Squeezing the network

Squeezing the network

The New Year has brought with it a positive outlook for IT as businesses shake off the panic-stricken days of October-November last year and set about dealing with outstanding projects that had stopped dead in their tracks when budgets froze.

But while the purse strings have come undone, there is a note of caution attached to every dollar that leaves its murky depths. The motto is, "spend to save". Organisations have accumulated fat from the smooth sailing of the last three or four years, and are struggling to rein in over-exaggerated forecasts and overstocked warehouses now that the 30 per cent growth has tapered to a conservative 7 to 10 per cent. In the networking arena this has caused some major projects to be taken off the map indefinitely. Tech Pacific has abandoned two networking-related installations in recent months, a $120 million ERP software project and a warehousing and inventory management software plug-in rumoured to be worth $70 million.

On the flip side however, the promise of e-commerce appears to have come full circle, with high-end organisations such as NRMA and St George Bank utilising the Internet as a cost-saving mechanism as well as a customer service tool to counterbalance the closure of suburban branches.

"We've arrived at the point where people prefer to do business online, and a customer will seriously consider changing banks or insurance providers if every time they get online they're told the service is unavailable," says Jim Fisher, business development manager for Computer Associates. "[For these organisations] the Web site is no longer just another channel, it's a core part of business."

According to Fisher, this online trend has many CIOs focusing on managing network traffic rather than expanding capacity by simply throwing hardware at it. "Organisations are cutting back on hardware infrastructure and are looking to get more out of [their networks] by managing bandwidth and prioritising software delivery," he says.

The upside of this approach for the channel is that these packages are typically good margin makers. What's more, vendors are working hard to increase the value proposition to end users by making them a less laborious sale. Early last year, Computer Associates witnessed strong demand for its Unicenter network application management suite and altered its sales strategy to maximise this by breaking the package down into modules. The vendor also started offering flexible pricing, including monthly and one-yearly contracts, in an effort to gain access to mid and low-end markets, a move that Fisher says has worked very well. "In this climate channel players need to get out of their ruts, evaluate the different [vendor] offers that are available and take advantage of them," he says.

Richard Huang, manager of Melbourne-based distributor Digicor, says the channel should apply this philosophy to the hardware side of networking as well. Huang believes Layer-3 technology will be a hot product this year, as SMEs (20 to 30 seats) realise their ability to increase the speed of their networks.

"Layer-3 has outgrown the high-end space; it's dropped from $10,000 per unit to $2000 or $3000. It's become affordable and people are showing more interest," says Huang. However, he feels the education process needs to continue before Layer-3 technology can come into its own. "People need to distinguish between the megabyte/gigabyte rating which increases the network speed, and the internal switching fabric which makes Layer-3 more efficient than Layer-2 technology. They are two separate factors to consider, a bit like CPU and RAM in a desktop."

Resellers get creative in a pinch

The need to stretch a dollar further is tempting integrators to take a risk on cheaper brands in place of best-of-breed manufacturers with high profiles and hefty price tags. Cut-price component distributors such as Cosmic Solutions appear to be thriving in the Australian marketplace, particularly on low-risk items such as cables and memory.

"What vendors often forget about the channel is that they're very sharp business people," says Ted Keating, managing director of Foundry Networks' newly appointed master distributor, ChannelWorx. "They're constantly hedged in on three sides - there's product in the stockroom that's melting in value, there's customers at the other end trying to drill the price down and there's the staff in the middle draining the profit margin. Often vendors and their reps aren't as smart and make pragmatic moves to their own detriment."

Keating says many of these tough decisions were made in the deep, dark days of the recession and resulted in the dissolution of whatever allegiances the channel may have had to particular vendors. "Cisco moved to take a lot of its business direct [during the recession] to help its bottom line, but in the long term it opened the door for other vendors to get a foot in. That's not to say that [resellers] are getting rid of Cisco completely, but they are putting up other products in deals to create more margin for themselves," says Keating.

Cisco remains unrepentant about its decisions, saying that it will continue on its course of championing wireless uptake, IP telephony and optical networking. It is these three sectors that are tipped to drive the requirement for fatter pipelines throughout the coming year - which brings us to the baneful subject of broadband rollout.

The dream of broadband

For the last 18 months, the networking industry has been hanging onto the dream of broadband to drive the market, while Telstra has dodged and weaved with the Australian Consumer and Competition Commission (ACCC) over pricing structures and line leasing. At the time of writing, Telstra was angling to raise the cost of its fast-Internet service for home users by as much as 31 per cent to $87.95 starting February 1 (March 1 for existing customers), while offering better deals to business users. ADSL prices where also being hiked up by approximately $6 per month, while fast cable to residential addresses was looking at a $21 per month rise with a 256KB speed restriction. Home networking vendors were seething at the blueprint, which would leave little or no room for dealers to sell associated technologies such as modems, switches and routers. However Ian McLean, managing director of NetGear Asia, is not giving up hope that Telstra will unbundle its ADSL service, a plan the telco has been discussing for some time. Unbundled ADSL, which is currently in place in New Zealand and being rolled out in Germany and the UK, would make the channel almost wholly responsible for the retail and services around ADSL and would relegate Telstra to a backstage role of flicking a switch.

Meanwhile, the networking industry senses rather than sees that DSL has to happen. "Broadband has been very slow to develop and that just has to stop," says Keating. The current game-plan is to squeeze ADSL adoption from the top and bottom end of the markets, with companies like Compaq Global Services, a dedicated player in the wireless and mobility arena, pushing from the high-end and small PC services dealers driving it through the SMEs. Even the very low-end networking sector - one hub, one router and a server-type set-up - is proving a solid revenue spinner for resellers. Fintan Persse, manager of WA-based services firm Aussie IT, says demand from existing customers has convinced him to expand his PC building and repairs business to include simple network construction.

Amid the cautious optimism that networking will remain a priority in 2002, vendors are warning that some of the current enquires and tenders are fishing trips that will fail to eventuate. "We should know by the end of February whether we'll get the kick along that we need or not," says McLean.

The bottom line

- LESSER KNOWN and cheaper brands are gaining market share as network builders shun unnecessary expenses.

- ENHANCEMENT GIZMOS are tipped to get a good run this year -- network management applications are hot real estate as customers squeeze performance and e-commerce finds its place. Layer-3 technology is expected to do well in the SMB market.

- BROADBAND ROLLOUT the purge continues; Telstra is rumoured to hike up its ADSL prices, which is likely to hinder home networking uptake.

Get to know your network

Today's networks are the most critical component of a corporate infrastructure, yet they are often the most troublesome. Many networks were not carefully planned; they are typically the result of cobbling together gear and bandwidth as a company's growth requires. This often leads to a tangled mess of routers, switches, wiring, gateways and network protocols.

As a result, when a network issue surfaces, identifying the cause of the problem can be more art than science. New technology in network sniffers -- the programs that capture and decode network packets -- provides real-time packet decoding and expert analysis that can make pinpointing network problems quick and painless.

Network sniffers have been around for quite some time. In the past, packets were captured into a file and then manually analysed or played back into an expert system for a detailed picture of what was happening on the network. Problem identification was not a quick and simple process.

New technology for network sniffers now allows network administrators to capture, decode and analyse packets in real time. With this technology, a system captures packets off the network, decodes them into human-readable format, runs the packet through an expert system for analysis, and finally displays the information to the administrator. Today, a network administrator might be alerted to a network issue before users experience any significant problems.

As the packets pass through the expert system, they are analysed for potential problems, then alerts are sent to administrators to warn them of any major issues. These alerts can be defaults configured by the vendor, or they can be thresholds set by the network administrator and configured specifically for the organisation's network. Thresholds can be set for any number of variables, such as too much bandwidth being utilised by a specific system; slow HTTP, POP3, or FTP response time; too many TCP retransmissions; IP header checksum errors, and so on.

Packet analysis tools also provide graphical representations and statistics. The peer map is an impressive feature that graphically shows which systems are communicating with one another and the volume of traffic they are passing, providing a quick, high-level overview of all traffic traversing the network. More detailed statistics are also available, such as the percentage of network traffic attributed to a specific protocol (including routing information protocol, HTTP, NetBios), detailed statistics for a specific node, statistics for a specific protocol, summary statistics for the entire network, and historical statistics to compare present and past performance.

These tools can also act as rudimentary network intrusion-detection systems. Many include analysis modules for basic Internet attacks, such as Jolt IP attacks, Land TCP attacks, RipTrace attacks, Teardrop IP attacks and WinNuke TCP attacks. Additional modules could include detailed analysis of HTTP, SMTP, POP3, FTP and Telnet sessions.

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