5o, where do we go from here? Yes, it is the biggest meltdown I’ve ever seen, in fact the only one. There was a drop, a significant drop, in undersea cable demand in ’96, but we came out of it in really good shape. Before that, the industry was pretty much controlled by a few dominant carriers and the market was capped according to their needs. Everybody reading this probably remembers the downturn in ’96 but there were also some lessons coming out of it that might not have had a lot of staying power. Admittedly, ’01 and ‘02 have been a lot worse in every way, but the future will still see huge need for new cables and my prediction is the demand will occur pretty quickly. The irony is, however, that I don’t think anyone in the industry will be prepared or ready for the up tick. Instead of rallying and riding a surge tide to success, the attempts to unravel the new order of things will tend to stall any recovery. The woes of the last year will be with us long after they should have
dissipated, as suppliers and customers seek to understand what is going on and find new directions in a different paradigm. That’s what happened in and after ’96. A whole new paradigm came out of that downturn and very few customers, very few carriers, and very few suppliers were able to understand and answer the new demands of an explosion on new carriers, dot coms and Moore’s law in undersea capacity. Perhaps if they had, the old guard would have maintained leadership in the industry and too many upstart companies wouldn’t have overbuilt so much. Be that as it may, we are about to see it happen again and I don’t think anyone has learned any lessons. Coming out of this downturn there will again be a new paradigm, new directions and new entrants.
Why so positive? First of all, demand isn’t going away. Communications is here to stay. The need has never decreased and ever increasing applications, with 7
By Bill Carter, Dorado Development Group ever increasing size of applications, and ever increasing numbers of users will continue to push demand for more bandwidth. Simply stated, that’s the formula – Users X Applications X Size. None of those are decreasing. Never will. It is just a matter of time before we use up what we have and need more. Size. (Bandwidth required for any particular application) Remember when Microsoft Word was delivered to you on a half dozen 1.4Mb disks? Wasn’t that long ago. Now, an old version chews up 80Mb of space on my computer. Any doubts that the size of applications is getting bigger and bigger? As memory got cheaper and cheaper, the larger the chunks we ate up. Mb’s went to Gb’s in a heart beat. Also true, as we all know, in bandwidth requirements. We have an insatiable appetite for more graphics, better resolution,