September 25th Update: Carrier Ethernet Thunder from Light Reading + PBT based Backhaul in SPRINT’s Xohm
Undoubtedly, this piece is intended to promote Light Reading’s Ethernet Expo next month in NYC. However, it has some useful market share numbers from the leading vendors, e.g. Cisco’s share has dropped to below 50%, while Alcatel-Lucent is in 2nd place. Light Reading claims “there has been a thundering of CESR-related product and feature news in recent months.” Judge for yourself:
Provider backbone transport (PBT, also call provider backbone bridging, or PBB) will be used for backhaul in Sprint’s new Xohm WiMAX network. Sprint is using gear from Ciena (and Clearwire is, too, according to Unstrung). In this scenario, the WiMAX MAC frame is enveloped in a PBT frame and transported over fiber optic cable.
PBT is based on an emerging standard for IEEE 802.1 “service provider” MAC bridging that has been in the works for many years (I participated in the initial debates in early 2002!). PBT is an alternative to MPLS-TP (IETF and ITU work in progress) for a scalable Carrier Ethernet network.
September 18th Update: Nortel to divest Metro Ethernet Unit
Standards in search of a market? Neglected enterprise network customers? This is how we characterized the Carrier Ethernet market, which was originally intended to provide new private line, virtual private line and virtual private LAN services to business customers. But that market has been growing very slowly.
Nortel just announced it plans to divest its Metro Ethernet unit. Who will buy it? A Heavy Reading analyst reports: ” The CESR market is likely to be about $2.1 billion in 2008, compared to $1.9 billion in 2007. So it’s a growing area, but also very competitive, with 21 equipment vendors in the space,” That is a very small growth rate- insufficient to support so many vendors, in our opinion. For more info:
“I am shocked by this announcement from Nortel,” says Heavy Reading‘s Sterling Perrin. “Given Nortel’s history and contributions to optical networking, they are in many ways selling the core business of Nortel. This has got to be incredibly difficult for the many long-time Nortel optical employees who have stuck with the company through tremendous upheaval.” Perrin says Nortel’s Metro Ethernet Networking (MEN) business, which houses the carrier Ethernet and optical equipment, only contributed about 13 percent of the company’s revenues through the first half of 2008, so “its contribution within the company clearly has diminished through the years.”
A recent Viodi TV video on Carrier Ethernet for rural markets (see bottom of this article for Abstract and link) , stimulated me to share thoughts about that long hyped technology, which has seen more action on standards, articles and conference papers then actual deployment.
The following report is taken from two posts to the IEEE ComSoc SCV Discussion mail list which I combined and edited for Viodi View readers.
Our take: In a post several months ago, we opined that despite a plethora of standards for Carrier Ethernet and over 8 years of vendor effort to get it going, the technology was still in search of a mass market. We identified last mile distribution for IPTV and fiber access VPNs for large business customers. Well, that may be changing with more and more carriers interested in expanding their Carrier Ethernet service to small and medium business customers. In addition, we see an important role for Carrier Ethernet in 2G/3G copper based backhaul (mid-band Ethernet) and in fiber based backhaul (Optical Ethernet).
We recommend reading the Telecommunications article (below) for a realistic assessment of the Carrier Ethernet market. There are still way too many chearleaders out there, even after so many startups in this space have gone belly up. Opinion: We still think that the main use of Ethernet in the MAN/WAN will be: for IP VPN access, to deliver IPTV services to residential customers, and for backhaul of 3G/4G and possibly WiMAX networks (as Ethernet over Microwave Radio or Fiber).
In addition to the market information provided in the articles below we note that ITU-T SG13 Question 11 is wrestling whether or not to define a lower rate (ODU0) to carry 1 Gig E and 2 Gig E over the OTN (a DWDM based optical network). They have a late September meeting in Korea, where they will hopefully decide. One of our members participates in that committee and we will report back in early October with results.
Here’s a summary and links to recent Carrier Ethernet articles of interest to Viodi View readers:
The Rural Telco Play: Carrier Ethernet Fills Wide-Open Spaces
A study that was disclosed at the OPASCO show reported that rural telcos’ traditional revenue will diminish by 5 percent this year, 9 percent next year and 13 percent the following year — and that federal and state subsidies, including the Universal Service Fund, will not support the revenue shortfall. As a result, rural carriers will have to take quick action to launch new revenue-generating services such as Ethernet.
The benefits of Carrier Ethernet are not lost on the rural telco community. Indeed, among Nortel Networks’ 40 Carrier Ethernet customers are Dakota Carrier Network, Frontier, Golden West Telecommunications and Panhandle Telephone Cooperative Inc. Increasing bandwidth demands are being driven by a variety of both residential and business applications, including IPTV, video on demand, Internet access, Ethernet services and 3G/4G wireless, noted Mike Loomis, director of Carrier Ethernet technical sales at Nortel
Carrier Ethernet services: strategy for success Service providers need a plan that balances their strengths and weaknesses
by Doug Allen Telecommunications Magazine, August 12, 2008 Conventional wisdom says carrier Ethernet services are the next Big Thing in telecom, and service providers are moving accordingly, from the Tier 1 carriers to alternative CLECs. Consider Verizon Business, along with AT&T one of the top national carriers, which claims Ethernet service revenues grew by more than 100% in 2007 over the previous year, even though Ethernet is only a small portion of the carrier’s overall data services portfolio. To read more, go to:
Business Ethernet shows gains
Fueled largely by demand from AT&T and Verizon Communications customers, the number of Business Ethernet services rose 16% in the first half of the year, according to Vertical Systems Group’s latest market analysis. “Most providers steadily increased their port deployments, spurred by new Ethernet service offerings and migration of larger customer networks,” said Rick Malone, principal at Vertical Systems Group. xchange (9/5)
XO Enhances Ethernet infrastructure to deliver new speeds and extended reach
XO Communications has rolled out new Ethernet speeds in several of its markets, which now have access to 20, 30, 40, 50, 60, 70, 200, 300, 400 or 500 Mbps at on-net fiber locations. Chicago; Dallas; Los Angeles; Minneapolis; New York; San Jose, Calif.; Seattle; Philadelphia; and Washington are the first markets to gain access to the higher speeds, although additional markets are set to follow. To read more, go to:
Light Reading: Ethernet Services Revenue Still Growing Strong
The latest news from key players suggests that the market is still going strong, although the law of large numbers is beginning to make growth look more modest than the 25 percent to 100 percent rates characteristic of 2005-2007. To read more….
NXTcomm: Carrier Ethernet heats ups at NXTcomm Trade Show in Las Vegas
There have been a number of product announcements and advancements offered by Tellabs, Alcatel-Lucent, Ericsson, Ixia, Soapstone Networks, Extreme Networks, Fujitsu, Foundry Networks, Actelis and others. While this week’s announcements address a variety of market trends, it might be safe to say that increasingly apparent needs for bigger and better mobile backhaul options are fueling some of the activity, while the emergence of a complex multi-carrier, multi-network Ethernet environment also factoring into the innovations.
Foundry Unveils Carrier Ethernet Switches
Foundry Networks unleashed a series of Carrier Ethernet edge/aggregation switches designed to scale Ethernet services while reducing the burden on MPLS routers. Foundry is unveiling six 1RU Carrier Ethernet switches under the NetIron CES 2000 brand. The switches feature 24- or 48-port gigabit Ethernet copper or fiber interfaces with optional dual 10 Gigabit Ethernet uplinks. The switches support the IEEE 802.1ad Provider Bridge (PB) and 802.1ah Provider Backbone Bridging (PBB) standards for scaling multipoint Ethernet services by hiding media access control (MAC) addresses.
Nortel Continues to Build Customer Base for Carrier Ethernet Portfolio
With over 40 customers around the world acquired within the last 12 months, a vendor ecosystem of more than 25 members and a growing product portfolio, Nortel is demonstrating how its innovative technologies have defined Carrier Ethernet as a viable, cost-effective metro infrastructure. Among Nortel’s 40 customers are U.S. service providers Panhandle Telephone Cooperative, Golden West Telecom, Frontier and Dakota Carrier Network as well as KPN in the Netherlands, China Netcom, Australia’s Silk Telecom and Promigas Telecomunicaciones in Colombia. http://money.cnn.com/news/newsfeeds/articles/marketwire/0407582.htm
Comment: What are the Tier 1 network operators doing? For years, Verizon has quietly deployed Private Line Ethernet and Ethernet Transparent LAN. What else is going on in the tier 1 carrier space?
Carrier Ethernet Growing Faster and Smarter
Standards bodies are working toward specifications for both Ethernet and optical networks that would run at 100G bps, which for Ethernet would represent the next speed hop in a streak that has come all the way from Gigabit Ethernet in about a decade. Another standard in the works will cover 40G bps Ethernet. But even the standards, not expected until 2010, won’t do the job by themselves. On June 16th, the “Road to 100G Alliance” formed a technical committee to fill in gaps in interoperability among various Ethernet and optical technologies that are under development for 100G-bps (bit-per-second) networks, spanning from enterprises to carrier backbones. http://www.pcworld.com/businesscenter/article/147158/carrier_ethernet_growing_faster_and_smarter.html
Carrier Ethernet Vendor Ethos Makes US Debut
The four-year-old company made generally available its portfolio, which includes two Carrier Ethernet transport switches, which employ PBB-TE technology, and a management system that allows service providers to monitor and optimize their networks, said company co-founder Adam Dunsky. Note: PBB= IEEE 802.1ah Provider Backbone Bridging http://www.xchangemag.com/hotnews/nxtcomm-carrier-ethernet-ethos-us-debut.html
Perspective from an IEEE ComSoc member who works for a vendor supplying Carrier Ethernet gear as well as other WAN transport equipment:
“From what I’ve seen, Ethernet is being mapped into SONET/SDH or OTN at all segments of the (wide area) network, with the possible exception of the access networks. Even in access networks there are deployments of Ethernet mapped via GFP over PDH (DS1s and DS3s) for bundled connections. As far as I know those types of deployments are all book ended (same vendor on each end of a link), though there is a standard for it (G.8040).”
Comment: Carrier Ethernet is defined as the transparent of Ethernet MAC and PHY frames over a “carrier class” network. That means robust, reliable, high performance. While Ethernet OAM was developed by the IEEE 802.3, 802.1, and ITU-T standards committees, many feel that the associated cost and complexity diminishes the attractiveness of Ethernet in the carrier network. Some say, that the cost and simplicity advantages are negated when you add OAM, Performance Monitoring, and Protection Switching to Ethernet. So with that said, the key issue is when and where Carrier Ethernet terminates and Ethernet over SONET/SDH or the OTN originates. As I previously mentioned, the now mostly extinct MSPP (God box) vendors thought that demarcation point was in the basement of a building (business tenants). Others felt it was at the 1st POP with either fiber or copper Ethernet access including OAM. Where is it now? What do Juniper and Cisco think about Carrier Ethernet vs Ethernet over Optical Transport networks? What’s your opinion?
Viodi Video: Carrier Ethernet for Rural Markets
In this interview Michael Loomis of Nortel Networks and Gary Bolton of Hatteras Networks explain the applicability of Carrier Ethernet to rural markets, using both existing copper and/or new fiber infrastructure. This allows carriers to provide services to rural areas that are comparable to what can be found in urban area. Michael Loomis points out how rural carriers are closer to their subscribers and are much faster to move to solutions than larger entities.