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In Focus : Networking Intelligently

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DQC News Bureau
Updated On
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Enterprises today require a new IT strategy to improve their ability to

respond to competitive pressures and market demands while accelerating business

growth. Vendors are incorporating new technologies like intelligence into

networking, which enable the applications and services to operate more

efficiently

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Networking solutions have been the first priority of any organization

irrespective of its size. And the segment holds a major share in the IT

investment of a company, which in turn would give a key figure about the

position of that company and its spending abilities. According IDC, IT spending

in India is set to grow the fastest in the world in 2008. Over the next three

years, IDC expects the Indian market to nearly triple to $71 billion by 2012.

Today more than ever, the network is critical to business success. Almost all

enterprises worldwide rely on their networks to expedite growth, increase

productivity, reduce costs and capitalize on new opportunities to outperform the

competition. As business demands and risks escalate, the performance of the

enterprise network will become increasingly important.

Active and passive networking solutions



The overall size of the networking market is worth Rs 7,000 crore and the

market has grown at a rate of 25 percent during the last fiscal. However this is

quite low as compared to the last year's growth of 32 percent. Predominantly the

networking industry can be divided into active and passive networking solutions,

where Ethernet, switches, routers, media converters, modems, network adapters,

network attached storage (NAS), network cards, network cameras, PoE (Power over

Ethernet), print servers, power line, wireless products are classified under the

active networking solutions. Under the passive networking solutions comes the

adapters and couplers, cabinets and racks, keystone jacks, network cable, patch

panels, surface raceway, tools, wall plates, wire ties etc.

Here we will focus on the active networking solutions, which is considered to

be the growing segment among the two. The fact that switches and routers

continue to dominate the networking segment clearly shows that the active

networking solutions space is growing at a consistent phase and is the

dominating one as compared to the passive products. The switches and routers

account for almost 59 percent in the overall networking products and the

wireless LANs are gaining more ground these days due to portability factor.

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Challenges

faced by SIs and SPs and solutions from vendors

S.No Challenges Solutions Spokesperson

Vendor

1.

Channels need help especially on

large complex cases on the pre-sales, sales and post-sales and other than

creating and owning newer account, a major significant challenge is to

acquire existing installed base to the next level

D-Link supports the partners

according to their requirement. As a vendor, we help in offering what

comprises pin to pen solutions

Jayesh Kodak, VP— Product

Management

D-Link India Ltd

2.

Value proposition to the

customer is the key challenge

As a vendor, Dax offers

solution-based approach so that partners can differentiate themselves in

their offering. We have designed niche solutions with which partners can

offer better RoI and truly make IT a business enabler

Sudha Jagdish, COO

Dax Networks

3.

Integrating products from

various vendors and various standards

It would be very easy if they

follow the technologies of open standards like IEEE. We provide technology

to the partners that are open standards and that can be easily integrated

with other solutions

Upender Jit Singh, Channel Sales

Manager

Juniper Networks

4.

Often, channel don't get a

solution based product line and have to pick different solutions from

different places

Keeping this in mind, we are

looking forward to proving a whole suite of solutions to the partners

Muthu Logan, CEO

Brovis Networks

5.

1) Due cash crunch, the IT

investments are delayed by the companies

 

2) Due to overall economic environment,

customers tend to push back some of their replacement or upgrade decisions

on their network

1) Cisco offers more aggressive

financing solutions to partners to convert customers capex purchases into

opex, so that the demand for Networking solutions continue

2) Cisco has launched couple of

programs to get the best out of the customer's existing investments. The

Cisco Technology Migration Program (CTMP) is a trade-in migration program

that encourages end customers to trade-in their installed base of Cisco

networking products and strategic competitive products. End customers earn

trade-in credits which serve as an upfront discount towards the purchase of

new Cisco solutions

R Dhamodaran, Sr VP, Channel

Operations and Commercial Strategy, India & SAARC

Cisco

Vendors in the space



Products such as switches, routers, modems, WLANs constitute the active

networking space. Cisco, Juniper, D-Link, Dax, Nortel, 3Com, HP Procurve are the

big players in this space. According to DQ Top 20, 2008, Cisco continues to be

the undisputed market leader in those areas, which it operates. Only Juniper has

registered higher growth than Cisco in the router segment, and with the launch

of its switches it is expected to give tough compe­tition to Cisco. Even though

there have been other players like 3Com in the market, that has established

networking product portfolios, the result hasn't been that satisfactory, as the

company is on the verge of shutting down its operations in India and has been

talking with a Mumbai-based company to take control of its Indian operations.

The channels of 3Com felt that the vendor hasn't been doing an impressive job in

India. Besides 3Com, it is also said that HP's networking company ProCurve has

also not been so aggressive in the market. The DQ Top20 had also estimated that

D-Link, another major player in the networking segment posted static growth in

all areas except WLANs.

Factors contributing to growth



As discussed earlier, the active networking components have been the

backbone for the IT infrastructure for any organi­zation. Apart from telecom

vertical, there are other major verticals that contribute to the growth of these

active networking products. According to Upender Jit Singh, Channel Sales

Manager-India and SAARC, Juniper Networks, “There are four major verticals that

contribute to the growth of active networking products apart from telecom, which

is a key vertical for us. These include IT and ITeS, BFSI, education and

government.” For Muthu Logan, CEO, Brovis Networks, there are many solutions

that are coming in and are catering to large number of verticals apart from the

stereotypical ones. “I would say that the video surveillance, hospitality and

residential, infrastructure, large enterprises where multimedia is in key usage

are places where the active networking solutions are playing a key role,” said

Logan.

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Enterprise

Networking: Overview

      Revenue (in Rs crore)
  FY 08

FY 07

Growth%

Routers

1,810

1,437

26

Switches

2,316

1,980

17

Modems

390

335

16

Structured cabling

1173

817

44

WLANs 210 150 40
Others* 1,019 824 24
Total 6,918 5,543 25


Source: DQ Estimates

Convergence is another factor that is driving the adoption of the networking

segment, especially the convergence of the voice and video applications. As more

and more offices are connected through video and audio conferencing, companies

are installing high performance networks that are able to deal with the

additional load. Consolidation of branch offices, new data centers and increase

in demand of bandwidth appli­cations can be termed as major growth drivers.

SMB is another segment that is contributing to the networking industry to a

great extent. Almost all the networking companies have a solution targeting the

SMBs, which clearly shows the focus of vendors in that segment and the market

potential. The vendors feel that the SMB segment is still spending on IT even

though large enterprises have cut down their expenses. According to the market

estimates, the SMB currently spends 30-40 percent of total market spend.

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IP telephony solutions, Gigabit Ethernet, backbone switches for network up

gradation, security solutions, layer 2 and layer 3 switches, draft N Routers, IP

Sec VPN firewalls, voice and video gateways, IP surveillance, RAID5 storage and

etc are some of the networking solutions that are seeing good adoption among the

enterprises. However, due to the fact that the notebooks are gaining huge uptake

among the end-users, the market for modems are said to be decreasing but the

adoption of broadband among the SMB and SOHO group is said to expand the market

for xDSL modems, which stands at Rs 180 crore.

Growing WLAN



Wireless LAN is another area which has a lot of potential and the adoption

has also been increasing on a regular basis among the enterprises. The WLANs is

one of the fastest growing products among net­working products and the major

driver of this has been the Wi-Fi adoption. “Wireless is moving from luxury to

necessity category for both SMB and enterprises. In the Enterprise space, the

concept is towards unified wired and wireless Solution. In the next 10 years

wireless networks will replace the majority of wired networks, mostly because of

the intro­duction of 802.11n and also because wireless is often cheaper and

easier to install and maintain than its wired counterpart,” claimed Jayesh H

Kotak, VP-Product Management, D-Link India.

Intelligent networking solutions



Over the years, the role of networks have evolved and today the networks are

expected to offer increased and diverse functionality as organizations face the

demands for increasing scalability of the infrastructure, integrate new complex

techno­logies, support new business applications, facing security challenges and

increasing system integration costs. Organizations are finding ways to increase

the agility needed to respond to and capitalize on market changes, while

decreasing costs.

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These requirements have made vendors incorporate the concept of intelligence

into their solutions. Adding intelligence to the network has enabled

applications and services to operate more effectively. “Today, routers have

matured to become an intelligent network device. Routers have the capability to

integrate key features such as content processing, VPNs, firewalls and load

balancing. Wireless capabilities are also becoming popular, replacing the need

for separate wireless access points for small office networks for eg Cisco's

range of Integrated Services Routers (ISR) offers secure concurrent services,

including secure IEEE 802.11 wireless LAN capabilities ser­vices as a single

resilient system. On the other hand, switches have more punch with



greater processing speed,” informed R Dhamodaran, Sr VP—Channel Operations and
Commercial Strategy, Cisco, India & SAARC.

Logan of Brovis Networks too felt that solutions like 10G, where the routers

are integrated with VPN capabilities, security management firewall etc are being

integrated with the wireless solutions. According to Singh of Juniper Networks,

PoE is a very important emerging technology. “The wireless networks have

multiplied over a period of time and is deployed. If there is an access point it

becomes very easy to connect it to the switch and power it. Apart from this, the

modular operating system on the switch is also an emerging thing, where

custo­mers could operate routers, switches, VPN, firewall on the same operating

system that makes life easy for the IT managers,” said Singh.

Dhamodaran of Cisco opined that currently the world has entered the second

phase of Internet and although colla­borative technologies and 'Web 2.0' have

been around for many years, employing them through entire organizations will be

made possible only by the intelligent network. “The network connects every part

of the IT infrastructure from servers to applications, middleware, and end

points. The network has the potential to improve the performance and

functionality of every element of the IT environment and bring benefits to all

organizations and



people within the enterprise. More and more intelligence has been added to the
network, and is becoming a platform for service oriented network

architec­ture,”quipped Dhamodaran.

NR Sethuraman



sethuramannr@cybermedia.co.in

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