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lines, not wholesale switches, and while the incumbents are not buying, they are shopping with RFPs and RFQs a good indicator of later movement. To date the main applications that softswitch solutions have addressed are enterprise applications such as PBX management, IP Centrex, VoIP, and wireless LANs.
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There is an evolution underway in the server market that is pulling the players away from the stand-alone server model in favor of a new design. The next evolutionary stage is called the blade server. A blade server is a complete server on a board that plugs into a common chassis and shares power, cooling, backplane cabling, and network access with other blades. It is designed to simplify the process of server management for IT staff and to reduce the cost of shared infrastructure. The second evolutionary stage is called a brick server. A brick server allows IT staff to interchange memory, processors, disks, and other elements on an individual blade, a model that allows for highly modular plug-and-play capability. Several manufacturers are already going down the blade-to-brick path including IBM, Dell, HP, and Sun.
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This is what it s all about: Designing and building the content that customers will access from a wide array of both stationary and mobile devices. Consider these numbers: 98 percent of all American households have TV; 69.4 percent of them have cable. Furthermore, there are 187 national cable channels. Ninety-one percent of American households have VCRs, while a slightly smaller (but equally respectable) number have DVD players. And just to provide fuel for that entertainment fire, 500 feature films emerge each year on 37,000 screens. And it isn t just television and movies: According to consultancy IDC, U.S. wireless gaming alone will grow to $71.2 million in 2007. And that s just the wireless segment! The key content providers have well-known names: AOL TimeWarner, Google, Sony, Vivendi, Terra-Lycos, Yahoo!, and Microsoft. Their activities in the marketplace illustrate that they understand all too well that the key to success is not only having a broadband access and
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transport network available, but having content to transport that customers will pay for. We noted earlier that 3G has not been particularly successful, largely because of the dearth of applications that can effectively take advantage of 3G s considerable technological capabilities. What seems to be largely missing in the market is an understanding that customers by and large are not looking for a new killer application: What they are looking for is a killer new way to access existing applications, such as (in addition to good-quality voice) instant messaging, email, Internet access, and gaming. The addition of simple multimedia applications such as video clips and photograph sharing are nice additions, but far from killer apps. Of course, many of the services delivered over networks are based on cultural demand. In South Korea, SK Telecom offers 15 channels of satellite TV service to mobile phones for about $4 per month. While slick, that s probably not an application that would generate large revenues in North America, in spite of the fact that companies like Sprint have announced TV broadcast plans for mobile devices. These applications imply that the handset market must evolve to accommodate them. As we noted previously in the wireless discussion, there is considerable activity underway as manufacturers scramble to define the nature of evolving services and the capabilities that handsets and other mobile devices must offer. A few companies are already moving into the multimedia handset space: Microsoft recently acquired Vicinity Corporation for $96 million; the company s products allow them to deliver maps and directions to mobile devices. Based on VoiceXML, call centers are among the firm s major targets. Originally less than willing to sell Windows to the mobile market, Microsoft is now making a concerted effort to penetrate that world. Concerned about a repeat of the Microsoft monopoly that occurred in the PC world, however, mobile manufacturers quickly pulled together following Microsoft s Windows CE entr e and created Symbian, a software consortium tasked to create a Windows-like mobile phone OS that would not be dominated by Microsoft. Symbian members include Nokia, Motorola, Siemens, SONY/Ericsson, Panasonic, and Samsung. Currently, the Symbian organization dominates the market with roughly 80 percent of the market because of its numerous licensees. In response to Symbian s position, Microsoft did an end-run. Instead of trying to sell to the major manufacturers that already had a stake in Symbian (although Samsung has licensed both platforms, as well as Palm s), Microsoft went directly to the mobile network operators and contract manufacturers that buy large volumes of handsets with plans to
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