When J. David Hann, president of GTE Telenet Communications Corp., wants to praise or castigate his national sales staff, he doesn't dictate a memo into a recording device for transcription and delivery, nor does he forward carbon copies to superiors nearly 300 miles away.
Instead, the president of the Vienna, Va.-based company turns from his desk to a screen and terminal behind it and, if all works well, types a code and message into the terminal. Moments later the message can be at the desks of all or a few of the more than 800 GTE Telenet employes, most of whom have similar equipment.
In the not-too-distant future, Hann and others linked to the company's Telemail system will be able to send reports -- or for that matter, love notes -- throughout a network that company officials hope ultimately will include hundreds of businesses. Perhaps -- with the help of others in the field -- the network eventually will take in practically the nations' entire business community.
"Our objective is to make our services available to as broad a range of customers as possible, so they can ultimately use it for intercompany and nt just intracompany communications," said Hann. For the moment, only about 5 percent of GTE's customers actually use the service outside their own organizations. o
While public grustration continues over the U.S. Postal Service, the Virginia company is moving to develop its own technologically advanced mail system, now serving more than 100 different companies and 5,000 subscribers through a network that includes more than 200 cities -- twice as many as a year ago.
Marilyn Mouly, a top GTE Telenet sales official said the Telemail system has altered dramatically work patterns at GTE and customer offices.
Managers, secretaries and sales people, for example, function differently using the electronic mail system, since it leaves them extra time to perform important business functions in an environment free from constant paper shuffling, phone calls that often go unanswered and messages that can wind up in a waste baskets, she said. GTE Telenet says that outgoing phone calls fail to reach the person sought 75 percent of the time. With Telemail, however, messages once received can be stored in a data bank, preventing possible loss or misplacing of messages on paper.
For example, Mouly explained, when using the Telemail system, workers no longer have to place cross-country calls with an eye on time-zone differences. "The person in the East can send a message to the West Coast when it's convenient, not necessarily when the person had made it to work" she said. "These days you have to focus on the productivity of the office worker and the role of the manager "Telemail forces you into a habit which is very nice. The system forces you into action. The whole concept of Telemail's is that the system prompts you to do something.
"You sit and respond immediately. We tried to make the system as consistent with the way people think as we could. We tried to target the non-data-processing user," she said, demonstrating a simple, direct coding system that permits easy access into the message system.
The year-old electronic mail system is just one facet of the evolution of GTE Telenet, which is now the parent company's umbrella for a variety of products and services, including a new telephone hookup that permits a merchant to flash a credit card through the back of a telephone and quickly check a consumer's credit.
The potential of the GTE Telenet system is so enormous that there is little doubt that on its success rides the future of General Telephone and Electronics ycorp. the Stamford, Conn.-based company that has reported revenue increases of close to $1 billion annually over the past five year, bring the total company sales to close to $10 billion last year.
"The future of GTE is tied to Telenet," said Hann, who had been the chief executive of UNC Resources before taking the reins of the company last fall. "They want to make sure they're in the total communications business. They want us to be number one in the data network business."
But when General Telephone & Electronics Corp. bought the then-tiny, little-known Telenet Corp. in million, the acquisition attracted little more than curiosity in the world at large and considerable skepticism. The purchase price seemed too high, and some industry observers thought GTE overpaid.
The Virginia company had never made a profit in its slice of the communications business, and GTE -- which serves about 10 percent of the nation's phones -- was stuck with an Avis-like No. 2 reputation, dwarfed by American Telephone & Telegraph Co.
Today, the picture has changed completely and the product of that venture, GTE Telenet Communications, stands at the forefront of developing a complex but heralded communications technology that features the most successful electronic mail operation yet developed in this country. In fact, only Tymshare Inc., which lacks the resources of a GTE, is currently a true competitor in the field. The GTE Telenet staff now is four times larger than it was at the time of the June 1979 purchase.
Further, the company is on the verge of making a major challenge to the dominant Bell System in advanced business communications systems with the blessings of an advanced technological base and an increasing ability to operate free from regulatory involvement.
Experts are suggesting that the company, to a certain extent, may even be in a position to threaten AT&T's potential position in the future of business communications since the giant Bell System operation is deeply in regulatory and judicial difficulties. Yet it is important to remember that AT&T appears to be on the verge of a dramatic charge into the unregulated market place with the resources of its Western Electric Co. laboratories behind it. And companies like Xerox and International Business Machines Corp. also are moving into similar communications fields, as is Satellite Business Systems, the Virginia partnership of IBM, Communications Satellite Corp. and Aetna Life & Casualty.
The GTE Telenet story seems even more promising in light of the scope of the company's system, particularly when combined with the capabilities of its parent.
Not only has the Telenet subsidiary developed a sophisticated packet-switching technology that is considered highly advanced, the company also has a computer processing subsidiary.
It has developed a PBX, or computerized switching device, that speeds the local connection of signals. With the 1984 launch of a satellite, the company will have the capability of moving data and voice transmissions quickly across the country, connecting with and already operating network in other continents.
"There is no company with the full range of solutions that GTE has," said Howard Anderson, a communications analyst with The Yankee Group, a Cambridge, Mass., consulting firm. "Now they have to make it work together, and they have to get out of the POTS [plain old telephone] mentality. They can be right in the middle of the race to wire the office.
"They've got the pieces, but it is a question of managing risk and making out well in the the process. They're building a new company from within, and GTE can play with the big boys. The question is, do they want to eat well and sleep well."
Anderson was referring to the pattern of deep losses the company has been battling, at a time when their officials are moving to expand the firm's network. The size of the company's losses have grown in tandem with the firm's sales.
Losses from the company's network system totaled $14.5 million last year, up from $9.1 million in 1979 and $4.9 million that year before. "Our performance has been commented on a lot, but we should be profitble in 1983 or 1984," said Hann. "We are growing and putting a lot of support into our expansion."
One Wall Street analyst emphasized the difficulties of the continuing stream of investment pouring from the company's coffers. "It would be useful to be making money while you're spending it," he said. "There's always the chance they'll get squeezed, and they may not be in the black until 1987."
But, in fact, sales have grown significantly from about $8 million in 1978 to $15 million in 1979 and up to more tha $32 million last year. "We're projecting sales of $60 million plus," said Stuart Mathison, vice president, business planning.
At the heart of the GTE Telenet network is the process known as pack-switching, a system that sends signals in bunches to central offices and another 207 smaller operations, known as "nodes."
The signals are sent over both the public telephone network and private GTE links throughout the United States, Mexico, Canada, Western Europe and other overseas locales, linking word- and data-processors, computers and ultimately voice signals. Rates over GTE's lines for terminal use can run as low as $4.40 an hour, compared with $29 for AT&T's direct distance dialing or WATS service, Mathison said.
This stream of information has been coded or addressed to send it to its ultimate destination, and one of the system's unique characteristics is the fact that the signals are compatible with computers of nearly all major kinds. The protocol developed by Telenet experts actually has become the international standard.
That technology is the outgrowth of a Defense Department research project run during the late 60s by Lawrence Roberts. The communications techniques developed there were contracted to the Boston company Bolt, Beranek and Newman Inc., which set up Telenet in the fall of 1972 and moved it here in 1974.
The current network grew out of seven-city network. Marketing was difficult during the middle 1970s. '"It's easy to sell a large network, it was hard to sell a small one," said Mathison.
Clearly, a rich partner was needed and several offers for Telenet were made before the eventual sale to GTE. The compatibility feature of the GTE Telenet technology started to take hold as the network expanded to more and more cities.
"A typical company, five to 10 years ago, had one big IBM computer," Mathison noted. "Now minicomputers are all over from lots of different vendors."
As Hann sees it, the growth of the computer industry is not too different from what GTE Telenet expects to see in the coming decade. "Nobody really knows what the telecommunications industry is or how big the market can become," he said. "We do know the growth is going to be as significant as the computer industry as the computer industry in the 1960s."