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Technology Stocks : Covad Communications - COVD

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To: Brasco One who wrote (3413)1/31/2001 6:37:33 PM
From: Captain James T. Kirk   of 10485
 
January 31, 2001

Look Past The Horror Stories
DSL is finally a viable option for corporate branch offices and telecommuters
By JOE MULLICH
When David M. Kurtiak ordered a DSL line for personal use at home, the senior engineer at Loral Skynet encountered just about every problem imaginable. First, he was told by his service provider that DSL was available in his area, then was told it wasn't. When the service finally became available, installation took four months. Then the DSL provider declared bankruptcy.

After all that, you'd think Kurtiak would swear off DSL forever. Instead, he's thrilled about the way replacing his company's T1 lines with three DSL lines of 1.1 Mbps, 2 Mbps and 7.1 Mbps helps him deliver less expensive VPN remote access to about 200 telecommuters.

Kurtiak says that by using DSL, Loral Skynet reduced its bill from $3,500 per month for T1 service in 1999 to less than $1,000 per month for the three DSL lines.

"Loral Skynet's experience with DSL has generally been excellent, with only one service outage in the past year due to Verizon literally cutting the wires in the central office,'' Kurtiak says.

While DSL may not be problem-free, the horror stories about lack of access, installation woes, management concerns and providers going belly-up have not stopped the technology from emerging as an invaluable business tool. Many IT managers are becoming convinced that DSL is at last mature enough to trust for business applications. In addition, the availability problems users faced 12 to 18 months ago are less acute today, thanks to wider deployment in most major metropolitan areas.

A study by consulting firm Vertical Systems Group says the total number of Internet-connected businesses in the United States will jump from 2.96 million in 2000 to 4.48 million in 2003. During this time, broadband connections will increase by a whopping 264 percent, while use of dial-up access will decline 10 percent. Vertical says that by 2003, DSL will exceed installations of all other broadband Internet access technologies combined, including leased lines, frame relay, ATM, cable modem, satellite and wireless. DSL offers guaranteed bandwidth--something that shared cable lines don't.

Most commercial DSL implementations have been at companies with fewer than 100 employees. The typical DSL user has five to 25 employees, and experts expect that to remain the "sweet spot" for most corporate DSL implementations. One example is Beginning 2 End Inc., an advertising agency in San Francisco. The 20-person company was one of the first to pilot DSL for Nokio Broadband Systems and Covad Communications several years ago.

Beginning 2 End replaced its more expensive and maxed-out ISDN lines, allowing its telecommuters on staff to run such appli-cations as videoconferences. That wasn't feasible with the older technology.

"DSL has been integral to our growth for the past four years," says Keith Lindbeck, president of Beginning 2 End. "I can think of plenty of pros to the technology but hardly any cons.''

Which is why many larger companies are now starting to use DSL, primarily to link telecommuters and remote branch users.

"The biggest misconception about DSL is people think it's only for home users, not for businesses," says Robin Gardner, manager of corporate voice and data services for Novell, the Provo, Utah-based $1.2 billion provider of Internet services software.

Novell is turning that misconception on its head with an ongoing project to equip its regional sales offices with DSL lines. So far, the lines have been rolled out in Australia, Canada, New Zealand and the United States. The DSL lines are replacing frame relay connections, dovetailing with a companywide initiative to reorganize corporate voice and data services around Internet access.

"We regard work as an activity, not a place, and we want to give employees the same infrastructure and connectivity options whether they are in the office, on the road or home," Gardner says. "DSL gives them a faster and cheaper access to the corporate data."

The remote offices using DSL have 15 to 25 employees each. Offices that have more workers or need higher service levels and committed information rates (an assurance of a given amount of capacity) are being equipped with T1 lines.

The branch office employees use DSL to access messaging, finance and planning applications. Productivity has improved dramatically, Gardner says, because of the higher speeds DSL offers. DSL can pump through information 10 to 100 times faster than standard dial-up modems. To make DSL even more appealing, Novell has redesigned its applications, making them lighter so users can interface with them through Internetportals.

"For the small field offices that need good-quality connectivity and are running corporate applications hosted from a central location, DSL is ideal," Gardner says.

PeopleSoft is also making an aggressive move to DSL. The software maker, which has fostered a telecommuting culture for several years, gives every employee a laptop on the first day of work. Two years ago, PeopleSoft announced plans to give all of its 7,000 employees high-speed DSL access from home. Those plans were stymied by having to negotiate separate deals with various DSL providers and the complexity of having to manage so many users. But today, almost 1,000 PeopleSoft employees telecommute using DSL links through the company's PeoplePipes program.

"DSL isn't a panacea," says Stan Christensen, director of network engineering at the Pleasanton, Calif., company. "But more than half of our staff works from home, and a 56-Kbps modem doesn't cut it for a lot of tasks." For example, Christensen found that users would become so frustrated trying to download large e-mail attachments at home that they wouldn't bother.

In PeopleSoft's case, the economics of DSL were compelling. Everyone in the company was already dialing into a RAS modem pool, and the IT department was receiving bills for home use by employees. The company determined that by using DSL, it could cut those costs in half.

"A company that has a lot of telecommuters can pretty easily quantify the benefits of DSL," Christensen says. "If most employees don't have a laptop or you don't allow your systems to be connected from home, the point becomes moot."

For larger companies with many at-home workers, DSL promises to solve numerous problems. Take Loral Skynet, which owns and operates the Telstar satellite fleet. As of September 1999, the global satellite communications service provider was paying $3,500 a month for a T1 line from PSINet Inc. to support Internet access for its New Jersey headquarters and 200 telecommuters.

"I wasn't satisfied with the performance or the cost," says Kurtiak, who adds that the T1 line experienced frequent outages. "I wanted to eliminate single points of failure within our network. How could I get away from a single ISP for less? The answer was DSL."

Kurtiak initially brought in a total of 3.1 Mbps from two DSL providers, reducing the cost of T1 lines by 50 percent. Another benefit is that if the company lost one DSL line, it could use the other as a backup. This requires a little more manual intervention, he says, but it's better than relying on a single T1 line that has no backup.

Loral Skynet's primary application for DSL is VPN remote access for telecommuters. It's about halfway through a project to eliminate its inbound dial-in pool. The company now has three DSL lines: a 1.1-Mbps line from Covad through AT&T Cerfnet; a 2-Mbps line from NAS-Corp., which goes through Eclipse, a local ISP; and a 7.1-Mbps line from Bell Atlantic/Verizon, which Loral Skynet uses for Web access. The lower-speed lines are used for inbound and relatively static outbound traffic, such as e-mail and access to the corporate network via a VPN. The 7.1-Mbps line is used for Web browsing.

Another approach companies take is to start off with DSL by rolling the technology out to its IT workers. Lawnmower and home-care products company Snapper Inc., a $300 million business with 1,000 employees based in McDonough, Ga., has DSL lines at IT employees' homes so they can troubleshoot problems. Now Snapper has begun offering DSL to its top executives.

"Almost all the executives have DSL access from their homes," says Howard Jones, the company's CIO. "They have the option of using cable modems, but I like DSL better because in our case, the cable connections run very slow at night."

Snapper has about 120 remote users connecting through remote access. The stumbling block to having more users on DSL is security. Snapper is working on a VPN project that will let its remote users migrate to a VPN, slashing the company's $17,000-a-month dial-up 800 costs.

PeopleSoft opted not to go with a VPN. Instead, it connected an ATM DSL circuit to a Cisco router that sits in the data center at PeopleSoft headquarters. The DSL modem on the user side runs in bridge mode. On the router side, a Cisco Bridge-Group Virtual Interface is run with the ATM circuit. The result is that when users log on to the computer, it's as if they're on the corporate LAN at the office.

"Troubleshooting issues would have been more complex for DSL over VPN," Christensen says. "Every employee here is a telecommuter from the day they're hired. They are used to plugging the laptop in anywhere globally, getting into our network and simply having it work. They have the same ability to do that from their house with a bridge network."

Christensen estimates that roughly 70 percent to 80 percent of the company's workforce now has access to DSL. "I don't see anyone doing anything from a carrier perspective that's ever going to provide complete DSL coverage, so you always need a backup plan," Christensen says. While DSL is beginning to make sense in numerous instances, experts say users still have to carefully analyze the pros and cons of the technology.

"People talk about DSL like it's mass market, but the technology is still in the early stages," says Kathi Hackler, vice president and chief analyst at the Gartner Group in San Jose, Calif. "It still has a lot of the problems you get when you try to take an old piece of infrastructure and layer a new technology on it."

There's no question that DSL is not for everyone. C-Bridge Internet Solutions, a 900-person e-services consulting firm in Cambridge, Mass., found that DSL couldn't deliver the performance the company required for employees to access its data center and business applications. Ralph Rodriguez, vice president and CIO at C-Bridge, recently completed a series of pilots using DSL with carriers around the country.

"We used VPN tunnels using IPSec," Rodriguez says. "We found that IPSec over VPN over DSL runs very poorly." The reason, he says, is that most DSL providers don't have a committed information rate, which is common with mature technologies such as frame relay.

Ready And Available
In terms of availability, finding a $40-a-month DSL provider of basic services, such as e-mail, Web access and file transferring is becoming easier. Pricier DSL services that charge, say, $200 a month for VPNs, security, higher bandwidth and service level agreements require a much closer look at the provider's capacity and track record, says the Gartner Group's Hackler.

"This is the same situation as years ago, when enterprises and businesses tried to implement ISDN and the stumbling block was always availability on a wide scale, because you don't want to have to mix and match your network," Hackler says.

DSL will become more attractive to businesses when SLAs with bandwidth guarantees, managed security and apps such as voice-over-DSL become more common over the next year or so. Analysts, including Hackler, say business users should look more closely at the provider's reach, overall support and provisioning capacity.

But despite all the continuing horror stories, DSL is finding a place at companies large and small. And experts say DSL will become more widespread when the market stabilizes and the early business users prove the benefits of the technology.

Joe Mullich is a freelance computer journalist based in Glendale, Calif. He can be reached at joemullich@aol.com.
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