The home networking e-box-ing match

In fact, Ericsson's "e-box," which spawned the group, wasn't even mentioned. But behind the little box is a big idea. It's not about letting your VCR, coffeepot and microwave talk to each other. It's about turning your home into a workstation on a huge corporate network - by giving away e-boxes for free.

And once these boxes are dropped in our homes like paratroopers, computer firms like Sun Microsystems Inc. and Oracle Corp. figure they'll be able to march in and finally cash in on the lucrative home electronics business.

When most consumers think of home networking, they think of James Bond-style gadget wizardry, such as televisions and bedroom lights that respond to voice commands. But that gadgetry has been in place for years - and only the earliest of adopters have raced to rewire their homes or fill their outlets with X-10 devices that let your PC turn lights on and off by communicating through electric wiring.

Working in reverse
That's because current home networking plans have it all backward, say members of the Open Source Gateway Initiative. Consumers won't change their lives, or spend hundreds of dollars, so they can call their coffeepots with their cell phones.

But an electric utility company will buy thousands of little black boxes and give them to customers - for free - if the boxes are smart enough to lower energy costs. And as long as the box is smart, why not make it really smart? Why not let security firms monitor home security systems with the box and let phone companies deliver other digital services through it? That's Ericsson's vision for "e-services," a vision the company sold to the members of the OSGI earlier this year.

"It's really a beachhead into the home," said Bob Mines, Sun's representative in the OSGI group. With such a beachhead established, members of the OSGI think they can win the little black box wars. What once was a battle among cable companies trying to deliver interactive television is being fought along a much broader front now - it's a struggle to control the center of your electronic universe. Even the cable industry has begun to study broadening set-top boxes into home networking devices, according to Mike Schwartz of Cable Labs.

So the OSGI "super-thermostat" e-box is smart enough to act as a "thin server" for all your home electronics. And smart enough to turn your home into a "client" on the power company's network.

"You're talking about a company being able to network outposts," Mines says. "There's a clear business model here for things like energy management and home security."

Making sense
The beachhead makes sense for the power company and its customers. The e-box would monitor usage patterns and make suggestions ("Do you reall need to keep the air conditioning on all day? Raising your thermostat one degree would save you $17 next month"). But it also makes sense for computer software and hardware firms salivating at any chance to edge in on the lucrative electronics industry - Ericsson says the merger of computers and electronics will be worth $30 billion a year. Oracle, for example, pictures the home network the way it once pictured network computers - electronics of the future will be "dumb terminals" that will have software "pushed" to them when needed from a central server, managed by an Oracle database. So you wouldn't buy a new VCR for new features, you would "download" them.

"This is really in synch with Oracle's whole strategy," said analyst Carl Olofson of International Data Corp. "Oracle is driving toward having little embeddable databases everywhere.... They want to move the focal point away from custom-coded applications and rely on services provided by a server."

Layering in other services beyond energy management requires a collection of high-tech firms to agree on standard software and communications protocols, and that's what Mines and others will be discussing this week when OSGI members meet in Paris at a "technical seminar and requirements working group." Sun's interest is clear - the e-box is already based on the Java programming language, and Sun wants to keep it that way.

What, no Microsoft?
The OSGI consortium was announced at the beginning of March, and it includes a hefty list of industry heavyweights - Sun, Oracle, Cable and Wireless, Ericsson, to name a few. Microsoft is among those who are conspiciously absent.

But the OSGI was formed around the Ericsson project, which created the e-box about a year ago. (Microsoft is a partner in MSNBC.)

"The idea is it's the operator who should be responsible for the connection, not the consumer,"'said Per Bengtsson of Ericsson. "Somebody has to take responsibility for the whole system. It belongs to the operator, they hold the line. It is a service business." The company has started six small-scale trials of the box in Norway and Sweden, where home users are just starting to link up to wider networks.

But Ericsson realized that for its box and its dream of e-services, it needed to groom other developers. So it signed up the OSGI group, made the e-box Java-compliant, and built in an Oracle database, a 486 processor, an Ethernet port and two PCMCIA slots.

For Sun, anything that invites creation of Java-compliant devices is good. Plus, a service gateway would mean the home computer wouldn't be the center of a home network - and neither would Microsoft's Windows. "It inserts a value point between the Internet and the PC," said Sun's Mines.

Microsoft isn't convinced
But Microsoft isn't convinced home networks need such a hub - not even the PC, according to Alec Saunders, group planning manager for Microsoft's productivity appliances group. Microsoft has no current plans to join OSGI.

"The architecture we've proposed for the home is Internet protocols," he said. A much simpler strategy, he says, is making all devices equal clients on a home network, so clocks would set themselves by plucking the correct time off any other networked device. "There's no need for centralized control. ... This initiative seems to be based on Java, and we believe the world is going to be bigger than that," he added.

That position is supported by members of another big-name home network consortium. The Home Phone Networking Alliance, founded by companies such as IBM Corp., Intel Corp., AT&T and 3Com, is dedicated to emerging technology that turns traditional telephone wires into network cabling, allowing Ethernet-based networks without the installation of new wires. Its members are also interested in marrying data and electronic appliances but think chasing Bond-style gadgetry is missing the point. They say satisfying the basic need for shared Internet access is the killer app for a home network.

Needs to share access
"My kids rush through their vegetables at dinner so they can get to the computer and the Internet phone line first," said Epigram Inc. CEO Jeff Thermond. Epigram, which makes chips that allow phone-line networks, was one of the companies at the center of the fast-moving home network market - until it was purchased by chip maker Broadcom Inc. last week for $316 million. "Any product that doesn't allow shared access is a non-starter."

And there's another reason to wonder about the future of OSGI and the e-box, said Olofson.

"Whenever you see 15 companies together, you wonder if something really can come of that," he said.

Still, even Saunders says gateways of one kind or another will have a place in the wired homes of the future. Sun's Mines said the central device U.S. citizens eventually receive will just as likely come from America Online, as an Internet access device, or Cisco, as a telephony device (both have talked to OSGI already, he said.) Meanwhile, Ericsson's Bengtsson thinks the future of his company's e-box is probably a bit clearer in Europe, where deregulation of utility companies has those firms scambling to offer new, competitive services.

"Take Sweden. They were very quick to adopt mobile technology," he said. "Perhaps it has to do with the fact that it is a small, uniform market. People have more or less the same needs, the same standard of living.

"In the U.S., it's a much more varied situation. There are all sorts of standards, income levels. It's difficult."