ATM has the potential to displace all existing internetworking technologies
One single network handles all traffic types: Bursty data and Time-sensitive continuous traffic (voice/video).
All these claims are still true if you just replace »ATM« with »IP«. So what went wrong with ATM (and why did the underdog IP win)? I can see the following major issues:
- ATM is a layer-2 technology that wanted to replace all other layer-2 technologies. Sometimes it made sense (ADSL), sometimes not so much (LAN … not to mention LANE). IP is a layer-3 technology that embraced all layer-2 technologies and unified them into a single network.
- ATM is an end-to-end circuit-oriented technology, which made perfect sense in a world where a single session (voice call, terminal session to mainframes) lasted for minutes or hours and therefore the cost of session setup became negligible. In a Web 2.0 world where each host opens tens of sessions per minute to servers all across the globe, the session setup costs would be prohibitive.
- Because of its circuit-oriented nature, ATM causes per-session overhead in each node in the network. Core IP routers don’t have to keep the session state as they forward individual IP datagrams independently. IP is thus inherently more scalable than ATM.
The shift that really made ATM obsolete was the changing data networking landscape: voice and long-lived low-bandwidth data sessions which dominated the world at the time when ATM was designed were dwarfed by the short-lived bursty high-bandwidth web requests. ATM was (in the end) a perfect solution to the wrong problem.