Abstract
Up to now most writing on telecommunications by economists is preoccupied with the supply side. Regulation and industrial policy are the topics that show up most prominently in the economic literature on telecommunications. The demand side, that is the users, usually get far less attention. In the last three chapters this book has been no exception to the rule. Now, however, we want to depart from doing “business as usual” and take account of the users. Accordingly, this chapter presents four case studies of telecommunications usage by German firms. The firms that we study are Commerzbank, one of the three largest private banks in Germany, Daimler-Benz, the well known car-manufacturer, Nixdorf, the electronics firm, and Nino, a middle sized textile firm.
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Notes
740 HfD leased lines and 10 international leased lines are used (see chart 3) in the national and international starlike primary network. 70 Datex-P and 40 Datex-L lines are used in the national secondary network, which forms the outer public X.25 ring network.
The starlike network is built in IBM’s SNA.
The outer ring uses SIEMENS Transdata network architecture.
The Nixdorf systems (Nixdorf BNC) were developped by Nixdorf in collaboration with Commerzbank.
There is no need for direct communication between two foreign affiliates for example between the affiliate in Tokyo and the affiliate in New York because they all have to report to the headquarter at Frankfurt. In addition — as noted above — time differentials are not important to achieve a special business advantage because all business information are available at each local trading operation.
Nixdorf BNC and Olivetti L1 systems
Word proccessing now is done via the network as any application; especially forms (which can consist of more than 7 pages) are filled in by the system.
BIGFON is the abbreviation of “wideband optical fibre local communication network” (Breitban-diges /ntegriertes Glasfaser Fernmelde OrtsNetz)
In future — if video telephony becomes a basic service in the wideband ISDN at low costs — videoconferences and video telephony would be used by the Commerzbank.
Deutsche Aerospace comprises MTU, MBB, and the relevant sectors of AEG.
Additionally, AEG provides electric and electronic equipment, information and communications systems, software, office automation equipment, mobile and fixed radio technology, antennas, cables and wires, terminal equipment, switching equipment, power plants (by its subsidiary AEG KANIS), air and space technology incuding satellite systems (which has been reallocated to Deutsche Aerospace in course of the restructuring of the concern), systems for transport and security. In 1988 AEG had 73,000 employees in Germany and 12 billion DM turnover.
The use of telematics by an electronics firm is discussed below for Nixdorf Computer AG.
Daimler DV Verbund System (Daimler data processing network)
System Network Architecture
Datex-P is the German digital packet switched network, see industry study
This is reflected in an 43 p.c. increase of the demand for Datex-P links in 1988 (Source: Annual Report of the DBP); see industry study for details.
Typical problems in the field of software are: incompatible operating systems of heterogeneous systems, incompatible proprietary communications protocols, lack of well performing communications and network management software, lack of open and standardized interfaces resulting in compatibility.
Programme for an European Traffic with Highest Efficiency and Unprecendented Safety
see Daimler-Benz AG Annual Report 1988 p 48
traffic and electronics
Automatic Radio Communication System for Traffic Emergency Situations on Highways and Urban Roads
In Germany the C-network and D-networks can be used; see industry study.
Also other car and truck manufacturers have applied for the cellular radio licence, for example BMW and MAN.
Exactly the project is conducted by AEG Olympia AG, a AEG subsidiary supplying computers, office autoamtion and other electronics.
The wage drift between suppliers and car manufacturers is equivalent to a ratio of 1:1.5 in Germany (1:2 in Japan). This is a key factor that is determing the division of labour in the automotive industry.
Porter (1985)
Optical fibres are used in manufacturing sites mainly because the transmission is undisturbed by electromagnetical signals and interferences.
The systems provides for instance automatic diagnosis in case of faults in a production line, it selects the appropriate experts of the fault clearing service, it provides information on the replacement task including spare parts and monitors the successful completion of the repair.
see industry study, chapter 4
see Rush, Howard, Hoffmann, Kurt, Information Technology and Economic Perspectives — Microelectronics and the Clothing Industry; OECD DSTI/ICCP 84.10 working paper, Paris 1984 for further references.
Courtauld operates over 300 sites in the UK and has many plants in worldwide locations.
Another important factor for the decision not to subscribe to BTX was its slow diffusion and growing costs in Germany.
This case study — as well as the other three — reflects the situation of the company in fall 1989. At this time it runs the rumour that probably Nixdorf would be taken over by a large European, U.S. or Japanese company early in 1990. Certainly such a merger would influence Nixdorf’s competitive strategy as well as its networking strategy. But due to the highly speculative character of any information about a forthcoming merger we cannot extent our analysis to cope with these latest developments.
see industry study, chapter 4
see Williamson 1985
The same kind of organisational re-centralization took place with Philips. We guess that centralization is a typical trend in this industry.
The term “production control” covers the production of services like software as well as production of hardware and includes all activities in the value chain like purchasing inputs, planning, automated order processing, physical production, logistics, distribition, financing and controlling. R&D activities are not covered by the notion “production control”.
Of course there is individualized production in the software sector; as noted above Nixdorf supplies individualized solution concepts.
If required data can be retrieved by the IPC at Paderborn or by IPCs at other locations at any time.
An important principle of network management is a location oriented organisation of file transfer. At Munich e.g. Nixdorf operates about 10 agencies (which are customer segment specific); each of them runs its own 8850 or 8870 system for applications and order processing. But all together use only one single 8860 system at Munich to link the agencies to the host at Paderborn. The 8860 has similar functions as the former used MARK III nodes).
MARK III is a value added service which is supplied inside a network which consists of file transfer servers and node computers.
This marketing aspect also seems to have played an important role for the decisions of Digital and Hewlett Packard to build their own networks.
This is not yet realized but planned.
Nixdorf hopes that at the end of the year all 10 companies will exchange data with Nixdorf
It is important to point out that these 3 companies are very large enterprises; Nixdorf would not be able to exploit them after it had locked them into the network (there would not be switching costs because the network connections are standardized and there are no other sunk costs).
The standard which is supported by Nixdorf is EDIFACT which would allow to handle orders as messages within the X.400 standard (in connection with T61 protocols (teletex protocols)).
Video conference applications are discussed below.
Porter 1985
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© 1990 Springer-Verlag Berlin Heidelberg
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Pfeiffer, G., Wieland, B. (1990). Case Studies. In: Telecommunications in Germany. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-75556-9_5
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DOI: https://doi.org/10.1007/978-3-642-75556-9_5
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