The price of telecommunications in the UK is preventing UK companies from taking advantage of the next generation of computing.
The next generation of computing, according to IT companies like Oracle, IBM and Cap Gemini, is to rent services from an Internet service provider (ISP) or facilities management company. Instead of buying all the hardware and software, companies download an application when they require it and pay for what they use.
"In the UK there is an inhibitor and it is called telecommunications," said Philip Oliver, marketing director at IBM Global Services. "It is still too expensive for many organisations to make very productive use of the Internet. You don't see that in the US.
"BT is still not subject to huge competition, but it will be, it's coming," he added. However, he estimated that it could be as long as five years before bandwidth ceases to be an issue.
Cap Gemini has established its own ATM virtual private network to facilitate the hosting of its customers' computing. Other IT services companies like EDS and ICL have announced plans to follow suit.
"There is a great pressure on BT and others to re-examine their charging policy. If the cost of infrastructure is fixed then telcos would benefit themselves by pushing up the volume and might liberate users in terms of working practices," said Andy Mulholland, divisional director at Cap Gemini.
Thin-client computing is one way to get round the bandwidth issue, claims Neil Robertson, UK managing director of Great Plains. The accountancy software firm has been trying out hosting its software in the UK using Citrix Winframe to keep the majority of the processing on the host server and keep the volumes downloaded to customers at a minimum.
"If the volumes are small it's just the cost of a local call," he said.
Great Plains plans to go live next year.
Maria Cappella, general manager of ISP GX Networks, said that it was "naive" to claim that BT had the power to keep up the price of bandwidth. It is still early days for hosting and it is not surprising that vendors are struggling to find profitable ways to take the service to market, she said.
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