Voyager, Netlink go where Xtra fears to tread

Voyager and Netlink both plan to use Telecom's new IPNet service to accelerate their plans for IP-based virtual private networks and e-commerce - taking them on a path Xtra may find it politically difficult to follow. While IPNet provides ISPs with a nationwide dial-in IP infrastructure which they can leverage to provide low-cost networking services, Xtra cannot do the same without cannibalising Telecom's existing network services.

Voyager and Netlink both plan to use Telecom’s new IPNet service to accelerate their plans for IP-based virtual private networks and e-commerce — taking them on a path Xtra may find it politically difficult to follow.

Voyager’s VPN strategy draws on that of its parent company, OzEmail, which has been working on Internet-based VPNs for more than a year and claims to have 40 or 50 customers running VPN services over its IP backbone in Australia. An “Anzac” VPN service link between Australia and New Zealand is operating, and the “Anzus” version is in trial mode.

OzEmail is doing “exciting” business on VPN projects, according to Bryan Rowe, the former Xtra marketing manager who followed his boss, Chris Tyler, to Australian ISP Access One and stayed with that company when it was sold to OzEmail.

“And what that’s effectively doing is cannibalising dedicated ISDN and frame relay networks. So it’s taking the private networking business away from the traditional telephone companies and network suppliers.” Gary Connolly, Netlink’s Auckland area manager, says the ATM-based IPNet, which provides single-number dial-in IP access from anywhere in the country, is likely to figure in the corporate ISP’s VPN plans.

“We’re already running VPNs. We’ve been working closely with Microsoft on IP tunnelling and sub-domains, and they’re very, very keen to have this move forward. The work we’ve done with them has been very successful. We’re also looking forward to electronic commerce applications this year.”

Voyager’s general manager David Mackey says the availability of IPNet overcomes the biggest challenge with running that sort of VPN — “the fact that you had to change telephone numbers”.

Graham Rowe, head of Telecom’s computer communications group, which developed IPNet, agrees that “Internet VPNs are one of the applications of the Internet — that’s undeniable and irrefutable. If you look at the opportunity side they enable many sites and applications that were just not feasible under the old data networking regime.”

He admits there there will be an impact on some existing Telecom services, and “there will be some applications that can migrate on to Internet VPN. But in many instances it’s not going to meet the requirements of today’s applications.

“Most networking architectures, and I include client-server in this, need guaranteed service parameters such as delay, latency, packet loss — all of those things require a level of service that is impossible to provide over residential Internet.”

Mackey says he sees “pluses and minuses” around IPNet. “There are some concerns about losing control of my network, but you can balance that up against what the opportunities are, and there are some significant opportunities in the marketplace. So we’re pleased too, no doubt about that.”

Bryan Rowe says OzEmail is on the verge of signing up its largest VPN deal yet, for 300 nodes. Mackey admits Voyager is “ probably not as far down the track as Australia ... we’ve signed with one major organisation, and we’re talking to three out of the top five organisations in the country.”

Electronic commerce, and especially a revitalised vision of EDI (electronic data interchange) also figure in OzEmail’s plans, says Bryan Rowe.

“What the Internet is now representing is an opportunity to allow the next tier of businesses to go into EDI. You obviously now don’t need the X.25 connection because you can do it over a dial-up connection. Instead of paying your traditional $150 a month, you’d be down to tens of dollars a month, and instead of your per-transaction charges being a couple of bucks, it’ll be under a dollar and potentially a lot less.”

Graham Rowe agrees that EDI over Internet will be a growth area: “Not EDI as we know it, derived from the OSI model, that won’t fly. But the enabling of electronic commerce on the Internet provides phenomenal opportunities.

“If you have a community of people, your suppliers or vendors or customers, and one or two of them are not connected to that network infrastructure, then an EDI application is not going to fly, you have to have workaround procedures. But everyone’s going to be connected to the Internet, you can assume that. So you have a ubiquitous network over which you can conduct commerce. EDI will fly.”

Graham Rowe also agrees that some part of Telecom will eventually offer dial-up VPN services similar to those being peddled by Voyager.

“The timing and the nature of that will come down to what out customers require. You have to realise that VPN technology is actually relatively immature. Most of the VPN equipment is proprietary beyond a very simple application — you’re requiring security and dependability and all those sorts of things and there’s probably another generation of equipment to come. That’s an area of research for me this year.”

And which group at Telecom would be likely to offer such a service?

“That’s hard to say. We’re scanning the market and looking at the technology, just like everyone else in the industry. It’ll come down to which markets we’re going to pitch it toward, where the opportunities are most likely to come from, and what support infrastructure will be needed.”

Bryan Rowe, David Mackey and Graham Rowe all feature in this week’s bumper @IDG Friday Fry-Up, at www.idg.co.nz.

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