Looking North

There are technical worries, but enterprises are fast adopting
newer structured cabling technologies

It's India shining for the structured cabling industry. Buoyed by foreign
investors, the country is now one of the fastest growing regions for most
vendors, not only in Asia, but also across the world. As companies aggressively
push in different technologies and get ready to go beyond Class A cities, they
are also adding more people, new facilities, bigger offices; creating and
ensuring that the business partner network is in place.

It's easy to see why the sun rises in the east now. At the macro level, the
Indian market has been growing at CAGR of 25-30% for the past 2-3 years. And
most companies, big and small, have reported growth north of 20% over the last
one year. Take Belden CDT's case for instance-its structured cabling
business in India grew by a phenomenal 53% last year-the other geographies
pale in significance. The y-o-y growth in Asia, in Europe, and the US was just
around 8%.

What's fuelling demand and the subsequent growth is India's new economic
structure, which has changed a great deal for the better; the last decade has
particularly seen a steep rise in IT-driven enterprises such as data centers,
knowledge centers, BPOs, and disaster recovery centers among others.
High-bandwidth and high-speed demands are pushing the limits of data
transmission in LAN networks. The demands of advanced applications such as Fast
Ethernet, and Gigabit Ethernet are pushing cabling solutions to reliably
transfer voice, video, and data information. As networking demands escalate, new
and forthcoming network applications have higher and higher data transmission
rates. And data centers and network operating centers, which are mushrooming,
require networking of SAN's and NAS's. The bull market feel, is because
India dominates the international market for outsourcing of ITeS and IT based
BPO. India's share of this global market of $40 bn is more than $28 bn and
this is expected to grow to $56 bn by 2007. What enables effective and efficient
enterprises is the IT infrastructure of which cabling is an important part.

The latest trend is the emergence of the cash rich middle class that is
driving the consumer and retail segments. Apart from these, many educational
institutions and rural-urbanization projects are underway in both public and
private sectors. These emerging market segments demand high technology products
and solutions such as intelligent cabling systems, besides high-speed data
network systems. Even though the pace of growth is fast, the area of growth is
mostly centered around the top class cities. There is still a large portion of
India that has to catch up with this growth. As the infrastructure gears up to
meet this growth, structured cabling will continue to be an important and
integral part of network systems.

Even as the major driving force is the IT/ITeS sector, structured cabling is
being deployed in all market segments-FIs and banking services, government,
and telecom. “The interesting fact is that in the Tier II and Tier III cities,
even the SME's are showing a greater acceptance of structured cabling for
their LAN networks. And customer demands are no different in India. If anything,
they are more demanding than elsewhere! Higher bandwidth and high-speed, future
proofing, product quality, reduced lead times, and competitive prices are
requirements of enterprises today,” says Bala Chandran, MD, ADC Krone.

Though enterprise demands change based upon the segments they are in, the
current trends indicate high demand for high speed networking products in both
copper and optical fiber, especially for data centric environments-structured
cabling products such as factory pre-terminated and tested cassettes that are as
easy as plug and play, are gaining popularity as they are fast and easy to
install. “The intelligent cabling systems that help manage the physical layer
of the network are also gaining momentum in the market as they assist in easy
detection of moves, adds, and changes (MACs), help maintain automatic logs of
network changes, serve as reference point for creating asset utilization reports
and also provide security.” informs KK Shetty, country manager, Tyco.

Tyco has been in the structured cabling market in India for the last 10 years
and its efforts in penetration of the country have been highly successful, he
says: “We have indeed crossed the threshold of class A cities and are quite
comfortable in class B and C cities as well. This is largely attributed to our
three national distributors, each of whom has offices and reseller networks in
A, B, C, and D class cities. This distribution model is further augmented by the
presence of at least two regional distributors in all the key cities,” said
Shetty. There is also a large network of thousands of resellers across India. In
addition, Tyco has a direct contracted relationship with almost 120 system
integrators or Network Designers & Installers (ND&I) that carry out the
actual installations at customer sites. “The presence of over 1200 Tyco
certified engineers who have attended globally accredited training programs has
further served to enhance our market penetration efforts. We currently, have
three training centers in India (Bangalore, Mumbai, and Delhi) that run this
globally accredited training program. The fourth one is scheduled to become
operational shortly in Hyderabad,” Shetty adds.

ADC KRONE similarly, has a presence in markets beyond Class A cities through
its national and regional distributors, and 300 plus certified installers in
India. It has a 15-year old manufacturing facility here and believes that with
an established outsourcing model, it will be able to scale rather easily. “We
do have a design team, which participates in collaborative global engineering
and designing initiatives. This includes investments into Pro-E and 3D modeling
and creating a vast pool of external vendor partners who support on tool design
and proto-typing,” says Chandran.

But unlike KRONE, Tyco or Systimax (with 90 certified partners), Belden is
not in a position to expand that rapidly beyond Class A cities because of the
lack of dedicated resources. Investments are therefore on its way. It will pour
in money in commercial resources, in its sales and marketing presence. Either a
better logistic infrastructure or a manufacturing capacity in this region and
also some investments in engineering talent may follow this.

International India

If enterprises in India are demanding higher speeds, they seem to be in mood
for the latest and the best of technology. Companies here are actually using
technology as way to go from ground zero-from no capability-to best in class
capability. “They want to differentiate themselves in the global landscape and
therefore use new technology. There are forward thinking companies in India,”
says Ispran Kandasamy of Systimax.

India Now

Belden CDT is bullish about India and proposes worthwhile investments                                     -John S Stroup, president and CEO, Belden CDT How are you expanding your position in India? We are talking about different alternatives we might be exploring. We are trying to be specific with ourselves, with what it means in terms of additional investments in sales and marketing resources, investing in engineering talent, and manufacturing capacity if possible. We do not have any manufacturing here today. The products that we sell here are manufactured in the US, Europe, and some in China. We warehouse a lot of it in Singapore. Are you seriously looking at manufacturing? We are in the early stages of evaluating that. We are serious about the evaluation. We are not in a position to say, where, when, and what products. Where we are coming from is making certain that decision is a natural follow on to our sales and marketing decisions. And clearly, we want to make sure that we have competitive landing cost; logistics of products is a significant piece of that. Manufacturing for some products may make sense. Site selection, if we get that far, will have to include the ability to find skilled labor, the ability to perhaps get incentives from the local government, and close proximity to our customers. Does manufacturing proximity to the customer matter for a structured cabling company? The cost of our products is largely material. The cost of labor is relatively small as a percentage. A big consideration is the time and cost to get the product from the factory to the customer. In the case of India, you have duty as well as a lot of time to get the product from different places. If you take the decision to manufacture in India, it would be because we want to reduce the time it takes to get the products to our customers as well as reduce the logistics cost to get it to our customers. What kind of customization do your products need for the Indian environment? I don't know about customization, but there are certainly some differences. For example, one difference is the fact that armored cable is a more traditional and more common requirement in India than it is in other parts of the world.  And armored cable is a product line that is fairly heavy, so importing it doesn't make a lot of economic sense. That is the example of a product line that we could manufacture in India for the India market. On the structured cable side, the demands are really not that different. It is a relatively global market whether it is Intel, HP, Reuters, Motorola or any other companies making a decision about the products they use in their data centers-in India, those decisions are similar to those made in other parts of the world.

The major international technological trends in structured cabling industry
include adoption of 10G systems, intelligent cabling systems and high-density
optical fiber networks in data centric environments. Deepesh R Krishnan,
business development manager-VDI with Legrand agrees: the Indian market has
been aligned to the worldwide trend because of globalization. The domestic trend
is also in sync with what is happening globally, because the demand for
bandwidth across the globe is growing phenomenally and this has driven the
development of various applications like 10 gig on MM fiber (OM3), LWP SM fiber
and now all are talking about 10G over copper. “Also, physical layer
management (Intelligent Patching) market is growing, as customers increasingly
want to have zero down time and improve business performance,” opines SA
Mohan, GM, Sales and Marketing, Molex.

D-Link, however, feels, there is no 'International' category any more in
structured cabling solutions. The major markets are the US, Europe, Asia
Pacific, and new emerging countries such as Brazil, Russia, India, and China (BRIC).
“In the US, we have 10G over UTP; in Europe predominantly Cat6a and Cat6 SFTP
cabling solutions. In BRIC countries, Cat6 UTP sales are on the increase, but
Cat6a is also going to be the buzzword. Fiber has a come back, especially single
mode in LAN in the US as well as Europe, and this will be repeated in India
too,” predicts Milind Tamhane, VP, Passive Products, D-Link India.

Tyco too feels internationally, 10G on fiber and STP is pervasive, but in
India, while fiber on the backbone for 10G applications is widely accepted, STP
is yet to gain momentum, as historically Indian installations are on UTP. “We
do see that Indian enterprises are beginning to realize the value of 10G on STP
(copper) and we think that the trend will soon pick up. As far as intelligent
cabling systems are concerned, Indian enterprises are actually leading the
international trend. As more and more data center environments, disaster
recovery centers are set up, intelligent infrastructure management systems will
continue to gain popularity,” Shetty tells.

Cost Tale

How is the pricing scene? D-Link feels copper is a bad news, international copper prices have increased from moderate $3,200/t to $6,200/t. Cables are going to be expensive, but fiber would play a key role. The price of structured cabling solutions in India is on par with international pricing, the difference lies only in the structure of government levies in terms of customs, octroi, and other taxes. The other factors that affect pricing from country to country are the differences in the distribution layers, labor costs, and also the size of the projects.

India has become the international hub for services, it has seen the highest
number of call centers, BPOs, etc. mushroom in the last few years. Needless to
say, this has boosted the market for data center networks with state-of-the-art
cabling systems that support bandwidth hungry applications with ease. These data
centers, in India, support, follow, and many times surpass international trends
as one sees new products such as plug and play, factory pre-terminated and
tested, fiber optic and copper products being deployed in these installations.
As Dilip Kumar, product manager, Enterprise networks, with ADC Krone tells,
“We lauch products globally and do not consider India to be late in adopting
technology. 10 Gigabit UTP cabling, Intelligent Cabling, and Power over Ethernet
were the three new trends, which we witnessed in the recent past in the
international market. These technologies were fast received by the Indian market
and some of our Indian customers are there in the first list of global customers
for these new products.”

So are the not-so-progressive enterprises reviewing their cabling roadmap in
the wake of recent developments, particularly with reference to 10G-over-UTP?
Are enterprises convinced about the use of 10G over copper rather than fiber or
are they still hesitant?

The early adopters of technology are always ready to implement new
technologies. In the wake of developments in 10G over twisted pair cabling,
enterprises are definitely reviewing their cabling roadmap, especially those
that are in expansion mode and those with new requirements but who want to
remain future ready and protect investment. “One must, however, note that
though 10G solutions are now available on all media, one must consider these on
the performance criteria of good, better and best solutions on 10G. Based solely
on the performance factor, 10G on fiber offers the best results. It is a
standards-based solution that is immune to radio frequency interference (RFI)
and alien cross talk (ANEXT) from adjacent cables; it offers the greatest
transmission distance and most bandwidth potential, informs Shetty of Tyco. 10G
over STP is a better solution than 10G over UTP, since the former is a standards
compliant solution that is capable of meeting the demands of 10G applications.
The foil shielding in STP overcomes the problems related to RFI and ANEXT. 10G
over UTP is also available now. Enterprises have been using 10G solutions in
fiber on the backbone and this trend will continue to rule. However, 10G on
copper will be used more widely on the data center cabling, once the active
devices are available to support it. Currently, the difference between the cost
of copper and fiber interface on the switch end does not make this a feasible
option. But this is just one of the reasons stopping enterprises from adopting
copper. There is the electronics part of it, which is switching. The electrical
part of it is the cable. “Typically, cable falls ahead of electronics.
Somewhere in the Cat5, Cat5e story, the two became more or less at the same
level. But again, cable has gone far ahead. So, we have the bandwidth for 10Gig
gbps. What is happening is the time taken to migrate optical 10G switches to
copper 10G switches is turning out to be higher than what was thought. It will
time well by the time cabling standards are ratified,” says Ashish Chand,
country manager-India and regional manager-SAARC of Belden.

Enterprise Unease

Computing speeds double every 18 months and hence, the shelf life of a
technology is only 3-4 years. Enterprises, worried about the barrier of
obsolescence, are asking how long they can hope to protect a cabling investment
as newer generations of resource hungry application perennially threaten to make
present cabling systems redundant. So, which technology among Cat5e, Cat6, and
CatA6 will have a longer shelf life?

Though Cat6 Augmented is still not ratified, the draft standard proposes
bandwidth support to 500MHz.  This
is ahead of 100 MHz for C5E and 200Mhz for Cat6, which means that Cat6 Aug will
not only support legacy and existing applications, it will also be able to
support future speeds of 10G on UTP.  “As a result, it would have better shelf life.
However, it will take 18-24 months for Cat6a to start being deployed on a
large scale, as it will initially be a premium solution.
Cat6 at the moment is the most practical solution, which supports all
applications,” says SA Mohan of Molex.

Most other vendors seem to agree. Life cycle for a cabling system is much
longer compared to the active infrastructure or software applications-it
accounts for only 5 to 10% of the total cost of network. “A cabling system
must be planned to support applications for the next 10-15 years and we are so
confident of our solutions that we give a 20-year warranty on our Truenet
portfolio of products. Cabling vendors do not wait until the active
infrastructure is commercially available, as our product has a much longer
timeline within the telecommunications infrastructure. Customers want their
products to have the longest timeline to obsolescence, therefore, opting to put
in latest cabling solutions in an effort to future proof their networks,”
tells Dilip Kumar of ADC Krone. He further explains with an example: Lets say a
network administrator had decided to put in Category 3 cable in 1995 simply
because they were only running at speeds of 10Mbps with their current active
hardware. Today, the same network administrator will now be faced with having a
cabling infrastructure that is well and truly redundant and can't even support
100Mbps, which has been available for 10 years, much less today's default
standard in Gigabit Ethernet. As long as the solution they chose was channel
compliant to the draft specification in 1995, it would be fully channel
compliant to the ratified standard today. If he had decided to implement Cat5e
then, despite the standard still being in draft, they would have been able to
run 100Mbps over the last 10 years and could have taken advantage of Gigabit
Ethernet as new active hardware is added to the network. The same holds true for
Cat6a today.

But some caution a more restraint approach, where advice is strictly on a
need basis. Ispran Kandasamy tells Systimax looks at a customer's five-year
requirement: “If it is an R&D company or an entertainment company, we
would recommend 10Gig technology-10G in the horizontal layer is a lot of
bandwidth-that will see them good for a number of years. We don't expect the
bandwidth to exceed 10G in the horizontal layer for sometime. However, if a
customer is setting up a call center for example, we would recommend Cat6-it
is very clear what the traffic will be and they wouldn't be introducing more
and more applications. For people who are looking way ahead, we do not recommend
CAT5e at this stage.”

Ashish Chand says there have been instances where Belden had gone and told
the customer to specifically buy CAT5e. “We know it is better to gain that
confidence and build upon it at a later date. Here's the process we normally
follow: when we meet with the customer, we normally assess what is their
bandwidth requirement and how long is that site going to be active. For example,
somebody who is doing a lease site would have a different frame of mind than
somebody who is doing a permanently owned site. We put it in some kind of matrix
and ask what are the kind of applications he is going to run?” It is then
fairly simple to arrive at CAT5e, CAT6 or CATA6. 

Another typical concern for most CIOs is the price-performance issue as far
as structured cabling solutions are concerned. They often complain that
solutions never give the touted performance despite the use of
standard-compliant cables. But opinion still remains divided on if
component-level compliance (each component must meet the standard) as opposed to
channel-level compliance (all components put together) is the right answer. 

Kandasamy asks if one would want to buy a car from one company and its tyre
from another vendor. Systimax projects itself is an end-to-end solution provider
and therefore is a channel provider. “A case study comparing Systimax's
channels against the mix and match channels found the throughputs of Systimax
significantly and consistently outperforming mix and match. We don't tend to
see all that many mix and match. It will lessen as the industry matures,” he
tells. More people are presenting themselves as end-to-end suppliers. “We have
seen many situations where a cable manufacturer has partnered with a component
manufacturer to go to market with an end-to-end channel. All our components are
compliant absolutely, even though we are an end-to-end supplier. When you have
stuff together, it acts a system, performs as a system. Once you start mixing
and matching things, you don't get that churning,” Russell Julius, technical
director, Systimax explains.

However, for Tamhane of D-Link, the price-performance issue is a non-starter.
“This has been a constant complaint, but is not true. As we expect more and
more bandwidth, the cabling components are required to be more meticulously
installed, though manufacturers like us would prove the components to comply in
isolation. The crux is if the installer messes up the job, then the end user
suffers. At D-Link, we believe in imparting training to the SI and end user to
extract most from the products.”

Tyco agrees and warns that purchase of standards compliant cables does not
necessarily ensure that the solution will deliver the performance. “We
recommend that enterprises follow a system approach instead of buying
components. In any case, the quality of installation also affects the
performance of the network; we recommend that enterprise insist on getting
vendor certified engineers to install their networks. Since these engineers are
trained by the vendor, they use proper tools that are available to ensure
consistency in terminations that is essential for network performance and
bandwidth delivery,” Shetty says. Another factor that can assure enterprises
that they are getting what they have paid for, is to buy products from vendors
that offer both component and performance warranties and are willing to provide
third party certification for the network.

However, KRONE and Molex proposes component level compliance. “Component
level compliance ensures interoperability between products of different vendors
and assures the performance, the system is rated for. To be component level
compliant, each component of the channel has to be manufactured to very tight
tolerances i.e. if the standard allows for 15% variation on impedance, a
component level compliant system would meet a range of 5-6% variation.
Hence, if a patch cord of vendor A is mated with jack (I/O) of vendor B,
the deviation in impedance will still be with standard limits.
Above all, component level compliance ensures double safety for the
customer that installed products will meet standards specifications,” says
Mohan. This will have enough headroom to offer the optimized channel performance
for a long period of time.

Goutam Das

goutamd@cybermedia.co.in