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Survey of World Telecommunications (37): Backbone of the worldwide corporate structure - Private networks
1112 words
7 October 1991
Financial Times
London Page XVIII

(c) 1991 The Financial Times Limited. All rights reserved


DATA communications networks began in the 1970s, when they were a utility which enabled companies to locate their computer centres in cheaper office accommodation outside the major cities. Now, they are mission-critical, the backbone of the corporate structure, without which trade would grind to a halt.


The scale and complexity of today's leading edge networks are a far cry from their predecessors. The early networks for data processing were built to a simple point to multi-point design. This meant that a central mainframe computer which held the organisation's entire database was hooked up to a number of smaller computers in other offices; a computer would make a call to the mainframe, and send or receive data.

In the mid to late 1980s, corporate data messaging networks emerged to carry internal messages and administrative data. These were usually separate from the processing network and large organisations often ended up with as many as 10 or 15 different networks.

In the past two years or so, network design has begun to evolve into a much more sophisticated structure. Businesses want to rationalise their lines and equipment into a single coherent network. At the same time, they want to take advantage of leading edge computer technology to restructure their data processing systems.

Cheaper, more powerful desktop computers are now used to handle much of the initial processing and pass the results to the mainframe, which has become just a 'number cruncher'. A further trend is for organisations to link together all their databases and processing facilities in what is becoming known as the 'enterprise-wide' network.

Mr Ken Knap, who is in charge of technology for Citicorp Bank in Europe, says that the new network model is radically different from the old, and more complex to manage. 'There are fewer host centres with totally integrated data. You'll end up with most of the initial processing being done on a PC network, but the analysis of the data is probably going to be on a database somewhere in a central data centre.'

Some multi-national organisations are setting up data processing super-centres for an entire continent, and linking them via high-speed lines to individual national offices.

At the Sanwa Bank a new network is being designed to link its offices in London, New York and Tokyo. A data processing centre is being set up in London, which will handle the processing from its European offices; it will come on-line in two to three years' time.

A similar set-up already operates at Chase Manhattan Bank, which uses its Bournemouth, UK data processing centre to handle much of the work for its European offices. Chase also leases direct fibre optic cable lines between the UK, the US and Japan, and has the capability to process data from Tokyo or New York on its Bournemouth computers.

One of the most ambitious projects is being installed by Visa International, the credit card company. Visa already carries more than 1.2bn transactions a year on its network. It is upgrading the technology to cater for what it believes will be a tripling in the number of credit card transactions by the end of the century.

The new design entails a global data processing hierarchy, consisting of four supercentres, which will process transactions for national and regional processing centres. They will be linked by high speed data communications multiplexers and fibre optic telephone lines. The regional centres in turn will have electronic links to the retail banks which are members of Visa.

Critical to these networks are more reliable phone lines, and equipment that is capable of faster transmission speeds. Both elements combine to enable the network to carry more data, and ensure that it gets to its destination without errors creeping in.

Several high capacity fibre optic cables have come into service in the past two years. They include PTAT and TAT8 across the Atlantic, the trans-Pacific fibre cable linking the US and Japan, and several undersea cables between the UK and Europe. They are better for data transmission because line errors occur less frequently than on copper cable, and they do not have the time delay problem of satellite.

Mr Knap believes that the network's reliability and robustness are most important factors. Citicorp, like many international banks, allows corporate customers direct access to its internal systems to obtain certain services. Those customers expect the network to be fully operational at all times.

The increased availability of fibre capacity is encouraging companies to consider new, faster transmission equipment such as the new frame relay standard. Frame relay has developed out of an existing data communications technique, known as X25 packet switching, which has become widely used in the past four years.

Frame relay is far faster than X25, and is able to take full advantage of today's fastest line speeds - 1.54 Megabits a second in the US, and two Megabits a second in Europe. Within the next 12 months, it will also be able to work to the emerging transmission standard of 45 Megabits a second.

Frame relay is suitable for companies that want to send high volumes of data, such as graphics or image. It is particularly designed to connect together personal computer networks which are located on different sites.

Few organisations have yet set up a frame relay network, although several are being tested. One trial on the BT Tymnet network in the US, entails a garment manufacturer with showrooms in cities all around the country. A frame relay system is being used not only to carry sales data between PC networks in the showrooms, but to transmit scanned images of forthcoming designs.

However, no network will be installed successfully unless the suppliers are willing to back up their customers when problems occur, as they inevitably do. Few to date can offer true multi-national support. Many equipment vendors give a list of countries in which they say their products are available, but the level of maintenance varies.

'There are only a handful of companies that can provide a true European service. You get a lot of small Californian companies with great products but poor representation in parts of Europe, but a lot of European companies aren't well represented either,' says Mr Jim McMahon, an independent networking consultant.

Some organisations are now specifying pan-European or global service levels as a condition of the supply contract. However, they tend to be those such as Chase Manhattan, which have enough clout or kudos for the vendors to accept their demands.

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About Iptegrity is the website of Dr Monica Horten.

I am a tech policy specialist, published author, post-doctoral scholar. I hold a PhD from the University of Westminster, and a DipM from the Chartered Institute of Marketing. Currently working on UK Online Safety Bill.

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