New alliances, partnerships and reseller arrangements are being forged to deliver a new generation of IP enabled products and services crossing the once clear demarcation into IT territory.

In fact Telecom, TelstraClear, second tier carriers, ISPs and PABX vendors are rapidly gearing to go head on with information technology vendors such as IBM, HP and systems integrators including Datacraft and Logical.

Telecom’s new LANlink Enhanced service, for example is a response to customer demand to go further than the in-port on a wide area network router. Now it’s providing LAN switches – typically Cisco or Nortel as it ventures closer to the heart of the enterprise.

While businesses are aware of the need to create more robust and responsive networks, spending at the large enterprise level has slowed while business cases are built and technology options reviewed.

Future-proofing infrastructure

Hard questions are being asked about the appropriate of architecture, servers, switches and desktop devices to deliver optimum return on investment. Will there be significant savings in replacing desktop PCs with dumb terminals? Is there value in going back to a centrally managed environment where users only have access to what is necessary for their job?

According to IDC, Cisco led the network hardware market in New Zealand in the second quarter of 2003 with 61.5 per cent of sales. Juniper, 3Com, Nortel, Foundry and Allied Telesyn were next in order of revenues. The top five LAN vendors in the Asia/Pacific region (excluding Japan) were Cisco with a 59 per cent share followed by 3Com, Nortel, Huawei, and Juniper.

Sarah Long LAN research analyst with IDC says hubs are a declining technology as end users continue to look towards replacement technologies such as switches. In Q2 2002, hubs accounted for 1.5 per cent of the total LAN market, for the corresponding period this year that had slipped to 0.72 per cent. D-link is the market leader in hubs with 37.5 per cent share followed by 3Com and Nortel.

Hub technology, which ensures everything sent into one port is available to all other ports, has been relegated to the edge of most networks where it has become a bandwidth distribution device.

About five years ago the market began moving switches, which literally switch information from one port to another, directing dedicated traffic to specific devices. Initially these were relatively dumb but now the switch includes an increasing level of ‘intelligence’.

Routers on speed

In a switched environment all the devices are on the same logical network. A router can be used to connect between a server, computer and the internet or create a sub-network off the LAN.

If that router has an in-built hub it can be used to distribute data to multiple computers from a DSL connection. In the LAN with a little tweaking, optimising and ‘marketing wizardry’ that same device might be called a layer three switch.

Even home users and small office are starting to use switches, largely because price is no longer an impediment. Entry level is around $220 for eight ports capable of running 10/100Mbit/sec Ethernet.

The next level up is a small business level or small workgroup switch where you pay

$1500-2000 for 24-ports and some software-based smarts including the ability to split into multiple logical networks including secure virtual LANS (V-LANs).

A mid-range intelligent switch (Cisco, 3Com, Allied Telesyn) is capable of handling gigabit speeds, typically used for backbone or in building distribution systems. These range in price between $15-20,000.

At the high-end the focus is more on intelligence and performance, switching multiple gigabits per second. There’s not much demand for this speed to the edge of the LAN yet except from organisations like film production house Weta. Besides at $70-$100,000 per switch and an interface device at around $250,000 you have to have deep pockets. This is where Foundry, Cisco, Allied Telesyn, and Nortel play.

Just how robust and smart does a network need to be to handle voice and video? The move to convergence has some serious momentum but still requires heavy investment. Some organisations are already deploying voice on the LAN but because people get upset if there’s no dial tone most still have dual systems.

Companies like Agile which sells and installs Cajun Avaya telephony servers are holding staunchly to their share of the dedicated VoIP soft phone or IP hard phone voice market alongside the traditional LAN. The product focuses on ‘quality of service’ with up to 100Mb full duplex Ethernet feed to the phone and PC to handle voice. An entry level 24-user Layer 2 switch is just under $1000.

Telecommunications spending is likely to be driven throughout the next year by the continued growth of IP and the uptake of 3G networks. "Telcos have begun to spend again as they upgrade their networks, which will positively affect vendors who sell into this segment, such as Juniper Networks," says IDC’s Sarah Long.

Continued bandwidth internet access by organisations will ensure service providers keep on purchasing routers for core and edge requirements to handle the strong demand. "Sales to service providers will account for the majority of all the router revenue, especially gigabit/terabit routers."

As networks become more intelligent and price points for the newer technologies fall, Layer 3 and above switches will increasingly replace existing Layer 2 switches. This will lead to more uptake in gigabit Ethernet due to price cutting from competitors, says Ms Long.

IP telephony explosion

The growing interest in IP telephony for voice communications should be good news for Cisco and Nortel. "More corporate organisations are expected to implement VoIP, therefore more sophisticated LAN switches will be required."

Phil Edholm, chief technology officer and vice president of network architecture for Nortel’s enterprise division says if a LAN is expected to support convergence of voice, data and video availability, flow classification, reliability, redundancy and latency become imperative.

He believes VoIP is about to cross the chasm from early adopter status to explode into the mainstream. "People are realizing VoIP can make a real difference enabling amazing things in terms of ‘reachability’ and application convergence."

He’s expecting voice will make the transition in the same way data over IP burst on the scene. In 1993 about 10-12 million people were using data over IP, by 1998-99 it was 250 million and today it’s 650 million. "It wasn’t about data over IP it was about the worldwide web, browsers, URLs and search engines. It was a profound transformation about how we interact with information. Fundamentally I believe the same thing is going to happen in what I call the human web in the next five years," says Mr Edholm.

Businesses will be drawn to VoIPs ‘follow me, find me’ functionality. "You can have multiple lines open at the same time and won’t need to hang up. Conferencing will be incredibly inexpensive, easy to use and the basis for communications. This time its not about how you find information, it will be about how we interact with each other."

Prepare for gigabit changes

Mr Edholm, says the worst thing for businesses to do is buy products that don’t have the right feature set to support convergence and will be redundant in two years. For example he says there’ll be a plethora of next generation 10/100Gbit devices arriving over the next six months that don’t cost much more than 10/100Mbit devices.

However this will challenge the whole network infrastructure raising the question of when fibre to the desktop is viable, particularly for organisations moving large multimedia, graphics, video, X-ray or CAD files.

While wireless connectivity is increasingly important outside the office, at the LAN level it still has a specialised role in the boardroom, meeting room or workplaces such as hospitals or warehouses.

That’s likely to shift rapidly though with a growing focus on wireless LAN hardware presenting a challenge to cabled LAN hardware. For example Pacific Retail Group (PRG) is moving increasingly toward thin client and sees significant advantages in adding wireless to the mix.

Network manager Steve Macintosh has been concerned about security issues but believes the technology has now reached a level of maturity where it is a viable. "That’s where LANs are going and we will definitely use wireless when we have a need to new or replace the technology we currently have."

He believes major savings are possible through using wireless in the general office area at PRG headquarters where about 50 people work together in an open office environment. "We deliver over a thin client infrastructure and it would give us the flexibility to move people around and relocate desks without worrying about cabling.

Wireless LAN challenge

Wireless is also expected to be a big plus in the Bond & Bond, Noel Leeming and Big Byte stores. "Instead of carrying around devices that need to be plugged in and then wait for inventory and other information downloaded later wireless devices would allow this to happen in real time."

He’s confident wireless could be put to work in a secure fashion today but would require the correct infrastructure. "Wireless switches operate pretty much the same as cable switches and they work together. From a network management perspective you can still see all the devices," says Mr Macintosh.

While its important to ensure your business case has no holes in it when investing in network technology it’s also imperative to ensure your new network is armour plated to repel

a growing number of security threats.

The IDC Enterprise Users 2003 Survey conducted across 10 countries in the Asia/Pacific region reveals the three greatest threats to network, data and internet security are viruses (69 per cent), external hacking (13 per cent) and corruption or replication of data (9 per cent).

IDC expects worldwide spending on security and business continuity to grow twice as fast as IT spending over the next several years, reaching more than $US116 billion by 2007.

Skills shortage concern

Compared to many overseas countries New Zealand typically retains a do-it-yourself approach using a mix and match of technology but Kaon Technology director Tony Krzyzewski warns we’re failing to train and retain people with the right skills.

"We’ve had quite a reduction in skills in the marketplace and people who haven’t got the background are missing even basic things. I keep coming across businesses who’s LANs are performing badly. A simple matter of investigating, reprogramming and setting things up correctly can make a big difference."

People often think they can simply go out and buy all the pieces of a network, put them together and hope it will run. Without the right level of expertise and experience there can be real problems, says Mr Krzyzewski

And while Microsoft, Novell, Unix and Linux continue to be mainstream network operating system providers in most countries there’s a tendency to stick to one or the other. "In New Zealand you are likely to all three as companies try to get their money’s worth and that presents an interesting challenge to integrate these into a cohesive network."

And he says setting up a security system is not a simple matter either. "Most of my business is now sorting out security problems such as internet borne threats, hackers, website taggers, viruses from internal and external sources and simple mistakes. Security requires specific procedures and policies."

Mr Krzyzewski says a new type of infrastructure is emerging where users must be authorised before they get access to the network and its resources. "You don’t get onto the highway until you can prove who you are."

Security might involve dedicated application specific firewalls (ASFs) for mail, antispam, antivirus, content control, web application and remote access firewalls.

He says a lot depends on the kind of skills you can retain in-house. You can have the best network in the world but it can run really badly unless you have the knowledge of how to get it performing. "People are always the key to keeping everything running smoothly." And without accurate documentation you can have a nightmare when skilled people move on.