Networking the mining boom
- 18 June, 2008 11:26
If the Australian economy used to be carried on the sheep's back, it's now sailing a swelling commodities wave. Demand from vastly populous Asian countries like Japan, China and India for the things we grow on our farms, dig up from under the red-brown earth and extract from the depths of the sea has jammed traffic outside national ports as ships queue up to carry our commodities north. Coking coal, iron ore, thermal coal, nickel, copper, uranium, wheat, lead, you name it and we're probably shipping it in large numbers.
The boom has allowed Australia to largely sail around the economic gloom seeping out of the US and also steered the Aussie dollar to 25-year highs against the greenback. In fact, Australia's $1 trillion economy has outperformed most of its industrialised counterparts and with resource companies like Rio Tinto Group and BHP Billiton snapping up the available human talent to man the ship the unemployment rate is at its lowest in 30 years. We are, it is fair to say, tacking nicely on the commodities high seas.
As a result a new breed has catapulted to the top of the wealth stakes; Fortescue Metals Group boss, Andrew Forrest, topped a recent BRW list as the richest Australian ever with a net worth of $9.4 billion. And as commodity prices experience sustained increases - more than two-fold since 2000 according to the Reserve Bank of Australia - mineral exploration has continued to hit record levels. More than $1.2 billion was spent in 2005/06 to look for resources, the highest amount in three decades and a 94 per cent increase on 2001/02 according to the Australian Bureau of Statistics. But because much of this exploration and extraction has occurred in remote and difficult terrain combined with the pressure cooker atmosphere of global trade, resource companies have needed state-of-the-art IT networks to preclude boarding a leaky commodities ship.
Unearthing networking technology
"Networks have always played a critical role in the mining sector," IDC market analyst network technologies, Jamie Jin, said. "But we are seeing more focus on the network as mining companies look to capitalise on next-generation networking technologies to gain further efficiencies in their product delivery cycle and automation of work tasks."
And as the boom appears far from over Jin believes resource companies will spend more on IT to expand the network infrastructure and deploy the latest technologies to keep the business competitive in the global market.
Australia's overall network statistics, according to IDC, reveal consistent growth over the past few years with an 18 per cent increase in the total switch and router market and a 23 per cent rise in the WLAN market in 2007 on the previous year; switch revenue hit $US573.3 million, router revenue $US339.5 million and the WLAN revenue $US136.73 million.
Networking players have noted resource companies are prepared to spend to acquire top shelf IT networks for their mines and assets.
"We're actually doing a lot of work in that vertical and I guess with the resources boom there is a lot of budget floating around," Raritan director of sales A/NZ, Gary Hull, acknowledged. With money to spend and the threat of huge opportunity loss through downtime always looming - having a ship in dry dock for example can cost a resource company close to $3 million a day according to Hull - the mining industry has revamped much of its communications and IT infrastructure.
Significantly, many resource companies have deployed self-funded fibre in order to gain additional capacity to shift to converged voice, video and data networking.
"In terms of interest right now obviously mining is pushing the industry," RAD Australia managing director, Udi Furman, claimed. "So we are getting much more interest and requests from the mining companies."
Digging it 24/7
But the mining game is not easy. To survive, both in a physical and trade sense, the colossal machines built to operate in mines have to be tough and the employees willing to put in the hard yakka. The appetite of emerging economies will not be sated by intermittent and unreliable supply. Consequently resource companies' IT networks also face the same expectations of resiliency and robustness.
"The criticality of having IT infrastructure and assets operational 24/7 and having a gateway to get to those assets I guess across that sector is a hot area," Hull said.
In many cases constant network availability is demanded; some players even claimed they had been asked for less than five minutes downtime a year. To achieve this, non-stop routing and virtualisation have been key technologies deployed to enable patching and maintenance to occur in the datacentre without systems going down.
"I think the concerns of the mining industry are not necessarily any different from other industries," Nortel product and solutions marketing Asia, Adam Kleemeyer, said. "They want networks that are resilient basically because they are 24 by 7 operations, so they don't want network downtime. And often mining is in remote locations but it could take time to get their parts or someone out there. So they want a network that doesn't break."
While these remote mining locations invoke images of beehive activity in desolate waste, the terrain itself does not pose significant challenges for the network. But the distance between where a user accesses the network and where the data is housed can.
"The push from the business to have systems always available no matter where they are, no matter who they are, is a real key thing," Juniper senior systems engineer, Richard Savage, said.
And as many resource companies have expanded through mergers and acquisitions they have centralised their operations with large datacentres located in the US and Europe being employed.
"What that means is that they have a real challenge because they are global companies but in the most extreme sense they could have people in the field in Latin America, in the Middle East to the middle of the WA desert," Savage said. "So the need to get access to those applications which are now potentially on the other side of the world is a real challenge in terms of delivery, access and those kinds of things."
To get applications across the network faster and reduce latency, WAN acceleration is often utilised. If you are physically in Perth and accessing something in Houston, for example, that distance can't be overcome by throwing bandwidth at the problem, Savage said.
"We have to look at ways to actually accelerate the application. So it is allowing these guys to reach across potentially low speed links, maybe even not necessarily reliable links, and provision access in a good way and monitor what is going on."
Moreover, provisioning access to the network in a secure and timely manner for the countless contractors that work the mines at distributed locations through access control technology is also key to reducing operational costs and improving efficiency.
But a mine is never just a mine. It always has a wide array of transport, administrative and residential facilities sprawling nearby for the workers. And like any other worker - or perhaps more so because of their isolation - mining industry employees want access to networks and the comforts of home like Internet, phone and TV.
"When you look at a mine site it's like a small city, or let's say a suburb," RAD's Furman explained. "Because today you have a factory, you have people that intend to live there for a week or a weekend and so forth. So they need to get services; data services, voice services, maybe television, some other mobile and so on."
Losing touch with family, friends and what the rest of the country is doing, it seems, could result in poor motivation and productivity - or a case of cabin fever. As a result networking companies have also been able to capitalise on the mounting residential requirements adjoining many mine sites.
"Every mine site is like a new network; even though they can be similar they are all different," Furman said. "If it is a new one you will have new technologies, if it is an existing one you will have a mix of old and new and so on. If you would like to classify it as easy or not easy maybe the new sites are easier because they are going to invest from scratch with new equipment, which means they are going to use up-to-date technology."
But while the mining industry does demand high quality networks and service, they are not necessarily any different from other industries.
"I wouldn't say they are out in front, I would say they are with other organisations that are looking for the best possible solutions," Nortel's Kleemeyer said.
"In no way are mining companies saying they are settling for anything less than the latest and greatest type of technology. But they are up there with the other leading types of industries that are looking for the best solutions."
Exporting mining lessons
There are several lessons that can be drawn from the networking experience in Australia's commodities boom for channel partners looking to get a berth. Indeed, IDC's Jin pointed out lessons from the mining sector can be applied to other verticals and in the same way solutions from other verticals also can be deployed in the mining sector. As an example he highlighted real-time information collection and video surveillance as two technologies that are regularly used across different verticals.
Nortel's Kleemeyer identified government, education and financial institutions as sectors commonly interested in the solutions deployed in the mining industry.
"What I am seeing in the market as we move forward is the differentiation in expectations between different industry types is becoming fewer and fewer," he said. "These sorts of requirements around performance and resiliency are becoming more and more universal. And it's not just from a vertical perspective but it's also from a size perspective. We're finding that just because an organisation is small it doesn't necessarily mean their expectations upon the network are any different from a large organisation."
In fact, for the most part the same challenges and expectations found in the mining industry have been around for years in other markets. But due to the impressive scope of networks deployed by resource operations and the high-risk nature of network failure inherent in a 24/7 industry, the channel should take note.
"From a channels perspective, looking at mining and identifying and recognising the trends that are there and what they are doing to address them can help them [integrators] then engage with other clients they are dealing with, maybe on a slightly lesser or smaller scale," Juniper's Savage said.
Indeed, the Australian resources sector has not achieved its soaring success by accepting anything less than the best networks, products and service from its IT partners.
"Since those people are in the market for so many years and are so remote you have to have quality products," RAD's Furman said.
"So for them if the difference is a couple of dollars on a product it is not a big issue because they want to send it once, turn it on and leave it there for a couple of years. And that is sometimes the difference between products on the market."
Without demanding the best networks available to support commodity export operations, it is arguable the national economy would not be sailing so smoothly.