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The first wave of e-business, with its emphasis on Web site hit rates and
transaction costs, is already being succeeded by the second wave of
e-business, which emphasizes Return on Relationship (ROR) and overall
customer service. The ROR model encompasses the lifetime of the customer
-- in other words, it comprehends the potential dollar value of repeat and
referral business both over time (throughout the customer's shifts in age,
spending patterns, and other demographic changes) and over a broad range
of products and services. In this business model, the enterprise gathers
information about its customers, interaction by interaction, and uses that
information to personalize how the customers are treated.
The impacts of (re-)engineering the enterprise around ROR extend right
across the organization. While dot-com companies have focused their
businesses on a single channel (the Web) and have built applications and
operational systems around that business model, most enterprises have
multiple service delivery channels, including brick and mortar channels
(branches, stores, clinics, and sales offices) and electronic channels
(the telephone, fax, e-mail, and chat, as well as the Web).
One key challenge for most established enterprises is interfacing their
Web-based e-business systems into legacy mainframe-based applications. The
reality is that in spite of the computing evolution to the client/server
model, 70 percent of business data and applications continue to be based
on mainframes, which are dominated by IBM and their System Network
Architecture (SNA).
THE LEGACY OF IBM'S SNA
Up until the mid-70s, the enterprise had no choice but to build
application-specific networks (for point-of-sale applications, financial
transaction networks, data entry, and batch processing) using a variety of
protocols and systems. This was a world of dumb terminals and large,
expensive mainframes.
At this time, the Internet was still an academic network, and Ethernet
still hadn't been invented. Mainframe vendors (for example, IBM, DEC, and
Burroughs) responded to this situation by introducing proprietary
networking architectures. Most had varied lives, evolving over the years.
And, in many enterprises, these architectures still exist, having assumed
the status of legacy systems.
IBM's SNA stands out because it represents the largest installed base.
A traditional SNA network consisted of a number of terminals connected to
a cluster controller, and a number of controllers multidropped on a
low-speed leased line off of a front-end processor, itself "channel
attached" to the mainframe computer via a high-speed interface. While
IBM owns the SNA specification, many vendors have established themselves
as players in the SNA space.
Very briefly, the SNA architecture consists of a set of networking,
session, and presentation protocols; a set of physical and logical node
types representing different levels of intelligence and control (all the
way from dumb 3270 terminals to "center of the universe"
mainframes); and, of course, a set of acronyms and terminology.
Manageability, reliability, and predictability were three key attributes
of IBM SNA networks, and these attributes allowed SNA networks to become
the workhorses of mission-critical enterprise networking in finance,
retail, and transportation industries (to name a few).
Interestingly, the strengths of SNA networks happened to be the
weaknesses of IP networks, which have made the marriage of these
environments a real challenge. To illustrate this point, when LANs took
off in the form of Ethernet, IBM developed its token ring LAN technology
with better manageability, reliability, and predictability. Only
relatively recently has IBM embraced Ethernet, which can now deliver token
ring performance at a considerably lower cost, through the use of
switching and quality of service capabilities. In the WAN, SNA networks
for the longest time were and continue to be run in parallel to
multiprotocol routed networks using frame relay networking technologies.
Generally, the marriage of SNA networking and IP networking has evolved
in three distinct stages:
- Stage 1. In the 90s, a technology called Data Link Switching
was developed, allowing consolidation of SNA traffic with other data
traffic over an IP network. The typical configuration consisted of PCs
emulating 3270 terminals connected to token ring LANs with a router
providing the Data Link Switching adaptation functionality. The SNA
traffic, now riding on IP, would be carried over the IP WAN to a
router at the data center. This latter router would convert the
traffic back to native SNA to be delivered over a token ring LAN to
the front-end processor and to the mainframe application.
- Stage 2. PCs and servers emulating 3270 terminals would
directly encapsulate the traffic into IP for transport, most often
over Ethernet and a wide area router network. At the host end, various
approaches were used, including software in the front-end processor or
channel-attached gateways, to unencapsulate the date and transform it
into SNA.
- Stage 3. PCs running standard browser software communicate
with applications over IP networks. Various Web-to-host networking
approaches exist. This market is accelerating rapidly due to end user
selection of browsers as the preferred interface, and due to the
strategic intent of enterprises to integrate e-business applications
with data and applications residing in IBM host environment. However,
this approach is not a panacea -- certainly not in transaction- and
data-entry-intensive environments, which are common, for example, in
the financial industry. Specialized (that is, non-browser-based)
man-machine interfaces will continue to be used, often concurrently
with browser-based solutions.
The Web-to-host market comprises products that run on servers or on IBM
hosts and act as instant Web-enablers in front of IBM hosts. They are
predominantly software products and are typically priced on a per-seat
basis to match the terminal-based pricing of the past. The vast majority
Web-to-host deployments have, to date, occurred within intranets for which
there was a ready-made market for vendors. Concerns about security are
addressed by the same features used in traditional host access products.
WEB-ENABLING MAINFRAMES FOR GREATER ROR
Maximizing ROR will require enterprises to integrate how they serve
their customers across multiple service delivery channels, including
"bricks and clicks." Highly scalable Web-to-host networking is a
key requirement given the growing importance of the Web and the need to
access legacy mainframe-based applications.
IDC predicts that Web access to the corporate mainframe will expand
like never before as companies exploit opportunities in Internet commerce.
Fueled initially by intranet implementation of Web-to-host access,
followed in later years by implementation across extranet and the
Internet, the market is expected to grow from $112 million in 1998 to
$1.25 billion in 2003, with a CAGR of 62 percent. The evolution of
traditional SNA networks to a Web-to-host environment represents a
critical component of e-business solutions and a critical link in the
chain of business transformation around the ROR model.
Tony Rybczynski is director of strategic marketing and technologies
for Nortel Networks' Enterprise
Solutions unit. E-mail questions or comments to [email protected].
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