COM I. Keene, B. Hafner

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1 I. Keene, B. Hafner Research Note 23 December 2002 Commentary The Telecommunications and Networking Hype Cycle New networking technologies and services continue to stream into the telecommunications marketplace. The hype cycle illustrates forthcoming technologies and services and how long it will be before they provide real value. The telecommunications and networking hype cycle in (Figure 1) is a consolidation of the primary technologies and services that are aggressively marketed (that is, "hyped") to service providers and enterprises. Gartner has attempted to put context and timeframes around each, allowing individuals to determine the amount of effort and time they should spend to monitor, evaluate, or implement the technology or service. Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Figure 1 The 2002 Telecommunications and Networking Hype Cycle Visibility Ethernet MANs Lambda Services Enterprise CDN "In the Cloud" Security Services Intrusion Prevention iscsi SANs IPv6 FTTH UWB WiFi Hot spots Location "Aware" Services Softswitches GMPLS DoS protection Wireless Web Key Now to Two Years Two to Five Years More Than Five Years Next-Generation Satellite NAS ATM Optical Switching DWDM Video Streaming VoIP WiFi/802.11b Bluetooth Managed Services ASPs a/g ADSL GPRS MPLS WLL FC SANs 3G Network IPSec Capability IP Telephony Technology Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity As of October 2002 Acronym Key Maturity ADSL Asymmetric digital subscriber line GPRS General packet radio service ATM Asynchronous transfer mode IPSec IP Security ASP Application service provider iscsi IP small computer system interface CDN Content delivery network MPLS Multiprotocol label switching DoS Denial of service NAS Network-attached storage DWDM Dense wave division multiplexing UWB Ultra wideband FC SANs Fiber channel storage area networks VoIP Voice over IP FTTH Fiber to the home WiFi Wireless LAN GMPLS General multiprotocol label switching WLL Wireless local loop Source: Gartner Research 23 December

3 The Five Stages of the Hype Cycle Technology trigger: An event that generates significant press and industry interest, such as a breakthrough, invention, discovery, public demonstration or product launch. Peak of inflated expectations: During this phase of over enthusiasm and unrealistic projections, a flurry of well-publicized activity by technology leaders results in some successes, but more failures, as the technology is pushed to its limits. The enterprises that make money during this phase are generally conference organizers, magazine publishers and consultants. Trough of disillusionment: The technology does not live up to inflated expectations, and, as a result, it rapidly becomes unfashionable, and the press abandons the technology or touts its failure to meet expectations. Slope of enlightenment: Focused experimentation and solid hard work by an increasingly diverse range of organizations leads to a true understanding of the technology's applicability, risks and benefits. Commercial off-the-shelf methodologies and tools become available to ease the development process and application integration. Plateau of productivity: The real-world benefits of the technology are demonstrated and accepted. Tools and methodologies are increasingly stable as they enter their second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only niche markets. Networking Technologies Asymmetric digital subscriber line (ADSL) deployment continues to grow, connecting millions of small offices, remote workers and consumers to broadband services. Many network service providers have multiprotocol label switching (MPLS) services, and enterprises are starting to move from frame relay to MPLS. Voice over IP (VoIP) the transport of packetized voice over an IP network has been successfully used in core networks for several years and is integrated into routers and private branch exchanges. IP telephony as a user application has yet to climb the slope of enlightenment. Application service provider (ASP) services remain in the trough of disillusionment, but this will change as a result of the expanding use of broadband services provided by Ethernet metropolitan area networks (MANs) during 2004 to Next-generation carrier infrastructure technologies such as softswitches, optical switching and general MPLS (GMPLS) are at least two years away from implementation, as carriers move the focus of their investments. version 6 of IP (IPv6) has been on the horizon for years but the ubiquity of IPv4 has made many nervous of the move. We believe that service providers will have a need for IPv6, but enterprises will not have a need for at least the next five years. Content delivery networks (CDNs) fulfill enterprises' drive to provide increasing amounts of content. However, enterprises are only starting to understand what they need from, and how to implement, CDNs. Wireless Technologies Wireless LAN (WiFi) moved through the hype cycle quickly during 2001 and Standard b is established in many enterprises, while a and g products are forecast to see high-volume adoption from the second half of 2003 onward. WiFi public "hot spots" are for early adopters, but it will reach the plateau of productivity within two to five years. Third-generation (3G) cellular networks are in 23 December

4 the trough of disillusionment; cellular operators first need to prove their ability to run profitable general packet radio service (GPRS) data services. Although there are now a large number of Bluetooth-enabled devices on the market (particularly in cellular phones), problems remain with inconsistent interoperability of products, limiting the use of Bluetooth as a personal-area network technology. Location-aware services will continue to improve dramatically during 2003 and By 2007, high-accuracy services will become mainstream. Security and Storage Technologies The emergence of new security technologies continues. While IP security (IPSec) is being adopted by more enterprises, denial of service (DoS) will be a technology only for the early adopters for the next one to two years. Intrusion prevention and "in the cloud" (in the WAN) security services (contained within carrier networks) are two to five years away from mainstream adoption. While networked attached storage (NAS) is accepted by enterprises, fiber channel storage area networks (FC SANs) are still climbing the slope of enlightenment. The alternative IP small computer system interface (iscsi) SAN technology, is very much at the early adopter stage. Market Downturn Affects the Hype Cycle The downturn in start-up activity since mid-2000, has resulted in fewer technologies to the left of the "peak of inflated expectations" than in the previous five years. Although opportunities to invest in both start-ups and small vendors still abound, in general, investors are skeptical. Those that are considering investment are researching their candidates far more carefully and tend to look toward building strong companies as opposed to strong stocks. Seed funding in particular has dropped dramatically. This would be a good opportunity for the large and established telecommunications and networking vendors to have a more significant role in innovation. Unfortunately, most of these companies are scaling back and focusing on immediate issues and the development of existing products. This situation is expected to continue until the end of 2004, by which time the telecommunications and networking market will need new technologies, but organizations with those new technologies and funding abilities will be rare and sought after. This will generate a new cycle of investment and a potential change in the vendor landscape. Moving Through the Cycle Technologies move through the hype cycle at different speeds and these speeds are rarely constant. The trough of disillusionment can be a particular bottleneck. For technologies to reach the plateau of productivity within the next five years, they must either leverage previous investments or need a relatively low-level of investment for implementation. The technologies that move through the hype cycle at the fastest rate will be those that either enable new revenue streams, decrease operating expenses or increase productivity. Table 1 lists technologies in the telecommunications hype cycle in alphabetical order. 23 December

5 Alphabetical Index of Technologies Technology Timescale Hype Cycle Position 3G Network Capability Two to five years Trough of disillusionment a and g Two to five years Trough of disillusionment ADSL Now to two years Slope of enlightenment ASPs Now to two years Trough of disillusionment ATM Now to two years Plateau of productivity Bluetooth Two to five years Trough of disillusionment DoS Protection Now to two years Peak of inflated expectations DWDM Now to two years Slope of enlightenment Enterprise CDN Two to five years Peak of inflated expectations Ethernet MANs Two to five years Peak of inflated expectations FC SANs Now to two years Trough of disillusionment Fiber to the home (FTTH) More than five years Technology trigger GMPLS Two to five years Peak of inflated expectations GPRS Now to two years Trough of disillusionment "In the cloud" security services Two to five years Peak of inflated expectations (in the WAN) Intrusion prevention Two to five years Technology trigger IP telephony Now to two years Trough of disillusionment IPSec Now to two years Trough of disillusionment IPv6 More than five years Technology trigger iscsi SANs Two to five years Technology trigger Lambda services Two to five years Peak of inflated expectations Location "aware" services Two to five years Peak of inflated expectations Managed services Now to two years Slope of enlightenment MPLS Now to two years Trough of disillusionment NAS Now to two years Plateau of productivity Next-generation satellite More than five years Trough of disillusionment Optical switching Two to five years Trough of disillusionment Softswitches Two to five years Peak of inflated expectations Ultra wideband (UWB) More than five years Technology trigger Video streaming Now to two years Trough of disillusionment VoIP Now to two years Slope of enlightenment WiFi b Now to two years Slope of enlightenment WiFi hot spots Two to five years Peak of inflated expectations Wireless Web Two to five years Peak of inflated expectations Wireless local loop (WLL) Two to five years Trough of disillusionment Source: Gartner Research (December 2002) Bottom Line: Enterprises and vendors should use the telecommunications and networking hype cycle to determine which technologies or services should be included in strategic network plans and when. 23 December