> What kind of database you did use?

SQL, does not really matter what type, it may depend on what's used
already, but Microsoft SQL Server is the best integrated with windows and
is what I used. 

> There will be one or two servers with around 250 clients each and I 
> was thinking of TCP/IP protocol
> Is this what you have done?

TCP/IP is not really a protocol, it's a transport stream.  Protocols are
FTP, HTTP, ping/ICMP, etc, or you design your own.  I used FTP for files,
HTTP for quick checking (and SQL web reporting) and a private TCP based
protocol with about 100 different packets for status messages and
commands. 
 
> Can communication be protected with blowfish? or do you have better 
> suggestions?

We did not bother, since initially we used a private ADSL network, later
we moved to public ADSL with VPNs.  

The problem with something like Blowfish is key distribution since both
ends need the same keys and they should really be periodically updated.
Using SSL with properly signed client and server certificates is fully
supported by ICS, but does have a learning curve. 

Angus

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