Ford Dealers Move To IP Network

For years, Ford dealers have used a satellite network to exchange data on car repairs, warranties, credit status, and other customer issues with Ford headquarters. Now many dealers are trading in their satellite network and shifting to a new IP-based network designed to provide faster and more reliable access to that information.

The FordSecure network, introduced on Tuesday, has been tested by several dealerships. It's been under development for the past 18 months and was built by auto industry system integrator Reynolds and Reynolds, using a Private IP service from MCI Communications.

"The immediate benefits are speed and availability," says Bob Dull, comptroller for Beau Townsend Ford in Vandalia, Ohio, which was the first dealership to test the network in July. Dull, who serves as the IT guy at the dealership, says Ford dealers have used the satellite network since the early 1990s, but many felt it was time to upgrade.

"With the satellite, there were times when there were too many users and you had to wait your turn to access warranty information," Dull says. That's not a good thing when customers are waiting to schedule appointments for car repairs. "Now our access to information is almost instantaneous. This has been a real smooth rollout."

The dealers are getting much more bandwidth with the new network. "Just five years ago, the vast majority of dealers--90% or more--were using 56 Kbps lines and outbound dial-up access," says Jim Aten, VP for network services at Reynolds. "Now the smallest circuit we deploy is 156 Kbps and most dealers are going higher than that to 256 Kbps or more. There is massive use of Internet-based traffic on the dealers' WAN infrastructure."The systems integrator is offering dealers the Reynolds Private Managed Network and Reynolds Secure Internet Access. The VPN connects Ford Motor Co. to a Reynolds data center, which is hosted by MCI, and the Reynolds dealer management system, offering a private, fully managed secure WAN. Among the services Reynolds offers Ford dealers are E-mail, managing firewalls, virus scanning, spam filtering, and content filtering.

MCI uses multiprotocol label switching technology on its Private IP network, which allows Reynolds and Ford dealers to prioritize traffic so mission-critical data has the right of way and less important traffic, such as Web surfing, is forced to wait. MCI's Private IP network has more than 160 nodes worldwide and is supplemented with the carrier's extensive frame-relay network. MCI says it has delivered more than 1,000 circuits to Reynolds.

None of the parties would discuss the cost of the network or potential savings. But many in the auto industry are moving away from satellite networks that were set up in the '90s when they were among the very 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. "IP networks provide many benefits, especially lower costs for maintaining hardware and software. It also lowers communications costs."

Cost is a big issue for the nation's 22,000 auto dealers, Bünger says, along with reliability. "If the network goes down, you've got people sitting around, paper piling up, and customers who can't get their loans approved."

In the long run, deployment of high-speed, IP-based connections will facilitate the implementation of new applications 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 to that model once they have a broadband connection," he says. Auto dealers spend between $2 billion and $2.5 billion annually on communications, software, and management systems, Bünger says.At Ford, there were 1,100 customers using the dealers' satellite network, although one "customer" could represent several dealerships sharing a network link, Reynolds says. Currently there are 65 customers using the new network and another 35 are in the process of shifting over. Reynolds must sell the network to dealers--they aren't required to use the new system. Some dealerships use third-party communications providers, and they will have to interconnect their systems with the Reynolds-provided network, which might prove an impediment.