AdvancedTCABig Wins for First MoversBrough Turner

Senior VP & CTO

January 2003 Slide 2

Global Telecom Industry in Transition….still

Little confidence Visibility remains poor Capacity, debt and business

models still problematic More consolidation expected Recovery slipping beyond ’03?

Some positive signs Consolidation/ restructuring

momentum growing Strength in parts of Asia New products - where there is

large (and fast) ROI Growth in enhanced services

January 2003 Slide 3

Historical PerspectiveEarly British Railroad Development

RR construction authorized by Parliament* Miles of track; Capital in millions of pounds sterling

Year Miles Capital Year Miles Capital 1833 218 5.5 1842 55 5.3 1834 131 2.3 1843 90 3.9 1835 202 4.8 1844 805 20.5 1836 955 22.9 1845 2,896 59.5 1837 543 13.5 1846 4,540 132.6 1838 49 2.1 1847 1,295 39.5 1839 54 6.5 1848 373 15.3 1840 0 2.5 1849 17 3.9 1841 14 3.4 1850 4.1 70.4

* Andrew Odlyzko, U of Minn., private correspondence

January 2003 Slide 4

0

1000

2000

3000

4000

5000

Mileage

Railways authorized by British Parliament (not necessarily built)< http://www.dtc.umn.edu/~odlyzko/talks/index.html >

Long History of Techno Bubble Overinvestment and Crashes

January 2003 Slide 5

19th Century British Railroads

Attitudes in 1840 & 1850 were extremely negative, but ...

More than 70 years of steady traffic growth depressions had only slight effect on growth rate

Cycles of financial investment “Irrational exuberance” to nearly zero investment Many bankruptcies, but…

No serious interruption of service!

Over long term, many fortunes were made and some were lost

January 2003 Slide 6

World Telecom Statistics Wireless Growth

0

200

400

600

800

1000

1200

140019

91

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Landline Subs

Mobile Subs

(mil

lio

ns

)

Crossoverhappened

May 2002 !

Source: ITU World Telecom Indicators 2002

January 2003 Slide 7

Wireless Growth

Cellular market growth consistently beats long term forecasts

Wireless local loop becoming competitive Costs driven by Moore’s law and cellular volumes

Wireless capacity created by engineers, not by regulators 100 years of exponential growth in bits /Hz /area Bandwidth scarcity is a regulatory problem

Wireless can change the “last mile” problem Wireless local loop; wireless IP access “Unlicensed” bands foster grassroots connectivity

January 2003 Slide 8

0

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004 2005 2006

United States Western Europe Asia Pacific Rest of World

Broadband Adoption Rates - Outpacing Cellular

Source: IDC, January 2002

Con

nect

ions

(m

illio

ns)

January 2003 Slide 9

Internet Backbone Traffic in U.S.

1

10

100

1000

10000

100000

1000000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Traffic (low est.) Traffic (high est.)

TB

/mon

th (

in D

ec)

Based on data from A. Odlyzko, U of Minn.

January 2003 Slide 10

Internet Traffic

Internet traffic (roughly) doubles every year consistently for more than 15 years at least 90% growth in 2002

Global telecom revenue growing 6% per year Consumer now getting benefit of Moore’s law Same money purchases dramatically more service

each year

Continuing need for ever more cost-effective network elements

January 2003 Slide 11

New Equipment Demands

Early in 10-20 year transition of telecom to converged communications Tiny to small penetration rates so far Multiple platform transitions yet to come

Equipment providers dramatically downsized R&D budgets down more than a third, but negligible

consolidation so far… Focus on core competencies; leverage the rest Product managers looking for help

Looking to COTS technology to reduce cost and cut time to market Ethernet, PCs, OSs, DBs, software!!!

January 2003 Slide 12

Off-the-Shelf Technology

Leverage larger commercial markets represented by market standards Less important whether standards are formal

or de facto Market leverage is what counts

Common, relatively simple, interfaces that can hide diverse complexities

AdvancedTCA is poised to foster a large commercial, off-the-shelf market

January 2003 Slide 13

AdvancedTCA Everywhere?

Not quite… pure storage likely to use SAN racks pure computing likely to use IT blade servers existing platforms will be milked wherever possible very high volume still justifies custom engineering

but, AdvancedTCA opportunity much, much larger

than CompactPCI or VME matches broader range of telecom applications and

requirements better fosters the migration from custom designs

January 2003 Slide 14

AdvancedTCA

Bigger boards, more power, more cooling smaller is beautiful -- to consumers! not for COs supports latest (power hungry) CPUs support bleeding edge network processors, DSPs

and ASIC designs

Telco power and mechanicals versus CompactPCI’s industrial focus, adapted for

enterprise telecom, and then adapted again 600 mm practice; ETSI & NEBS; full redundancy;

high density I/O; front and back fiber I/O

Telco mindset !

January 2003 Slide 15

Serial Technology

Data transfer rates beat parallel buses press the physical limits on copper, and fiber SERDES becoming just another silicon block

Follows networking paradigm autonomous modules with Ethernet and other point-

to-point interconnect

Leverage emerging “switch fabrics” Ethernet Infiniband, Starfabric, PCI Express

January 2003 Slide 16

Management Structure

Mandatory common approach to management AdvancedTCA, PICMG 3.0, section 3.1 leverages and enhances PICMG 2.9 address telco requirements leveraging IT

technology (IPMI), protocols and software

Reverse benefits applicable back to CompactPCI (and potentially to

CompactTCA) as well at VITA 38

Basis for combined systems that leverage AdvancedTCA and other IT equipment

January 2003 Slide 17

ATCA Success Indicators

Leveraging years of CompactPCI telecom learning while, so far, avoiding “second system

syndrome” leveraging and evolving PICMG 2.x software,

e.g. 2.9 management

Leveraging IP networking concepts and IT software base basic protocols; databases; clustering

software; …

January 2003 Slide 18

Looking Forward

Despite Internet / Telecom Bubble and Crash: Subscriber and traffic growth robust today!

wireless subs; broadband subs; Internet traffic

Carrier Capex growing by late 2003 into 2004 pent-up demand for new service platforms,

beginning this year new round of disruption in traditional infrastructure

will take off in 2004-2005

Next generation of platform designs leveraging applicable off-the-shelf technology

Leveraging AdvancedTCA !

January 2003 Slide 19

Telecom and AdvancedTCA

Continuous gains in underlying technology Memory, processors, fiber and radio bandwidth

Very small global market penetration 6B humans, 2B phones

Convergence means replacing existing networks

Substantial, long term, worldwide growth!

Significant positive impact on humanity

AdvancedTCA accelerates the process

January 2003 Slide 20

First Mover Advantage

Goes to those who move, now…

Have Fun - Make Money !

N M S C O M M U N I C A T I O N STechnology for tomorrow’s networks