FINDING THE RIGHT WAN

JOHN KAROLEFSKI

Now that retailers are using so many high-tech applications at their stores, they face a growing challenge: figuring out a way to transfer all of the text, voice and video associated with those applications from their stores to their headquarters, and back.

For that they need a retail-hardened WAN (wide area network -- see box on Page 54 for terminology used in this article), which covers a large geographic area.

"It is a must-have for enabling a whole bunch of strategies across the board," said Mohsen Moazami, vice president of the Internet Business Solutions Group at Cisco Systems, San Jose, Calif. "Those strategies require you to be close to consumers at the point of purchase. You cannot make real-time decisions without data, intelligence and insight derived from data. To do this right and become customer-intimate, the network becomes extremely strategic."

Take Giant Eagle. At the Pittsburgh-based chain, the growing number of retail applications that rely on high-speed connectivity includes POS data, electronic fund transfer, gift card, e-mail, retail pricing , electronic marketing , employee data, direct-store delivery, budgeting , scale management, video, pharmacy adjudication, and store system support applications.

The technology of WANs has become quite varied and complex in recent years with the rise of the Internet and IP (Internet Protocol), the development of such services as frame relay and DSL, and the continued use of satellite technologies, and even dial-up. Picking the system that suits a given retail business is no trivial matter.

Yet, these are not mutually exclusive categories. "There are mixed environments where in one location they may have frame, IP in another location, in some locations they are actually using satellite," said Ravi Bagal, director of marketing for Tomax, a Salt Lake City-based provider of host-to-store software systems for retail chains.

Tomax markets a solution that includes a "thin-client" model where the computer clients at the store have very little data storage and just execute retail applications, while all the data and processing takes place at headquarters. This process depends on solid WAN data flow

Frame relay remains the most-entrenched network in place, and today accounts for about 85% of installations, according to industry estimates. Giant Eagle, for example, is providing data communications to its 215 stores via connections over an IP-enabled frame-relay solution from AT&T. Frame-relay port speed is 256 Kbps, and the backup to the network is an ISDN dial backup.

"Currently, we find frame relay to be our most efficient and reliable [WAN] solution," said Keith Kaiser, Giant Eagle's director of technical services. "It provides more consistent performance and higher reliability than the Internet."

Other food distributors are also banking on frame relay. For example, Bozzuto's, a Cheshire, Conn.-based wholesaler, developed a frame-relay network so that its independents could afford "chain-like" benefits when processing debit and credit transactions. The network is connected to Concord EFS, a Memphis, Tenn.-based electronic transaction processor. By using a single processor, Bozzuto's has lowered the per-transaction charges its retailers pay, and increased processing speed in the checkout lane. A dial-up system was used previously.

The wholesaler's corporate stores are using frame relay to receive pricing information from the head office.

The Lure of IP

While frame relay has been the network of choice, IP-based networks are now making big in-roads, according to Tom Chell, a network consultant for Tomax. "IP networks are inherently more scalable and more flexible," he said. "So most of the momentum today for new circuits going in to support retail are IP-based networks."

Some of the forces making IP more attractive are the new generation of providers who are utilizing new access technologies to get to the network, Chell explained. Specifically, DSL and cable are now much more commonly accepted means to connect a physical store to the network itself.

The growth of technologies such as cable and DSL into the store creates a potentially huge cost benefit for supermarkets, according to Chell. "In the traditional frame-relay network, the retailer might be paying something in the area of $500 a month for network connectivity to a location. Today, you can provide that same sort of broadband access connectivity over a DSL or cable for $150 a month."

Additional security technologies now common in IP networks, specifically virtual private networks, are also driving the shift from frame relay to IP.

However, the real rising star in WAN communications is VOIP (voice over Internet protocol) -- sending voice calls over Internet data lines.

VOIP is a separate service that would utilize an IP network to allow a large grocery chain to communicate from store to store, explained Chell. "Basically, it eliminates the need to call long distance between store locations." The payoff is the big savings in phone bills. Ken Corless, a partner in the retail practice at Accenture, Chicago, explained that nearly all retailers have two networks: one for voice, and one for data. Yet with VOIP maturing, people are looking at sharing a network to consolidate their network costs.

Giant Eagle is now using VOIP in selected areas, according to Kaiser. "However, we are not currently using VOIP over our frame-relay network," he said. "Some initial tests produced voice quality issues. Our experience with VOIP is that it works very well over LANs with QOS support and direct point-to-point WAN connections with QOS. The time dependency of this technology makes it difficult to deploy over our current frame-relay/ATM network."

Meanwhile, the potential for cost savings has prompted other major chains to launch VOIP pilots. In fact, most of the top 10 grocery retailers in the United States are investigating pilots with IP telephony, according to David Meany, an Internet group director at Cisco. "The cost opportunities are high enough where it gets a fair amount of attention. It's early, but there are a lot of people exploring it aggressively," he said, listing Metro in Germany and Safeway in the United States as two of the interested firms.

Data communications experts said retailers are also interested in VOIP because of its ability to communicate information to executives when and where they need it, using the phone as an option for delivery. "There is a big focus in grocery around making the manager very mobile," said Meany. "IP telephony allows you to do that."

Sky High

While much of the attention on data communications is on land-based lines, some retailers are looking to the sky.

That is, there is growing interest in satellite networks, based on two-way satellite or VSAT technology, to provide broadband connectivity. For example, Kroger Co. has deployed a nationwide two-way satellite network. The Cincinnati-based retailer selected Spacenet, the U.S. subsidiary of Gilat Satellite Networks Ltd., to provide remote VSAT and baseband hub technology.

At first, the network will link multiple video studios with Fred Meyer store locations through a broadband connection. This will allow high-speed video on demand (VoD) delivery and voice-over IP (VOIP) for interactive distance learning (IDL) and video conferencing applications.

Kroger also aims to use the network to support various other future applications, including software and content delivery, frame-relay backup, and other interactive data applications. Satellite proponents point out several advantages of this platform, including:

Availability: Satellite is the only broadband WAN technology that is available everywhere around the world. The only requirement is a clear view of the Southern sky.

Reliability: Satellite networks provide fewer potential points of failure than terrestrial solutions, which are subject to outages.

Cost Effective: The economics of a satellite network translate into less costly deployment, maintenance and operation, as compared with terrestrial networks with their buried cable, switches, equipment, and construction and maintenance personnel.

However, there are some bugs to be worked out with satellite technology, some executives told SN.

"We have used satellite communications in the past, but those systems have some inherent problems with bandwidth and propagation delay," said Keith Kaiser, director, technical services, Giant Eagle.

"Satellite has certain technology characteristics that have made it difficult for the support of higher bandwidth applications, primarily due to latency inherent in the technology," said Tom Chell, network consultant, Tomax.

Latency is basically the time it takes for the data to travel from Point A to Point B within the network. So in a satellite environment that goes to the satellite and back to earth, there is more of a delay getting data from Point A to Point B than over a frame-relay or an IP network, according to Chell.

He added that satellite could be an option for retailers in very remote areas, where the cost of other networks would be too prohibitive.

Electronic Communications 101

The following basic definitions were gleaned from searchNetworking.com.

WAN (wide area network) is a geographically dispersed telecommunications network.

LAN (local area network) is a group of computers and associated devices that share a common communications line within a small geographic area.

Dial-up pertains to a telephone connection, sometimes called a switched line, that is maintained for a limited time duration.

Leased line is a telephone line, sometimes called a dedicated line, that has been leased for private use.

Frame relay is a telecommunication service designed for cost-efficient data transmission for intermittent traffic between local area networks and between end-points in a wide area network.

DSL (digital subscriber line) is a technology for bringing high-bandwidth information to homes and small businesses over ordinary copper telephone lines.

Internet protocol (IP) is the method by which data, voice, video and other information is sent from one computer to another on the Internet.

IP telephony (Internet protocol telephony) is a general term for the technologies that use Internet connections to transmit voice, fax and other forms of information that have traditionally been carried over the dedicated connections of the public telephone network.

VOIP (voice-over IP) is an organized effort to standardize IP telephony.

QOS (quality of service), on the Internet and in other networks, is the idea that transmission rates, error rates, and other characteristics can be measured, improved and, to some extent, guaranteed in advance.