Network Integration : The Time is Now

Networks are getting complex day-by-day, growing both in terms of number of
connects and bandwidth capacity per connect. The pressure is on reducing costs
in these tough times and to excel is making organizations search for innovative
ways of designing, building and managing networks.

Newer networking technologies and applications are driving organizations to
deploy networks of a scale and complexity never seen before. Government-led
initiatives like the state WANs and state data centers (both under the
e-governance plan), de-regularization of the insurance industry, large network
roll-outs by the banking, insurance and financial services industry, etc, are
other factors leading to new avenues of growth for the network integration
industry.

Key Trends

The hottest trend in the network integration industry is network
convergence, ie, carrying voice, video and data together on the same network and
integrating it with wireless technologies for mobility. This requires a lot of
integration and communications between different services and applications in
order to work seamlessly. Convergence and mobility are the biggest issues to be
tackled in the network integration space today.

The other big area is making networks ready for virtualization and
consolidation. Applications and server hardware are gearing up to tackle
multiple services consolidating the environment, to reduce the infrastructure
and its underlying cost. Virtualization technologies on network equipment with
high throughputs and capacity like NEXUS, is the answer. Adoption has to happen
fast to keep pace with the consolidation and virtualization drive.

The third area that continues to gain momentum is the overall network
security. The importance of security, whether it is from the compliance
standpoint or to mitigate risk, is gaining importance as companies build up
their IT departments. As network IT becomes more strategic to business everyone
wants to ensure that it is a secured environment where they can mitigate as much
risks as possible. Hence, security that is reliable is crucial.

Cost optimization is also a crucial area for the network integration space as
customers are looking for ways to reap benefits from investments done in their
network infrastructure. They are looking for ways to find solutions for current
business challenges with marginal increase in capex for infrastructure.

On the Go

The network integration industry has shown significant growth over the past
years as enterprises and the government have realized the benefits of creating a
centralized, high end networking platform to power up varied applications being
used by different functional groups.

Over the past years, various technologies have matured and are now available
for enterprise deployment. Most of these technologies allow enterprises to
increase employee productivity and reduce their overall costs. India is emerging
as one of the most lucrative markets for such technologies given the phenomenal
growth of applications such as e-learning, tele-medicine, and e-governance.
Innovative technologies like wireless, tele-presence and unified communications
have been the key technologies in the market this year.

Moreover, virtualization and storage are changing the landscape of data
centers and in turn pushing OEMs for a more complete and collaborative solution
in the data center space. This forces the designers to look beyond networks.

Experts panel

Prem Nithin, senior technical consultant, Cisco, India & SAARC Sanjay Virnave, president, sales, Tulip Telecom Gurpreet Singh Kohli, head, global networks practice, HCL Comnet Jayesh H Kotak, VP, product management, D-Link India Murtaza Bhatia, national manager, professional service security, iBoss Vikas Srivastava, general manager, EPD & TIS Business, Wipro Infotech Alamuri Sitaramaiah, GM sales, Fluke Networks India

Forward thinking companies are moving toward a vision in which business and
IT strategy and architecture align. Building upon its existing network
foundation, an organization can pursue an enterprise architecture strategy that
enables it to rapidly add innovation to business models and processes. Instead
of spending time and money integrating single applications, they can link
standardized infrastructure and applications components for use across different
departments and divisions.

By adopting such a deliberate approach towards managing and enabling change,
organizations can drive agility and efficiency not by optimizing around one
specific business model, but by adapting quickly to evolving competitive
solutions and thereby accelerating business value across the entire company.

Surging Ahead

The BFSI sector is driving the growth for network integrators. But with all
major industry houses entering the retail business, it is becoming a lucrative
segment wherein the very format of operations requires creating physical
establishment which in turn needs to be connected. So the retail industry is
also drumming up a lot of interest.

The other emerging verticals showing growth opportunities include government.
NeGP on government's agenda on e-governance will be a big business opportunity
for all possible network integrators. As large PSU banks get into their third
and fourth phases of network rollouts, we see a lot of rural branch connectivity
projects being rolled out accelerating the demand of network integration
services in the banking sector.

Telecom service providers-migrating to IP and buckling under increased cost
pressure-is the other prominent vertical. SEZs, manufacturing, airports/ports
and healthcare will also boost network integration.

CIOs are aware that the new generation of workforce expects to work in an
environment driven by technology, its adoption and usage. Hence, they are
pushing IT to give their employees the same kind of personalized services. CIOs
understand that with collaboration comes increase in the levels of innovation,
and in this second phase of innovation, they know investing in the network can
help deliver all forms of communications, ushering in new innovations to drive
business further.

CIOs today are more of business leaders than technocrats. They are constantly
looking for avenues where the right and innovative use of technology might offer
an organizational edge in the marketplace. In this line they are engaging with
service providers at a much higher level in the value chain. They want their
service providers to think of benefits for end users and to continuously analyze
their set up, build the knowledge base and come back with suggestions for
optimizations.

CIOs look for value for the money spent. The test for CIOs today is to
address business challenges with a marginal increase in their network
infrastructure capex; at the same time getting good returns in terms of cost
savings.

2008 has seen a lot of fluctuations with respect to pricing. One key impact
has been value of the dollar going up from below Rs 40 to approximately Rs
48-translating to a 20% increase in cost. Customers have strongly objected to
any price increase and at the same time are quick to expect immediate price
benefit of any cost reductions like excise duty cuts. Crunching budgets and
projects on hold will be the scenario at least in this quarter and probably the
next quarters as well.

The economic downturn has indeed forced everyone to re-think their
strategies, and naturally, the need for service providers is to move up the
value chain and quality levels. Budgetary constraints and competition have
forced the industry to drive down costs. Enterprises are asking for lower levels
of integration pricing. The concept of end-to-end solutions or one-stop
solutions has gained momentum. Bandwidth prices have also come down
considerably, and device functionalities are increasing disproportionately to
price.

The Way Forward

At a time when every organization is caught up in the effects of the
economic downturn, the question on everybody's mind is what strategies to adopt
to best beat the recession blues. IT analysts representing the industry are only
too aware of the role that a mature and agile IT set up will play to drive
business and fuel growth.

To tighten their purse strings, some clear cut expectations that they have
includes a business resilience and adaptability driven approach. And models that
will protect their investments while ensuring up-to-date technology. Though the
recession might be hitting the Indian shores more psychologically than in
reality, organizations in such a situation become more prudent in their spending
and opt more effective measures. This means business for network integrators.

Innovative thinking in managed services is going to be the way ahead. The
industry would undoubtedly seek ways that will help permeate scalability and
flexibility to adapt to both lean and growth periods. Organization will expect a
lot of changes in the way business is done. There would be change in the
business model service partners operate on, to give maximum benefit to the
customer without compromising on quality. Organizations that adapt to these
changes will thrive during the recession.

Arpita Prem

arpitap@cybermedia.co.in