REMARKS BY WILLIAM LOUDEN, GENERAL MANAGER, GENIE
Keynote address to the ENA Conference - May, 1988


The information age is upon us; that should be no surprise
to members of the ENA. But it has surprised some MIS managers of
companies over the past few years. MIS managers were comfortable
when the company's information and data was on their mainframe or
mini computers; but their users wanted to connect to outside
sources, too, by using their PCs. Well, enter the inter-
information age.

At GE Information Services, the parent company of GEnie, we
have seen a shift in market demand in three key areas: notably
electronic mail, electronic data interchange (or EDI as most call
it), and external information sources, such as GEnie, the GE
Network for Information Exchange, which became commercial in
October 1985.

Electronic mail is certainly not new; GE Information
Services has been providing commercial private electronic mail
systems for over 10 years. And our QUIK-COMM System is considered
one of the leading private electronic mail services in the
industry.

What is new, however, is an increasing demand for global
access, interconnectivity to external, and perhaps "alien," E-
Mail services, and the beginning of the elimination of foreign
government regulations on the transmission of electronic mail
across borders.

First, let's discuss global access. Increasingly, many
corporations are thinking in terms of global access for their
products. These corporations are rapidly finding that they need
access to global information services - such as E-Mail and EDI -
if they want to compete on a global basis. The technology exists
to use these network-based information services worldwide, but
the ability for companies to use these services to their fullest
capabilities is restricted by actual and threatened regulatory
impediments in many countries.

These corporations also are establishing branch offices
throughout the world. They see the critical need to be able to
communicate quickly and efficiently with their co-workers,
regardless of whether they are in the Tokyo office or in the
office down the hall.

Second, there has been a fundamental change in the way that
corporations view electronic mail services. In the past, E-Mail
services were viewed as private castles, with addresses doled out
sparingly only to the secretaries of the "corporate nobility."

And these castles were only considered private and secure
when they were protected by thick electronic walls limiting
access to a select few internal users, with perhaps an electronic
moat barring access to any company outsiders. No more.

Today, corporations are increasingly requesting private and
secure E-Mail systems for all employees, from the guard at the
front desk to the CEO. And they are all increasingly requesting
inter-connectivity to other external and/or private E-Mail
services as well.

At GE information services, we offer our QUIK-COMM system
users the capability called "cross community," which allows one
private QUIK-COMM system to transmit an electronic message to
another private QUIK-COMM system, if permitted by the
system administrators, while still ensuring the privacy and
security of each E-Mail community.

We are also actively pursuing interfaces to other private E-
Mail systems. To date, we provide QUIK-COMM System interfaces to
IBM's PROFS (Professional Office System) and DISOSS (Distributed
Office Support System) E-Mail Systems and to DEC`s Al-In-1 mail
system.

This, however, still does not address the interconnectivity
requirement between two dissimilar E-Mail systems, such as
private vs. public, on different provider's mainframes, located
in different countries with, perhaps, a different billing system.

Thus, the X.400 standard has emerged as a method to span the
bridge between those differing E-Mail systems. GE Information
Services, as well as many other international electronic mail
providers, have already stated that they will support the S.400
standard in their E-Mail systems.

But technical standards and technology are not enough;
network service providers need a harmonious political and
regulatory environment in the nations where they seek to operate.
Only where such an environment exists can they help their clients
to achieve the leading edge competitiveness required in a fast-
changing global economy.

However, in many countries today, it is still difficult, if
not illegal, to send a simple electronic mail message across a
country's borders. Fortunately, a liberalization is now taking
place, particularly in Europe as part of Europe 1992.

In Japan, for example, private networks and information
services such as GE Information Services or NEC may now offer
communications and value added network services that, in the
past, were only reserved for the government.

In Europe, liberalization is also speeding up as a result of
the plan to create a European marketing community by 1992. Last
year the United Kingdom, Germany and Switzerland permitted
private enterprises to offer electronic mail and information
services traditionally reserved for the PTTs. And the objective
of total liberalization of most industries, including
telecommunications, in the European Economic Community is
targeted for 1992. That date may be a little late by our
standards, perhaps, but it is welcome nonetheless.

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The second area of increased market demand is in electronic
data interchange. EDI in its simplest form is the computer to
computer exchange of intercompany business documents, such as
invoices and purchase orders, in a public standard format.

Some people consider EDI to be a specialized form of
electronic mail; but it is differentiated from electronic funds
transfer (EFT). EDI moves information in a standard format; EFT
moves money.

GE Information Services is recognized as the leading
provider of EDI services today; with the following major
corporations as EDI clients: Eastman Kodak, Levi Strauss,
Burlington Industries, Gillette, 3M, Texas Instruments, and Toys
"R" Us.

In some industries, EDI has already become the norm; not the
exception. For example, in the wholesale drug industry, 95
percent of all purchase orders today are delivered to
manufacturers via EDI. In an industry with an average profit
margin of less than one percent; EDI has been critical to the
continued success and profitability of many organizations.

At GE, we estimate that 70 percent of computer output is
another computer's input; and that 25 percent of a transaction's
cost is the data entry and data re-entry. EDI makes good business
sense; but that is usually not enough to get some businesses to
adopt a new technology.

In the case of EDI, adoption of the new technology is aided
by gentle coercion. No one called you and said, "Use Electronic
Mail, or FAX, or personal computers, or we'll cut you off!" But
in the case of EDI, that is exactly what is happening now in
major industry sectors, such as automotive, transportation and
wholesale drug businesses.

What usually happens is that a major purchaser (called a
hub) in a given industry sector will issue a directive to its
suppliers that if they wish to continue to do business with the
hub, then the suppliers must implement EDI services. Faced with a
loss of revenue, suppliers soon adopt the EDI technology in their
business. The 80/20 rule seems applicable with EDI; if 80 percent
of your dollar volume comes from 20 percent of your trading
partners, those 20 percent will force you into EDI, and it may be
sooner than you think.

Before I leave EDI, I would like to come back to the X.400
standard. Many people in the information services industry
believe that the X.400 standard also has significant applications
for EDI as well as electronic mail. In fact, some say that the
rapid acceptance of EDI will be the major force in the future
acceptance and use of the X.400 messaging standard.

In fact, GE Information Services was recently selected by
CEFIC, the European Council of Chemical Manufacturers'
Federations, to provide a pilot EDI service to its member
companies. CEFIC is the recognized voice of the European Chemical
Industry which employs more than two million people. What makes
this contract of particular mention here is the use in the pilot
of the X.400 messaging standard as a carrier for EDI documents
across Europe. In this respect, the CEFIC EDI pilot is the first
major implementation to employ both the X.400 messaging standard
and EDIFACT, the international EDI standard.

The third emerging market is the area of external
information services, such as GEnie. These services are not all
that new; the concept of these services, often called videotex,
has been evolving for the past several years and they continue to
grow in popularity.

The world leader, by number of terminals in place, in
videotex services is the French Minitel service. They currently
have delivered over 4 million free terminals to French users;
with 58 million accesses per month and over 7,000 information
providers online. The French experience was made possible by the
French government's subsidizing the cost of the terminals and
mandating a common network gateway through the government
controlled telephone and telecommunications ministry.

In the United States, the market is being driven by personal
computers in the home, not low-priced terminals. It is estimated
the U.S. now has over 14 million PCs in the home; plus 17 million
PCs in the workplace and an additional 13 million on-line
terminals. Of the PCs in homes and offices, one-fifth, or some 6
million, are equipped with a modem. And approximately one million
of these PC owners subscribe to a commercial online service in
the U.S. today By the year 2000, it is estimated that 50 percent
of the U.S. population (35 million households) will be using
videotex services on at least an occasional basis.`

Now where does GEnie fit into this scenario. GE Information
Services, which has been providing network based business
applications and other services to corporate America for more
than 20 years, decided in 1985 to use some of its excess
mainframe computer capacity during non-prime time by offering a
consumer information service.

Thus GEnie became operational on October 1, 1985, with zero
subscribers, other than the internal GE Information services
people online. After only a little over two years in operation,
GEnie recently passed the 100,000 subscriber level and now has
110,000 subscribers as I speak here today.

As a result of this phenomenal growth, GEnie is now number
two in the U.S. consumer information industry. GEnie is an
excellent example of where the online consumer information
services industry can go in the near future.