ANNUAL REPORT 2011 AARNet National Network Darwin Cairns Townsville Mackay Rockhampton Alice Springs Gladstone Maroochydore MRO Geraldton Brisbane Armidale Perth Broken Hill Sydney Adelaide Mildura Victor Harbor Shepparton Canberra Key AARNet PoP < 155 Mbps Melbourne < 622 Mbps < 1 Gbps < 2.5 Gbps <10 Gbps WDM Transmission Hobart 02 A message from Deane Terrell, Chair 24 Chair Retires Content 04 A message from Chris Hancock, CEO 25 Welcome to Professor Gerard Sutton 08 Operating the Network 28 Reaching our communities 13 New products and applications 33 AARNet advisory committee 20 Our Team 36 Appendix A London Beijing Seoul Tokyo Islamabad Hong Kong Taipei Hanoi Mumbai Vientiane Phnom Quezon City Bangkok Penh Kuala Lumpur Singapore Bandung Cape Town Perth AARNet International Network Seattle New York Tokyo Palo Alto San Jose Los Angeles Honolulu Mauna Lani Quezon City Guam Suva Key Other R&E PoP Sydney Other R&E Network Auckland AARNet PoP < 155 Mbps < 622 Mbps < 1 Gbps < 2.5 Gbps <10 Gbps WDM Transmission AARNet - a confident and mature organisation, so difficult to achieve yet impossible to emulate Message from the chair Dear Shareholders It is with a tinge of sadness but with a great deal of satisfaction that I present my last Annual Report for 2011 to the Shareholders of AARNet. As I reflect on my last 16 years as the Chair of AARNet and the high goals that we set when we established AARNet Pty Ltd as an independent company in 1989, the dominant and recurring image is of the extraordinary achievements of the Executive Management within AARNet who have continually realised our ambitions. Each year and every year I have watched the AARNet Management team working to exceed the expectations we have set, building thousands of kilometers of national infrastructure and expanding the reach of the network both nationally and internationally. We have developed products and services that have strengthened our communities and together, working with researchers and educators we have made a positive impact on their ability to innovate for the benefit of the wider Australian community. My personal journey with AARNet started with my own research in time series and econometrics and my simple need to connect with the relatively few international colleagues around the world in the early ‘70’s. It was clear to me then, as it is now, that without communications the tyranny of distance would forever bedevil research in Australia. We have aspired to be a company recognized for developing a world class National Research and Education Network (NREN); excelling as a trusted and loyal partner to strengthen the nation’s research and education capabilities; and creating exceptional shareholder value in the process. As the Shareholders, and owners of AARNet, we share a commitment to create from this value a better world. In 23 years we have come a long way and these are exhilarating times for all of us who are committed to using science and technology as the instruments of change in our society. 2 I am proud of what we have built. I am proud They have not built AARNet for their own In the many annual reports that we have of the commitment of our Shareholders, and use, they have done so for generations of produced we have focused on our physical I am most proud of the open and trusted Australian scientists and educators all of scientists, physicists and astronomers, all of relationship between the AARNet Board and whom can now participate and communicate who have spoken of the importance of AARNet’s executive team. It has been an around the world and will continue to do so AARNet as the major enabler of collaboration. extraordinary achievement and a wonderful for many years to come. This year we are proud to showcase the work exemplar of collaboration. In comparing of our medical researchers, medical science AARNet to the NREN’s around the world, During the past two years, the Board has and education all of whom are increasingly while it is not the biggest; some NRENs been progressively developing three-year dependent on AARNet to achieve seamless particularly in Asia now have more rolling strategic plans, imposing greater connectivity to the rest of the world. customers, some have more products and expectations on management with a greater services - it is simply the best. It is the best degree of discipline and transparency. On behalf of the Board of Directors, our because it has something far more important Transparency and openness have always Executive Management and the Staff of than the sheer number of people it serves, been an underpinning philosophy of AARNet’s AARNet I would like to thank each and every far more important than the number of pair operations, and the cornerstone of the great Member of the AARNet community for his or kilometres it has built and far more important relationship with our customers. her contribution over the past years. I than the quantum of products it has express my sincere thanks to Professor Alan developed. AARNet has heart and strength During 2011, we sharpened the company’s Robson AM from the University of Western and that heart comes from the CEO Chris strategic focus on wider education and Australia, Professor Ian Goulter from Charles Hancock and the talented team who have health research opportunities that provide Sturt University, Associate Professor Richard built AARNet into what it is today – a great growth potential. Constantine from Swinburne University and confident and mature organisation – that is Mr JF Kropp, all of whom retired from the We finished the year with strong momentum. usually so difficult to achieve and almost Board during the year. We also welcomed Traffic between our customers well always impossible to emulate. Mr John Rohan and Mr Paul Campbell during surpasses that of the commercial internet, the year. Finally I would like to thank the In recent years the growth has been indicating the rise in collaborative Commonwealth Government for its support. extraordinary. Today AARNet is home to e-research. As a company, we are financially some of Australia’s most skilled network stronger than we have ever been in our I offer my successor Professor Gerard Sutton engineers and talented professionals who history, and we are capitalizing on the and all at AARNet my very best wishes for have had the foresight to invest wisely in opportunities in front of us. The financial the future. With the genuine cooperative long term sustainable infrastructure, the headline indicators following tell a story of partnership of our Shareholders, I am knowledge to architect and equip a world growth and sustainability. Record growth in confident that our past endeavours will class network, operating the length and internet traffic, improvements in productivity continue to inspire tomorrow. breadth of this vast country. It is their and a disciplined investment strategy have all dedication and sense of purpose that sets contributed to AARNet’s continuing ability to them apart. effectively manage its telecommunications charges to Members. Deane Terrell AO Chair AARNet Board Selected Financial Data 2004 2005 2006 2007 2008 2009 2010 2011 $m $m $m $m $m $m $m $m * $16.3m was earned during the year due to an IRU with Southern Net Assets $36.8 $43.5 $60.2 $65.1 $66.6 $76.6 $89.1 $101.3 Cross Cable Networks Net Income $11.2 $6.6 *$16.8 $4.9 $1.5 $9.0 $13.5 $12.4 ** (net assets $89,808,000 - less intangible assets $47,480,000) Net Tangible Assets $11.6 $19.5 $21.2 $20.8 $28.1 $34.9 **$41.6 #$49.1 # (net assets $101,317,946 less Cashflow from Operations $6.9 $10.8 $14.7 $19.2 $21.0 $26.3 $31.5 $22.4 intangible assets $52,264,422) 3 Building and Operating the Network The performance of the network continues to be outstanding with the key measure, of average network availability across all capital cities, coming in at 99.983% for the year. This was higher than the 99.95% target and translates into 1 hour and 28 minutes of downtime for the entire year. Even the January floods in Queensland did not affect overall availability as connectivity to Queensland was maintained throughout using a temporary, pre-emptive bypass circuit from Sydney. Planning commenced for AARNet4 which will see AARNet move to the next generation 100 gigabit backbone to cater for exponential traffic growth in the research and education Our strategy comes to life… community. The rate of data transfer is fundamental to the way in which we now A message from the CEO live. It is commonplace for every member of society, but the demands of our leading 2011 marked the first year of AARNet’s new Strategic Plan and another year of researchers and educators far outweighs significant achievement for the company. But before outlining to you our anything we have witnessed in the past. performance against these key deliverables, I must acknowledge the end of an incredible journey for our outgoing Chairman, Professor Deane Terrell. Our Network Operations Centre (NOC) that we established in Perth and Sydney last year Every long and successful journey requires astute navigation, has developed into a professional service and congratulations must go to Deane in steering the course offering for our customers, with initial take of the AARNet ship in a decade of unprecedented growth and up showing enthusiastic interest. AARNet change. Strong Leadership has been the hallmark of Deane’s pushed the boundaries with a 100gig optical contribution to AARNet and his standards of excellence trial that replicated the path for the Square ensured that the AARNet Board and its Management team Kilometre Array (SKA) and conducted a “live” were in no doubt as to the level of contribution required.