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Packet switching services and equipment
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Voice compression technology: developments, market opportunities BCC, USA (1985) $1750 According to this study the market for compression equipment in 1985 is projected to be $346 M, an increase from $180 M in 1984. By 1993, sales of component and end user equipment are estimated to be $790M, representing an average annual growth rate of 11% over the period. The growth of individual equipment markets will be uneven, or staggered over the period, since the industry will be characterized by a large number of product entries during the mid-to-late 1980s, and because of the products now in R&D. Individual product categories will have dollar market growth rates ranging from -9% to 40% annually from 1985 to 1993. The availability of lower cost components and equipment with enhanced networking features, together with new digital voice standards will increase demand for these products. The report concludes that unit sales will increase greatly for component equipment (digital signal processors and codecs) over the period as more applications develop for adaptive differential pulse code modulation (ADPCM) and other low bit rate voice equipment. Unit prices, however, are expected to drop steadily for both end user and component equipment as more manufacturers introduce products -although certain classes of compression gear will resist price declines better than others. Selected equipment types will undergo dramatic sales increases as prices drop. For example, as transcoder prices decline, the regional BOCs and other independent telephone companies are expected to introduce compression technology and services to their networks. The report observes that the near term markets for producers of ADPCM-based hardware are in route relief (selected common carrier routes) and in bypass (corporate) telecommunications networks.
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The report states that the outlook for compression markets in the 1990s hinges on ISDN standards. Digital voice transmission standards are now being evaluated. The final choice of 64 Kbit/s (PCM) or 32 Kbit/s (ADPCM) for digital conversation has fundamental architectural implications for telecommunications service providers and for designers of switch and transmission equipment. ADPCMcompressed voice signals provide significant bandwidth savings with little sacrifice of voice quality. However, limitations on the number of permissible back-to-back conversations (from analogue to digital signals) complicate ADPCM's use in public telephone systems. The distribution aspects of the compression equipment industry are of extreme importance and interest. International markets for analogue TASI, TDMA satellite gear and T1 multiplexers are growing strongly and to participate in this overseas growth, small firms have set up international offices, built distributor networks abroad and licensed their technology for manufacture and sale by larger companies. The use of OEM's or original equipment manufacturers,
which resell equipment under their own names, is especially common among T1 multiples manufacturers. Some of these manufacturers are reported to supply as many as six OEM's for their equipment. Larger US electronic firms have been eager to resell other companies' T1 multiplexers to gain sales to corporations while avoiding the product development expenses necessitated by fast changing product technology. Small firms, for their part, have been seeking U.S. distribution agreements with the Regional BOCs and large independent telecommunications companies whose equipment selling subsidiaries are expected to become a significant sales outlet for transcoders and multiplexers. The report concludes that new entries to the industry will vary in number and size according to the type of equipment. Producers of end user equipment such as T1 multiplexers will soon include elctronics conglomerates although there is still room for small ventures in this industry. Codecs and other components will be produced by traditional telephone equipment makers and semiconductor manufacturers, particularly Japanese firms. Finally, certain manufacturers will phase out analogue compression products in favour of digital devices. (Business Communicat/ons Company, 9 Viaduct Road, Stamford, CT 06907, USA. Tel: (203) 325-2208) []
Packet switching services and equipment IRD, USA (1985) $2300, 179 pp Revenues from packet-switching services in the USA approached $600 M in 1985 and will be ten times as high in 1995. So states this report, which analyses expected user requirements for transmission of data, image, text and voice, and concludes that much of the future growth in data transmission will be absorbed by the packet services, rather than by increased use of leased-line data networks.
Although the packet-switching market has grown dramatically over the past ten years, the overall growth of data transmission revenues has been very slow during that time. As a percentage of overall transmission service revenues, data transmission represents about 15% today, which is about the same figure as in 1975. Growth in data transmission revenues has paralleled the 3-4% per year growth in voice transmission, but
computer communications
while revenue growth has been sluggish, the actual quantity of data transmitted has grown more than tenfold. This seeming contradiction is explained, accordingto the report, by three major factors: • the doubling in the data transmission speeds used in IBM SNA-type leased networks, and also in typical asynchronous ASCII-type transmission, • the transfer of many large data customers to packet-switching, across both public and private networks, which in some cases has resulted in ten times as much data transmission capability per dollar spent on transmission, • the improved efficieny of newer IBM data communications protocols (SDLC, etc.) as compared with the binary synchronous communications techniques in widespread use ten years ago.
All of the same factors are expected to prevail over the next ten years and, according to the report, will allow users to obtain a further tenfold improvement, on average, in data transmission per dollar. There will also be a massive transfer of data traffic to leased wideband facilities (particularly T-I) and packetswitched facilities, away from leased voice-grade networks. A major factor in the speed of this transfer will be IBM's expected upgrading of its Systems Network Architecture (SNA) to better accommodate X.25 and T-1 transmission. If present trends were to continue, the report estimates that total data transmission revenues would actually decline to about 13% of transmission by 1995 from the current 15%, with much of the revenue transfer coming out of leased-voice grade facilities. According to the report, the lesson of the past ten years is that users are willing to spend lots of money on
Distributed process control in Europe Frost and Sullivan, UK (1985) $2 200, 335 pp The supervision and coordination of the many controllers dispersed around plants is virtually impossible for plant operators to monitor. Computers solved this problem with distributed processor controllers. The applications of digital data communication techniques make it possible to connect widely-separated system components; which in tum has led to distributed process control systems. In Europe, this type of system is gaining popularity. This report projects that the market will reach a value of $690M in 1990, more than doubling 1984's $320M market. According to the report distributed control systems are essentially network-oriented multitask control systems where tasks are distributed functionally at several levels of hierarchy. The tasks may be distributed geographically as well. This means that the control system structures are decentralized; either hierarchically or geographically. The basic features of such a system
vol 9 no 1 february 1986
include: a network linking together various functional elements; a CRTbased operator workstation; a microprocessor-based multi-loop controller configurable so the user can select appopriate functions; and integration of continuous control, batch control, data acquisition, supervisory control, and management information in a single system. The distributed process control system has taken hold particularly in the Western European chemical and petrochemical industry. This sector is by far the largest user of distributed process control systems, with a demand of nearly $101.7 M in 1984. Demand is expected to reach $213.8 M by the end of the decade, growing at a healthy 13.2% average annual rate. Through the end of the forecast period, this sector will still be the largest, although it will decline to account for an overall from 32% to 31% of the total European market. One of the fastest growing sectors for microprocessor controlled
faster modems, multiplexers, packet nodes and other hardware, in order to reduce their spending on leased transmission channels. While spending on transmission has increased only slightly over ten years, the market for data communications hardware has skyrocketed. The entry of telephone companies particularly the ex-Bell operating companies into packet-switching is explored in some depth in the report. There have been some fears that the new packet services from the BOCs would result in market overcapacity, and would dilute the revenue potential of services from GTE Telenet and Tymnet, for example. But the study does not expect a major push by the BOCs into Inter-LATA services, unless the regulatory and judicial picture changes considerably. (International Resource Development Inc., 6 Prowitt Street, Norwalk, CT 06855, USA. Tel: (203) 866-7800; Telex 64 3452) []
processes during the forecast period will be the food and beverage market. This sector will grow at a 15.6% rate between 1984 and 1990, and reach a market value of $49.1 M by the end of the decade, more than doubling 1984's $26.8 M market. Distributed control systems reviewed in the report include systems used in continuous and batch processes, but not manufacturing processes. The analysis in the report is carried out both by industry and by country with specific sections on West Germany, France, the United Kingdom, Italy, the Netherlands, and Belgium. These six countries together represent nearly 85% of the total West European market for distributed control systems. Industries covered include the chemical and petrochemical industry, petroleum refining, power generation, primary metals industry, pulp and paper, and the food and beverage industry. There is also a supplier analysis featuring profiles of the leading suppliers. (Frost & Sullivan Ltd., 704112 Marylebone Lane, London W l M 5FU, UK. Tek 01-935 3190) []
35
o ~
~ w
v v
w ~q~l.
Voice compression technology: developments, market opportunities BCC, USA (1985) $1750 According to this study the market for compression equipment in 1985 is projected to be $346 M, an increase from $180 M in 1984. By 1993, sales of component and end user equipment are estimated to be $790M, representing an average annual growth rate of 11% over the period. The growth of individual equipment markets will be uneven, or staggered over the period, since the industry will be characterized by a large number of product entries during the mid-to-late 1980s, and because of the products now in R&D. Individual product categories will have dollar market growth rates ranging from -9% to 40% annually from 1985 to 1993. The availability of lower cost components and equipment with enhanced networking features, together with new digital voice standards will increase demand for these products. The report concludes that unit sales will increase greatly for component equipment (digital signal processors and codecs) over the period as more applications develop for adaptive differential pulse code modulation (ADPCM) and other low bit rate voice equipment. Unit prices, however, are expected to drop steadily for both end user and component equipment as more manufacturers introduce products -although certain classes of compression gear will resist price declines better than others. Selected equipment types will undergo dramatic sales increases as prices drop. For example, as transcoder prices decline, the regional BOCs and other independent telephone companies are expected to introduce compression technology and services to their networks. The report observes that the near term markets for producers of ADPCM-based hardware are in route relief (selected common carrier routes) and in bypass (corporate) telecommunications networks.
34
The report states that the outlook for compression markets in the 1990s hinges on ISDN standards. Digital voice transmission standards are now being evaluated. The final choice of 64 Kbit/s (PCM) or 32 Kbit/s (ADPCM) for digital conversation has fundamental architectural implications for telecommunications service providers and for designers of switch and transmission equipment. ADPCMcompressed voice signals provide significant bandwidth savings with little sacrifice of voice quality. However, limitations on the number of permissible back-to-back conversations (from analogue to digital signals) complicate ADPCM's use in public telephone systems. The distribution aspects of the compression equipment industry are of extreme importance and interest. International markets for analogue TASI, TDMA satellite gear and T1 multiplexers are growing strongly and to participate in this overseas growth, small firms have set up international offices, built distributor networks abroad and licensed their technology for manufacture and sale by larger companies. The use of OEM's or original equipment manufacturers,
which resell equipment under their own names, is especially common among T1 multiples manufacturers. Some of these manufacturers are reported to supply as many as six OEM's for their equipment. Larger US electronic firms have been eager to resell other companies' T1 multiplexers to gain sales to corporations while avoiding the product development expenses necessitated by fast changing product technology. Small firms, for their part, have been seeking U.S. distribution agreements with the Regional BOCs and large independent telecommunications companies whose equipment selling subsidiaries are expected to become a significant sales outlet for transcoders and multiplexers. The report concludes that new entries to the industry will vary in number and size according to the type of equipment. Producers of end user equipment such as T1 multiplexers will soon include elctronics conglomerates although there is still room for small ventures in this industry. Codecs and other components will be produced by traditional telephone equipment makers and semiconductor manufacturers, particularly Japanese firms. Finally, certain manufacturers will phase out analogue compression products in favour of digital devices. (Business Communicat/ons Company, 9 Viaduct Road, Stamford, CT 06907, USA. Tel: (203) 325-2208) []
Packet switching services and equipment IRD, USA (1985) $2300, 179 pp Revenues from packet-switching services in the USA approached $600 M in 1985 and will be ten times as high in 1995. So states this report, which analyses expected user requirements for transmission of data, image, text and voice, and concludes that much of the future growth in data transmission will be absorbed by the packet services, rather than by increased use of leased-line data networks.
Although the packet-switching market has grown dramatically over the past ten years, the overall growth of data transmission revenues has been very slow during that time. As a percentage of overall transmission service revenues, data transmission represents about 15% today, which is about the same figure as in 1975. Growth in data transmission revenues has paralleled the 3-4% per year growth in voice transmission, but
computer communications
while revenue growth has been sluggish, the actual quantity of data transmitted has grown more than tenfold. This seeming contradiction is explained, accordingto the report, by three major factors: • the doubling in the data transmission speeds used in IBM SNA-type leased networks, and also in typical asynchronous ASCII-type transmission, • the transfer of many large data customers to packet-switching, across both public and private networks, which in some cases has resulted in ten times as much data transmission capability per dollar spent on transmission, • the improved efficieny of newer IBM data communications protocols (SDLC, etc.) as compared with the binary synchronous communications techniques in widespread use ten years ago.
All of the same factors are expected to prevail over the next ten years and, according to the report, will allow users to obtain a further tenfold improvement, on average, in data transmission per dollar. There will also be a massive transfer of data traffic to leased wideband facilities (particularly T-I) and packetswitched facilities, away from leased voice-grade networks. A major factor in the speed of this transfer will be IBM's expected upgrading of its Systems Network Architecture (SNA) to better accommodate X.25 and T-1 transmission. If present trends were to continue, the report estimates that total data transmission revenues would actually decline to about 13% of transmission by 1995 from the current 15%, with much of the revenue transfer coming out of leased-voice grade facilities. According to the report, the lesson of the past ten years is that users are willing to spend lots of money on
Distributed process control in Europe Frost and Sullivan, UK (1985) $2 200, 335 pp The supervision and coordination of the many controllers dispersed around plants is virtually impossible for plant operators to monitor. Computers solved this problem with distributed processor controllers. The applications of digital data communication techniques make it possible to connect widely-separated system components; which in tum has led to distributed process control systems. In Europe, this type of system is gaining popularity. This report projects that the market will reach a value of $690M in 1990, more than doubling 1984's $320M market. According to the report distributed control systems are essentially network-oriented multitask control systems where tasks are distributed functionally at several levels of hierarchy. The tasks may be distributed geographically as well. This means that the control system structures are decentralized; either hierarchically or geographically. The basic features of such a system
vol 9 no 1 february 1986
include: a network linking together various functional elements; a CRTbased operator workstation; a microprocessor-based multi-loop controller configurable so the user can select appopriate functions; and integration of continuous control, batch control, data acquisition, supervisory control, and management information in a single system. The distributed process control system has taken hold particularly in the Western European chemical and petrochemical industry. This sector is by far the largest user of distributed process control systems, with a demand of nearly $101.7 M in 1984. Demand is expected to reach $213.8 M by the end of the decade, growing at a healthy 13.2% average annual rate. Through the end of the forecast period, this sector will still be the largest, although it will decline to account for an overall from 32% to 31% of the total European market. One of the fastest growing sectors for microprocessor controlled
faster modems, multiplexers, packet nodes and other hardware, in order to reduce their spending on leased transmission channels. While spending on transmission has increased only slightly over ten years, the market for data communications hardware has skyrocketed. The entry of telephone companies particularly the ex-Bell operating companies into packet-switching is explored in some depth in the report. There have been some fears that the new packet services from the BOCs would result in market overcapacity, and would dilute the revenue potential of services from GTE Telenet and Tymnet, for example. But the study does not expect a major push by the BOCs into Inter-LATA services, unless the regulatory and judicial picture changes considerably. (International Resource Development Inc., 6 Prowitt Street, Norwalk, CT 06855, USA. Tel: (203) 866-7800; Telex 64 3452) []
processes during the forecast period will be the food and beverage market. This sector will grow at a 15.6% rate between 1984 and 1990, and reach a market value of $49.1 M by the end of the decade, more than doubling 1984's $26.8 M market. Distributed control systems reviewed in the report include systems used in continuous and batch processes, but not manufacturing processes. The analysis in the report is carried out both by industry and by country with specific sections on West Germany, France, the United Kingdom, Italy, the Netherlands, and Belgium. These six countries together represent nearly 85% of the total West European market for distributed control systems. Industries covered include the chemical and petrochemical industry, petroleum refining, power generation, primary metals industry, pulp and paper, and the food and beverage industry. There is also a supplier analysis featuring profiles of the leading suppliers. (Frost & Sullivan Ltd., 704112 Marylebone Lane, London W l M 5FU, UK. Tek 01-935 3190) []
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