IP provides lower costs and higher speeds over existing satellite network
Ford Motor Co. and its 4,500 Ford and Lincoln-Mercury dealerships have begun a multiyear project to upgrade their data-communications infrastructure by moving it off a satellite network and onto an Internet-based one. Ford hopes to have most of its dealers on the new IP-based network by 2007.
"The ultimate goal is to have a single, high-speed Internet connection that will allow us to do everything," says Mark Gruskin, manager of the FordStar network, the satellite network that dealers have been using to exchange vehicle orders, warranty claims, credit applications, and other information. Ford plans to enhance the satellite network and use its capability for high-quality video for training, executive presentations, and real-time interactive business communications, he says.
The FordSecure IP network will provide dealers with a standard IP-based connection to reach all of Ford's data-communication applications. So far, 340 dealers have moved to FordSecure, Gruskin says. "Our dealers have all kinds of Internet connections: T1s, DSL, cable modems," he says. "We're trying to build a solution that works with every one of those transport options." Dealers aren't being asked to spend money for the IP network, Gruskin says.
"The immediate benefits are speed and availability," says Bob Dull, comptroller and head of IT for Beau Townsend Ford in Vandalia, Ohio, which began testing the network in July. "With the satellite, there were times when there were too many users and you had to wait your turn to access warranty information. Now our access to information is almost instantaneous."
Ford is working with 10 systems integrators to deploy the network. Beau Townsend is on a system built by auto-industry system integrator Reynolds and Reynolds Co., using a private IP service from MCI Communications. "Just five years ago, the vast majority of dealers, 90% or more, were using 56-Kbps tie-lines and outbound dial-up access," says Jim Aten, VP for network services at Reynolds and Reynolds. "Now most dealers are using 256 Kbps or more. There's massive use of Internet-based traffic on the dealers' WAN."
Many in the auto industry are shifting away from the satellite networks set up in the '90s, when they were among the few options available for creating high-bandwidth WANs to serve many locations, says Mark Bünger, a senior analyst specializing in the auto industry for Forrester Research. "An IP network provides many benefits [over a satellite network], especially lower costs for maintaining hardware and software," Bünger says. "It also lowers communications costs."
Deployment of high-speed, IP-based connections will facilitate the use of new apps and services by dealers, Bünger says. "A lot of dealers are interested in having their dealer-management systems delivered by an [application service provider], and it will be easier to migrate once they have broadband connections," he says. Bünger estimates that auto dealers spend between $2 billion and $2.5 billion annually on communications, software, and management systems.
Reynolds and Reynolds had 1,100 customers using the satellite network, it says, but one "customer" could represent several dealerships sharing a network link. Currently, 65 of its customers are using the new network and another 35 are in the process of shifting over, the company says. The systems integrator is offering dealers the Reynolds Private Managed Network and Reynolds Secure Internet Access. The VPN connects Ford to a Reynolds and Reynolds data center, which MCI hosts, and the dealer-management system, offering a private, fully managed secure WAN. Reynolds and Reynolds also offers Ford dealers managed-firewall services, E-mail, virus scanning, spam filtering, and content filtering.
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