Hardware that does it all

Chirasrota Jena finds that networking hardware that’s ‘smarter’ and offers a richer set of functions at lower prices is where the sweet spot is.

Over the years the role of the network has evolved. Initially, networks provided basic connectivity among users, bandwidth and access to applications that supported business processes, and the intelligence existed outside the network. However, today’s networks are expected to offer increased and diverse functionality as organisations face the demand for increasing the scalability of the infrastructure, the need to integrate new complex technologies and support new business applications, the challenge of new and daily threats from crackers and viruses, and the escalating cost of systems integration. They need to find ways to increase the agility needed to respond to and capitalise on market changes while simultaneously decreasing costs.

Indian companies have crossed the first wave of IT and technology adoption, and are looking at other advanced technologies for greater operational efficiencies, higher profitability and a faster growth rate. The networking hardware market continues to gain further traction in this context. According to Rajat Sharma, Industry Analyst, ICT Practice, Frost & Sullivan, “Across both large enterprises and SMBs, investment in networking and communication hardware continues to increase. Overall, the market is expected to grow between 32 to 35 percent till 2008-09, with segments like WLAN growing at over 50 percent. The total Indian networking market is estimated to be Rs 5,100 crore for 2005-06.”

There is a significant trend of migration from low-range wired routers to wireless access routers, principally due to the huge price drops in the latter category. As the broadband subscriber base grows, service providers will be offering new services. Wireless Internet access at home will be one such value-added service. Informs Parijat Chakraborty, General Manager, Research, IDC India, “The total LAN hardware market for 2005 was around $524 million, with switches constituting around $298 million and routers $226 million. The complete LAN hardware market grew by 28 percent— switches grew by 19 percent and routers 43 percent [all figures are for y-o-y growth]. Also, the Wireless LAN (WLAN) hardware market touched $21 million in 2005, growing by 133 percent to do that. Telcos spending on Metro Ethernet projects is one interesting trend that will contribute to the networking hardware market. Tata, Bharti, BSNL, MTNL and Reliance are working with vendors like Cisco, Extreme, Foundry, DAX, Allied Telesyn and Netgear for these projects.” This will drive the demand for both core and edge switches, apart from customer premise equipment (CPE) devices.

Mobility, security and performance

Performance is the key as far as routing on the corporate backbone is concerned. But in addition to this, the latest routers also have the capability to keep the packets moving while integrating features ranging from VoIP (Voice over IP) to content processing. As far as routers for the enterprise space are concerned, today users want to handle huge amounts of data traffic, and they also need the flexibility of content processing, VPNs, firewalls, load balancing, VLANs, etc. Keeping this in mind, vendors like Cisco and Nortel are rolling out products that offer a range of functions at a competitive price. The idea is to replace a wide range of network devices with these do-it-all boxes.

Security is paramount in today’s wireless networks, and the access points available in the market deliver advanced authentication and encryption. Opines Jimmy Goh, Vice-president of Marketing, SMC Networks Asia Pacific, “In the enterprise environment, security, range and flexibility are notable concerns, and these wireless access points have it all.” Often IT staff think that deploying a UTM appliance will solve their security problems in one go. They fail to realise that the throughput of many UTMs drops significantly below 1 Mbps with layer 7 protection activated. It can therefore be a bottleneck in cases where throughput is all-important. Remarks Milind Kamat, Principal Representative, India, ZyXEL Communications, “It makes perfect sense for the corporate with restricted resources to employ all-in-one security appliances. With the ZyWALL UTM series from ZyXEL, security features can be set up at once. T his relieves users from complicated installation, and MIS staff from the need to manage diverse devices.”

According to Ranajoy Punja, VP, Marketing, Cisco Systems India & SAARC, “Routers have matured to become intelligent network devices. Routers in the future will have the capability to integrate features such as content processing, VPNs, firewalls and load balancing. Wireless capabilities will be popular, replacing the need for separate wireless access points for small office networks. For example, Cisco’s range of Integrated Services Routers offer secure concurrent services, including secure IEEE 802.11 wireless LAN capability services. Meanwhile, switches are packing more punch with greater processing speed.” Products with security-centric features are being introduced. In the process, routers have become UTMs in all but name, and even Layer 3 switches have many advanced traffic-filtering features.

As enterprises focus on the mobility market, hardware players are trying their best to provide offerings for this segment. States Nagendra Venkaswamy, Managing Director, India and SAARC, Juniper Networks, “Our focus for the last three years was on building up the network. Now we want to improve its performance and accelerate networking activities. We want to provide quality of service to end-customers through a secure network. Our focus is also on mobility, remote access and secure access to the network.”

Reaching out

The network touches everything from end-users to middleware, services, applications and servers. Adding intelligence to the network will enable applications and services to operate more effectively. Says Tushar Sighat, VP, Channel Business, D-Link India, “The biggest challenge before us is to reach each and every corner of the country, and to make the technology popular. We have a presence in 16 cities and want to widen our reach.”

Nortel India has provided total call-centre solutions and data networking equipment to a broad range of Indian enterprise customers across multiple vertical markets and diverse geographical areas. Notes Dhananjay Ganjoo, Director, Enterprise, Sales and Channels, Nortel India, “To deliver the products and the price points demanded by Indian customers are the biggest challenges before us. We are internally working on shortening the delivery time to meet the project deadline. The wide geographical area which is typical in India is also a challenge for us.”

There is great demand for professionals with the right skills. Most companies are facing problems with regard to getting hold of qualified professionals. Cisco is fuelling the market with qualified networking professionals through its NetAcad, formerly the CNAP (Cisco Network Academy Program) initiative in India.

Telecom in the driver’s seat

Telecom is the biggest buyer of networking equipment. Banking, financial services, insurance, government and BPO have emerged as other key adopters. Internet access devices such as IPDSLAM, VDSL, ADSL CPE, FTTX Internet Security and wireless switches are all areas where consumption is rising. Apart from these, the growing cell-phone market is also a booster for hardware manufacturers. Punja says that “the SMB market also holds enormous potential, and the focus now is to create greater awareness about the business benefits that networking can provide. Cisco has recently introduced its NOW (Network on Wheels) campaign aimed at showing the latest networking solutions to customers in Tier-B & C cities in India.”

Banks rolling out branches and setting up contact centres has added fuel to the market. Sighat opines, “Some of the verticals where we are focussing our energies are telecom (ISPs in particular), manufacturing, banking and education. We have also started focussing on SMBs and home/SOHO. Because different verticals have different requirements, we have started providing on the basis of their requirements.”

Ganjoo informs us that “Nortel has divided key verticals under five heads. We address verticals like government and defence, IT and BPO, finance and SMBs. Nortel is poised to serve its customers better and consolidate its leadership in the enterprise networking space. Since there is much hoopla about the convergence of technologies around the globe, we are focussing more on Unified Communications, which will take care of all kinds of convergence. Nortel is also eyeing the growing mobility market.” In the spotlight are a more positive capex environment driven by network convergence, broadband network transformation, a broadening base of private IP-VPN offerings, and the retail market boom (which calls for huge investments in infrastructure projects).

For the customer

To get closer to the customer and align Cisco’s products and solutions to address their pain-points, Cisco verticalised its business a year and a half ago. Punja speaks about it in detail: “This realignment has shown us rich dividends as the focussed teams have been able to create customised solutions, thus enabling a true partnership model. From a product point of view Cisco’s focus has been to offer products and services that help enterprises future-proof their investment and thus generate greater ROI. The fact that Cisco offers a complete range of networking solutions to cater to each segment of the market is a demonstration of our commitment to our customers in India. We are also working to strengthen our value proposition by offering flexible leasing and financial services to customers and channel partners in India through our leasing arm called Cisco Capital. Meanwhile, Cisco Customer Services will offer service expertise in network design and implementation, as well as technical support and professional services to help customers maintain and optimise technology operations.”

At ZyXEL they are planning to promote their brand in the Indian market in the years to come. Kamat informs, “Our strategy for the Indian market is clear. To enter the market with the best of products, create awareness and educate the target audience through a host of activities, appoint channel partners with the appropriate skill-sets, and support them well enough in every manner. Finally, we want to invest in local operations with ZyXEL India.”

On its part, Nortel has enhanced its R&D thrust in India. In recent times all major Nortel Technology Labs around the world have assigned part of their development activity to India. Reveals Ganjoo: “The acquisition of Tasman Networks Nortel Technology Excellence Centre (formerly Tasman Networks) has also strengthened Nortel’s R&D efforts in India. The focus of the Nortel Technology Excellence Centre (NTEC) is on advanced routers, Ethernet switching, security and VoIP for the enterprise market. The NTEC initiative is yet another example of how Nortel is integrating itself with the local Indian industry to serve its customers better.” Nortel is planning to launch a new range of products for the SMB segment in October 2006.

Going forward, we expect to see convergence, the wireless boom and broadband all taking the networking hardware market upwards. Vendors need to focus on the SMB segment and cater to its unique needs.