2013 Annual Report
Dear Merit Members, Pictured above: Don Welch receives the Computerworld 21st Century Award on behalf of Merit; Welch speaks during the 2013 Merit Member Conference. As we celebrate our 48th year as a Membership organization and key collaborator in the state of Michigan, I feel that it is important to reflect on some of Merit s key accomplishments of the previous year and look ahead to continued progress in 2014. This year, Merit Network will focus on growing our Membership Community through outreach and engagement. This new focus is made possible by the recent success of the REACH-3MC project. Not four years ago we set out to construct a monumental 2,300-mile fiber-optic network extension through underserved areas of Michigan. We faced numerous challenges along the way, but I m proud to report that the network is up and serving you, with just some clean up left for us to do. For the first time in our rich history, we are able to leverage a facilities-based network that achieves significant geographic coverage throughout the state. Now with the infrastructure in place, it is important to continue to grow our community. Merit has the network now to reach more institutions, while the value we can deliver to Members increases with each new addition. New for 2014 is the Merit Collaboration tool, an application for Merit Members with similar interests to connect with one another anytime, anywhere. The idea behind the tool is to foster collaboration between Merit Members everywhere. Our community is enlivened and strengthened through collaborative efforts with one another. This new tool is another way that Merit strives to support and foster collaboration among its Members. Another exciting development is the launch of the Internet2 NET+ Regional Partner Program. Select Internet2 NET+ Services, which were previously only available at special pricing to Internet2 member institutions, are now available at discounted rates to Merit Members. The program leverages the economies of scale found in a national organization like Internet2 to deliver cost savings for participating organizations at the state and local level. As one of the first R&E s to participate in this innovative program, we are eager to play a pioneering role and to help shape this initiative. Consistent with our core value of Innovation, the Michigan Cyber Range continues to establish Michigan as a national leader in cybersecurity, economic development and education. Whether it s supporting the secure infrastructure needs of our Members cybersecurity curriculum, staging events to help prepare the next generation of cyberwarriors, adding more realistic components to the Alphaville learning environment or building business relationships with industry leaders, the Michigan Cyber Range is quickly becoming an invaluable resource for the state of Michigan and our Members. In December, students from the Houghton area joined others across the nation via videoconference for ceremonies led by Justice Anthony Scalia at the Solidiers National Cemetery in Gettysburg, PA to commemorate the 150th Anniversary of the Gettysburg Address. It was a wonderful experience for all involved, showcasing the transformative power of next-generation technology to engage students in learning. The program, part of Internet2 s K20 initiative, was made possible through the library s relationship with Merit Network and Superiorland Library Cooperative. We plan to make more programming of this nature available to our Members. We could not have accomplished all that we have this year without the support of our Members. My best wishes for you both personally and professionally in 2014. Don Welch, President/CEO for Merit Network
Balance Sheet June 30, 2013 June 30, 2012 Assets Cash and cash equivalents $ 12,827,579 $ 5,126,886 Accounts receivable 17,828,524 12,389,157 Restricted Cash 1,574,577 4,201,318 Prepaid expenses and other: Prepaid expenses 647,089 574,509 Bond financing fees - Net of accumulated amortization of $101,995 and $77,856 at June 30, 2012 and 2011 respectively 123,799 147,938 Property and equipment - Net 44,264,209 28,752,804 Software licenses - Net 295,912 723,908 Total assets $ 77,561,689 $ 51,916,520 Liabilities and Net Assets Liabilities Accounts payable $ 14,872,621 $ 8,782,249 Accrued liabilities and other: Accrued wages and other liabilities 573,537 588,924 Deferred revenue 1,409,885 1,081,698 Debt 8,160,089 8,385,348 Total liabilities 25,016,132 18,838,219 Net Assets - Unrestricted 52,545,557 33,078,301 Total liabilities and net assets $ 77,561,689 $ 51,916,520 Merit Network 1
Member Update REACH-3MC 2013 was a year of milestones for the REACH-3MC (Rural, Education, Anchor, Community & Healthcare-Michigan Middle Mile Collaborative) project. The momentum of construction continued from 2012 into 2013, with crews working diligently to build, test and light fiber-optic network segments. During its peak, there were 40 construction crews working simultaneously all over Michigan. In April, Merit finished Round 1 construction, completing the 1,017 network extension in the Lower Peninsula. 55 CAI (Community Anchor Institutions) fiber-optic laterals to Merit Member organizations were connected from the middle-mile infrastructure. By September, Merit had completed and lit over 2,100 miles of fiber in the Upper and Lower Peninsulas, the equivalent of travelling from Ann Arbor to Tallahassee, Florida. For the first time, network traffic could travel over fiber from Monroe to Ironwood in the Western Upper Peninsula. As 2013 came to a close, 99% of construction for the REACH-3MC had been completed, with only small incomplete segments remaining in Hancock and Calumet, Michigan and in Green Bay, Wisconsin. At the close of 2013, 139 of the community anchor institutions were connected, with only 2 remaining. Pictured above: REACH-3MC construction near Boyne City; Splicing fiber in Hillsdale, Merit's Bob Stovall speaking at the REACH-3MC Infrastructure Dedication in Berrien Springs. Network Engineering and Operations In January, Merit s engineers upgraded the equipment for portions of its network in Southern Michigan to 40 100 gigabit-per-second (Gbps) waves. The routes connect Ann Arbor, Detroit, and East Lansing to research and education networks in Chicago. In April, network connections between Merit s 12 Governing Members were increased to. KEWEENAW Houghton Calumet 1G HOUGHTON CSME Duluth Ontonagon Superior Baraga 1G orion Odanah 100M 1G LUCE 1G WakefieldONTONAGON Covington Marquette Sault Ste. Marie, Canada Ashland GOGEBIC BARAGA Ironwood Gwinn Seney Eckerman IRON Sault Ste. Munising Internet Traffic Marie MARQUETTE ALGER CHIPPEWA Watersmeet Crystal DICKINSON SCHOOLCRAFT Falls MACKINAC DELTA Equinix Chicago Sagola St. Ignace Manistique Iron Mountain Mackinaw City 2 Gbps Powers Cheboygan Escanaba EMMET Indian Rogers City MENOMINEE Petoskey River Charlevoix Onaway Posen CHEBOYGAN PRESQUE ISLE CHARLEVOIX ALPENA 1 Gbps Marinette Menominee Gaylord Alpena Hillman Traverse City ANTRIM OTSEGO MONTMORENCY Cleveland OSCODA LEELANAU Grayling Mio Beulah GRAND Kalkaska BENZIE TRAVERSE KALKASKA CRAWFORD ALCONA Rose City Lake Houghton Oscoda Green Bay Manistee Lake Cadillac City West Branch WEXFORD MANISTEE MISSAUKEE ROSCOMMON OGEMAW IOSCO Tawas LAKE OSCEOLA CLARE GLADWIN ARENAC City Luther Gladwin Ludington Clare BAY MASON Big OCEANA NEWAYGO ISABELLA MIDLAND 2G Rapids Bay HURON Midland City SANILAC Map Key MECOSTA Mt. Pleasant Saginaw MiLR DWDM, GRATIOT CSME Howard TUSCOLA LAPEER City SAGINAW Merit Fiber - local access & long haul, speeds 1- MUSKEGON MONTCALM Muskegon ST. CLAIR Allendale SHIAWASSEE Flint Lapeer Merit Fiber - local access, 1Gbps Grand IONIA Marysville Rapids Corunna GENESEE Backbone Telco Link Holland Clinton OTTAWA KENT 2 x CLINTON Metro Fiber Ring, 1- OAKLAND Zeeland Twp. LIVINGSTON Lansing/ Rochester External Link East Lansing MACOMB 2 x Southfield Fiber Under Construction EATON 2 x ALLEGAN BARRY INGHAM Ann Detroit Marshall Arbor Benton Kalamazoo 1G Jackson 2 x n x 1G n x 1G - Multiple GigE Harbor 2 x JACKSON WASHTENAW WAYNE Windsor, Canada 10G 10G - 10G bps VAN BUREN2 xkalamazoo CALHOUN Cassopolis Coldwater 3 x Backbone node 2 x Adrian orion Berrien Centreville Springs Hillsdale Monroe BERRIEN CASS ST. JOSEPH BRANCH CSME CSME 600 W Chicago St. MONROE HILLSDALE LENAWEE NETWORK INC Chicago Toledo Cleveland 2 x AT&T Non-transit peers 710 N. Lakeshore Dr., Chicago Internet2 R&E Peers Internet2 Qwest (Backup) * Merit provides services in all of Michigan s counties, which are labeled in grey. Merit Backbone Map Annual Report Feb. 3, 2014 Equinix Chicago 710 N Lakeshore Dr. Chicago 2
Michigan Cyber Range In January, the Michigan Cyber Range formed a collaborative partnership with Mile2 to provide cybersecurity certification courses. The courses were initially taught in Ann Arbor and were later made available online, with the instructor conducting the class live and students attending remotely over an Internet connection. At the first Michigan Cybersecurity Industry Summit in May, the Michigan Cyber Range introduced Alphaville, its new cybersecurity training platform. Alphaville is a secure, enclosed virtual environment that simulates the computer resources of a town hall, police station, and school. Alphaville is ideal for cybersecurity training and exercises. In July, the Michigan Cyber Range held a red team-blue team cybersecurity exercise with the West Michigan Cyber Security Consortium (WMCSC). The Michigan Cyber Range staff played the role of the agressors, attacking the computer resources of the WMCSC team, who participated from Grand Valley State University s DeVos Center. In October, the Michigan Cyber Range debuted its SCADA security training component at the 2013 Michigan Cyber Summit, hosted by Michigan Governor Rick Snyder. The SCADA component is part of Alphaville, the Range s secure virtual environment. Pictured above: CISSO cybersecurity certification course; Red team-blue team exercise with WMCSC. Merit Professional Learning In 2013, Merit Professional Learning offered many opportunities for Merit Members to advance their skills and collaborate with other organizations. The Michigan Collaboration Summit fostered discussion on IT challenges & solutions. Virtualization Summit 2013 was a great opportunity for virtualization professionals to learn, network and share best practices. Networkers exchanged ideas during Networking Summit 2013 and many learned about software-defined networking (SDN) during an OpenFlow workshop the following day. IT Project Management and Negotiation Skills for Project Managers taught attendees the necessary tools to manage projects successfully. Management professionals learned skillful negotiation, improved communication, managing risk, and conflict resolution solutions. Merit's Leadership Academy program continued to create better leaders. Don Welch, the President & CEO of Merit Network, guides attendees through creating their own personal leadership philosophy and mastering the skills to help improve business results and accelerate their careers. 2013 marked the fifteenth annual Merit Member Conference which brought together over 300 IT professionals for a two-day gathering on the current state of networking and technology. Pictured above: Networking Summit 2013; Virtualization Summit 2013; Merit Member Conference. Security played a key role in Professional Learning for 2013. Network Security Fundamentals, Security Auditing Your Website, and a full calendar of cybersecurity certification courseware, utilizing the Michigan Cyber Range, provided many with the vital skills to secure their online assets and infrastructure. Merit Community Supporter Program The Merit Community Supporter Program continues to be a valuable asset for Merit Members. The program enables commercial organizations that share Merit s core values of Integrity, People, Innovation, Community and Excellence to become part of the Merit Community and contribute to the success of Merit s Members. The Merit Community Supporter Program provides financial support for Members to attend Merit Professional Learning classes and events. Merit is pleased to have ADVA Optical Networking, Cisco Systems, Data Strategy and Juniper Networks continue to participate in the program in 2014. Merit Network 3
Many Members Taking Advantage of Multiple Merit Services For many years, Merit's network and its high-speed connections to the Internet and Internet2 have been the primary reason that Members have chosen Merit as a service provider. Since 2006, Merit has grown its service portfolio to provide more choices and greater value to the Membership. "As Merit has developed services we have taken feedback and suggestions from our Members, both informally and through the Services Innovation Group, to improve our service offerings," said Elwood Downing, vice president for membership outreach and engagement at Merit. "We strive to provide value and cost savings to our Members who subscribe to our services." Alpena Community College Alpena Community College has been connected to Merit's network since 2006 and currently utilizes MeritVoice, Merit Cloud Media, Merit VirtualDataCenters, and Merit Cloud Storage. Their relationship with Merit was a deciding factor in choosing Merit for their multiple services. Alpena Community College "The value, cost effectiveness, and access to Merit have always been a benefit. Merit isn't like a for-profit Telco," said Vicky Kropp, co-director of management information systems for Alpena Community College. "Merit strives to create more of a one-on-one relationship with its customers, which you don't have with other providers. Using Merit for hosted services has been very cost effective. With the hosted service we have not had to deal with hardware, or additional staffing that we would have needed with an in-house service." Bay Mills Community College Bay Mills Community College In the Upper Peninsula of Michigan, there are limited choices when it comes to information technology services. "There are very few choices for high-speed Internet and our services are limited on bandwidth because of our wireless connection," said Chet Kasper, director of technology at Bay Mills Community College. In 2013, Bay Mills became a Merit Member and currently subscribes to MeritMail, Merit Cloud Storage, and Merit VirtualDataCenters. "Now we enjoy the benefits of web-based email, which is something that we didn't have before. We no longer have a limit as to how much email we can store in our inbox, and it works with our wireless devices, as well as our desktops and laptops. We now have unlimited storage. We had previously been severely limited on storage. We had POP3 mail, and they discouraged storage on the server. Now we have a central backup for our mail in a secure location," Kasper said. Kasper has been very pleased with the customer service he receives from Merit."It's been outstanding. There's a million web-based email programs, but (Merit) is proactive. They let us know when there's a problem and it's been very stable." Cleary University "What really stood out for Merit was the bandwidth," said David Bowers, executive director and chief information officer for Cleary University. "We had a series of problems with our ISP, and it was comical how poor the service was. We chose Merit for our Internet connection and we built from there." Cleary University Cleary University is connected to Merit's high-speed network and currently subscribes to Merit Cloud Media, Merit Colocation, MeritMail, and Merit Michigan ID. "The biggest thing for Cleary is that we're small. For me to provision a server was too costly, so being able to leverage Merit's services lets me offer more services without spending a ton," Bowers said. Annual Report 4
New Services for Members Merit continues to develop quality & reliable professional IT services for its Members. In 2013, several new services and enhancements to existing services were introduced. Merit Secure Sandbox: Merit Secure Sandbox service is a virtual environment that enables organizations and users to practice, train, and test cybersecurity techniques. Merit Secure Sandbox is designed to be an educational space, where instructors can set up their own virtual environments for cybersecurity training. It is the ideal solution for organizations that want to test applications, web sites, or virtualized environments in a secure location that is not connected to the Internet and their own computer networks. Merit MailScreen: Merit MailScreen is a standalone secure email gateway solution, offering virus, spam and malware filtering that integrates with an existing email service. Powered by Cisco Ironport, Merit MailScreen blocks up to 80% of external threats before they are delivered to a user's inbox and eliminates 98% of spam, freeing up organizations' bandwidth, storage, processor and administrative resources. MeritLicensing Service-Airwatch: Merit offers all Members with a direct connection to Merit s advanced network the opportunity to purchase AirWatch products at a significantly discounted price. This program is offered through a unique partnership between AirWatch, the global leader in mobile security and the largest Enterprise Mobility Management (EMM) provider, and The Quilt, the national coalition of advanced regional networks for research and education. Merit, a member of The Quilt, is able to provide cost-savings to its Members. Services Updates Merit Cloud Media: Merit Cloud Media now provides organizations with the ability to post video content from commercial providers, including PBS, Media Education Foundation, University of Michigan Press, and others. Merit Cloud Media subscribers that have existing agreements with commercial vendors can request to have videos added to their cloud media collections. Members can also purchase content from over 50 participating commercial vendors at a discount. Members can now choose a Merit Cloud Media pricing package that fits their organization's needs. Service options are available in either standard, pro or enterprise. Organizations can subscribe to a package that provides the necessary amount of storage and capacity for their organization. MeritMail Collaboration Suite: In 2013, Merit laid the groundwork to introduce the latest version of this powerful software suite to its Members. Highlights of the newest version of MeritMail include: Changes to the interface and switching to conversation mode. The new Activity Stream, or the ultimate graymail solution. Enterprise Calendaring tools to schedule meetings more efficiently. New features for administrators, a behind-the-scenes console designed to simplify email management, enhanced mobility management, and more. Merit Network 5
Board of Directors Central Michigan University Roger Rehm (Chair) Vice President for Information Technology and Chief Information Officer Eastern Michigan University Dr. Carl Powell Chief Information Officer Ferris State University John Urbanick Chief Technology Officer Grand Valley State University Susan Korzinek Director of Information Technology Lake Superior State University Scott Olson Director of Information Technology Michigan State University Tom Davis Vice Provost for Libaries, Computing and Technology Michigan Technological University Dr. Walter Milligan (Secretary) Chief Information Officer Northern Michigan University Gavin Leach Vice President for Finance & Administration Oakland University Theresa Rowe Chief Information Officer, University Technology Services University of Michigan Laura Patterson Associate Vice President, Chief Information Officer Wayne State University Joseph Sawasky (Vice Chair) Associate Vice President for Computing & Information Technology, CIO Western Michigan University Dr. James Gilchrist (Treasurer) Vice-Provost for Academic Operations, CIO Merit Network, Inc. Dr. Donald J. Welch President and CEO, Merit Network, Inc. Pictured above: Central Michigan University; Eastern Michigan University; Grand Valley State University; Lake Superior State University; Michigan Technological University; University of Michigan. Annual Report 6
Merit Advisory Council Members Michael Zimmerman from Macomb Community College served as the Chair, and Randall Melton from Lake Michigan College served as the Vice Chair. K12 Dennis Buckmaster St.Clair County RESA Michael Richardson Regional Educational Media Center 1/Copper Country ISD Matthew McMahon Gratiot-Isabella RESD Alternates: Jeff Mesch Henry Ford Learning Institute Libraries Angie Michelini The Library Network Sheryl Mase The Library of Michigan Community Colleges Randall Melton Lake Michigan College Robert Montgomery Oakland Community College Alternates: Jason Erickson Bay de Noc Community College Michael Zimmerman Macomb Community College Private Colleges Randy Schapel Mott Community College Tim Chavis Lawrence Technological University David Zenz Hillsdale College Government, Not-for-Profit Agencies, Research, and For-Profit Businesses Eric Macy Hillsdale BPU Health Care Jake Martin Alpena Regional Medical Center Brandon Couvillion Delta County Alternate: David Holcomb Hillsdale County Merit Awards Recognize Member Achievements At the 2013 Merit Member Conference, the annual Merit Awards were awarded to honor individuals and organizations that have provided leadership in computer networking and have assisted the Merit community. Innovation in Networking and Information Technology David Behen, State of Michigan Award for Community Building Eric Macy, City of Hillsdale Meritorious Service Award Tim Brown, Regional Educational Media Center 4 (REMC 4) Kim Frazho, Houghton Lake Public Library Larry Garter, COOR ISD Merit Network 7
New Members Merit extends a warm welcome to the following Members who have joined our community during 2013: Pictured above: City of Crystal Falls; Surrey Township Public Library; Schoolcraft Memorial Hospital; Carney-Nadeau Public Schools; Oakland County CMH. 1. Altarum Institute Survey Project, MI 2. Ann Arbor Transportation Authority, MI 3. Arbor Networks, MI 4. Arenac County, MI 5. Bad River Band of Lake Superior Chippewa, WI 6. Bay Mills Community College, MI 7. California State University Fresno, CA 8. Carney-Nadeau Public Schools, MI 9. City of Crystal Falls, MI 10. Crawford County, MI 11. Foundation for Blood Research, ME 12. Iosco County Central Dispatch, MI 13. Jackson ISD, MI 14. LEARN, TX 15. Memorial Healthcare Center, MI 16. Michigan Health Information Network, MI 17. Michigan Virtual University, MI 18. Michigan Tech Enterprise Corporation, MI 19. Midland County, MI 20. Oakland County CMH, MI 21. Oscoda County, MI 22. Schoolcraft Memorial Hospital, MI 23. St. Joseph County, MI 24. St. Joseph County Road Commission, MI 25. Surrey Township Public Library, MI 26. Walsh College, MI 27. Wayne County Community College District, MI Looking Ahead Merit will be transitioning out of the construction & warranty phase of the REACH-3MC Project and moving towards managing and maintaining the nearly 2,300 miles of fiber-optic infrastructure. The Michigan Cyber Range will continue to expand the virtual environment of Alphaville. Additional access to the Range is being planned at Camp Grayling and Fort Custer. An extended menu of custom Red Team-Blue Team and Capture the Flag cybersecurity exercises are being created. Merit's Product Development team will work to develop new technology services and improve the current services portfolio. More services will be added to the Internet2 NET+ Regional Partnership Program, allowing Members to receive discounts on a suite of IT services from leading brands. Emphasis on Member feedback will continue with meetings of the Services Innovation Group. Merit will proceed with its mission to enhance the experience of its Members. We will continue to provide superior value in the Merit Membership. Exciting new tools are being created to facilitate collaboration between Merit Members. The Merit Professional Learning program has a full calendar of IT development opportunites and events aimed at bringing Members together to learn and share knowledge. This is just a glimpse of what is to come for Merit Members in the coming year. Annual Report 8
2013 Timeline JANUARY Merit announces completion of 98% of REACH-3MC Round I Construction. Upgrade completed for the high-speed research network ring, increasing capacity for MSU, U-M, WSU. MARCH Merit begins offering cybersecurity courseware and certifications through the Michigan Cyber Range. APRIL Merit Network is recognized by Computerworld as 2013 Computerworld Honors Laureate for the REACH- 3MC project. Merit hosts dual REACH-3MC Fiber-optic Infrastructure Dedication Ceremonies via interactive video in Mackinaw City and St. Ignace, with Sen. Carl Levin joining from Washington D.C. JULY Member dedicated connections surpasses 500! The Michigan Cyber Range conducts a red team-blue team cyber exercise with the West Michigan Cyber Security Consortium. AUGUST Merit lights 2,100 miles of fiber, from Monroe to Ironwood, growing it s footprint to over 3,000 miles of fiber infrastructure. Eastern Michigan University holds a cybersecurity competition for area high schools, utilizing the Michigan Cyber Range and the Alphaville learning environment. MAY Merit hosts 1st annual Michigan Cybersecurity Industry Summit, introducing the virtual town of Alphaville. SEPTEMBER Leveraging the infrastructure of the Michigan Cyber Range, Merit announces Merit Secure Sandbox service. OCTOBER The Michigan Cyber Range debuts its new SCADA component called Alphaville Power & Electric during the 2013 Michigan Cyber Summit, hosted by Governor Rick Snyder. Record turnout marks the 15th Annual Merit Member Conference, with over 300 IT professionals in attendance. JUNE Merit wins Computerworld Honors Program 21st Century Achievement Award in recognition of the REACH-3MC Project. NOVEMBER Merit holds REACH-3MC Fiber-optic Infrastructure Dedication events in Ironwood and Menominee. Celebrating key interconnection points to Wisconsin s Research & Education Network, WiscNet. DECEMBER Merit and OARnet light a second fiber-optic path between the R & E networks and providing Hillsdale County with four network paths.
Merit Network, Inc. 1000 Oakbrook Drive, Suite 200, Ann Arbor, Michigan 48104-6794 (734) 527-5700 www.merit.edu