International Business Machines Corp. has released data transmission technology that promises to cut costs for banks routing information between computer centers.
The new product allows users to simultaneously send as many as 20 data streams over a single optical fiber, reducing the need for renting the high-speed, high-volume transmission wires. Two financial companies, Morgan Stanley and the Bank of Austria, have been testing this optical multiplexe for at least two months.
Paul Green, the manager of advanced optical networking for IBM Research, said every fiber using this new technology would have 25,000 gigabytes of capacity - enough to carry all the transmissions passing over all the telephone lines in the country during the busiest hour of the year.
IBM officials predict that this technology will have even more far- reaching applications in aiding banks to transmit data over the much- ballyhooed information superhighway.
Now, Big Blue is intent on launching this "first salvo into being a serious networking company," said Jeff Jaffe, the vice president for systems in IBM's research division.
IBM officials say the company has signed a raft of agreements to sell this product to a number of undisclosed companies, including about half a dozen financial institutions.
"One of (IBM chairman and chief executive officer) Lou Gerstner's imperatives is that IBM is going to become a network-centric computing company," Mr. Jaffe said at a press conference last week. "That includes making the information superhighway accessible, and making it work for our customers."
Given the extent to which IBM's traditional business lines may suffer through the rise of PC-based and open-systems computing, the moves to broaden the mainframe maker's horizons have been applauded by industry analysts.
And this new product development, called Muxmaster, provides a couple of firsts - or at least novel approaches - for the staid computing giant.
Aside from being the first major leap into networking systems, it marks one of the few times that a technology marketing effort has come straight out of the research area without first being adopted by a specific product division.
According to Mr. Jaffe, IBM's customers have expressed "an insatiable appetite for bandwidth," which is the term applied to the amount of available transmission capacity.
With the onslaught of electronic commerce possibilities, banks may need to start thinking just as seriously about ways to make such options cost effective as well as feasible, he added.
IBM estimates that Muxmaster's 20-fold increase in capacity for each optical fiber could potentially save users 95% of their cost for leasing lines. Each Muxmaster unit costs $230,000 to $250,000, according to Mr. Green.
The Muxmaster works like a prism, defracting and dispersing different streams of information on various colors of light waves to get the most out of each optical fiber. Though this type of technology has existed for some time, IBM officials claim that they are the first to bring it out of the research lab and make it available for real-life business applications.
To be sure, this is still a work in progress to some extent.
Right now, the major drawback appears to be a very limited reach. The product can only transmit data over a 50-kilometer span or less. Considering that many banks maintain data centers that are often hundreds or thousands of miles away, that would prohibit their use of the technology as its exists.
IBM researchers plan to extend the Muxmaster's span of operation through amplification, but that could take two years or more, according to Rajiv Ramaswami, the scientist most directly involved with the product's development.
But IBM research officials feel that this technology is still well worth pursuing, given that "optical transmissions and networks don't have some of the inherent slowdowns that electronic systems do," Mr. Jaffe said.