The landscape of network analysis

The data provided by rugged network analysis not only supports business strategy, but can often provide the basis for sounder decisions in the strategy process. In short, network monitoring and analysis is no longer a “nice-to-have”, but a “have-to-have” in IT networks.

The initial driver for monitoring and analysis
Network monitoring and analysis was initially employed to provide insight into network behavior (ie who is sending what to whom). This was necessary as Ethernet/IP protocols do not provide embedded network management information as was the practice in telecommunication network protocols, such as SONET/SDH. In addition, Ethernet/IP is typically deployed as a connection-less network with all users sharing available bandwidth and data finding its own way through the network. This is in contrast to telecommunication protocols, which typically reserve bandwidth in a connection-oriented manner. Think of a telephone call where the connection between the two callers is reserved for the duration of the call.

Network monitoring and analysis tools, such as network probes, are therefore necessary to understand where data is being routed in the network and how much individual connections in the network are being used. Network probes are hardware devices that capture and analyse copies of the network data in real-time. In addition, it is possible to determine the sender and receiver of the data and the application used to send the data (if it is a well-known service with a defined TCP/UDP port).

New opportunities and new demands driving new solutions
It did not take long for innovative thinkers to identify opportunities to use the information provided by network monitoring and analysis for new applications. For example:
– Network testing, troubleshooting and forensics: If the network is not performing as expected or there is a fault, network monitoring and analysis probes can be used to determine where there is an issue.
– Network enterprise security: Network data can be monitored to detect anomalies in network behaviour and known malware.
– Cybersecurity: Networks can also be monitored to detect illegal behaviour by criminals, terrorists or foreign espionage.
– Policy enforcement: Services provided by networks can be managed using network policies based on real-time data collected by network monitoring and analysis probes.
– Financial trading networks: Financial institutions need to ensure that they react fast to market dynamics and therefore require the lowest latency to ensure that they can execute trades as quickly as possible, which is measured by network monitoring and analysis probes.

The examples above are but a taste of the various opportunities emerging based on the availability of real-time network data on crucial connections in the network.

At the same time, the demands on the OEM vendors addressing these opportunities are increasing. ABI Research recently forecast that the volume of global annual data traffic will exceed 60,000 petabytes in 2016, over seven times more than the 8,000 petabytes expected in 2011. It also estimates that the fastest year-on-year growth will occur in 2012, at 58 percent. This means that the network monitoring and analysis systems being developed by OEM vendors need to be able to handle the large increase in data volume expected over the coming years.

Why is this important? Surely the whole idea of Ethernet/IP networks is that if data is not received, it is simply re-sent? This is true for communication, but not the case for network monitoring and analysis. In communication, you are only interested in the data that is addressed to you. In network monitoring and analysis, all data needs to be examined. It’s the difference between receiving a letter as an individual and working in the postal sorting service. How big should the letterbox be in each case?

Many communication services do not require real-time data (eg email), but there are two issues from a network monitoring and analysis point of view:
– More and more services are real-time or near real-time. For example, Voice-over-IP, Streaming video and hosted or cloud services.
– To perform a useful analysis, you can’t afford to lose any information as the part you are missing could be the crucial piece of information that solves the puzzle.

So, not only do OEM vendors of network monitoring and analysis systems need to handle a large amount of data, but they cannot afford to lose any of this data in order to provide a useful analysis. In addition, they have to do all of this in real-time to properly support all types of services.

For this very reason, OEM vendors are considering new approaches to developing network monitoring and analysis systems so that they are not only able to meet current demands, but can keep up with the demands of the future.

Re-thinking network monitoring and analysis system design
The initial approach to developing network monitoring and analysis systems took one of two paths:
– Proprietary hardware and/or chip development to ensure high performance (still practiced by many enterprise network security vendors today).
– System development based on standard “off-the-shelf” hardware, such as standard servers and standard Network Interface Cards (NICs).

Proprietary hardware and chip development (even if the chip is a programmable FPGA or NPU) is a costly, high-risk approach with a need for constant investment and support to keep up with customer demands and growth in bandwidth. As an OEM vendor, one needs to be certain that the expected volumes can justify the investment.

The opposite approach of using “off-the-shelf” hardware is a low-risk approach that avoids long development cycles and thus provides a fast-time-to-market. The processing power and memory provided by modern servers and CPU chipsets are more than adequate for even the most demanding applications. There are, therefore, many OEM vendors who have adopted this approach in order to avoid the cost and risk of developing proprietary hardware. Especially, as many of the competitively distinctive features of their solutions lie in the analysis of data in application software rather than in hardware. In addition, it is much easier to program in standard CPU environments than in proprietary FPGA or NPU environments.

The Achilles heel of the standard “off-the-shelf” hardware approach is standard NICs or data input/output. As mentioned, standard NICs are built for communication and not for network monitoring and analysis. They are standard letterboxes for individual households rather than the docking bay that is needed for receiving all the post that needs to be sorted centrally.

To successfully exploit the “standard off-the-shelf” approach, dedicated network monitoring and analysis network adapters are required that can keep up with data loads and ensure that no data is lost. These types of network adapter have been available for a number of years and are being used in all the applications listed earlier, helping OEM vendors to continuously increase performance and keep up with demands. The combination of standard servers and these specialised network adapters allows OEM vendors to quickly and easily increase hardware performance as new standard servers with more powerful CPU chipsets are available. The only demand on the network adapter is that it can provide full line-rate data capture and transfer to the application software without losing any data. At the time of writing, there are network adapters capable of handling 40 Gbps of Ethernet data as either 1×40 Gbps port or 4×10 Gbps port.

Intelligent network adapters provide this type of functionality, but also provide additional features to off-load compute intensive data management tasks, such as flow identification, filtering and distribution, from the application. This provides more CPU processing power to the application allowing it to run faster and keep up with data traffic growth.

The advent of virtualisation and cloud services
Thus, the technology is now in place to support high performance network monitoring and analysis for a number of applications using standard “off-the-shelf” hardware. OEM vendors can now keep up with data growth and support the port speeds required without losing any data. The next challenge is supporting customers in their transition to virtual environments and cloud services.

Demonstrations have already been made showing how many physical network monitoring and analysis systems can be consolidated onto a single physical server as virtual machines. This provides new possibilities of upgrading legacy systems to support new data growth and port speed demands in a fast and efficient way. It also allows multiple virtual systems to analyse the same data at the same time.

These solutions thus help OEM vendors of network monitoring and analysis systems to also provide the same level of performance and support in virtualised environments as more and more companies outsource their operations to cloud service providers.

Keeping up with change
The technology pieces are in place to help network monitoring and analysis vendors to continuously evolve and keep up with market dynamics, be they new applications, data growth and line speeds or the onset of virtualisation and cloud services. This allows OEM vendors to focus on these needs and adapt accordingly without the distraction of re-inventing the “hardware wheel”.

Philips to cut 4,500 jobs amid profit slump; Occupy Wall Street continues

Dutch electronics group Philips on Monday announced that 4,500 jobs will have to be cut “inevitably” to help restore earnings after 3Q11 profits dropped to a two-year low, as demonstrators in London continued a sit-in at the London Stock Exchange.

Net profit for the three months to the end of September decreased to €74m, down from €524 in 2010, while revenues declined 1.3 percent to €5.39bn.

Plummeting profit were due to falling sales, losses at its TV joint venture, weaker demand for consumer products and an increase in raw material prices.

The group is now taking steps to attain its 2013 mid-term financial targets which include a four to six percent sales growth and an EBITA of between 10 and 12 percent.

Philips CEO, Frans van Houten, said: “We are not yet satisfied with our current financial performance given the ongoing economic challenges, especially in Europe, and operational issues and risks. We do not expect to realise a material performance improvement in the near term. We are taking the right steps to achieve our 2013 mid-term financial targets.”

Meanwhile, the anti-capitalist protests are set to continue at the LSE.

S&P drops Spain rating one notch on weak growth

Standard & Poor’s late on Thursday slashed Spain’s credit rating one notch to AA- with a negative outlook from AA, citing economic woes.

The lowering of Spain’s long term rating reflects its uncertain growth prospects in light of the private sector’s need to access fresh financing to roll over high levels of external debt amid rising funding costs, the rating agency said in a statement.

The financial profile of the country’s banking system will weaken further due to stock of problematic assets rising further, according to the assessment. Standard & Poor’s recently revised its Banking Industry Country Risk Assessment on Spain to group four from group three.

China trade slows; BlackBerry outrage continues

China’s trade surplus shrank for a second straight month in September to $14.5bn.

Trade data published on Thursday showed September’s figures were $3.3bn lower than the $17.8bn in August and had reduced by more than half from the $31.5bn figure recorded in July.

September’s imports rose 20.9 percent compared with 30.2 percent in August, and exports increased by only 17.1 percent contrasted with a 24.5 percent gain in August.

The slowdown was especially obvious in china’s trade with Europe where exports increased only by 9.8 percent compared with 22.3 percent in August.

Despite the slowing growth, China’s imports and exports have now recorded unprecedented highs with exports reaching $169.6bn and imports rising to $155.1bn.

On the other side of the planet, the outrage that spread through Europe, the Middle East, and South America surrounding the breakdown in BlackBerry services, has made its way to North America, where sporadic service blackouts have affected both the United States and Canada. RIM, the company behind BlackBerry, has said it is working “day and night” to eradicate the problem.

Brazil’s retail sales plunge; Occupy Wall Street kicks off

Brazil saw retail sales volumes drop 0.4 percent from a month earlier indication a slowdown as South America’s largest economy continues to struggle with rising inflation, the Brazilian Institute of geography and Statistics announced late on Tuesday.

Sales in August were up 6.2 percent year-on-year but nonetheless produced the second most sluggish growth rate since September 2009. It was the first recorded volume decline since a 0.2 percent drop in April.

Only two of Brazil’s ten activities that make up the retail trade reported positive growth. Vehicles, fabric and apparel, construction material, cosmetics and furniture appliances reported the largest decrease.

Meanwhile, the Occupy Wall Street campaign has grown into a global movement and continues to attract tens of thousands of protestors marching against the current political and economic system. What started with a group of around 1,000 people walking through the streets of New York has turned into an international appeal for an end to taxpayer bailouts and for political leaders to accept accountability and responsibility for their action.

Volkswagen, Acer, Wal-Mart stimulating growth

SAB turn to Foster’s
South Africa’s hugely acquisitive SABMiller, world’s second-largest brewer with brands such as Peroni and Grolsch in its portfolio, snapped up Australian beer group Foster’s in September for £6.53bn ($10.22bn), albeit 10 percent more than it wanted to pay. “Good call”, as the Foster’s ads say.

Alpha bank Euro
The embattled Greek government heaved a sigh of relief when Alpha Bank and Eurobank EFG agreed to merge in August. Not only did it create an institution with €150bn ($216bn) in assets, it paved the way for similar exercises that should strengthen a beaten-up financial sector. The Athens stock market jumped 15 percent.

China seeks Daylight
China’s voracious appetite for energy assets saw a division of petro-chemical group Sinopec agree a $2.1bn all-cash purchase of Canada’s Daylight Energy in October.

Latin American drugs
In a rare Spanish takeover of a US company, family-controlled pharmaceutical group Grifols bought plasma specialist Talecris for $3.4bn in August.

Gates’ blue Skype thinking
Microsoft’s high-priced $8.5bn acquisition of Luxembourg-based Skype got the green light in October from the European Commission. However most analysts think Bill Gates’ old firm paid far too much.

VW keeps on trucking
In the latest step by Volkswagen boss Ferdinand Piech to topple Toyota as the world’s no. 1 automobile manufacturer, the group won official approval in late September to buy Munich-based truck-manufacturer MAN for $16.5bn.

Acer opens the valley
High-tech Singapore invaded Silicon Valley when the Acer computer group paid $395m for California’s iGware, a specialist in cloud technology, earlier this year.

Pushy texts
The mega-merger that may not happen is the $39bn one between cellphone giants AT&T and T-Mobile USA. The parties reached agreement but the US justice department has sued to block it on anti-competitive grounds.

Murdoch gagged
And the one that won’t happen, at least for a while, is Murdoch-controlled News International’s minimum £12bn ($18.76bn) bid for complete control of UK-based satellite channel group BSkyB. The bid was withdrawn following general outrage after some of Murdoch’s British journalists hacked into the phones of celebrities and politicians.

Wal-Mart goes local
And back in South Africa, retail giant Wal-Mart’s $2.4bn takeover of local supermarket chain Massmart finally overcame union and government fears of a flood of cheap imports. In a compromise deal the big American agreed not to fire workers for two years and to foster local suppliers.

Qatar’s royals to buy Dexia’s KBL and BIL

The royal family of Qatar is moving up its investment in Europe’s banking sector with plans to acquire private banking arms of Dexia and its Belgian competitor KBC.

Private lender KBC said it was to sell its Luxembourg division to Qatari investment group Precision Capital for €1.05bn. The sale will allow the bank to reduce its risk profile, raise capital and permit it to focus on its central and eastern European markets.

Luxembourg’s finance minister Luc Frieden said late on Monday that the Qatari investment group, which is now to take over Dexia’s Banque Internationale Luxembourg, belongs to the al-Thani royal family.

The al Thani’s, who are known also for their sovereign wealth fund the Qatar Investment Authority, have previously invested in European banks at the end of 2008 when they helped raise emergency funds for Barclays bank.

China’s Sinopec to acquire Daylight for C$2.2bn

Sinopec Group, a unit of China’s state-backed energy company China Petroleum & Chemical Corp, late on Sunday signed a deal to acquire Canada’s oil and gas explorer Daylight Energy for C$2.2bn.

In its largest acquisition this year Sinopec offered a 43.6 percent premium to Daylight Energy’s 60-day weighted average trading price, or C$10.08 a share, in cash.

The deal is considered to be the largest takeover by a Chinese energy company in North America after rival Cnook bought Opti Canada for $2.1bn earlier this year.

Sinopec is China’s largest producer and supplier in oil products and major petrochemical products and will join competitors Cnook and China National Petroleum in their attempt to expand global shale gas exploration through international partnership.

Sony secures financial backing from Abu Dhabi fund

Sony Corporation has reportedly secured financing from Abu Dhabi’s investment fund, Mubadala, to help compete for British music label EMI Group.

The Middle Eastern investment funds’ backing, and additional financial support from media investment bank Raine, will assist Sony to better compete with the other bidders which are said to include Warner Music Group and Universal Music Group.

Second-round bids at auction came in at between $3.5bn and $4bn, according to sources close to the process. The present owner of the label is Citigroup which had been forced to take over EMI Group after the previous owners were unable to pay their debt.

Private equity fund Kohlberg Kravis Roberts and BMG jointly are currently seen as the front runners for EMI Music Publishing while Warner Music is said to be leading the race for EMI’s recorded music assets.

IMF says swift action needed to steady Europe’s banks

A quick recapitalisation of European banks is necessary to steady markets and avert the economy from falling into another recession, IMF Europe Director, Antonio Borges, said late on Wednesday. The price tag for such a move was estimated in the range between €100bn and €200bn, he said.

According to the IMF report, the eurozone debt crisis and its effects are disseminating across core banks and nations and make it impossible to rule out a further economic recession.

The report cautioned that stronger economies should steer clear of compelling radical budget cuts at the expense of growth.

The IMF moreover offered its help through the possible implementation of a financing tool that allows it to buy bonds, particularly Spanish and Italian ones, in private markets to assist in curbing the bloc’s debt crisis.

“Any investment we would make in Spain or Italy would be based on full confidence that these countries are on the right track, that they are solvent and that they are taking all the measures they should, Borges told a news conference.

Europe’s shares higher after Italy downgrade

Stock markets in Europe bounced higher early on Wednesday as traders decided to pick up stocks trading down at discount levels following three days of losses and Italy’s credit downgrade late on Tuesday.

Moody’s cut Italy’s credit rating from Aa2 to A2 with a negative outlook, blaming “material increase in long-term funding risks for the euro area,” the ratings agency said in a statement.

The FTSE 100 index was up 2.2 percent to 5,053.38, Germany’s DAX 30 added 2.1 percent to 5,324.60, and France’s CAC40 rose 2.5 percent to 2,921.

Lenders also gained with Deutsche Bank up 5.5 percent and BNP Paribas in Paris rising 6.99 percent to €29.08.

European shares tumble as Greece misses deficit target

Shares in Europe slumped on Monday after the Greek governments’ Finance Ministry announced its draft budget figures showing the country’s deficit is likely to reach 8.5 percent of GDP for 2011.

Greece will miss the terms of the bailout, originally agreed with Troika, which obliged it to meet a 7.6 percent target for 2011. The country is also unlikely to meet the 6.5 percent objective set for 2012, the ministry said late on Sunday.

The Frankfurt DAX dropped 3.2 percent, Stoxx Europe 600 and the FTSE 100 both decreased by two percent to 221.76 and 5024.43 respectively.

Banks slumped on the news, with BNP Paribas down almost seven percent, Commerzbank down 5.9 percent, and Societe Generale decreasing by six percent.

China in $1.29bn copper mine deal with Anvil

Minmetal Resources, a unit of Chinas largest metal trader, China Minmetals Group, on Friday launched a C$1.3bn ($1.29bn) friendly takeover bid for Congo-focused copper producer Anvil Mining.

The move by Hong Kong-listed Minmetal Resources is the second attempt to acquire a copper producer with operations in Africa as it unsuccessfully bid C$6.3bn for Equinox Minerals in March.

Anvil shareholders, who include Trafigura Beheer and collectively hold a stake of 40.1 percent, supported the C$8 a-share offer, Minmetals said in a statement.  

The price offer made to Anvil represents a 30 percent premium to the 20-day volume weighted average price and a 39 percent premium of its closing share price on Thursday, the statement said.

European regulators extend short selling ban

Italian, Spanish and French financial market regulators late on Wednesday extended the temporary bans on the short selling of selected financial stocks and banks in a bid to curb market volatility.

The ban, which was originally implemented on August 12, will now last until November 11 for France and Italy owing to “continued market instability in European markets,” the European Securities and Markets Authority announced. Spain’s ban will not be lifted “until market conditions allow it.”

The Spanish financial regulator said in a statement: “The current situation of protracted instability in European securities markets, in particular in financial stocks, does not yet make it advisable to lift the temporary restrictions on transactions that might constitute a creation or increase of net short positions in Spanish financial stocks.”

Stock markets slip as Greece bailout decision looms

European stocks decreased in early trading Wednesday as markets await Troika’s evaluation on Greece’s progress in reducing its debt levels. The ECB, EU and IMF, collectively known as Troika, hold the key to discharging the next tranche of the bailout money, a sum of €8bn from a total of €109bn, to Greece.

Optimism about a solution weakened however following a report that European leaders were undecided about whether to reorganise Greece’s bailout.

The FTSE 100 index, which on Tuesday gained significantly, fell 0.81 percent to 5,250.92, the German Dax decreased by 1.19 percent to 5,561.26, and the French CAC 40 slipped 1.28 percent to 2,984.77.