of those people that pay for it because I find it very useful.  I have a 128K ISDN line and cable modem at home, a T3 at work and DSL at my lake cabin.  I run IP Telephony.

The real solution to the telecom issues of our day is the break-up of the RBOCs in to two entities; not tax subsidies to Big Telco.  Lobbyists and elected officials might like the subsidy route because their buddies in Big Telco will reward them with ammunition in their re-election campaigns.  So don't be surprised if your taxes increase to pay for the broadband you weren't willing to pay for before based on market economics.  And you'll still have the problem of having just one service provider to call on for local phone service.

On the other hand, if you want true competition and are willing to go a few rounds in the ring, push for the break-up of the local loop.  The RBOCs have a much more powerful monopoly on the local loop than Microsoft has on the Operating System.

10.0  Is your Data Center Facility Up to Par?

By NetSudser Craig Schmidtke, craig.schmidtke@agiliti.com

What is your disaster recover plan?  How often do you test it?  What kind of redundancies do you have in place?  How will you provide 7x24 support? What capacity are you currently running at?  How do you manage capacity?  What technical skills do you possess? What system and facilities monitoring capabilities do you have?

If you are an Information Technology (IT) or Data Center Operations Manager, chances are you’ve got these questions before.  Get used to it.  The ‘sobered’ IT economy has entered a new chapter.  No longer will technology consumers be threatened by the infinitely complex world of IT.  These consumers are demanding to ‘take control’ of their technology rather then being held hostage by it.

So does this mean that we have seen the end of the technology craze?  “Absolutely not, we haven’t seen anything yet”, say Tom Kieffer, Chairman of Agiliti, Inc.,  a Hosting and Managed Services provider located in Bloomington, MN.  “IT has simply been put into its place.  The trend is that IT is going to be the next utility; Transparent and available anytime, anywhere.”

So what kind of pressure does this put on the facilities that support IT?  A LOT.  Data center facilities around the world are undergoing rigorous audits to assess their true capabilities and vulnerabilities to meet the escalated demands of its stakeholders.  All in an effort to support this ‘Utility’ trend

Is your data center facility up to par? 

If not, there are a few approaches to addressing this problem.  A short-term, tactical approach allows you to expand your capabilities, as needed, one element at a time.  A long-term, strategic approach involves major facility enhancements across multiple elements or a brand-new facility construction project.  Finally, outsourcing IT represents a growing trend as business leaders learn the hard truth about the costs and complexities involved with building and managing a mission critical data center facility. 

Short-Term/Tactical Approach:

These approaches usually address a single element within the facility at a time.  For example, you may need to add more cooling capacity with additional air conditioners or maybe add some electrical redundancy by adding another UPS module.  Regardless, these enhancements involve little or no downtime to the customers and are often accompanied by an acceptable level of vulnerability during the project.  Drivers for this type of approach usually involve one of the following:

• Changes in customer requirements.

• Addressing single-element capacity issues.

• Maintenance to degraded systems.

Short-term, tactical solutions usually fall within established budgets and should not result in unexpected capital expenditures. 

Long-Term/Strategic Approach:

This approach involves conducting major upgrades to an existing facility or constructing a new one.  A large amount of planning and preparation is required to ensure that timing milestones are met, costs stay within budgets, and downtime is minimized.  Often these large-scale projects require complicated migration efforts once the project is complete.  Drivers for this type approach include the following:

• Required infrastructure to support new products or services.

• Serious capacity problems within a current data center facility across multiple elements that render a short-term, tactical approach ineffective or more costly then building new.

• Need to support custom facility capabilities.

Due to the capital expenditures required, long-term, strategic approaches to mission critical facilities must adhere to and support the strategic direction of the organization as a whole.

Outsourcing:

More and more business leaders and IT managers are coming to the conclusion that building and supporting a mission critical facility requires more resources than they can afford.  This has raised the popularity of IT outsourcing firms.  Infrastructure service providers, or data center providers, are able to gain valuable economies of scale by spreading their costs out across a large number of systems and customers.  This allows them to meet a customer’s data center facility requirements for less then customers could do it for themselves.  Many of these infrastructure providers also offer managed technical services such as design and implementation services, system monitoring and reporting, and on-going technical operation services.  Some of the main drivers for outsourcing are:

• High costs of building & managing mission critical facilities.

• Customer-conscious IT support staff.

• Specialized services & skill-sets that are available ‘on-demand’ from outsourcing firm. 

Another advantage to outsourcing approaches is that they are usually billed on a monthly basis, thus, not requiring a large, one-time capital outlay that may cause cash-flow problems. 

Conclusion

So which option is right for you?  There is no quick answer to this question.  It will take some work to understand your specific requirements and choose the right approach.  However, there is one element that will never change and that is the significance of talking to the experts.  Work with organizations and individuals that have relevant experience to help you understand the implications of the various alternatives.  It could be the most important decision you make towards supporting your mission critical business.

11.0  Guest Writers for This Report

I have opened up the Monthly NetSuds Report to guest writers. If you have a passion for a topic, and you can write (at least no worse than me), send an email to me matt@netsuds.com.  You can even send copies of your work.  It needs to be on "com and .com" topics and can include entrepreneur/investor activities.  Good information from our    service providers and vendors is also welcome so long as it is not a "commercial" for any one company or individual.

We will consider both sponsored and unsponsored columnists and guest writers.

If you are aware of others who would like to receive the NetSuds Report, ask them to visit http://mailman.netsuds.com/ to subscribe or unsubscribe.

Please send your comments and feedback regarding this issue of the NetSuds Report to matt@netsuds.com.

Matt Noah

980 Lake Susan Hills Drive
Chanhassen, MN  55317

612.279.2154
fax:  425.795.2019
matt@netsuds.com

© 2000, 2001, 2002 NetSuds.com™, Inc.  All Rights Reserved.

↓↓↓↓