STRUCTURED CABLING: The Mercury Rose for Copper

The market was abuzz with activities, both in terms of
business and introduction of new products and technologies. The most important
news in the year 2004-05 was the launch of pre-standards 10GE-over-copper
solutions by at least three vendors. Different vendors showed different
patterns, but Cat 6 continued to be the dominant standard, with an estimated 48%
share of deployments.

It was heartening to see some early deployments of
10G-over-UTP during the year. It's a clear sign of Indian enterprises'
readiness in adopting new technologies. They are taking a foresighted view of
things and are taking steps to future-proof their structured cabling
infrastructure.

Buoyant and Bubbly

All vendors experienced healthy to strong growths during FY 2004-05. The
overall market grew by 25% over the previous year. From Rs 325.5 crore in the
previous fiscal, the industry revenues this year rose to Rs 405.5 crore. While
there were no upsets in the rankings and Systimax remained positioned on top,
Tyco impressed with the highest-in-the-class growth rate-34%. In the course,
Tyco crossed the Rs 100 crore mark, posting an estimated Rs 106 crore of net
sales. Industry leader Systimax is understood to have made net sales of Rs 120
crore, thus clocking a growth rate of 20%. D-Link, which topped the growth rate
tally in the previous fiscal, showed a growth of 31% this year, the second
highest rate in the industry.

Among the verticals that contributed significantly to the
industry growth, IT/BPO, BFSI, government, and telecom were prominent. The BPO
boom in the country remained a phenomenon, thus ensuring a steady stream of
revenues for the structured cabling industry. Some large deployments in the
banking vertical also contributed to the industry growth. Best, vendors didn't
have to resort to price cuts significantly. There was enough for all and the
competition was quite healthy in nature.

Standards that Ruled

Overall, Cat 6 continued to be the dominant standard, with an estimated 48%
share of the market. Contrary to some earlier assumptions, Cat 5e continued to
go strong and dominated some large deployments. It easily enjoyed a share of
34%. Fiber accounted for 14%.

The 10GE-over-copper solutions that hit the market during the
fiscal threw up a pleasant surprise by accounting for 2% of the market. Cat 7
also accounted for about 2% of the pie. Of course, as pointed out earlier,
different vendors experienced different patterns. For example, D-Link found that
banking and finance sectors as well as government and PSUs were still seeing Cat
5e as the preferred cabling whereas BPOs, call centers, software parks and other
IT-savvy organizations were going for Cat 6 solutions. The vendors say that Cat
5e deployment dominated with almost 60% of the new installations while the rest
40% deployments were Cat 6. There were no takers for fiber to the desktop
solution, but fiber kept going strong in the backbone.

Tyco said the year marked a shift from Cat 5e to Cat 6
installations and this reflected in the market share break-ups for these.
According to the vendor, the break-ups for Cat 5e, Cat 6 and fiber were
approximately 30%, 60% and 10% respectively. Systimax said that Cat 6 solutions
were being installed by more and more organizations and the installed base of
Cat 6 was on the rise. ADC Krone could see more clear patterns in favor of Cat
6. According to the vendor, Cat 6 was the largest deployed standard cabling
during the year 2004-05. Also, it experienced a decline in Cat 5e demand. This
was largely due to the Cat 6 ratification that happened in 2002. The
ratification meant that price levels could come down considerably and make the
new technology more affordable. For Krone, Cat 6 saw a growth of about 60% over
the previous year, while Cat 5e grew by 6% and fiber by about 12%.

Orders That Flowed

Among various installations based on Systimax solutions during the fiscal
2004-05, some BPO projects were noteworthy. For example, the installation at one
of the leading BPO companies involved 20,000 drops of the Systimax GigaSpeed XL
solution. This Cat 6 solution was part of other significant projects too, as far
as the vendor is concerned. The patching solution involved in this project was
VisiPatch. Systimax said that VisiPatch was particularly suited for the needs of
the ITeS industry, which is characterized by frequent moves, adds and changes.
The GigaSpeed XL solution was also the basis of a much larger deal for Systimax,
which went up to 80,000 drops.

Yet another win for Systimax was in the shipping space. Here,
the project involved 2,500 drops of GigaSpeed XL, in conjunction with iPatch.
The iPatch solution here was aimed at providing real-time monitoring of copper
and fiber channels and links to network management software for greater uptime.

Systimax has also won an order for its GigaSpeed X10D
solution from Hyderabad-based Vimta Labs. However, the deal will get reflected
in its 2005-06 revenues.

Installation of the only Cat 7 site by Tyco was the highlight
of its business in the last fiscal. The vendor said that Cat 7 systems were
capable of supporting 10G and the installation definitely future-proofed the
client's network.

ADC Krone is understood to have bagged at least three
significant orders for its 10 G UTP solution, CopperTen. It was the first
company to launch a 10GE solution in India and leveraged that to its advantage.
Two of these orders came from i2 Technologies and TCS. The CopperTen
installation at i2 Technologies connects 4,000 points, servers and firewall
systems within its software development facility. The company also bagged a
couple of projects for intelligent cabling solution. Some other significant
projects bagged by Krone came from TCS, EMC, Cognizant Technology Solutions,
Intellinet Global Services, Assembly of Karnataka, IIT Chennai, Delhi
University, and Qualcomm.

Delhi-based Belden CDT had some impressive wins during the
fiscal. One installation was for a leading global financial firm's BPO in
Bangalore. The solution used was Belden's Cat 5e+ and the number of nodes
catered to were 7,500. The solution used was Cat5e+ (350 MHz cabling). This
provides three and a half times higher bandwidth than the standard product and
also future proofing for all 1GBPS applications.

D-Link bagged a very large number of wins during FY 2004-05.
The new structured cabling installations involving D-Link solutions were easily
more than 80 in number. Chennai-based HCL-P also bagged some good deals during
the fiscal. Some of these included a 1,000-node installation at Kalyani
University, a 1,200-node set-up for DSL Software Solutions, 2,000 nodes at HCL
Technologies, and 800 nodes at Vellammal Engineering College and group of
education institutions.

What Was New...

As far as the structured cabling industry in India is concerned, 10G UTP
solutions generated a lot of interest. More importantly, the hype was quickly
followed by some actual orders and shipments.

ADC Krone was the first vendor to come out with its 10G UTP
solution called CopperTen. Systimax and Belden also came out with their 10G
solutions, Systimax GigaSpeed X10D and Belden IBDN 10GX respectively. All these
solutions, however, are in the pre-standard stage. An IEEE group is already
working on the 10G UTP standard and the ratification is likely to happen
sometime in 2006. Once ratified, the standard will be called Cat A6.

Another new technology introduced in India last year was
Power-over-Ethernet (PoE). However, the market underwent an education phase for
the technology and, therefore, not many projects specified PoE as a deliverable.
Moreover, the case for PoE will become stronger as enterprise mobility picks up
as a trend. According to Krone, with the VoIP and wireless access markets
catching up, one should expect PoE requirements to increase this year.

Systimax said the PoE technology was suited for access
points, and a host of other PoE-ready devices like IP phones and IP cameras.
Belden also felt that given the recent introduction, it would be some time
before PoE picks up. However, it said PoE was shipped to two of its important
projects. The company launched its PowerSense mid-span hubs in the PoE space.
These had features like port-level modularity and hot-swappability.

Tyco launched intelligent cabling systems and also presented
10G solutions in the fiber, shielded twisted pair (STP) as well as UTP areas.
The company says it will continue to focus on these new technologies.

Systimax offered its intelligent patching solution iPatch
that helps plan, implement, track and audit moves, adds and changes. Target
market segments included large corporate office buildings, remote branch office
locations, and data center applications.

Among other things, Krone also launched a high-density 25
pair cross-connect solution called Highband 25. The Cat 6-compliant Highband 25
solution is an integral part of Krone's TrueNET solution and is aimed at
supporting emerging applications such as 10GE, VoIP and broadband.

The Outlook

The healthy growth of the Indian economy will encourage businesses to set up
new facilities, which will mandate LAN cabling as a must-have. Verticals like
ITeS/BPO, BFSI, manufacturing, telecom, and education will continue to
contribute significantly to the industry growth.

On the technologies front, PoE and 10G-over-UTP will gain
more ground, though they will not become growth leaders next year. Nevertheless,
they will start getting recognition and acceptance in the market. Also, the
installed base for OM3 fiber will increase.

In fiscal 2006-07, however, 10G-over-UTP will be able to gain
a dominant share of the market. Intelligent cabling will also find more takers.
If vendors are able to educate the market well, component-level compliance can
become the order of the next year.

The structured cabling industry in India has mastered the art
of survival-and-growth well enough. Vendors' spends and efforts have not gone
unrewarded and cabling is a fairly sophisticated area now. Newer,
bandwidth-hungry applications keep arriving on the scene to consume the capacity
that's available at a given point in time. Vendors have been able to
anticipate growth in bandwidth requirements and come out with cabling that can
cater to users' needs. Fiber is already the default medium on the campus
backbone while Cat 5e and Cat 6 are being used in the horizontal. The
developments have ensured a scenario where 1Gbps in the backbone and 100 Mbps
for the desktop are norms for all new installations.

It is anticipated that newer, video-intensive communication
trends at enterprises will demand 1G-to-the-desktop in the next couple of years.
The structured cabling industry is comfortably positioned to support such
demand.

10G UTP Found Takers

The arrival of 10G-over-UTP solutions in the market generated a good deal of
curiosity about its possibilities and potential benefits. However, given pre
pre-ratification stage of the solutions, not everybody jumped for these
solutions. Yet, takers were not missing. There were at least three early orders
for 10G-over-UTP. Moreover, many network managers wanted to evaluate the
solutions and hence there was a lot of interest around the technology. Also,
they wanted to understand and review their cabling roadmap in the wake of recent
developments. The more specific things here were: which tech, among Cat 5e, Cat
6, and Cat A6 will have the longest shelf life? Or, is Cat 6 the path of golden
mean?

As one already knows, Cat A6-augmented Cat 6-is the proposed
standard for 10G-over-UTP. As far as the structured cabling industry in India is
concerned, 10G-over-UTP solutions generated a lot of interest. Most importantly,
the hype was quickly followed by some actual orders and shipments. Even as the
IEEE 802.3an task force continues to work on the requirements of twisted pair
cables for supporting 10G Ethernet, at least three vendors have come out with
their 10G over UTP offerings in India. The credit to do that first, however,
goes to ADC Krone, which came out with its 10G solution in early 2004. The
product launch gave Krone an early-mover advantage, which the company was able
to leverage successfully.

ADC Krone is understood to have bagged at least three
significant orders for its 10G-over-UTP solution, CopperTen. Two of these orders
came from i2 Technologies and TCS. The CopperTen installation at i2 Technologies
connects 4,000 points, servers and firewall systems within its software
development facility. Systimax and Belden also came out with their 10G
solutions, Systimax GigaSpeed X10D and Belden IBDN 10GX, respectively. Tyco is
also ready with a 10G-over-UTP solution. All these solutions, however, are in
the pre-standard stage. An IEEE group is already working on the 10G UTP standard
and the ratification is likely to happen sometime in 2006. Once ratified, the
standard will be called Cat A6. Other companies are also testing 10G solutions
at their respective labs. All in all, the 10GE-over-UTP solutions that hit the
market during the fiscal threw up a pleasant surprise by accounting for 2% of
the installations.

Vendors are unanimous of the view that early adopters of
10G-over-UTP will be data centers and other bandwidth-intensive businesses.
Also, post the ratification, 10G solutions will also be used for building
backbones. 10G will also compete against fiber to an extent. True, copper will
have disadvantages against fiber in terms of electrical interference, but there
will be notable advantages too. The most significant of these would be in terms
of lower equipment-and installation and maintenance-costs. Also, the connections
remain copper-to-copper and thus the cost of changing electrons to photons and
back to electrons is avoided. The uptake of 10G-over-UTP in the market will also
depend on how quickly vendors are able to educate enterprises on the benefits
and possible usage of the new technology, as also on how fast apps move in to
demand the higher bandwidth-and speed.

P-o-E: A Potential Growth Driver

Several vendors launched the power-over-Ethernet (PoE) technology in India
last year. PoE allows IP telephones, wireless LAN access points, webcams and
many other appliances to receive power as well as data over Ethernet protocol,
using the existing LAN cabling.

Also, with the PoE technology coming into play, wireless
access points and other such devices will need structured cabling as the
underlying infrastructure. The technology works by injecting DC-converted power
over the spare pairs of Cat 5 and above cables. Various WLAN equipment and
end-user devices including laptops and VoIP phones can then be plugged into the
cable to draw DC power. PoE, as one can see, converges not just telephony and
Internet-but also power-on a single medium, copper. It also addresses the
problem of an IP call getting disconnected in the event of a general power
failure.

The growth in PoE is directly linked to the rapid growth in
IP-based applications (telephony and video) as also wireless LAN protocols. The
case for providing PoE through the structured cabling system is based on the
fact that provision of power should be done in a transparent (non-interfering)
manner. The passive solution lends itself to such a transparent provision as
long as power is injected over the non-data carrying pairs in the UTP cabling,
and as long as the device used for injecting power does not have the potential
to interfere with sensitive switches and patch panels.

Component-level Compliance

The question that buyers often ask: why doesn't a structured cabling
solution give the touted performance despite the use of standard-compliant
cables? This brings up the issue of component-level compliance into play, as
against the hitherto focus on channel-level compliance.

Network managers are also keen to evaluate and compare
value-adds offered by various vendors. They are increasingly waking up to the
benefits of intelligent features of the cabling systems. The higher-frequency
cables have made component-level compliance to standards very important.
Component-level compliance really enables interoperability among vendors. With
Cat 6, this is very much required, as several vendors launched solutions
initially that could not be interchanged with other vendor products.
Fortunately, Cat A6 is only an addendum to the current Cat 6 specification, and
designs at the component level should already be interchangeable. That being
said, sellers of full end-to-end solutions will be focusing on global
infrastructure solutions and talking about full systems with components in full
compliance.

One must note here that component-level compliance will not
necessarily lead to channel compliance. Hence, equal emphasis has to be given to
both component and channel compliances with standards. As the rated frequency
increases from Cat 5e through Cat 6 to Cat A6, the emphasis on all parameters,
including component/channel compliance increases.

Deepak Kumar