Partners likely to set de facto standards

Although the race to install high-bandwidth wiring (the “highways”) has occupied most everyone’s attention over the past couple of years, the wiring and switches are only part of the overall system. The servers, communication protocols, security, accounting and user terminals are all equally important — and equally challenging to implement.

While the telcos and the cable companies battle over who is going to re-wire the nation, a host of computer firms are battling over who will provide the key network software. As has occurred in previous computing markets from mainframes to personal computers, only a small number of hardware and software standards will survive. The company or companies that lead the market and consequently set standards will be in the catbird’s seat.

Recent partnership agreements between a newly formed Bell Atlantic subsidiary and its network service providers indicate that the race to discover just exactly which companies will take positions of prominence — has begun in earnest and Bell Atlantic is in the lead.

WHO PROVIDES ‘ASPHALT’ FOR SUPERHIGHWAY?

In what will certainly become a standard practice for regional phone companies, Bell Atlantic recently founded a separate Video Services subsidiary to develop interactive services for its proposed broadband network.

Although other companies will be free to compete with Bell Atlantic Video Services — Digital Equipment and USA Video have already announced their plans to do so — we believe BVS, as the subsidiary is called, is likely to start out with a tremendous advantage in terms of capital, name recognition, access to customers and intimate knowledge of the network.

It is probable, therefore, that BVS will set the key de facto standards for anyone who wants to provide competitive interactive services over the entire BA network and/or anyone who would like to provide user terminals that connect to this network.

Oracle, NCube chosen. On January 11, the BA subsidiary announced that it will employ massively parallel video servers provided by Foster City, CA-based NCube, settop boxes provided by IBM Corp. and two consortia, and system software from Oracle Corp.

Of these, it is the Oracle software that is most important because the server software and network protocols comprise the “heart” of an interactive broadband system.

ORACLE PROVIDES END-TO-END SOFTWARE

Oracle, which is the dominant worldwide supplier of SQL database systems for large-scale corporate applications, will provide its Media Server software for BA’s interactive broadband services, known as Stargazer. Starting in the second quarter of this year, Bell Atlantic plans to install network servers built around new versions of Oracle’s database software.

We believe that this decision effectively determines a good portion of the software architecture for the entire Bell Atlantic system. As noted above, other companies can compete with BA Video Services by offering their own systems using their own protocols, but it is more likely that BVS’s competitors will prefer to be compatible with BA Video Services so that their servers could be accessed interchangeably with the BVS servers.

Creating standards. This means that any competitors to BVS will either have to buy their server software from Oracle or buy it from another company that guarantees its software will work flawlessly with the protocols established by Oracle and BVS. We are certain that Oracle and BVS will publish the interface specifications. But even so, this will put Oracle in a very enviable position.

At the other end of the pipe, there will have to be software in the user terminals that will “talk” the language of the network. Presumably, competing companies that had the Oracle/Bell Atlantic specifications could build this software into their own terminals. However, it is almost certain that Oracle will provide the initial software itself to ensure that everything works together.

Lingua franca of BA’s network? Thus, for all practical purposes, Oracle system software and Oracle network protocols are likely to become the de facto lingua franca on the Bell Atlantic broadband network. The companies that provide equivalent software for other telco or cable systems will have a similar advantage on those systems. Theoretically, we could end up with a complete mess with different software and different network protocols used on every different regional system. However, it is more likely that the market will eventually shake out to a small number of players and protocols.

Beyond the BA deal. The Bell Atlantic deal puts Oracle in a good position to be one of those elect few companies. Bell Atlantic is well aware of this and does not want to be left out. As part of the deal, the two companies have formed an alliance management committee “to pursue joint marketing opportunities and the development of additional services.” These will include joint ventures to provide services and cooperative efforts to sell technology to other phone or cable companies. The deal is not exclusive, however, so either partner can sell to whomever it pleases.

WHAT MAKES A VIDEO SERVER?

A half-dozen years ago, Oracle president Larry Ellison became convinced that large-scale computing for the future would be done on massively parallel computers made up of thousands of semi-autonomous microprocessors. He became so convinced, in fact, that he personally bought a controlling stake of an innovative start-up company, NCube, and ordered Oracle’s programmers to make its database software run on NCube and other massively parallel computers.

Lots of data, fast. Originally these machines were intended for large-scale scientific calculations and large corporate databases. Now it turns out that they are exceptionally well-suited as interactive video servers. (It is a fallacy to think a media server needs to do much computing. What it does need to do is transfer massive amounts of data at very high speeds. A massively parallel computer turns out to be an excellent way to do this.)

In the NCube design, each processor can transfer data independently rather than sending all data down a common bus. NCube claims that the NCube2, which will be used in early Media Server installations, will deliver digital video on-demand to 20,000 simultaneous users. The NCube3, promised for early next year, is supposed to be three times as powerful.

A video server technology first. Bell Atlantic has chosen a combination of more conventional symmetrical multiprocessor (SMP) and massively parallel NCube machines as its server hardware. As far as we know, it is the first telco or cable company to select massively parallel computers for its servers. Most of the other implementations announced thus far will rely on a number of smaller SMP computers.

Oracle says the first implementation of its Media Server software will be for the NCube. After that, it will port the software to other massively parallel computers and — if there are customers who commit to buy it — to conventional computers as well.

NEW ENTRANTS IN SETTOP BOX RACE

Bell Atlantic Video Services has also broken new ground in its initial selection of companies to provide settop boxes. The companies that dominate the existing cable business — General Instrument and Scientific Atlanta — did not make the list, nor did any companies proposing adaptations of existing computer or game platforms.

PowerPC implementation. The user terminals delivered in 1994 will be based on a Motorola 68000-series processor with 2 to 5 MB of memory and MPEG II digital video decompression. Starting in 1995, the boxes will use a more powerful RISC processor. This will be a new PowerPC 4XX version of the IBM/Motorola PowerPC. PowerPC 600 family processors are used in IBM workstations, the next generation of Macintosh computers and one of the settop boxes to be supplied by Scientific Atlanta. The 4XX series chips integrate more functions onto a single chip and are designed to be used as integrated embedded controllers in much less expensive devices.

BVS has selected three vendors to supply the user terminals: IBM; a partnership of Philips Digital Videocommunications of Knoxville, TN, and Compression Labs of San Jose, CA; and a consortium consisting of Divicom of Milpitas, CA, Adaptive Microware of Fort Wayne, IN, and Eurodec of Paris. (No details on the intelligence or cost of delivery for the three user terminal devices were released.)

THE NEXT COMPUTER INDUSTRY

In tandem with their race to re-wire their service areas, the regional phone companies are all going to be doing what Bell Atlantic has done: Establish an interactive video service subsidiary that will provide both interactive services and user terminals to access those services. In fact, Pacific Bell has already done so.

While the cable companies are pre-occupied with trials that will prove the concept and help determine which kinds of services are commercially interesting, the phone companies suddenly find themselves in a position to plunge right into full deployment. They are, therefore, looking for systems that they believe they can roll out very quickly.

Jockeying for position. If they are successful, we believe that the telco service subsidiaries will end up establishing at least one set of de facto standards for their respective networks. It is also possible that these subsidiaries could create the de facto nationwide standards. Just as it is unlikely that very many standards can co-exist on the same network, so it is unlikely that very many different standards can co-exist on competing networks. (Someone who wants to provide a nationwide service is not going to want to program 15 different implementations of that service to cope with different standards on different systems.)

The race to provide these early systems will therefore be intense and hotly contested. Look for a lot of activity in this arena in coming months as ambitious companies, including AT&T, IBM, Digital Equipment, Silicon Graphics, Sun Microsystems, Microsoft and Oracle jockey for position at the start of the next computer industry.

Jonathan Seybold