Ethernet Gigabit – Part 2 – Market Review

Market Review• Optical Ethernet Status Quo: Although Ethernet-over-copper gained ground in 2008, the vast majority of services still run on fiber optic lines where available, or where the customer is willing to pay to have fiber brought in. Optical Ethernet services can be configured on dedicated point-to-point fiber links or more sophisticated, shared bandwidth Ethernet services with frame relay-like virtual circuits, and even switched for any-to-any connectivity.• Fifty Ways to Leave Your LAN: There is no one standard way to provide metro or wide area Ethernet services. According to Current Analysis’ demand-side primary research, the most common form of transport is Ethernet over fiber (62%), followed by Ethernet over SONET (40%), Ethernet over copper (19%), Ethernet over wavelength (15%), and Ethernet over RPR (8%). Most Ethernet services are deployed in point-to-point configurations (63%) in metropolitan areas only (40%). In contrast, 23% of enterprises surveyed used inter-metro Ethernet services, and only 8% used international Ethernet services. Since Current Analysis’ original research, however, Ethernet over RPR has come into wider deployment: Verizon launched RPR-based Ethernet Packet Ring Service in 2008, for example.• Limits to Fiber: Ethernet services usually require fiber to the premises, but only about 15% of commercial locations are connected by fiber lines, which limited Ethernet access to larger office buildings. However, low-speed or “mid-band” Ethernet over copper technology is finally seeing wider deployment by both incumbent (AT&T, Embarq and Qwest) and competitive (Cavalier, XO) carriers. Mid-band Ethernet uses copper pair bonding techniques, typically over G.SHDSL, to deliver 2-10 Mbps symmetrically at distances of one or two miles. XO, for example, supports 10 Mbps over 9,000 feet using five copper pairs. Ethernet can also be delivered using bonded TDM circuits such as NxT1 or DS-3, and in 2008, cable MSOs launched Ethernet over HFC networks.• Switched Ethernet Success: Many carriers have deployed metro Ethernet switches in a shared configuration. Switched Ethernet spreads the cost of infrastructure among multiple customers, decreasing the cost of service, while VLAN (802.1q) tagging provides logical separation of customer traffic. However, today’s switched Ethernet is limited by the number of VLAN ID tags, 4,094, too few to support the growth of carrier Ethernet services on a large scale, and even techniques such as VLAN encapsulation (802.1q-in-q) will only buy a little more time. Many carriers are turning to MPLS infrastructure to scale their Ethernet services, especially on long haul networks where the added cost can be more easily justified.• Ethernet as an Access Alternative: Dedicated Internet access (DIA) ranks as one of the most popular applications for metro Ethernet services. As an access service, Ethernet offers copious and scalable bandwidth at much lower price points than TDM, frame relay, or ATM. Cogent built its business case around low-priced bandwidth for that primary application. Ethernet is also popular as an access method for other “cloud”-type services, such as Verizon Business’ Private IP global VPN service; Global Crossing, for example, recently announced its Ether Extend Flex access offer, which uses VLAN IDs to carve out EVC bandwidth for each customer.• Long Haul Limits: Long-haul Ethernet private line services are available from the large Tier-1 carriers, but intercity switched services generally are not. Switched Ethernet is usually limited to metro area networks, to a limited number of end-points, and it can be difficult to scale and manage in wide area networks. However, some carriers offer MPLS-based Ethernet services, specified by the IETF as virtual private LAN service and virtual private wire service (VPLS & VPWS), which can scale to global proportions and larger numbers of endpoints by using the carrier’s IP routed backbone networks.• Everything Ethernet: Carriers are implementing Next Generation Network (NGN) strategies that support pure Ethernet transport at the core to enable them to support a variety of wholesale and retail network services, including IPTV content platforms, wireless backhaul, and Ethernet VPN services (including Ethernet over IP/MPLS, over VPLS). This architecture leverages the same network to support converged IP transport and legacy infrastructure: carriers can support core transport (e.g., long-haul) as well as white-label Ethernet-based services (such as Ethernet VPN) for retail or wholesale offers.Part 3 Ethernet Gigabit- Long Term Market Trends

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