In Focus : Networking Intelligently

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

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.

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.

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.

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.

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