IBM plots network division revival

By Marc Songini
Network World, 6/15/98

Research Triangle Park, N.C. - IBM's network business may be down, but it has no intentions of staying out.

In a wide-ranging interview with Network World editors, IBM Network Hardware Division executives said the company will introduce a new router, Internet servers, bundled applications and service provider packages this year in an attempt to provide users with low-cost network building blocks.

The IBM moves are meant to put some products behind NHD's recent reorganization rhetoric (NW, April 27, page 1). NHD is trying to recharge its sagging network business by rolling out new Ethernet and TCP/IP products as well as making the division a serious supplier to telco and ISP vendors.

"IBM is focusing on creating products sold through the right channel at the right price point," said Frank Dzubeck, president of the Washington, D.C.-based consultancy Communications Network Architects. IBM and Intel Corp. can build cost-effective products from scratch from the chips up - unlike their competitors.

To that end, IBM last week rolled out the first fruits of its new plan: a low end, low-cost family of Ethernet hubs and switches). For example, IBM announced an 8/16-port Ethernet hub, Model 8242, priced at $18 per port [See IBM rolls out new low-end Ethernet gear]

IBM executives said later this year the company would build a new, mid-size, low-cost router to complement its low-end 2210 and high-end 2216 router families. Details from IBM executives were sketchy, but sources said the box will likely support Layer 2/Layer 3 switching, tn3270 server and remote branch office connectivity capabilities.

IBM did confirm that the box will be able handle IP, SNA and ATM protocols, but that it will not support Gigabit Ethernet.

IBM will also roll out a family of devices dubbed infrastructure servers, said Rob Greenberg, business line manager for NHD's enterprise networks group.

According to Greenberg, these servers will be available in six to eight months and will run a package of software that includes Web caching, IP load balancing, firewall, security and Java application support. IBM will likely bundle this software across all its servers from Windows NT boxes to S/390 mainframes.

By pushing these servers to the edge of their nets for quick downloading of Web pages, users will be able to cut down on traffic congestion in the network backbone and save on bandwidth consumption, said Robert Zimmer, business line manager for NHD's service provider networks group.

Zimmer said his group is involved with a number of future IBM offerings aimed at telcos and ISPs. The service provider networks group is working on a bundled package of IBM's ATM switches and software that it will sell to telcos, which in turn will resell the package as a managed ATM offering.

Similar packages that will enable ISPs and telcos to resell managed voice over frame relay, ATM and IP services are also in the works.

According to Zimmer, users are looking to outsource these types of services, and IBM wants to help service providers offer low-cost services to answer that call.

IBM's service provider networks group has inked half a dozen deals for these packages, but Zimmer declined to name the vendor contracts.

For those service providers that want to harness two or more mainframes joined together in a cluster for failover or shared tasks, Zimmer said managed Enterprise Systems Connection (ESCON) service packages will also be available.

ESCON is the fiber technology used to link the mainframes to other big iron or peripheral devices such as storage facilities.

IBM will also sell bundled mainframe and communications hardware/software packages under the auspices of a new service called Netplex.

With Netplex, IBM will sell a S/390 mainframe running TCP/IP bundled with a 2216 router as a TCP/IP package. Ideally, this package would cost less than if users had to buy the hardware separately, but IBM did not reveal pricing for Netplex packages.

"People won't buy [communications products] just because they're IBM's," said Jerry Wetherington, systems coordinator at the University of Florida in Gainesville.

But if the products are priced right, IBM has a shot, he said.