Selling networking in 2009

We often hear that knowing the mechanics of certain parts of the ICT sector is akin to an understanding of the ‘black’ or ‘dark’ arts. Making predictions is similar.

Apart from those who (still) predict that the product they make will create a new ‘paradigm’ that revolutionises the world, it’s often hard to pick exactly how a prediction was arrived at.

Channel partners and systems integrators can make decisions based on the credibility of the organisation that made the prediction, but in the end, understanding how it was reached is still largely a dark art that is open to speculation, discussion and in many cases dismissal of the prediction itself.

“The good thing we’re seeing from vendors in their [predictive] behaviour is that they’re knuckling down on what they’re presenting to the market,” said Nick Verykios, sales and marketing director for Distribution Central.

“We’re seeing a lot of stuff that was previously hype now translate into true productivity gains and vendor roadmaps are no longer being regularly thrown around,” said Verykios.

Verykios touches on a critical point.

The most valuable part of a prediction for the channel is immediacy of product availability, market readiness, marketing materials and income potential.

Without immediacy, predictions are simply ‘blue sky’; they won’t be incorporated into customers’ business plans and in a year where IT budgets are potentially thin, projects that deliver customers an immediate ROI will even remain on the table.

And with that, here are our top 10 tips for selling (or not selling) networking equipment and services in 2009.

1. Web application acceleration

According to Steve Dixon, managing director A/NZ for Riverbed, there’s no doubt 2008 was the year for WAN optimisation and acceleration.

The technology was incorporated into IT budgets, moving from niche deployments up into the broader enterprise space.

“It’s the first time we’ve seen the really big companies do it,” said Dixon.

“In the preceding three years we saw a lot of uptake but it was from smaller organisations or people with a specific problem.”

The tipping point in this space, it appears, is the strain is now on network architectures. Users want fast access to rich applications, whether they are hosted internally or externally as a third-party SaaS, and whether the users themselves are in the office or travelling.

In addition, network links are now carrying voice and video from Unified Communications and IP-PBX deployments, as well as multiple virtual workloads as businesses dynamically allocate resources depending on demand.

“There’s a massive amount of attention in the market around WAN acceleration because Australia still has quite expensive point-to-point links both between states and nationally,” said Phil Caleno, technical director at F5 Networks A/NZ.

“It comes from the perspective of throwing more bandwidth at applications to make them go faster, but the big problem is the limitations in the HTTP and TCP protocols. Neither are conducive to delivering complex WAN or web applications at high speed.”

Web applications typically suffer from latency and page complexity issues and according to Caleno, latency is being driven up as a side effect of data centre consolidation because now the user is typically further away from
the centre.

“For example, if each page of the web application has 250 objects, all 250 have to be validated in a roundtrip between the user and the data centre each time the user moves from page one to page two.

“When the data centre is close, that’s OK, but when it’s further away it introduces latency; degrades the user experience and drives down adoption [of the web application] as a result,” said Caleno.

He continued: “Customers have mostly gone down the WAN optimisation path expecting it would fix all their web application problems, but web-based apps didn’t get the same performance gains [from WAN optimisation as those applications hosted internally].

“This year will be about delivering that second wave of web application performance gains,” said Caleno.

F5 proposes to do this with its BigIP 1600 and 3600 ‘advanced application delivery controllers’ (ADCs) – basically hardware appliances with a number of application delivery architecture features that the company is using to target the web application acceleration space in the first instance.

Alcatel-Lucent is also pursuing the market.

It is approaching it from the angle of ‘application aware networking’, according to its director of IPD Australasia, Darren Batty.

“It’s really about the network becoming aware of the applications that run through it,” said Batty.

“We do this by hooking into the bit stream and prioritising application traffic on the network based on service-level agreements. It uses standard quality-of-service techniques but applies them on-the-fly.”

The technology required in this case is an integrated services adapter and application assurance module – ISAAA for short.

Batty said WAN optimisation could still have a place in some network architectures.

“The reality is, there’s some niche applications for WAN optimisation,” said Batty.

“We’ve looked at them and made them more broad based [with ISAAA].”

Although much of Alcatel-Lucent’s attention has been focused in the carrier space to date, there are enterprise applications.

Batty revealed a couple of the current user scenarios the firm is working on in Australia.

“In the future, ISPs will be able to offer an application aware broadband pipe to their customers,” said Batty.

“Also, in the carrier space where they are offering business VPN services, carriers will be able to offer customers the ability to slice and dice their bit stream to manage their VPN appropriately.

“We expect it will be possible to prioritise bit streams on the fly through the carrier’s network to solve short-term periods of demand, then once the session is over apportioning the capacity back for use by all other applications. It’s basically dynamic use of bandwidth within the VPN itself between different applications,” said Batty.

This kind of dynamic capacity distribution will also be critical to the long-term take-up of SaaS suites such as Telstra’s T-Suite and NEC’s Applications Net, according to Andrew Milroy, director of the ICT group at Frost & Sullivan Australia.

2. Network virtualisation

Virtualisation within the network appears an obvious choice as the IT assets that it connects become increasingly virtualised.

It’s hardly a new concept – most networks have been running virtualisation in some form for years, whether virtual LANs (VLANs), VPNs and multiprotocol label switching (MPLS) – but server virtualisation and its potential impacts on network resources is driving a resurgence in interest around the technology.

“Virtualisation will happen at a lot of different layers,” said Dylan Morison, data centre general manager for Cisco Systems A/NZ.

“The number one priority is that the underlying infrastructure needs to be aware of what’s happening in virtual machines. You need your networking equipment to be able to see into the virtual machine and to be able to secure and manage it.”

Cisco recently launched a product for this called the Nexus 1000V, which is a distributed virtual soft switch that sits within the VMware hypervisor.

“The other side of network virtualisation is to virtualise straight-out network services, routers and firewalls,” said Morison.

Kevin Bloch, CTO of Cisco A/NZ added: “The first thing IT thinks about is doing more with what they’ve got, which is where virtualisation kicks in. Then they look at getting more efficiency from an application point of view, and then drill down into how they can virtualise more of the hardware they’ve got.

“What Cisco enables is virtualisation of server, storage and security and that’s all enabled by the network,” said Bloch.

From a wider network virtualisation perspective, Cisco is also talking up its unified fabric architecture.

It is said to assist with VMotion and virtual machine portability by ensuring workloads can be moved around a data centre without worrying about whether the destination machine has the proper I/O profile, Omar Sultan, a solution manager for data centre switching at Cisco, wrote in a Cisco blog post earlier in 2008.

Rival Juniper Networks also sees network virtualisation as a big trend for 2009.

“We’ve always focused a lot of effort on virtualising firewalls and our routing platforms,” said Roger Geerts, director of systems engineering at Juniper Networks A/NZ.

“We’re working with partners to look at their customers’ networks more holistically in the way they embrace virtualisation.”

Alcatel-Lucent’s Darren Batty said virtualisation is currently being used as a mechanism to consolidate networks – a trend that Juniper is also seeing.

“We’ve seen customers with 12 or 13 networks consolidate them onto a single physical network but then end up with 13 logical networks sitting on top of that,” said Batty.

“That’s been going on for quite some time and it’s moving into the enterprise as well.”

But not everyone is convinced.

“There’s not much network virtualisation happening right now,” said Mitch Radomir, solutions marketing Asia for Nortel Networks.

“People aren’t spending big bucks on it now but it will play a major role in strategy going forward.”

3. Network outsourcing

We’ve all heard the managed services spiel in the past few months – something along the lines of ‘when the reins on capital expenditure are tight, opex becomes an attractive proposition to customers’.

It’s often used in the same sentence as SaaS, but there’s no reason it won‘t be applied to other aspects of IT infrastructure, according to Nortel’s Radomir.

“There could be potential for outsourcers to take on a customer’s network infrastructure for the next three years,” said Radomir.

“We’re coming into contact with a lot of customers who last upgraded their networks in 2001 or 2002 and haven’t done much since then. A lot of that equipment is coming to end-of-life or end-of-support and could now be incapable of doing the things that IT needs such as virtualisation.”

Radomir said that as much as 20-30 percent of the market is ripe for refresh.

“Those people have to make a decision on how to deliver the next big jump in network capability,” said Radomir.

“How many can wait until 2010? I don’t know, but at least 20 percent of customers in the market need a major refresh of capability.”

Radomir said he did not think it was just the carriers that would benefit from outsourced network services.

“We always think of the carriers when talking about managed service providers, but it could also be the likes of EDS/HP, IBM and DiData that benefit,” explained Radomir.

“We see a lot of tenders now where the whole desktop to server to network is being outsourced. It’s a big boom area for service providers and consulting firms.”

Riverbed’s Steve Dixon is also watching the network outsourcing market closely.

“It will be interesting to see whether we see more managed services and leasing contracts as opposed to outright capital expenditure on network infrastructure,” said Dixon.

“Most IT organisations should at least include in any proposal the opportunity to have the solution provided either as a managed service or under lease.

Sure, some of the accounting benefits of leasing have disappeared in recent years, but in a world where cash is king, why buy something when you can spread that expenditure over a longer term period?”

4. National Broadband Network

This proved to be a thorny issue among many of the networking vendors CRN spoke to.

But with at least $10 billion quoted for most potential builds, and (at time of press) Telstra being thrown out of the evaluation process, it’s not unreasonable to expect there could be substantial services revenue opportunities around for those with the right skills and equipment to assist in construction.

Alcatel-Lucent invoked Senator Conroy’s gag order when asked whether there were opportunities for its channel partners.

Thankfully, other networking vendors were a bit more forthcoming.

“There’s definitely a role for partners in the build process but I see that as a smaller part of the bigger picture,” said Kevin Bloch, CTO for Cisco A/NZ.

“There’s always opportunity in terms of building out network infrastructure and implementation, but the real opportunity for partners is how to leverage that infrastructure in terms of services that run on top of it.

“Assuming we have a fantastic new broadband network, what services can we put on the NBN to really fire up our economy? That’s the challenge and opportunity – how we get best use from that network,” said Bloch.

Agreeing, Juniper’s Roger Geerts believes the main opportunity is on the application side rather than the build.

He said, if Australia gets an NBN, it has to be a good thing for the country and it will open up doors not just to build it but for other services to go on top of it.

5. IPv6 adoption

Unless your customers are carriers, service providers or are forging ahead with a major network refresh, it could be another year of slow to zero take-up of ‘IPv6- ready’ equipment.

“There’s certainly still a feeling of customers sticking their heads in the sand [on IPv6],” said Juniper’s Roger Geerts. “We’re not pushing it down anyone’s throats – we’ve had it in products for a long time now and we’re ready to go.”

Geerts said that the run out of IPv4 address space on the Internet, which is anticipated as early as 2010, is unlikely to provide much sales impetus for IPv6 in 2009.

“IP addresses running out is more an issue for service providers than enterprise customers,” said Geerts.

“If people are building out new infrastructures then why wouldn’t they enable IPv6? But outside of them, service providers and large government departments, I don’t see it being implemented widely very soon,” he said.

Alcatel-Lucent likewise is deploying ‘IPv6 ready’ platforms but it appears few customers are switching on the capabilities yet.

“We’re working with carriers to help them understand what it means for their business,” said Batty.

“The platforms being deployed in modern carrier networks are IPv6 ready. It’s now a matter of when will the trigger be pulled to enact those capabilities in the business,” he said.

Distribution Central’s Nick Verykios was more blunt on the IPv4 address shortage.

“That stuff doesn’t entice an end-user to spend money,” he said.

6. Friendly co-operation

One of the more unusual consultancy opportunities in 2009 is in breaking down walls between application, network and security architects to aid in
end-to-end virtualisation deployments.

F5 Networks’s Phil Caleno said the opportunity is so great that it’s ‘cables down’ for much of his team – and partners can benefit, too.

“My team spends a lot of time facilitating discussions rather than plugging cables,” said Caleno.

“That’s because customers who get the best return on virtualisation are the ones who can get all their architects around one table and understand what can be done if you break down some of these walls.”

Caleno said the situation is often further complicated when different outsourcers hold contracts for different parts of a customer’s business, but the problem isn’t irresolvable.

“The architecture managers already get the ‘do more with less’ approach,” said Caleno.

“Network engineers should at least entertain these types of conversations.”

Alcatel-Lucent’s Darren Batty was more sceptical of enterprise-wide virtualisation deployments.

“Typically, server, network or desktop virtualisation run as separate projects,” said Batty.

“The application layer is often the common thread between the server and network guys, but do we see virtualisation being implemented across the enterprise in a single project? Not yet.”

However, Juniper’s Roger Geerts believes pursuing a connection is potentially worthwhile.

“It’s common to see server and network virtualisation projects linked together, but they don’t have to be,” he said.

7. Mobile security

As more business users work remotely, many are apparently choosing not to log into the corporate VPN when they roam on other networks.

Alcatel-Lucent calls this a ‘mobile blindspot’ – which they define as
‘a condition where enterprises have no visibility or control over the location, use or configuration of employee laptops’.

The firm’s answer is the OmniAccess 3500 non-stop laptop guardian (NLG).

It’s essentially the size of a 3G USB modem with the same functionality along with some added security and management features that enable it to act as ‘the ignition key to the laptop’, according to Mark Magill, portfolio director of the enterprise business group at Alcatel-Lucent A/NZ.

“When a user takes their laptop outside the corporate network and connects to a network elsewhere, they’ve got a choice to work with the laptop immediately or re-establish a VPN connection back into the corporate network,” said Magill.

The NLG takes back that choice from the end-user, he said.

“If they have an NLG, the laptop is effectively useless without it. You can still use it in an offline mode, but as soon as you go online and connect to the Internet, the NLG will first connect you back into the corporate VPN,” he said.

NLG technology gives enterprises 24/7 access to employee laptops – enabling them to automatically enforce policies for compliance and deliver software patches and upgrades to their increasingly mobile workforce even if the laptop is turned off, according to Alcatel-Lucent.

It’s a big opportunity for partners to resell, particularly this year: “We’re going to release this into Australia and New Zealand in 2009,” said Magill.
8VDI vs. the web

Virtual desktop infrastructure has been a hot topic for the likes of VMware, but it may not be the best way to push applications over the network – at least according to F5 Networks’s, Phil Caleno.

He told CRN that while he believes VDI is ‘interesting’ he doesn’t yet think it’s ‘compelling’.

“I think there’s still some jostling to be had on whether the application that sits at the remote site is through a browser or a remote desktop client,” said Caleno.

“The market has been looking to send applications to the browser as opposed to VDI for a long time. Customers should consider whether VDI is the necessary way to get the end-user experience they’re trying to achieve out to staff.”

Caleno cautioned prospective VDI customers to also look at thin browser-based approaches to application deployment.

“It appears that everyone is running towards VDI as a solution that’s going to fit every scenario,” said Caleno.

“I don’t think it’s as black and white. I think maybe there’s some balance that could be reached.”

9. Dual-band in the home

A slight change of pace now as we move to the home networking market.

According to Graeme Reardon, regional director of the Linksys by Cisco brand, the opportunity in 2009 is selling dual-band wireless A+G product.

“It’s still relatively new,” said Reardon.

“Obviously the technology itself still isn’t ratified but we expect that will be done early in 2009. From all expectations it will be firmware upgradeable when the final standard is released.”

Linksys anticipates the addition of the 5GHz band will allow consumers to ‘let their minds go free when it comes to home networking’.

“We really see the technology as the underlying infrastructure that will help customers run many more applications on their home networks,” said Reardon.

“You could for example have VoIP running on the network as well as a cordless phone without the two interfering.”

Reardon said he also expected networked media storage to be a big selling point for the channel in 2009, tipping some new product announcements at the Consumer Electronics Show (CES) in Las Vegas in January.

“Having a centralised hub for multimedia content and then being able to distribute that content around different devices and mediums in the home over core infrastructure – it’s really the first steps to having a connected home.”

Resellers will have to wait for CES for more. “We want to keep the hype out there without getting consumers too worked up,” added Reardon.

10. Take our advice

Networking projects won’t be exempt from the impacts of a tighter IT market.

According to Riverbed’s Steve Dixon, network refreshes that may have happened every three or four years ‘may be pushed back by a year or two’.

“I think unless they are really required any refreshes will be pushed back,” said Dixon.

Distribution Central’s Nick Verykios agrees, to an extent.

“There’s so much networking technology being talked about but if budgets aren’t being allocated then it’s another 12 months away,” said Verykios.

“It’s all about where budgets for 2009 are allocated”.

But it’s not all doom and gloom.

There is still money in networking if you know where to look.

“There will be growth in areas that can offer customers fast ROI and major productivity gains,” said Verykios.