Back-to-basics theme permeates show floor

LAS VEGAS - While NetWorld+Interop has always been a showcase for cutting-edge network technologies, last week's event focused more on technologies for cutting IT costs.

Sure, optical Ethernet, voice over IP and other glitzy new offerings got a chance to shine. But many of the show's 800 exhibitors emphasized network management and other more familiar tools aimed at helping companies squeeze more out of their network investments - a message that many attendees welcomed.

"I'm just making do most of the time," said Lance Ray, network/systems infrastructure manager at service provider XO Communications. Ray, who saw his $2.5 million network management budget get slashed this year, was examining new technology from management software vendor RiverSoft, which sells a product called Fault Manager that XO uses to manage its network with minimal staff.

"We don't have the luxury to just keep buying and not get all that we can from our existing software anymore," said Kim Kloskey, a senior data network engineer with Aurora Health Care, which is taking another look at Aprisma management software it had sitting on its shelves. "It's more like 'Try before you buy.'"

The cost-cutting theme was evident even in the event's attendance, which show organizers estimated at 15% below last year's crowd of 60,000 - probably the result of cuts in corporate travel budgets.

Service providers were active at the show, with the hopes that an economic slide will attract users to outsourcing applications or cheaper alternatives to traditional WAN services such as T-1 and T-3 lines.

"Customers are more concerned about total cost of ownership," said Jeremy Thompson, president of Cable & Wireless a-Services ASP business, which hosts Microsoft Office and Exchange applications for customers. "Outsourcing is less expensive and offers users more flexibility."

"When things were going well and users were having record profits, they were willing to stay where they were," said Richard Ellenberger, CEO at Broadwing, a carrier that introduced a Gigabit Ethernet WAN service at the show.

"Now they are being told: 'Either you will have to cut 10% of your group or you'll have to find a new approach to telecom,'" he said.

Broadwing claims new dedicated wavelength services could deliver companies up to 2.4G bit/sec at 20% less cost than similar SONET services.

"We have Fortune 1000 companies that are saying 'I want to talk to you about lightwaves, I want to talk about a different approach that can cut my costs,'" Ellenberger said.

NetReality, a maker of traffic monitoring and shaping devices, used Interop to informally survey IT managers about their budgets.

Of the 334 attendees interviewed, 84% said they have experienced some sort of budget cut this year. Half of those interviewed said their budget cuts were in the 20% to 40% range.

Hardware vendors at the show were ready to answer the call for austerity. For example, the exorbitant costs of electricity and data center space are the twin targets of Compaq's new hyperdense QuickBlade servers, which will feature Intel's low-voltage Tualatin processors (see related story, page 18).

"This innovative design will let you put hundreds of servers where today 40 or so is the best we can do," said Compaq CEO Michael Capellas in a videotaped message at the show's opening keynote session. "QuickBlade will not only use a fraction of the normal power consumption, it will also be the answer to the high cost of data-center real estate. And it will define a new server metric by which you will judge us: transactions per watt, per square foot of data-center space."

Other hardware vendors echoed the "try before you buy" mentality of Aurora Health Care's Kloskey. To help large organizations that want to deploy IP voice, Empirix is targeting its line of PacketSphere test systems at large enterprise network test labs. While used mainly by voice-over-IP equipment makers and service providers, Empirix said companies can make better buying decisions on what types of voice-over-IP gear or network upgrades are necessary for IP telephony by running a network though the paces.

Of course, not everyone at the show - located in the heart of a city that encourages its visitors to spend wildly in its casinos - was feeling the economic pinch in their IT budgets.

"We budget and purchase IT products based on what we need, not based on the economy," said Mike Meyers, network architect for Health Midwest, a nonprofit healthcare organization in Kansas City, Mo. "It's simple - either you need these computers or you don't. If we need them, we buy them."

Meyers said that while net management is important, many show vendors overused the struggling stock market example to try to scare users into thinking they need new management products to keep network costs down.

Staff Writers Phil Hochmuth and Denise Dubie, Senior Editor Denise Pappalardo and Associate News Editor Paul McNamara contributed to this report.

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