1. The Internet: SUPERnet January 22, 2002 Fred Chang President & CEO SBC Technology Resources, Inc. Fred Chang President & CEO SBC Technology Resources, Inc. Maturing to a Critical Infrastructure

2. © SBC Technology Resources, Inc. 2002 Agenda First 30 Years –Historical Perspective & Timeline Broadband Internet –Broadband Adoption, Providers, Use and Applications Critical Infrastructure –Increasing Bandwidth –Network Gets Smarter –Management and Security 1. 2. 3.

3. © SBC Technology Resources, Inc. 2002 Internet Timeline Ethernet TCP/IP NSFNET ARPANET Web Browser World Wide Web UUCP 160 130 100 90 80 70 60 50 40 30 20 10 0 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 Global Host Count (In Millions) Yahoo! Broadband Internet IPO NAPs Netscape IPO

4. © SBC Technology Resources, Inc. 2002 Residential Broadband Adoption Source: Gartner Dataquest Number of households in millions 11.1 17.1 23.3 28.3

5. © SBC Technology Resources, Inc. 2002 Makeup of Broadband in 2002 Source: Gartner Dataquest Percentage of households

6. © SBC Technology Resources, Inc. 2002 Broadband Use Is Exploding it’s a whole new experience. is not just faster, DSL25 hours per week Dial-up7.5 hours per week Users online: Broadband

7. © SBC Technology Resources, Inc. 2002 Hooked on Broadband 78% daily newspaper 74% AM/FM radio 63% morning coffee 59% cable TV Broadband Users Value DSL % who would give up:

8. © SBC Technology Resources, Inc. 2002 The Broadband Home Phone + DSL Telephone Jacks Internet Camera Network Printer Smart Appliances Internet Phone Wireless Pad Entertainment Center Monitor Broadband Home Gateway Digital Picture Frame

9. © SBC Technology Resources, Inc. 2002 Central Office Home Network Hub Wireless Laptop Wireless Appliance RioReceiver Broadband Home Gateway Home Network Home Networking Example Phone + DSL

10. © SBC Technology Resources, Inc. 2002 Hosted Network Software “In three to four years, high speed broadband communications will be available everywhere. The notion of software as a packaged product will disappear. That’s a fact.” Software Delivery Steve Ballmer, CEO Microsoft

11. © SBC Technology Resources, Inc. 2002 Peer to Peer Computing Company A Company B P2P will enable ad-hoc inter-company workgroups

12. © SBC Technology Resources, Inc. 2002 Home Monitoring & Automation 1. Sensors monitor home and send notification of any “events” 2. Events flow through PC and to home monitoring system 3. Events are stored in user’s account and are accessible via the web. Pager/email notifications can also be sent. DSL

13. © SBC Technology Resources, Inc. 2002 Increasing Bandwidth.COM bursting bubble did not throttle demand Demand will catch up Applications will fill any given capacity over time

14. © SBC Technology Resources, Inc. 2002 “Big Pipe” Technologies Gigabit Ethernet Fiber Channel ESCON OADM SONET Fiber Channel SONET OADM Gigabit Ethernet ESCON

15. © SBC Technology Resources, Inc. 2002 Ethernet Invades the Core Network Edge Layer 3 Routing Layer 2 Switching Network Core Network Core

16. © SBC Technology Resources, Inc. 2002 The Network Gets Smarter

17. © SBC Technology Resources, Inc. 2002 Quality of Service Peak bandwidth Minimum guarantees Packet loss metrics Absolute delay limits Differential delay limits VoIP Video telephony Audio entertainment Video entertainment Mission-critical

18. © SBC Technology Resources, Inc. 2002 Virtual Networks A B B B B A A A Public Network

19. © SBC Technology Resources, Inc. 2002 Stability Carrier class elements No more router reboots Redundancy Rerouting Reliability Availability

20. © SBC Technology Resources, Inc. 2002 Manageability: SNMP Meets OSS Capacity planning Performance monitoring, load sharing Automated fault detection, isolation, recovery Usage-based billing Decision support Customer network management

21. © SBC Technology Resources, Inc. 2002 Internet Security Malicious Code Viruses Worms Buffer Overflows Session Hijacking Port Scanning Trojans Denial of Service

22. © SBC Technology Resources, Inc. 2002 Problem is Worsening 60000 50000 40000 30000 20000 10000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Internet Security Violations Jerusalem Tequila Michelangelo Good Times Melissa & ILOVEYOU Anna Kournikova Code Red Nimba Badtrans Source: CERT® Coordination Center Carnegie Mellon

23. © SBC Technology Resources, Inc. 2002 Core Network Security Most security now at the edge Firewalls, Hosts, Applications Can we make the core more secure? Large networks Broad participation Novel approaches

24. © SBC Technology Resources, Inc. 2002 JFMAMJJASONDJFMAMJJASOND Stock Index 70 80 90 100 110 120 130 140 150 Host Count (Millions) Perception Versus Reality Nasdaq 5000 4000 3000 2000 1000 Host Count Internet Growth (Jan. 2000 through December 2001) 2000 2001