- Email: [email protected]
Barriers to progress in telecommunications
325
Barriers to Progress in Telecommunications W i l l i a m S. A n d e r s o n Chairman NCR Corporation, Worm Headquarters, Dayton, OH 45479, USA
Editor's Comment This article is the printed record of the keynote address delivered by Mr. Anderson at Interface '81, a major conference in the USA devoted to data communications, on March 30, 1981, in Las Vegas, USA, Mr. Anderson discussed in his address the possibility that the USA may forfeit its leadership position in the information processing and telecommunications industries because of failure to promote international standards and greater systems compatibility. Our thanks are due to Mr. Anderson for his kind permission to reproduce his speech in this Journal. Ph. Enslow, Jr.
William S. Anderson is at present Chairman of the Board and Chief Executive Officer, NCR Corporation. His business career started 19381939, assuming the post of Internal Advisor, Hong Kong & Shanghai Hotels Ltd. After having served as Auditor with Linstead & Davis (1940-1941), Mr. Anderson was in war service from 1941 to 1945. He joined the National Cash Register Company's British organization in 1945, and has b~en Manager, NCR Hong Kong from 1946 till 1959. He then was (until 1972) Vice President, Far East and Chairman, NCR Japan. Mr. Anderson became Corporate President and Director in 1972, and Chief Executive Officer in 1973. In 1974 he became Chairman and President. Mr. Anderson was appointed Chairman of the Board in 1976. His other affiliations include Vice Chairmanship of the Advisory Council on J a p a n - US Economic Relations and of the ASEAN-US Business Council, and numerous other international and domestic advisory positions. Mr. Anderson was born in 1919, in Hankow, China. North-Holland Publishing Company Computer Networks 5 (1981) 325-330
1. Introduction When I was a young man growing up in China, someone once told me that to accept the responsibility of addressing an audience is more of an obligation than a privilege. The obligation, I was told, is to discuss challenging issues of interest and importance. When I agreed to share the privilege of keynoting Interface '81, I acknowledged that responsibility and accepted that obligation. I think we can all agree that ours is not an industry in search of challenging issues. To the contrary, we are today confronted with a number of challenges for which there are no easy answers. But all of us - users, vendors, and members of government - must face up to those challenges honestly and forthrightly. At stake is the technological and market leadership which the computer and communications industries have enjoyed for so many years. First and foremost among those challenges is the further integration o f computer and communications technologies. Meeting that challenge, as our conference theme suggests, is the pathway to greater information productivity. Unfortunately, the bridges we have built to date to link the technologies of computers and communic a t i o n s - are inadequate even f o r today's requirements, let alone tomorrow's. Clearly, the time has come to reappraise our past efforts, to decide where we must go, and to move ahead together toward that destination. How can we best accomplish that? It seems to me the starting point is to recognize that the essence o f the problem is not technological. The technologies to further integrate information processing and information transmission are readily available. But we lack coherent and consistent policies and practices to more effectively use those technologies to close the gap between our expectations and our actual achievements in combining communications of all k i n d s voice, data, text, and i m a g e - with the speed and power of computer processing. We see evidence o f this in the proliferation of networking architectures which have emerged during the
326
I¢.S. Anderson /Barriers to Progress
past several years. Computer manufacturers and carriers alike have struggled m i g h t i l y - and expens i v e l y - to surmount the transmission and interconnectability barriers which have impeded our progress into the telecommunications era. The range of 'solutions" offered is as diverse as the architects who propose them. As a result, users face a bewildering array of communication c h o i c e s - centralized host control of the network versus distributed network control; private network approaches versus public network offerings; traditional common carrier services versus specialized or value added carrier services; packet switching versus circuit switching; a n d - even more b a s i c - the choice of systems available today versus those promised for tomorrow. The shopping list is almost endless.
2. Regulatory climate becoming murkier Compounding this confusion is a regulatory climate which in recent months and weeks has become even murkier than before. Will the world's largest data communications carrier be fully deregulated, partially deregulated, or not deregulated at all? What are the policy directions of the Federal Communications Commission? Will the FCC support national and world standards? Or will it avoid the issue while every vendor continues to go his own way? And what about Congress? Will we at long last see an updating of our outmoded communications legislation, which was written before most of you in this auditorium were born? We have no firm answers to those questions. Nor are we likely to have such answers in the near future.
Unfortunately, the bridges we have built to date - - to link the technologies of computers and communications - - are inadequate even for today's requirements, let alone tomorrow's. Yet meanwhile our businesses must go on, even though the rules are subject to sudden and possibly drastic change. Yet surely we can do more than mark time during this period of turmoil and uncertainty. Specifically, we can s t r i v e - as users and v e n d o r s - to reach a better consensus on desirable future directions. And we can then use that consensus to influence the
development of what the United States currently lacks, but desperately needs - namely, a comprehensive national communications policy which will enable this country to maintain its traditional leadership in the computer and communications industries.
3. Six basic types of networks Have we unnecessarily complicated the communications networking problem in the past? To answer that question, let's categorize the basic types of networks: First, are the countless local area networks for use inside private facilities. Second, partial store and forward systems, as used in packet-switching networks. Third, circuit-switching networks, as offered by the common carriers. Fourth, accept and forward systems, as employed by NCR's CNA network architecture and by IBM's SNA. Fifth, store and forward systems which provide flexible rates and are also suitable for electronic mail. Sixth, datagram systems which could transmit standard messages at low cost to any point in the world. All six types of networks are needed. But can we afford multiple and substantially different implementations of each type? There are literally dozens of different design approaches, all aimed at the same objectives. At this point we can't even quantify the respective values and benefits of these six basic types of networks. There is little agreement among vendors or users on how best to develop them, or how interconnection among them is to be achieved. Nor are there adequate mechanisms within the industry to openly discuss and objectively measure their respective strengths and weaknesses. Equally disturbing is a lack of awareness that there are limits, both economic and physical, on our capacity for expanding current voice, data, text, and image transmission facilities. Many users are discovering that their communications costs are getting out of hand. And such costs are pure and simple operating costs; they cannot be depreciated and they earn no investment credits. The limited nature of the public communications resource must be lived with. It cannot be wished away or legislated' out of existence. The radio frequency spectrum will accommodate only so much traffic. Even space, which we think of as infinite,
w.S. Anderson /Barriers to Progress
provides only a limited number of geosynchronous orbital slots. A "place in space" has become a precious public resource. We cannot afford to use it inefficiently.
4. Teleconferencing to replace travel One doesn't have to be a futurist to foresee that sophisticated teleconferencing techniques will increasingly replace physical travel, as energy and transportation costs continue to escalate. Teleconferencing is a concept whose t i m e - i f not h e r e - i s surely coming. This is evidenced by the inclusion of a panel on that subject at this conference, and by the recent teleconferencing announcements of Satellite Business Systems and AT&T. But as the teleconferencing market grows, how many different approaches to that market will be competing for development and implementation thnds? It's generally acknowledged that widespread usage of high-quality teleconferencing will severely tax the amount of available bandwidth that can be economically justified. Is it not then logical to use available resources to better utilize the available bandwidth instead of developing a dozen different and incompatible systems?
A "place in space" has become a precious public resource. We cannot afford to use it inefficiently. The information processing demands of the future are becoming increasingly clear, even awesome. Users, vendors and regulatory bodies must openly agree upon methods and procedures for interconnection of different manufacturers' equipment across publiclyowned communications resources. We have to start tearing down the Chinese walls that have been constructed by our legislators, regulators, common carriers - and yes, even our computer manufacturers. Failure to do so will place one of the most difficult constraints imaginable on the orderly and productive growth of the information industry. Someone may say, "You're overstating the seriousness of the problem. After all, there's been substantial progress on the standards front in recent years. It's beginning to come together." I agree that we have seen several encouraging developments. With X.25 we now have a standardized
327
framework for interfacing with public data networks. X.21 has established a potential for common protocols for circuit switching, thereby making possible the combinations of packet switching and circuit switching networks required for cost-effective teleprocessing. And X.75 has cleared the way for transnational network linkups. What we still lack, of course, is agreement on how we can best interface dissimilar systems and products across these networks. The Open Systems Interconnection reference model, although still incomplete and far from being a standard, is clearly a landmark development. OSI can, and I believe will, if permitted to do so, help the industry cut its way out of today's jungle of systems incompatibility.
5. Need to repent sins of the past So there's much to be optimistic about. But will these developments persuade vendors to repent their past sins of wasteful duplication of interfacing techni. ques? Over the long term the answer has to be yes. Telecommunications is an indispensable key to achieving the kind of information-based society that all nations require for increased productivity. The world is no longer willing to live under the constraints of de facto standards established by the United States' predominant common carrier or largest computer vendor. By the time Interface '91 convenes - whether by teleconferencing or n o t - I'm confident that worldwide standardization of communications architectures and protocols will be a fact of life. The real question, therefore, is not whether standardization will come, but rather how soon. Are the U.S. computer and communications industries to be dragged screaming and kicking into conformance with the rest of the world, or will we accept our obligation to move in that direction voluntarily and enthusiastically? Let's earnestly hope it will be the latter - not only for the sake of the U.S. computer and telecommunications industries, but for the sake of the hundreds of thousands of users who are dependent on those industries for affordable, efficient systems to satisfy their rapidly growing information requirements.
6. Is Rube Goldberg alive and working? Is anyone so bold as to suggest that equipment and systems incompatibility is not the curse of today's
328
t¢.S. Anderson / Barriers to Progress
information processing world? Datamation magazine summed it up memorably in its preview of Interface '81, and I quote: "Incompatible systems have a lot of users wondering whether Rube Goldberg is alive and working as a communications consultant." Realistically, of course, it's not the consulting profession which is to blame for standardization's slow progress and the resulting communications
The world is no longer willing to live under the constraints of de facto standards established by the United States 'predominant common carrier or largest computer vendor. Tower of Babel which today frustrates users and vendors alike. Many hands took part in the construction of that tower. Indeed, I'm personally hesitant to cast any sizable stones. Few organizations are immune to the Not Invented Here disease. My own company persisted too long in perpetuating its own programming language despite an industry-wide move toward COBOL. Corporate ego overcame common sense. And by the time we finally jumped on the standardization bandwagon many of the choicest seats were already taken. We don't intend to repeat that mistake. That is why we're fully committed to support X.25, X.21 and X.75 in our current and future product development. We are also planning to support the concept of Open Systems Interconnection. We have taken these positions because we're convinced that common data communications interfaces are essential to the very existence of our industry. We know that they are in the best interests of our customers and our Company. But what about the nearer-term outlook? Is the United States moving too slowly in the increasingly competitive race for overseas markets? The evidence suggests that we are. As a British citizen, who has spent most of his 35year career in information processing outside the United States, I'm constantly astonished by the lack of concern, on the part of many Americans, about what is happening elsewhere in the communications world. American companies gave birth to the computer. They nurtured it, took it abroad and won global dominance in data processing. America also created the world's most extensive internal communications
network. American publications are filled with articles heralding the communications revolution and the coming of the Information Age.
7. On verge of forfeiting leadership Yet today the United States is on the verge of forfeiting the leadership role it might logically be expected to assume, as a highly interdependent world copes with the sweeping changes now occurring in the computer and communications industries. • It is Europe, not America, which today is pushing the development and implementation of international standards and greater systems compatibility. • It is Europe, not America, wich has most clearly understood that fact that improved information processing is the key to greater national productivity. • It is Europe, not America, which for political, social, and above all economic reasons is establishing legislation regulating the flow of information across national borders. • And it is Europe and Japan, not America, which are doing everything within their power to dramatically improve the worldwide competitive positions of their data processing and communications industries. In my opinion they will be successful- not because they are smarter, or because they work harder, but because they have established and are working toward clear-cut, agreed-upon goals. And they are setting up the necessary infrastructure and making the necessary investments to reach those objectives. Nowhere is this more evident than in Japan, a country in which I've spent more than a third of my business career. Perhaps more clearly than any other country, Japan has perceived the magnitude of the changes which will drastically restructure the world economy between now and the end of this century. To the Japanese, the term Information Age is much more than a catchy phrase, l't represents the next stage in the economic development of a nation which has already become the most competitive nation on earth. The Japanese make no secret of their determination to convert their current highly industrialized society into a knowledge-intensive society based on high technology. As Japan's Ministry of International Trade and Industry recently stated, "The period
w.s. Anderson /Barriers to Progress
when Japan made progress by applying and improving existing ideas has already come to an end, and a period of creativity and initiative is beginning."
8. Japan seeking dominant position Japan has also made it clear that the cornerstone of that massive effort will be the achievement of a dominant worldwide position in the computer and telecommunications industries. And the basic foundation for reaching that goal is already in place. • In just a few years, the Japanese semiconductor industry has become a formidable contender for a global market which is expected to reach 100 billion dollars annually by the end of the century. • Meanwhile, the Japanese computer industry has moved from nowhere to the No. 2 position in the world computer industry. It is now in the process of establishing a global distribution system which for the first time will enable Japan to challenge the United States for world leadership in a market which already exceeds 60 billion dollars annually. • Comparable progress has been achieved by the Japanese telecommunications industry, not only in penetrating the huge U.S. market but other telecommunications markets throughout the world. And Nippon Telephone and Telegraph has pioneered digital data transmission, including X.21 circuit switching and X.25 packet-switching interfacing, along with an advanced network architecture developed jointly with the Japanese computer industry. Could the handwriting on the wall be any clearer? The Japanese are coming, and they are coming in f o r c e - w i t h the full cooperation and aggressive support of the government of Japan. And they are being ioined in that challenge to America's leadership by every major European country. I think we would all agree that this is a healthy development. The progress of any industry is directly proportionate to how competitive that industry is. The American computer industry has thrived because fierce competition has made it mandatory for every successful vendor to strive to outperform its competitors in offering superior customer value. But it should be equally apparent that we have reached a critical decision point. Continued insistence by each railroad that it have its own gauge has become philosophically ludicrous and economically extravagant.
329
For the computer systems vendor, the problems created by the lack of common interconnection techniques are becoming nightmarish. It is understandable, for example, that the different language requirements of the worldwide market necessitate the development of a dozen different printer models. But when each of those models also requires a multitude of communications interfaces, suddenly the interface development becomes bigger and more costly than the development of the printers themselves.
9. Price of redundancy is staggering The price of this developmental redundancy is staggering. I think it's accurate to say that because of its past reluctance to work toward common communications interfacing standards, the computer systems industry has spent - and is spending today at least 25 percent of its development resources nonproductively. And ultimately, it is the user who pays for that waste of talent and money. Clearly, we have a great deal of work to do if we are to put our house in better order. And we had better get started. If we fail to make it easier for users to mix and match equipment supplied by different vendors, then all of the industry's products will become less competitive, not only in world markets but in this country as well.
Is anyone so bold as to suggest that equipment and systems incompatibility is not the curse of today's information processing world? The United Sates has a systems design capability, a software development capability, and a technological capability which are still unmatched by any other country. To squander those capabilities, by trying to stave off the inevitable standardization of communications interfaces, would virtually guarantee an evershrinking role for this country's products in tomorrow's markets.
10. Five remedial steps are available It's been said that "Almost everything in life is easier to get into than out of." Yet there are steps that can be taken to speed up the arrival of the era when systems developed by different vendors and
330
W.S. Anderson /Barriers to Progress
users can freely interconnect on a non-restrictive basis. First, we can begin to simplify today's maze of interfacing techniques and requirements by significantly increasing our support of standardization efforts, both on the national and international levels. And if additional industry or public forums are needed, by all means let's establish them. Admittedly, the road to greater standardization is a long one. It will take years to reach our destination. But we must make faster progress traveling that road in the future than we have in the past.
Because of its past reluctance to work toward common communications interfacing standards, the computer systems industry has spent - - and is spending today - - at least 25 percent of its development resources nonproductively. Second, I believe the user community can play a key role in speeding up that process. By supporting those vendors that support communications standards, users can deliver a powerful message to all vendors - n a m e l y , that the user community wants to see more competition among vendors in the 1980s, not less competition, for the very practical reason that more competition means more user benefits. Third, we need to use every forum available - and every power of persuasion we can muster - to create greater awareness in the federal government that rapid progress in telecommunications and information processing is essential to any successful effort to revitalize America's competitiveness in " world markets. In the current effort to restore the United States' ailing industries to economic health, it would be ironic and tragic if this country were to allow its most dynamic industries to decline, through disinterest and neglect. Fourth, the federal government could take a giant step toward preserving the vitality of the computer and telecommunications industries by updating its position on what does or does not foster competition. It could do so by clarifying, and in some cases modifying, those anti-trust laws and regulatory restraints that effectively prevent cooperative efforts by
vendors of computer and communications systems. The guidelines recently issued by the Justice Department, to encourage joint basic research among noncompetitive companies, are a positive step in that direction. Especially significant is the pledge that the Justice Department will now take into account whether "international competitive realities" necessitate such cooperative ventures. It will be interesting to see if future rulings reflect that modification of past practices. Fifth, the Executive Branch of the federal government should serve as the catalyst and prime mover in developing a comprehensive national and international information processing and telecommunications policy geared to the requirements of the 1980s and 1990s.
11. Review of existing apparatus needed Recent developments - including legislation on transborder data flow, proposed taxes on information processing activities, and a host of other international regulatory proposals that constitute a new form of protectionism - h a v e indicated the need for a major review of the nation's existing apparatus for developing and implementing communications policy. Under today's system, priorities, if established at all, tend to be formulated haphazardly. Responsibilities are scattered, and in some cases overlap. Coordination of effort is difficult, if not impossible, to achieve. Surely there has never been a more favorable time to meet these challenges head-on. The winds of change are now blowing briskly in Washington. We have a new administration, and a willingness to try new approaches to the problems which threaten America's future. As I have suggested, some of those problems are not receiving the attention they should receive. All of us therefore have a responsibility to make it clear - in every way we can - how much is at stake. And I think we can also contribute importantly in the search for responsible solutions to those problems. The time and effort required could well be one of the soundest investments we've ever made, both as an industry and as individuals.
Barriers to Progress in Telecommunications W i l l i a m S. A n d e r s o n Chairman NCR Corporation, Worm Headquarters, Dayton, OH 45479, USA
Editor's Comment This article is the printed record of the keynote address delivered by Mr. Anderson at Interface '81, a major conference in the USA devoted to data communications, on March 30, 1981, in Las Vegas, USA, Mr. Anderson discussed in his address the possibility that the USA may forfeit its leadership position in the information processing and telecommunications industries because of failure to promote international standards and greater systems compatibility. Our thanks are due to Mr. Anderson for his kind permission to reproduce his speech in this Journal. Ph. Enslow, Jr.
William S. Anderson is at present Chairman of the Board and Chief Executive Officer, NCR Corporation. His business career started 19381939, assuming the post of Internal Advisor, Hong Kong & Shanghai Hotels Ltd. After having served as Auditor with Linstead & Davis (1940-1941), Mr. Anderson was in war service from 1941 to 1945. He joined the National Cash Register Company's British organization in 1945, and has b~en Manager, NCR Hong Kong from 1946 till 1959. He then was (until 1972) Vice President, Far East and Chairman, NCR Japan. Mr. Anderson became Corporate President and Director in 1972, and Chief Executive Officer in 1973. In 1974 he became Chairman and President. Mr. Anderson was appointed Chairman of the Board in 1976. His other affiliations include Vice Chairmanship of the Advisory Council on J a p a n - US Economic Relations and of the ASEAN-US Business Council, and numerous other international and domestic advisory positions. Mr. Anderson was born in 1919, in Hankow, China. North-Holland Publishing Company Computer Networks 5 (1981) 325-330
1. Introduction When I was a young man growing up in China, someone once told me that to accept the responsibility of addressing an audience is more of an obligation than a privilege. The obligation, I was told, is to discuss challenging issues of interest and importance. When I agreed to share the privilege of keynoting Interface '81, I acknowledged that responsibility and accepted that obligation. I think we can all agree that ours is not an industry in search of challenging issues. To the contrary, we are today confronted with a number of challenges for which there are no easy answers. But all of us - users, vendors, and members of government - must face up to those challenges honestly and forthrightly. At stake is the technological and market leadership which the computer and communications industries have enjoyed for so many years. First and foremost among those challenges is the further integration o f computer and communications technologies. Meeting that challenge, as our conference theme suggests, is the pathway to greater information productivity. Unfortunately, the bridges we have built to date to link the technologies of computers and communic a t i o n s - are inadequate even f o r today's requirements, let alone tomorrow's. Clearly, the time has come to reappraise our past efforts, to decide where we must go, and to move ahead together toward that destination. How can we best accomplish that? It seems to me the starting point is to recognize that the essence o f the problem is not technological. The technologies to further integrate information processing and information transmission are readily available. But we lack coherent and consistent policies and practices to more effectively use those technologies to close the gap between our expectations and our actual achievements in combining communications of all k i n d s voice, data, text, and i m a g e - with the speed and power of computer processing. We see evidence o f this in the proliferation of networking architectures which have emerged during the
326
I¢.S. Anderson /Barriers to Progress
past several years. Computer manufacturers and carriers alike have struggled m i g h t i l y - and expens i v e l y - to surmount the transmission and interconnectability barriers which have impeded our progress into the telecommunications era. The range of 'solutions" offered is as diverse as the architects who propose them. As a result, users face a bewildering array of communication c h o i c e s - centralized host control of the network versus distributed network control; private network approaches versus public network offerings; traditional common carrier services versus specialized or value added carrier services; packet switching versus circuit switching; a n d - even more b a s i c - the choice of systems available today versus those promised for tomorrow. The shopping list is almost endless.
2. Regulatory climate becoming murkier Compounding this confusion is a regulatory climate which in recent months and weeks has become even murkier than before. Will the world's largest data communications carrier be fully deregulated, partially deregulated, or not deregulated at all? What are the policy directions of the Federal Communications Commission? Will the FCC support national and world standards? Or will it avoid the issue while every vendor continues to go his own way? And what about Congress? Will we at long last see an updating of our outmoded communications legislation, which was written before most of you in this auditorium were born? We have no firm answers to those questions. Nor are we likely to have such answers in the near future.
Unfortunately, the bridges we have built to date - - to link the technologies of computers and communications - - are inadequate even for today's requirements, let alone tomorrow's. Yet meanwhile our businesses must go on, even though the rules are subject to sudden and possibly drastic change. Yet surely we can do more than mark time during this period of turmoil and uncertainty. Specifically, we can s t r i v e - as users and v e n d o r s - to reach a better consensus on desirable future directions. And we can then use that consensus to influence the
development of what the United States currently lacks, but desperately needs - namely, a comprehensive national communications policy which will enable this country to maintain its traditional leadership in the computer and communications industries.
3. Six basic types of networks Have we unnecessarily complicated the communications networking problem in the past? To answer that question, let's categorize the basic types of networks: First, are the countless local area networks for use inside private facilities. Second, partial store and forward systems, as used in packet-switching networks. Third, circuit-switching networks, as offered by the common carriers. Fourth, accept and forward systems, as employed by NCR's CNA network architecture and by IBM's SNA. Fifth, store and forward systems which provide flexible rates and are also suitable for electronic mail. Sixth, datagram systems which could transmit standard messages at low cost to any point in the world. All six types of networks are needed. But can we afford multiple and substantially different implementations of each type? There are literally dozens of different design approaches, all aimed at the same objectives. At this point we can't even quantify the respective values and benefits of these six basic types of networks. There is little agreement among vendors or users on how best to develop them, or how interconnection among them is to be achieved. Nor are there adequate mechanisms within the industry to openly discuss and objectively measure their respective strengths and weaknesses. Equally disturbing is a lack of awareness that there are limits, both economic and physical, on our capacity for expanding current voice, data, text, and image transmission facilities. Many users are discovering that their communications costs are getting out of hand. And such costs are pure and simple operating costs; they cannot be depreciated and they earn no investment credits. The limited nature of the public communications resource must be lived with. It cannot be wished away or legislated' out of existence. The radio frequency spectrum will accommodate only so much traffic. Even space, which we think of as infinite,
w.S. Anderson /Barriers to Progress
provides only a limited number of geosynchronous orbital slots. A "place in space" has become a precious public resource. We cannot afford to use it inefficiently.
4. Teleconferencing to replace travel One doesn't have to be a futurist to foresee that sophisticated teleconferencing techniques will increasingly replace physical travel, as energy and transportation costs continue to escalate. Teleconferencing is a concept whose t i m e - i f not h e r e - i s surely coming. This is evidenced by the inclusion of a panel on that subject at this conference, and by the recent teleconferencing announcements of Satellite Business Systems and AT&T. But as the teleconferencing market grows, how many different approaches to that market will be competing for development and implementation thnds? It's generally acknowledged that widespread usage of high-quality teleconferencing will severely tax the amount of available bandwidth that can be economically justified. Is it not then logical to use available resources to better utilize the available bandwidth instead of developing a dozen different and incompatible systems?
A "place in space" has become a precious public resource. We cannot afford to use it inefficiently. The information processing demands of the future are becoming increasingly clear, even awesome. Users, vendors and regulatory bodies must openly agree upon methods and procedures for interconnection of different manufacturers' equipment across publiclyowned communications resources. We have to start tearing down the Chinese walls that have been constructed by our legislators, regulators, common carriers - and yes, even our computer manufacturers. Failure to do so will place one of the most difficult constraints imaginable on the orderly and productive growth of the information industry. Someone may say, "You're overstating the seriousness of the problem. After all, there's been substantial progress on the standards front in recent years. It's beginning to come together." I agree that we have seen several encouraging developments. With X.25 we now have a standardized
327
framework for interfacing with public data networks. X.21 has established a potential for common protocols for circuit switching, thereby making possible the combinations of packet switching and circuit switching networks required for cost-effective teleprocessing. And X.75 has cleared the way for transnational network linkups. What we still lack, of course, is agreement on how we can best interface dissimilar systems and products across these networks. The Open Systems Interconnection reference model, although still incomplete and far from being a standard, is clearly a landmark development. OSI can, and I believe will, if permitted to do so, help the industry cut its way out of today's jungle of systems incompatibility.
5. Need to repent sins of the past So there's much to be optimistic about. But will these developments persuade vendors to repent their past sins of wasteful duplication of interfacing techni. ques? Over the long term the answer has to be yes. Telecommunications is an indispensable key to achieving the kind of information-based society that all nations require for increased productivity. The world is no longer willing to live under the constraints of de facto standards established by the United States' predominant common carrier or largest computer vendor. By the time Interface '91 convenes - whether by teleconferencing or n o t - I'm confident that worldwide standardization of communications architectures and protocols will be a fact of life. The real question, therefore, is not whether standardization will come, but rather how soon. Are the U.S. computer and communications industries to be dragged screaming and kicking into conformance with the rest of the world, or will we accept our obligation to move in that direction voluntarily and enthusiastically? Let's earnestly hope it will be the latter - not only for the sake of the U.S. computer and telecommunications industries, but for the sake of the hundreds of thousands of users who are dependent on those industries for affordable, efficient systems to satisfy their rapidly growing information requirements.
6. Is Rube Goldberg alive and working? Is anyone so bold as to suggest that equipment and systems incompatibility is not the curse of today's
328
t¢.S. Anderson / Barriers to Progress
information processing world? Datamation magazine summed it up memorably in its preview of Interface '81, and I quote: "Incompatible systems have a lot of users wondering whether Rube Goldberg is alive and working as a communications consultant." Realistically, of course, it's not the consulting profession which is to blame for standardization's slow progress and the resulting communications
The world is no longer willing to live under the constraints of de facto standards established by the United States 'predominant common carrier or largest computer vendor. Tower of Babel which today frustrates users and vendors alike. Many hands took part in the construction of that tower. Indeed, I'm personally hesitant to cast any sizable stones. Few organizations are immune to the Not Invented Here disease. My own company persisted too long in perpetuating its own programming language despite an industry-wide move toward COBOL. Corporate ego overcame common sense. And by the time we finally jumped on the standardization bandwagon many of the choicest seats were already taken. We don't intend to repeat that mistake. That is why we're fully committed to support X.25, X.21 and X.75 in our current and future product development. We are also planning to support the concept of Open Systems Interconnection. We have taken these positions because we're convinced that common data communications interfaces are essential to the very existence of our industry. We know that they are in the best interests of our customers and our Company. But what about the nearer-term outlook? Is the United States moving too slowly in the increasingly competitive race for overseas markets? The evidence suggests that we are. As a British citizen, who has spent most of his 35year career in information processing outside the United States, I'm constantly astonished by the lack of concern, on the part of many Americans, about what is happening elsewhere in the communications world. American companies gave birth to the computer. They nurtured it, took it abroad and won global dominance in data processing. America also created the world's most extensive internal communications
network. American publications are filled with articles heralding the communications revolution and the coming of the Information Age.
7. On verge of forfeiting leadership Yet today the United States is on the verge of forfeiting the leadership role it might logically be expected to assume, as a highly interdependent world copes with the sweeping changes now occurring in the computer and communications industries. • It is Europe, not America, which today is pushing the development and implementation of international standards and greater systems compatibility. • It is Europe, not America, wich has most clearly understood that fact that improved information processing is the key to greater national productivity. • It is Europe, not America, which for political, social, and above all economic reasons is establishing legislation regulating the flow of information across national borders. • And it is Europe and Japan, not America, which are doing everything within their power to dramatically improve the worldwide competitive positions of their data processing and communications industries. In my opinion they will be successful- not because they are smarter, or because they work harder, but because they have established and are working toward clear-cut, agreed-upon goals. And they are setting up the necessary infrastructure and making the necessary investments to reach those objectives. Nowhere is this more evident than in Japan, a country in which I've spent more than a third of my business career. Perhaps more clearly than any other country, Japan has perceived the magnitude of the changes which will drastically restructure the world economy between now and the end of this century. To the Japanese, the term Information Age is much more than a catchy phrase, l't represents the next stage in the economic development of a nation which has already become the most competitive nation on earth. The Japanese make no secret of their determination to convert their current highly industrialized society into a knowledge-intensive society based on high technology. As Japan's Ministry of International Trade and Industry recently stated, "The period
w.s. Anderson /Barriers to Progress
when Japan made progress by applying and improving existing ideas has already come to an end, and a period of creativity and initiative is beginning."
8. Japan seeking dominant position Japan has also made it clear that the cornerstone of that massive effort will be the achievement of a dominant worldwide position in the computer and telecommunications industries. And the basic foundation for reaching that goal is already in place. • In just a few years, the Japanese semiconductor industry has become a formidable contender for a global market which is expected to reach 100 billion dollars annually by the end of the century. • Meanwhile, the Japanese computer industry has moved from nowhere to the No. 2 position in the world computer industry. It is now in the process of establishing a global distribution system which for the first time will enable Japan to challenge the United States for world leadership in a market which already exceeds 60 billion dollars annually. • Comparable progress has been achieved by the Japanese telecommunications industry, not only in penetrating the huge U.S. market but other telecommunications markets throughout the world. And Nippon Telephone and Telegraph has pioneered digital data transmission, including X.21 circuit switching and X.25 packet-switching interfacing, along with an advanced network architecture developed jointly with the Japanese computer industry. Could the handwriting on the wall be any clearer? The Japanese are coming, and they are coming in f o r c e - w i t h the full cooperation and aggressive support of the government of Japan. And they are being ioined in that challenge to America's leadership by every major European country. I think we would all agree that this is a healthy development. The progress of any industry is directly proportionate to how competitive that industry is. The American computer industry has thrived because fierce competition has made it mandatory for every successful vendor to strive to outperform its competitors in offering superior customer value. But it should be equally apparent that we have reached a critical decision point. Continued insistence by each railroad that it have its own gauge has become philosophically ludicrous and economically extravagant.
329
For the computer systems vendor, the problems created by the lack of common interconnection techniques are becoming nightmarish. It is understandable, for example, that the different language requirements of the worldwide market necessitate the development of a dozen different printer models. But when each of those models also requires a multitude of communications interfaces, suddenly the interface development becomes bigger and more costly than the development of the printers themselves.
9. Price of redundancy is staggering The price of this developmental redundancy is staggering. I think it's accurate to say that because of its past reluctance to work toward common communications interfacing standards, the computer systems industry has spent - and is spending today at least 25 percent of its development resources nonproductively. And ultimately, it is the user who pays for that waste of talent and money. Clearly, we have a great deal of work to do if we are to put our house in better order. And we had better get started. If we fail to make it easier for users to mix and match equipment supplied by different vendors, then all of the industry's products will become less competitive, not only in world markets but in this country as well.
Is anyone so bold as to suggest that equipment and systems incompatibility is not the curse of today's information processing world? The United Sates has a systems design capability, a software development capability, and a technological capability which are still unmatched by any other country. To squander those capabilities, by trying to stave off the inevitable standardization of communications interfaces, would virtually guarantee an evershrinking role for this country's products in tomorrow's markets.
10. Five remedial steps are available It's been said that "Almost everything in life is easier to get into than out of." Yet there are steps that can be taken to speed up the arrival of the era when systems developed by different vendors and
330
W.S. Anderson /Barriers to Progress
users can freely interconnect on a non-restrictive basis. First, we can begin to simplify today's maze of interfacing techniques and requirements by significantly increasing our support of standardization efforts, both on the national and international levels. And if additional industry or public forums are needed, by all means let's establish them. Admittedly, the road to greater standardization is a long one. It will take years to reach our destination. But we must make faster progress traveling that road in the future than we have in the past.
Because of its past reluctance to work toward common communications interfacing standards, the computer systems industry has spent - - and is spending today - - at least 25 percent of its development resources nonproductively. Second, I believe the user community can play a key role in speeding up that process. By supporting those vendors that support communications standards, users can deliver a powerful message to all vendors - n a m e l y , that the user community wants to see more competition among vendors in the 1980s, not less competition, for the very practical reason that more competition means more user benefits. Third, we need to use every forum available - and every power of persuasion we can muster - to create greater awareness in the federal government that rapid progress in telecommunications and information processing is essential to any successful effort to revitalize America's competitiveness in " world markets. In the current effort to restore the United States' ailing industries to economic health, it would be ironic and tragic if this country were to allow its most dynamic industries to decline, through disinterest and neglect. Fourth, the federal government could take a giant step toward preserving the vitality of the computer and telecommunications industries by updating its position on what does or does not foster competition. It could do so by clarifying, and in some cases modifying, those anti-trust laws and regulatory restraints that effectively prevent cooperative efforts by
vendors of computer and communications systems. The guidelines recently issued by the Justice Department, to encourage joint basic research among noncompetitive companies, are a positive step in that direction. Especially significant is the pledge that the Justice Department will now take into account whether "international competitive realities" necessitate such cooperative ventures. It will be interesting to see if future rulings reflect that modification of past practices. Fifth, the Executive Branch of the federal government should serve as the catalyst and prime mover in developing a comprehensive national and international information processing and telecommunications policy geared to the requirements of the 1980s and 1990s.
11. Review of existing apparatus needed Recent developments - including legislation on transborder data flow, proposed taxes on information processing activities, and a host of other international regulatory proposals that constitute a new form of protectionism - h a v e indicated the need for a major review of the nation's existing apparatus for developing and implementing communications policy. Under today's system, priorities, if established at all, tend to be formulated haphazardly. Responsibilities are scattered, and in some cases overlap. Coordination of effort is difficult, if not impossible, to achieve. Surely there has never been a more favorable time to meet these challenges head-on. The winds of change are now blowing briskly in Washington. We have a new administration, and a willingness to try new approaches to the problems which threaten America's future. As I have suggested, some of those problems are not receiving the attention they should receive. All of us therefore have a responsibility to make it clear - in every way we can - how much is at stake. And I think we can also contribute importantly in the search for responsible solutions to those problems. The time and effort required could well be one of the soundest investments we've ever made, both as an industry and as individuals.