Stride Rite CIO Bucking Conventional VPN Wisdom

Written by Evan Schuman
June 20th, 2005

The conventional wisdom in large-scale networking is that sitting a virtual private network atop the Internet is the most cost-effective way to build a wide area network. But the CIO of $558 million children’s shoe chain Stride Rite isn’t so sure.

Stride Rite is in the final stages of contracting for an $8 million upgrade to the point-of-sale systems and network for its 270-store national chain. CIO Yusef Akyuz is hoping the upgrade will yield major productivity improvements.

Akyuz knows that the stores and headquarters will communicate via some kind of a private network, but?even though pricing is a crucial factor?he is very dubious about putting critical connections atop the public Internet.

He is primarily concerned with service levels and agreements to ensure them. The company is contractors for firm assurances of performance. Stability and consistency are higher on his list of concerns than security, or other common networking issues, he said.

“We’re figuring out whether to go with IP or not,” he said.

Stride Rite’s hesitation is based on some less-than-favorable experiences on its global WAN running from its headquarters in Lexington, Mass., to some manufacturing/production facilities the company uses in China.

Initially, the company used a frame relay connection. But as the need for high-bandwidth content rose, it started exploring less-expensive alternatives.

“We knew that we wanted to do voice, video and data, so we did a proof-of-concept using an Internet-based VPN between our China offices and Lexington so we could prove our applications would work,” Akyuz said.

The applications worked fine and the cost was good, Akyuz said, “but the speed and uptime was not consistent. Every time a major incident happened in China?such as the SARS scare?we saw that we had a pretty significant degradation of service.”

Stride Rite’s “takeaway from that was that VPN is the direction” for the global WAN, but over a private network.

Stride Rite’s global WAN is now using a private line MPLS (MultiProtocol Label Switching) network from Equant, with “end-to-end Cisco” equipment and software, Akyuz said.

The network between the Massachusetts headquarters and the U.S.-based stores, however, might justify a different technology, he said. A brief transmission hiccup of sales/inventory exchanges may be less troublesome than long delays in exchanging multimedia traffic.

“We feel the issues are not as significant with the stores. It’s only data. No video plans,” Akyuz said. “In that respect, maybe it’s not as crucial as the Asia test.”

Pricing is also a factor, but the CIO said that back-and-forth competitive bids have brought the projected costs of an IP network much closer than expected to the cost of a private network.

“There is a cost differential, and we’re trying to work it down with the different proposals that we have, but [the price difference] is actually a lot less extreme than one would think,” Akyuz said. He wouldn’t say what the latest price differences are, but he said it was less than a 50 percent difference.

This is not to say that Akyuz has definitely decided against using a VPN over IP for the domestic store network. Ordinarily, if the price difference were insignificant, most CIOs might go with a private network. But Akyuz wants to do more research; one of the unnamed vendors pitching an IP approach touted as client references quite a few major financial firms, whose need for reliability and security are even greater than Stride Rite’s.

“I want to talk with these references to see what swung them to that side. A significant number of financial institutions going Internet sends a message,” he said.

“I want to hear what they have to say to make sure that we haven’t missed anything.”

The concern about moving away from VPNs?while not yet widespread?is a legitimate reaction to recent Internet slowdowns, said Aaron McPherson, research director at the Financial Insights analyst firm.

“Given the unreliability of the Internet and its susceptibility to brownouts, it seems reasonable,” McPherson said. “For it to be worthwhile depends on a company’s traffic and the tolerance for delay. It’s going to be more expensive to use a private network than the open Internet, but it could be worth it.”

Stride Rite’s plans on the hardware side are to simply modernize.

The current POS systems “are using technologies that we don’t want to be in,” Akyuz said. “The old POS is DOS-based, and that doesn’t provide the level of customer service we need. No gift cards, no corporate inventory” and the old POS can only “poll the stores on a nightly basis.”

The new software will be a JDA WinDSS store system running Windows XP, Akyuz said. The POS machines being evaluated are DigiPoS, Ultimate Technology and Wincor Nixdorf.

With the new network, he hopes for better capabilities. “With the new implementation, we will be in constant update mode, downloading SKU [stock keeping unit] information and price changes.”

On the store end of the as-yet-unawarded network set to be in place by the middle of next year, Akyuz wants to have remote site broadband, most likely DSL and cable modems.

The changes will be on the back end, out of customers’ view, he said, not wanting to monkey with the hands-on personalized tone of the stores.

“We do not want the technology to be the dominant aspect of the customer relationship with Stride Rite. We are certainly not looking at wireless service in the store,” he said. “We typically spend about 20 minutes per child per customer, fitting different shoes and making sure the right product is selected. We don’t want technology to get in front of that.”

The CIO is hoping for faster checkouts, with a touch of customer history information available on the salesperson’s screen.

“The point is not that the current system is not servicing the customer as it should. This is simply a pretty significant technology upgrade,” Akyuz said.


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