"The Internet is broken." So says Ed English, vice president of strategic planning and corporate development for San Jose, CA-based netVmg, one of a growing number of companies out to spot Internet traffic jams and find ways around them.

Companies that rely on the Internet are increasingly using multiple service providers to get the most reliable access possible. The system's not simple, though. Companies must set rules for which of those providers they will use to send different kinds of data; for example, they might send e-mail over the cheapest, but slowest, network, while sending Web traffic out on an expensive but fast connection. The approach often leads to high costs and gives variable results; the expensive provider, for instance, might have an equipment failure or unusually high traffic in the middle of the day. The solution? Intelligent Internet traffic management. Intelligent-routing companies use proprietary techniques to measure the performance of different service providers throughout the day and decide in real time which provider to use for a given piece of data.

By making sure each piece of data heads out in the right direction, says Charles Rutstein, research director at Forrester Research, "these guys are trying to solve the problems underlying the protocol that routes information on the Internet," which aims to ensure that information reaches its destination, without regard for how long it might take to get there. The benefits of solving those problems are improved performance and reliability and, perhaps more importantly, cost savings. As more companies look to move critical business functions like accounting and supply-chain management onto the Internet, the field is set to explode. Credit Suisse First Boston estimates the intelligent traffic management market will reach $3 billion by 2004. Early entrants include Seattle's Internap Network Services, Newton, MA-based Sockeye Networks and netVmg.

Strategies for managing the traffic vary somewhat. Internap functions as a virtual service provider, maintaining connections to several backbone carriers like AT&T and Qwest, eliminating the need for customers to deal directly with multiple service providers. In contrast, the customers of newcomers Sockeye and netVmg must maintain their own connections to multiple service providers. The companies monitor both global and local traffic conditions and provide services that optimize outgoing-traffic delivery in real time,  based on factors chosen by the customer, such as cost or efficient routing of specific data types. Both companies had only beta customers as TR went to press.