Network Turbulence. InformationWeek article
[Mentions CSCO WAN routing vulnerability]
pubs.cmpnet.com
pubs.cmpnet.com
pubs.cmpnet.com
Excerpt: "In the long term, even Cisco's WAN routing franchise is likely
to come under siege, analysts say. A proposed standard
called Multiprotocol Label Switching, which simplifies IP
routing, could heighten competition. It will enable
packet-forwarding to be understood by switches as well as
routers, so more switches will be able to do the job of routers."
Despite lower prices from vendors and their own
soaring bandwidth demands, many users aren't ready
for next-generation products
By Monua Janah, 4/13/98
Networking equipment prices are tumbling and bandwidth
demands are escalating like never before. So why are
so many customers holding back from buying next-generation
switches that promise to solve their networking problems?
For one thing, they've been disappointed before. The benefits
of the last big networking wave--the move from shared to
switched LANs that began in the early 1990s--have been
short-lived. New enterprise resource planning, intranet, and
other applications have already gobbled up the added
capacity, leaving network managers in an awkward position.
"We've just gotten through investing in our network
infrastructure, but we're seeing apps roll out that weren't even
being considered three years ago," says a network manager
at a major metals company. "There's no way we dare go back
to management and ask for more money."
The Seattle Times has ridden the upgrade wave for four
years, moving from a shared-media and router environment to
a 10-Mbps switched environment up to 10/100 Mbps. "We
basically broke up our flat network into smaller workgroups,"
says Margaret MacDonald, a senior network systems analyst
for the newspaper. "About the time we got that done, the
Internet and push technology came along. It blew away a lot of
what we were trying to do."
Some of the problems are the result of poor planning. The
move to switched networks required users to redesign their
infrastructure. But some users just popped the devices into
their networks without a master plan, causing poor
performance, says Mark Kudel, executive director of product
development at Donnelley Enterprise Solutions, a systems
integrator in New York.
As a result, customers are approaching Layer 3
devices--essentially, intelligent switches that do basic
routing--with a great deal of caution. At the same time,
network purchasing decisions at many companies are moving
to nontechnical managers reluctant to deal with the complexity
of high-end products.
"I've heard Layer 3 switching discussed at a deep technical
level, but I haven't heard it discussed at the executive level,"
Kudel says. "There's also a residual sense that the investment
during the last couple of years in switching hasn't really
panned out. Now there's a reluctance to jump on the next
bandwagon."
Many customers are making do by buying ever-cheaper
current-generation switching products, choosing from scores
of new and niche vendors.
Meanwhile, a flood of next-generation products is hitting the
market from vendors other than the Big Four of Cisco
Systems, 3Com, Bay Networks, and Cabletron. Extreme
Networks Inc. last week introduced a desktop route-switch.
Torrent Networking is readying enhancements to its IP9000
terabit router that will handle large volumes of traffic at high
speed. Nexabit Networks offers a 6.4-terabit-per-second
switching router. This week, Neo Networks will introduce Fast
Ethernet support for its 512-Gbps router, as well as a version
with a smaller 80-Gbps chassis geared for enterprise
networks.
continued...page 2, 3
continued...page 2 of 3
By Monua Janah
Along the parallel trend of price cutting, vendors are making
moves at both the low and high ends. Allied Telesyn two
weeks ago cut prices on its Fast Ethernet and Ethernet
switches. Foundry Networks Inc. has slashed prices on its
Gigabit route-switches and started selling a cost-effective
workgroup switch bundle with Gigabit Ethernet uplinks. With
the recent entry of two computer industry mainstays--Intel and
Compaq--into the Gigabit Ethernet market, prices will likely
tumble further, analysts say.
The combination of customer cautiousness and competitor
aggressiveness has put established vendors in a bind. 3Com,
Bay, and Cabletron have all posted sagging financial results
in recent quarters. Two weeks ago, CEO Don Reed resigned
from Cabletron after just seven months on the job.
The one major networking equipment vendor that has
maintained its operating margins is Cisco. It's staying ahead
partly because profit margins for big routers--still one of
Cisco's main businesses despite rapid
diversification--remain relatively high. Cisco has also
succeeded in using the shift in customer purchasing
responsibility to its advantage.
"Cisco has become the secure choice now," says Kudel of
systems integrator Donnelley. "The people making technical
decisions now are nontechnical, maybe because IS budgets
are getting so large. Microsoft set the trend of selling up,
higher in the organization. It seems as if Cisco has learned
from that."
In the long term, even Cisco's WAN routing franchise is likely
to come under siege, analysts say. A proposed standard
called Multiprotocol Label Switching, which simplifies IP
routing, could heighten competition. It will enable
packet-forwarding to be understood by switches as well as
routers, so more switches will be able to do the job of routers.
Cisco's LAN switch revenue is also under pressure. Its
Ethernet switch revenue was flat in the fourth quarter, at just
over $500 million, following price cuts in 100-Mbps Ethernet,
according to the Dell'Oro Group, a research firm in Portola
Valley, Calif.
Early Adopters
Despite the slow start of Layer 3 switching, there are some
early adopters. Texas Instruments uses Extreme Networks'
Summit devices. But even here, the need was first for more
bandwidth; the Layer 3 routing capabilities came as
something of a bonus, says Hans Baartmans, Unix network
administrator at Texas Instruments.
Nielsen Media Research is using four Bay Networks Accelar
gigabit route switches in its LAN. "The performance is
outstanding," says John Booth, manager of data network
operations at the Dunedin, Fla., company.
continued...page 3
continued...page 3 of 3
By Monua Janah
Still, Booth can't throw out Nielsen Media's routers just yet,
because the Accelars don't route Novell's IPX protocol. "IPX
routing is at the top of my list," he says. "I could convert the
entire backbone network to Layer 3 100-Mbps switched
routing if the IPX product were released. It would eliminate
my dependence on the existing LAN routers."
But even when customers take
the time to redesign their
networks from the ground up,
Layer 3 technologies don't
always play a part. Prudential
Insurance Co. of America, for
example, is in the midst of a
major network upgrade, using wide area ASX switches from
Fore Systems, Catalyst switches from Cisco, and a
combination of new and existing Cisco routers. "We're
completely revamping our network topology, taking it from
multiple legacy architectures to a new virtual network," says
Bernie O'Neill, VP of distributed computing and networking
at Prudential.
Under the new design, the ASX boxes provide WAN
connectivity between sites; frame relay and ATM services
from AT&T link Prudential's 1,000 or so offices. In the
campus backbone, Prudential is deploying switched Fast
Ethernet, scaling up to Gigabit Ethernet or ATM. For desktop
connectivity, the company is replacing shared token ring with
switched 10/100 Ethernet.
The outlay was considerable, but getting Prudential
management to buy in wasn't difficult, O'Neill says.
"Prudential made a fundamental decision to do business with
customers any way they want to business with us," he says.
"We want to entice people by providing services, and we are
revamping our technology architecture in order to enable
that."
Although Prudential totally redesigned its network, it plans to
redeploy some existing technology: its routers. "Layer 3
switching will be the right way to go when the market really
supports it in a grand way," O'Neill says. "In our environment,
because we were a typical token ring shop, we routed
between every segment. So we have an abundance of
routing capacity, and we need routers for WAN connectivity
in any case. For us, routers fill the role of the Layer 3
switches."
Averse To Change
Other companies are making major investments in
competing technologies, such as ATM. Chris Horrocks, CIO
of Commercial Financial Services in Tulsa, Okla., says he
isn't interested in Layer 3 switches. "First of all, I don't like
change," Horrocks says. "And second, we've just been
through this massive ATM implementation. That took over
seven man-years of planning."
Moreover, lack of support for multiple protocols is keeping
Level 3 switches out of corporate networks. Says MacDonald
of the Seattle Times: "Part of our dilemma is that we are
running multiple protocols on our publishing and business
networks. There's a lot of AppleTalk on the publishing side.
And most of the Layer 3 switches are IP only, so right now
there's no benefit for us."
At the other end of the spectrum are companies staying
miles away from Layer 3, instead of adding more cheap
bandwidth as needed.
"During a period when the next paradigm is unclear, what you
do is you just buy bits for bucks," notes Tom Nolle, president
of CIMI Corp., a consulting firm in Voorhees, N.J. "What you
should not try to do is evolve to the next level, because there
are too many technologies being presented for all of them to
be successful."
Because of this conservatism, older technologies like token
ring are hanging on. For instance, the token ring switch
market grew by 75% in the last quarter of 1997, to $48.5
million, estimates the Dell'Oro Group.
Hewitt Associates, a benefits consulting and human
resources firm in Lincolnshire, Ill., decided to remain with
token ring switching when building a new facility rather than
move to Ethernet at the desktop. Ethernet was cheaper, says
Hewitt network design engineer Ben Spizziri, but the
company's critical Benefits Administration Application runs
over SNA. "To run SNA over Ethernet, we would have to do
new kinds of source-routing, which we weren't familiar with,"
Spizziri says. "We were uncomfortable with that."
Hewitt also has no qualms about opting for what is seen as a
niche technology. "The directive to me was to put a network
technology in this facility that will carry us for the next three
years," Spizziri says. "These [token ring] products fit that
directive very easily. The market is swaying now, with
high-speed Ethernet, Gigabit Ethernet, ATM. The jury is still
out on what is the wave of the future."
For now, many companies are clinging to what they
know--and no networking vendor is better known than Cisco.
AlliedSignal Inc. recently picked Cisco Catalyst switches to
boost bandwidth to accommodate new enterprisewide ERP
and intranet applications, as well as to handle Internet access
and an extranet for suppliers and customers.
The $30 million Cisco contract is an extension of
AlliedSignal's four-year-old relationship with the supplier. In
the context of all the networking industry's many technology
initiatives and vendors, AlliedSignal needed a proven
partner, says Jim Carr, AlliedSignal manager of WAN
services. "We've invested in the infrastructure and realized
the benefits by improving availability," Carr says. "Without
that investment, we would never have been able to support
the applications. It hurts when it doesn't work."
Photo of Bernie O'Neill by Giorgio Palmisano |
