Never a technology to sit still for long, the IT network is on the move again.
Wireless having already grown to an almost unbelievable degree is more corpulent by the day. Video, web conferencing and other IP-borne collaboration tools are in greater demand than ever. Convergence, migration and virtualisation have turned into the great Father, Son, and Holy Ghost IT triumvirate. And all manner of firms are suddenly buying into the benefits of ideals such as remote working, datacentre consolidation, and 24/7 application access via technologies such as smartphones, PDAs, and thin clients. Happy days then.
Only this time it is different. It is no longer just the multinational, conglomerate, behemoth corporate that is setting this pace and the networking market agenda. It is no longer just enterprise customers that are looking to turn their networks into true utilities. It is SMEs.
And that spells channel opportunity, according to Peter Airs, business development director of three-times CRN Networking Vendor of the Year, NetGear.
“The networking market has evolved apace in the last 12 to 18 months, especially at the lower end of the SME space,” says Airs. “Here, where bandwidth-hungry, network-intensive applications like voice over IP (VoIP), video and wireless access used to enjoy only a minimal profile among smaller businesses, they are now much more commonplace.”
“Because of this, growing numbers of SMEs are coming to a realisation. If they want to properly deploy and reap the full benefits of IP-based applications which are now more readily available to them they must also start to take much greater control of their network infrastructures.
“They can have the next-generation applications they want, but they also need the infrastructures to go with it.”
Sarah Guy, marketing director at ZyXEL, agrees, saying networking manufacturers have been forced to act accordingly.
“There is no doubt about it. The networking market is changing at a rate of knots. In the past 12 months we have seen a demand for enterprise-class services at an SME and mid-market level as these environments become more complicated, for example with the growth in flexible working. Networks must now be intelligent and able to respond rapidly to SMEs’ changing and continually evolving requirements.”
Because of this, she says, there is now a need for vendors to make products smarter and more intuitive to enable resellers to sell them into SME and mid-market sectors more easily. “Resellers can command higher margins by deploying such solutions and advising customers to make their networks future-proof and scalable. For those resellers actively engaging in this, smart networking provides a critical unique selling point.”
It is a fair point. Even if a customer is not using smart networking technologies now, they will want to sooner or later.
Meanwhile, Bruce Hockin, head of business strategy at Horizon Equip Technology, believes that there are several other drivers behind the rise in smart networking adoption among SMEs citing the growth in digital trading and advertising; the continuing development of the SaaS market; and the culture of flexible working as a handful of reasons why many smaller businesses are adopting more holistic approaches to building networks.
“Paying particular consideration to security, availability, mobility, and manageability, the boundaries between the needs of the enterprise and that of the small business are blurring. Broadband internet access and, in particular, changes in application delivery, are enabling businesses to compete on the same level.”
The smart network, he says, is the one that takes advantage of the development in technology while providing simplified solutions to business challenges, and is therefore, the one most likely to secure the budget.
This increasing value that is being placed on the network is creating a significant opportunity for the channel, says Hockin; the greatest challenge for the small business being a shortage of the knowledge and skills needed to implement a networking solution that delivers genuine business advantage.
“The commoditisation of intelligent technology has made networking affordable, but it is the ability to architect, integrate, support and manage that allows a business to realise the value of their investment.”
“To the SME, the value of these technologies is neither determined by which is the fastest, has the most ports or flashing lights; it is that which helps improve productivity, reduce cost and risk, and help deliver superior customer service.
“Therefore, the key for SMEs is to reduce management cost and integration headaches by consolidating certain functions into one device.”
The first and most obvious of these smarter networking devices is the smart switch a technology that is winning popularity with SME and mid-market businesses thanks to its combination of high manageability, robust security and relatively low costs, says Peter Airs, whose company NetGear leads the smart switch market ahead of the likes of HP, D-Link, ZyXEL and Linksys.
“There is still a lot of education to be done, but as businesses begin to realise and embrace the need for greater control over their networks, selling in smart switches, which are secure and easily managed, against unmanaged switches, which are open, intrinsically insecure and by definition unmanageable, should become easier for channel companies.”
“Smart switches offer many of the same advanced features that fully managed switches do,” Airs added, “with a more easily managed front end a bro wser-based GUI rather than command line-based interface and at a price that is closer to that of an unmanaged switch.
“Add stackability to this and consider that the SME now has no need to buy features they will never need, at huge expense, and it becomes a no-brainer. Deploy a large number of these units, perhaps across multiple locations and the cost savings start to stack up,” he said.
Dave Smith is vice president of business solutions at D-Link Europe, another smart switch player. He too puts the smart switch’s popularity down to the fact that it delivers many of the benefits of a fully managed switch, but without the complexity or cost, and believes that this plays into the hands of the reseller.
“One would typically expect about two-thirds of small businesses to engage resellers to set up and possibly even maintain their networks, with the other third doing it themselves,” he said.
“The idea of smart switches is to simplify network setup and management. Once installed, they require very little maintenance other than, for example, adding new users to the network. The main advantage for the reseller is that they do not need to invest a huge amount of resource into training staff on complex, proprietary operating systems.”
The fact that smart switches can be managed via a web interface also improves margins because they can be supported easily from remote locations as well as cutting costs for the end user through lowering total cost of ownership and accelerating return on investment.
“Additionally,” says Smith, “as companies grow and require the network to scale accordingly, web-based smart switches help to web protect and future-proof the network investment. A web-based smart switch can operate as an unmanaged switch out of the box.
“But key features such as link aggregation, quality of service, and network monitoring enable a company to scale and grow without having to replace switches or perform ‘forklift’ upgrades.”
Another switching technology previously limited largely to enterprise
installations, but now making a marked move towards the SME space, is the KVM
(keyboard, video, mouse) switch the deployment
of which can help optimise rack space, reduce energy bills and cut hardware costs by providing central access and control from anywhere with IP functionality.
“It is a great market to be in,” notes ATEN UK’s managing director, John Chen. “Feedback from our partners is that the network switch opportunity is growing dramatically here,” he said.
From a security perspective, Hockin notes that device consolidation has
become a major driver in the unified threat management (UTM) space, where the
integration of firewall, VPN, intrusion detection, audiovisual and anti-spam
technologies is helping smaller businesses to reduce network risk and lower
However, because of this, says Keith Bird, vice president for Europe at SonicWALL, expectancy levels are becoming much higher among smaller enterprises.
“Small and mid-size sectors are demanding the same networking features as those in the enterprise space,” he explains. “But any solution aimed here also has to be extremely simple to manage and demonstrate real value back to the business to be considered.”
Reporting is critical he says, warning that if you cannot show the business’s non-technical audience where their money is going, you will not get your foot in the door.
Another consideration in terms of network security is value for money. “UTM is extremely popular with SMEs and as the number of features continues to grow, companies are comparing feature lists to check what they are receiving for their investment; so solutions based on single boxes are being dropped for UTM appliances.
“The ability to see and manage everything from a single point is the biggest selling point. These areas are making customers far more aware of the issues around IT security and many are relying on the channel to help them in what is a very dynamic sector,” said Bird.
David Ellis, director of e-security, professional services and training at ComputerLinks, says the push toward network security device consolidation is set to continue.
“Many vendors such as Juniper offer solutions that combine security services such as firewalls, VPNs, content filtering and intrusion prevention on the network device itself. It is likely that this trend will continue with routers and switches offering far more functionality than in the past, so that e-security becomes part of the core infrastructure.”
However, he says, as the threats and the risk landscape are changing, there
will always be a need for
separate IT security products as networking vendors will not be agile enough to keep up with the new and changing threats.
Among these of course is wireless; the massive rise in the number of mobile devices being a particularly compelling factor here, according to Bird. IDC estimates that by 2009, there will be 850 million mobile and remote workers globally; up from 650 million in 2004. This compares with the sharp increase in cyber crime and tightening regulatory and compliance rules.
“Smart networking implies some degree of integration of security technology, yet there are still concerns with regards wireless,” notes Ian Kilpatrick, chairman of the Wick Hill Group.
“Witness TK Maxx and the failure of its wireless security when it used outmoded WEP instead of WPA2. Therefore, customers are looking for resellers who are able to work with them through the various mazes of wireless security and provide them with WPA2-compliant wireless security from suppliers such as Check Point and WatchGuard.
“They are looking for resellers who can couple that with the strong authentication required to ensure that only authorised users can access the network,” said Kilpatrick.
Anthony Fulgoni, vice president of strategic international sales at Proxim Wireless, believes that Wi-Fi will, nevertheless continue to dominate the space, with technologies such as 802.11n continuing the push towards the all-wireless enterprise and the wireless provision of multiple applications such as data access, VoIP and video.
“As more client devices use Wi-Fi and more applications take advantage of the technology’s productivity benefits cost savings and higher speed access resellers can look to a wider infrastructure and service play; considerations for storage and management and true WAN teleworking using wireless broadband and smart HSDPA plans from service providers.”
And resellers have a huge role to play in the unwiring of the enterprise, says Fulgoni.
“In addition to the product revenue, deploying and selling wireless networks enables the reseller to capture high-margin service revenues. Furthermore, subject matter expertise that comes with technical training can be a huge competitive differentiator for the reseller.”
Another important driver in the networking arena has been the push towards backbones that can promise faster, easier, more reliable application delivery particularly in areas such as voice.
“VoIP raises considerable questions and opportunities in this arena, challenging the network both in capacity, latency, and security. This year will show this challenge in sharp relief as performance and security will come to the fore over and above what has increasingly been just a cost and application access sale,” said Kilpatrick.
“With VoIP, streaming video and similar technologies deployed alongside other smart networking technologies, it is crucial to be able to prioritise those applications that need performance and identify and bar or minimise those applications on the network that are hogging resources,” he said.
Companies such as Allot Communications and their VARs are seeing significant sales growth with solutions that perform application prioritisation, as well as secure deep packet inspection to detect malicious or inappropriate application traffic.
“There are significant opportunities for those resellers that have skilled up
in this area, and we have had strong take-up of courses that deliver training in
this value-add arena. We know from our sales
figures that this area will continue to grow.”
Future proofing is another important consideration, says Rajesh Sinha, technical director at Bailey Teswaine, especially when it comes to the differing life spans of various parts of the network infrastructure. Where IT infrastructure such as servers, switches and PCs typically lasts three to five years, he explains, structured cabling is expected to last much longer, perhaps 20 years.
“Building in headroom through dark fibre and spare capacity will help future proof the building and organisation for years to come. Building management systems such as heating, lighting, CCTV and air-conditioning are increasingly IP-enabled too. The ability to integrate building systems, better monitor and control energy use and provide an optimal environment for staff can all generate network traffic. Scaling the network correctly at the planning stage enables companies to support these applications.”
One way or the other, there looks to be a significant channel opportunity in smart networking products and services moving forward. It is not, however, as simple as stocking up and knocking on a few doors, cautions Kilpatrick.
“Smart networking is a big shift for the channel from a product sale to a solution sale, because the elements of smart networking need to be integrated and interoperable. As a consequence, enterprise and high-end SMEs are looking for VARs that are able to deliver rounded solutions, with expertise and services.”
“This market is still, therefore, in development and a long way from maturity and there are considerable opportunities for suitably skilled VARs. While users want smart networking, they also need good partners they can trust to deliver it.”
So what does it take to succeed in the smart networking arena?
Troy Leliard, head of professional services with secure platform provider s2s, a subsidiary of Bailey Teswaine, sees the reseller’s approach as being as important as the technology they are offering.
“I think that smart networking is still a difficult sell, particularly to SMEs,” he says. “Admittedly, device intelligence is becoming affordable, but device intelligence by itself is only half the picture. The real benefit comes into play when multiple intelligent devices start working together to monitor, optimise, and protect the network infrastructure and associated services,” said Leliard.
“Most of these systems are still out of the reach for SMEs to buy directly, so an opportunity arises for VARs to outlay the capital expenditure, white label such services and provide them to SMEs as managed or licensed services.”
This is where vendor incentives can really come into their own, adds Leliard. The more common ones include trade-in and buy-back schemes where the vendor helps offset the user’s capital expenditure by offering trade in value on other hardware such as reseller rebates, particularly on new technologies; joint marketing funds; and easy finance options, particularly pertinent given the current credit crunch.
In the end, it is a question of adding real value says Leliard. “For resellers to be successful in this environment, being able to build proper return on investment and total cost of ownership estimates is the best approach to take. If you do not take this route, there will be increased competition on price alone.”
Overall, says NetGear’s Peter Airs, there is every reason for resellers to be optimistic where smart networking is concerned. “There are all sorts of incentives for resellers to try to move their customers away from unmanaged networks and towards smart networking technologies.
“Extra revenues; a greater understanding of their customers’ networking capabilities and, therefore, a clearer network road map and upgrade path. Easier network management when offering third-party management services and a good incremental opportunity as users grow their networks over time for example,” he added.
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