News briefs-CN, July/August 2006

Cisco Systems Inc. has announced an aggressive plan to introduce a new technology every four months and plans to roll out telepresence later this year.

During his keynote address at the annual Cisco Networkers user conference in Las Vegas, which drew about 10,000 customers and partners, CEO John Chambers said telepresence will allow business groups to communicate and collaborate using voice and video conferencing.

“Intelligence between different networks … will allow new business architectures to set in and provide higher productivity,” said Chambers, adding up to 40 to 50 per cent of productivity gains over the next several years will be through collaboration.

“I’m asking the engineers to take a Star Trek approach to building telepresence,” Chambers said.

Telepresence is interesting but is still a few years away from making it into the mainstream, said Zeus Kerravala, vice-president of infrastructure and security research at the Boston-based Yankee Group.

One piece that is missing, said Kerravala, is what this actually means for the business. “If you’re an end-to-end Cisco environment, and the network empowers a hospital, how can doctors provide better patient care? How can teachers educate better? How can lawyers handle more cases?” he said.

In other conference news, Cisco announced enhancements to the its Catalyst 6500 series switches.

“We’ve added enhancements to a whole slew of service modules, introduced more comprehensive traffic analysis and capability to monitor virtualized networks,” said Marie Hattar, senior director of Cisco’s network systems marketing.
—Buket Oktem

The new members of Nortel Networks Corp.’s executive team have the potential to get the embattled equipment manufacturer back on track, according to an analyst with Infonetics Research Inc.

During the last six months, the Brampton, Ont.-based firm, which lost US$2.3 billion last year and US$2.6 billion in 2004, has hired Dietmar Wendt as president of global services and George Riedel as chief strategy officer.

With CEO Mike Zafirovski, who joined Nortel last November, the new leaders can focus on business strategy, said Stephane Teral, directing analyst, service provider, next-generation voice and mobile for Campbell, Calif.-based Infonetics.

“It looks to me as if that’s a team that has records of turning around business units, if not entire companies,” he said.

Riedel said he was initially reluctant to join Nortel when Zafirovski called him last winter.

“I told him, ‘I’m kind of busy, thanks for the call.’ He said, ‘No, no no, I need to spend some time with you,’” Riedel said during a keynote address at the Canadian Telecom Summit in Toronto in June.

Zafirovski changed his mind with his “forceful optimism,” Riedel added.

Since then, Nortel has launched its IPT 1-2-3 initiative, a set of products and services for enterprise Internet Protocol telephony users. In addition to enterprise voice and data, the company also plans to zero in on next-generation mobility technologies, including video, and services, Riedel said.

“We’re not confused about the urgency to act,” he said. “We’re not confused about our ability to make decisions.”

Riedel said 17 per cent of Nortel’s revenue comes from services.

“We’re busy trying to figure out exactly what kind of practices we want to build in systems integration, in network management and in support services,” Riedel said.

With low-cost networking products available from Chinese vendors, Nortel may have no choice but to focus more on services and integration, Teral said.

“How much can they make by selling products when these products are manufactured in low-cost facilities?” Teral said. “You need less of these products because today, you don’t need 10 boxes to do 10 different things. Today, one box will do these 10 different things.”
—Greg Meckbach

As carriers use multiprotocol label switching technologies to sell site-to-site communications services, total spending on virtual private networking (VPN) services is projected to reach US$29 billion in 2009, according to a recent report from Infonetics Research Inc.

That’s a 22 per cent increase from the US$23 billion spent on VPN services last year. Total VPN service revenues increased 14 per cent between 2004 and 2005, said Jeff Wilson, principal analyst at Campbell, Calif.-based Infonetics. He added about half the money companies spent last year on VPNs was actually for Internet access.

Wilson attributes the increase in VPN service spending on the need to connect users at different sites, and to allow employees to share information with business partners.

Although VPNs provide greater security than sharing over the Internet with no security whatsoever, Wilson said the need for security “both helps and hinders” the VPN market.

“In some cases, people see VPNs as a more secure connection technology,” he said. “In other cases, they see VPNs as opening up their network to people coming in from the Internet, and you never used to let anything other than easily identifiable Web traffic through the firewall.”

Infonetics puts VPN services in a category separate from managed security services, which are projected to grow to US$8 billion in 2009, from US$5 billion last year, and Wilson says this is partly attributable to spyware.

“In the past, security was invested in by people who were really worried about someone stealing their corporate assets, but now everyone needs to invest in security, because the threats that are around today are sort of productivity-crippling,” Wilson said. “Even if you don’t ever think a person’s going to steal a piece of data off your network, you have to worry about viruses and spam and spyware.”
—Greg Meckbach

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