Two years ago, the average small business would have been hard-pressed to afford the necessary networking smarts to achieve the standard of connectivity enjoyed by their bigger and typically more techno-savvy competitors. Aside from the prohibitive cost of the equipment itself, data networking solutions needed engineers and proper network administrators to make things work.
The landscape is very different now, however. Not only do smaller companies have access to the kinds of high-speed globally connected solutions which once defined the big multinationals, but the move towards convergence and Internet-based communications is fast creating a situation whereby technology is favouring the underdog in business.
Over the last year, technology giants such as IBM, Cisco and Microsoft have led the chorus warning organisations to get online or face irrelevancy. Cynics argue that these companies stand to boost profits enormously if their advice is heeded. On the other hand though, if e-commerce reaches anywhere near the dizzy projections of the major analyst groups, companies that don't listen may well regret it.
E-commerce is becoming David's slingshot against Goliath and the race to sell the necessary smarts to his corporate equivalent is reaching breathtaking speed. The terms "simple" and "networking" are now becoming synonymous with one another but according to most companies interviewed by ARN, vendors offering the best training will see their interests best served in the marketplace.
The push towards more Web-based networking solutions is fuelling a raft of new products designed to make it easier for small companies to use e-mail, connect to the Internet and even sell online.
And the big vendors are bending over backwards to get their technology entrenched in small business offices. Last week, IBM revealed that it was reviewing its traditional technology sales model for its e-commerce solutions, proposing that customers purchase technology in return for a percentage of their online business.
Vendors now fear that shunning relatively tiny sales at small sites could cost them dearly further down the track if that company turns out to be the next Amazon.com.
Phil Cronin, head of small business networking at Intel Australia, jokes that the chip giant is "trying to take over the world" in terms of the SME market.
Some would argue that Intel already has, simply by virtue of its monolithic CPU business. But few people know that Intel was one of the first manufacturers of that often-maligned networking device: the hub.
Hubs have received a bad rap over the last few years as more sophisticated switching and routing technologies threatened to make them obsolete. "But hubs ain't hubs anymore," Cronin said.
"The days of spending hours and hours configuring a simple hub-based network are well and truly over." The key feature of modern hubs, Cronin adds, is their ease of use compared to flashier alternatives.
"They carry a lot of smarts that move away from complex network setups." The biggest development in simple networking this year has been the ability for an inexperienced user to set up a network using the Internet to guide them through the process and download necessary software.
Most networking companies are moving to browser-based networking models, meaning that users now have a hand to hold while they nut out how to configure the technology.
Intel's 330T Express Stackable Hub ships with Intel Device View, which is a Web-based technology enabling easy setup in three stages. The product ships with a CD that takes the user to Intel's Web page.
People that would not have networked their organisations a year ago are now looking at cheaper hardware, easier use and setup, Cronin said. The effect of this transition on the distribution and reseller channels over the last two years has been huge, according to Tony Gattari, head of computers and communications at Harvey Norman.
"We're investing massive amounts of money in our networking business," he said. And their efforts appear to have paid off with the company's growth in small business networking up around 100 per cent over the last year, although Gattari admits that this is partly because "we did such a bad job of it" in the past. Two years ago, even the best do-it-yourself networking kits were nothing more than a hub and some cables packaged in a brown cardboard box with no instructions, Gattari said.
Now people can buy an easy-to-install network in a box for as little as $200, with prices looking like falling even further.
Harvey Norman has just completed an intense two-week product range review with the top brass attempting to plot the company's road map for networking products. The result of the review should be available this week. Gattari added that Harvey Norman would have a good, better, best philosophy and hinted that 3Com and Nortel/Bay Networks' NetGear would be well represented "to legitimise the channel".
Manufacturers are taking low-end networking very seriously now, Gattari said, as demonstrated by the increased emphasis on training and certification programs.
"Our guys are much more comfortable with networking now. If you go back as recently as early last year, most of our sales staff were at pains to steer well clear of it." The problem is mainly the jargon, Gattari explains. "It's like the old days in the modem business; everyone was talking MIPS and bits. The baggage from the technical arena will eventually disappear from retail.
"But we don't mean to downplay the complexity underlying many of these technologies. Yes, we are selling hubs but we don't want to insult our customers' intelligence by pretending to be experts in networking," Gattari added.
Figures from a recent IDC study on the Asia-Pacific networking and communications market show that users are getting better value from manufacturers than ever before. While revenues in the LAN switching market are growing at a compound rate of 18 per cent, the number of ports is growing at 39 per cent.
"The big vendors are really competing hard in this space," said Graham Penn, research director of IDC Australia. "Increasingly we're seeing the use of microprocessor technology to build smarts into PCs and smarter switches."
According to the Australian Bureau of Statistics, nearly 1.3 million households (18 per cent of all households) had access to the Internet from home. This is an increase of 50 per cent (423,000) over February 1998. It also found that there were nearly 3.2 million households with a home computer in February of this year, an increase of 10 per cent (287,000) over the February 1998 estimate of 2.9 million.
Gattari believes one of the main reasons why more computers are being sold is the pathetic resale value of the average PC.
"People are seeing what their old computer is worth and opting to keep it rather than bothering to try and sell it," Gattari said. The result is that more and more small office/home environments are seeing a dramatic build-up in their number of computers.
Harvey Norman offloads 90 per cent of its networking gear to businesses and the rest to home users, Gattari said, but he predicts the balance to shift in the other direction as home networking takes off big time.
He recently returned from the US to investigate the low-end networking market. There, he believes home networking is shaping up to become the next big thing.
It's what Brian Killin, director of Sydney-based integrator/distributor PowerCorp describes as the "McDonald's" mentality.
"People are so used to plug-and-play they want to be able to work straight away."
In an interview last year, Killin predicted that the mass market for networking would erode as users moved towards more specialist providers and became fed up with a lack of networking expertise in the channel.
A seasoned veteran of the Australian networking market, he geared his business towards this philosophy and invested his energies in cornering what he then coined the niche market for networking solutions. But a year is a long time in IT, Killin admits. The last twelve months have seen the company double its business on the back of high-volume sales of basic office networking products, Killin said. At the start of this year, PowerCorp began distributing small office networking products for Taiwanese manufacturer LANTech. The LANTech shared Internet access servers have been "flying out the door in their hundreds", he claims.
Ross Cochrane, managing director of Express Data, one of Australia's leading distributors and integrators of networking technology, said that the small reseller is now pretty familiar with networking technology at the local area network level. "Vendors have shown a lot more enthusiasm for delivering training to their channel partners."
Cochrane added that resellers must have the necessary skills set because "they may be forced to support other organisations on an outsourced basis".
Cochrane believes one of the best areas for resellers to move into to differentiate themselves is in the new world of convergence. Australia took a giant leap in this direction last week when Telstra announced its first army of suppliers for the DMO (Data Mode of Operation) overhaul of the carriers and Australia's network infrastructure. The project marks Telstra's first major step towards developing a single IP-based network capable of handling both voice and data.
"Many of our resellers are investing in training to bring their skills in voice into line with their data capabilities," Cochrane said.
Ian McLean, sales and marketing manager of Nortel/Bay Network's NetGear, said that training has become a powerful training weapon.
"Vendors are realising they need to get their channel partners trained up properly, as dealer recommendations account for a big proportion of sales."
Antony Steele, channels manager with Canberra-based distributor Open Systems, agrees: "It's very important to build loyalty in this area as resellers are often wary of being subjected to further training.
"You can supply a very cheap product to a customer but then end up stuck on-site getting it running. Resellers need to know when they supply a networking solution exactly how long it's going to take to get running."
Open Systems is the sole Australian distributor of a UK product it claims will change forever the way in which small businesses view networking. The LinxSpeed router family offers a range of networking solutions spanning simple analog fixed-line connectivity ISDN, right up to the possibility of super-high-speed Frame Relay at the high end for under $2000.
The big draw card for the LinxSpeed products, according to Steele, is that they offer the sort of Web-based configuration service offered by Intel, although he claims Open Systems is the first to offer this capability in Australia.
All the LinxSpeed products are able to be configured remotely, Steele said, a feature which is proving particularly popular amongst ISPs.
While many companies have baulked at networking in the past, fearful of invisible installation costs, Steele declared that "it's no longer necessary for an engineer to visit a site".
The level of competition in the low-end networking market is guaranteed to deliver better and better solutions to organisations which accept the need to get online and establish sophisticated communications solutions, according to IDC's Penn.
He pointed to the fact that the IEEE recently ratified two important new hub standards governing traffic prioritisation and Quality of Service.
The first of these, 802.1P, refers to assigning priority to packages on the network according to what signal they are being transmitted at. The second, 802.1Q, was created to deliver Quality of Service features such as allowing network administrators to guarantee bandwidth to particular areas of an organisation, such as the CEO's office.
What's new from . . . Intel
Intel's InBusiness range of networking products is aimed at providing the bottom-dollar networking basics. There are three models in this range starting with the 5 port 10Mbps, retailing for $99. This is followed by the 8 port version priced at $130 and the 8 port 10/100Mbps hub with autosensing which will set you back $459.
Intel's Intel Express range of hubs is aimed at quenching the thirst for increased speed amongst smaller companies with a tight budget. The 140T Express is a stand-alone hub for what Intel calls the single environment, referring to the one office or one floor. It comes in two flavours: 16 port Fast Ethernet (RRP $1399) and 24 port Fast Ethernet (RRP $1699).
The 330T Express Stackable hub offers Fast Ethernet but also adds autosensing to enable the configuration of networks so as to distinguish between 10Mbps and 100Mbps signals. It also ships with Intel DeviceView for easy Web-based deployment. The 16 port 330T retails for $1859 while the 24 port version carries a price tag of $2109.
Tel (02) 9937 5800
What's new from . . . Open Systems
Canberra-based Open Systems distributes a number of networking products with the LinxSpeed router as its flagship offering. The LinxSpeed is manufactured by British networking company Virtual Access and comes in a number of flavours depending on the user's particular need for grunt.
LinxSpeed Pro 105. This is Virtual Access' entry-level product, offering one ISDN connection (ISDN supports two data channels) but no phone port. RRP is $997.
LinxSpeed Pro 110 offers two analog POTS ports allowing for phone and Internet access. RRP is $1116.
LinxSpeed Pro 120 comes with an asynchronous port on the back. It has been designed for the home worker not needing ISDN access to the office network. Users plug in a normal modem to dial in or to connect to another site without ISDN. The biggest plus for the 120 is that it is upgradeable to Frame Relay.
All products are remotely configured using the CD provided which connects users to the Open System server, which then delivers the necessary software.
Tel (02) 6261 4900
What's new from . . . Nortel/Bay
After Nortel bought Bay Networks last year, the merged company placed a lot of emphasis on positioning the NetGear range of networking products.
NetGear falls into three distinct product lines covering everything from network cards through to hubs, switches, routers, print servers and network management software.
The company's newest product, due for Australian release in the next few weeks, is the Network Disk Server. The Network Disk server will allow network administrators to assign and prioritise storage for PC users on the server, potentially freeing most computers from the constraints of the standard 2.5GB hard drives.
The company claims to have had most success in its thin server or integrated products. NetGear offers an integrated 56Kbps modem and IP router, offering shared Internet access for up to 30 users on a LAN for $700.
Tel (02) 9325 5200
What's new from . . . Cisco
The FastHub 400, 10/100 series with autosensing, was released in March this year, offering seamless migration to Fast Ethernet for small-to-medium businesses.
Cisco is positioning the FastHub to complement the Catalyst 2900 XL Series Fast Ethernet switches. Users looking for the flexibility of 10/100 Fast Ethernet can use the 2900 switch to aggregate one or more FastHub 400s. The FastHub ships with Simple Network Management Protocol (SNMP) and Remote Monitoring (RMON) capabilities as well as a Web-based management interface. All products come with a limited lifetime warranty. Prices start at $2059.
The 1548 and 1538 Series 10/100 Micro Hubs. Cisco is positioning these products to appeal to small and growing businesses as well as remote branch offices. Both products ship with a Web-based management interface common to the Catalyst 1900 and 2900 XL products allowing the network administrator to manage the switch or hub from anywhere on the Internet using a standard Web browser.
The Cisco 1538 Series Micro Hub 10/100 offers 10/100 autosensing Fast Ethernet desktop connectivity. The eight-port 10BaseT/100BaseTX autosensing hub provides 100Mbps peak aggregate throughput and, Cisco claims, will enable users to migrate easily from legacy 10BaseT to 100BaseTX networks. The 1538 MicroHub is priced from $1138.
Tel (02) 9937 4306