Demand for Ethernet equipment and services is expected to grow dramatically in the coming years because of the technology’s familiarity, ease of use and technical advancements.
Ethernet has been the dominant LAN transport protocol in corporate networks for almost 30 years. But now carriers are using it to inexpensively build high-performance networks using switches, optical transport gear and installed fiber, to offer services that extend Ethernet from the LAN to the metropolitan-area (MAN) and WAN.
The growth in data services translates into growth for Ethernet equipment and services in the carrier network. SONET networks are optimized for voice and do not inherently provide efficient bandwidth utilization for data.
Moreover, the ubiquity of Ethernet in corporations makes it an especially attractive service as carriers attempt to provide “seamless” connectivity from the company through the MAN and WAN. And Ethernet offers operational simplicity because of decades of user experience.
Finally, Ethernet presents a relatively inexpensive alternative to high-speed services provisioned from legacy interfaces. This cost-effectiveness is driving carrier interest in Ethernet now and should continue to do so in the future, research firm Current Analysis Inc. says.
In the MAN market, worldwide Ethernet equipment revenue hit US$2.5 billion last year, and is projected to grow to $5.7 billion by 2006, according to Infonetics Research. Worldwide metropolitan Ethernet equipment ports reached 756,000 in 2002 and will more than quadruple to 3.3 million by 2006, according to the firm.
Compared with SONET, Ethernet will account for a larger portion of carriers’ capital expenditures for the MAN, Infonetics predicts. Infonetics co-founder and principal analyst Michael Howard predicts that Ethernet will “take over the metro” in the next 10 years.
Even with the pressure of decreasing capital expenditures – carriers have cut spending by half or more over the past two years – service providers are investing in metropolitan Ethernet equipment to respond to customer demand or risk losing customers to a competitor, Infonetics says.
But are Ethernet services really new? Incumbent carriers have offered transparent LAN services (TLS) over Ethernet for years, but these have largely been niche products, according to Current Analysis.
It wasn’t until the emergence of metropolitan Ethernet providers – such as Cogent Communications, Telseon and Yipes – in the mid- to late-1990s that regional Bell operating companies, incumbent local exchange carriers and interexchange carriers felt compelled to offer Ethernet as a faster and more widely available service. AT&T, BellSouth, Qwest, SBC and Verizon offer Gigabit Ethernet services either throughout or in select areas of their coverage territories.
BellSouth has offered its dedicated Native Mode LAN Interconnection (NMLI) metro TLS service for nine years at 10M bit/sec and then 100M bit/sec. The RBOC pumped NMLI up to 1G bit/sec last year, and it also now supports both shared and dedicated connectivity, says Bob Smith, BellSouth senior director of data transport and connectivity.
“It’s the fastest growing enterprise data product for BellSouth,” Smith says of NMLI.
Carriers view Gigabit Ethernet service as a natural extension of TLS services they’ve offered for years, analysts say.
“It’s basically about the same as TLS but with more features underneath,” Howard says.
Carriers are now offering virtual LAN (VLAN) capabilities with their TLS offerings, lowering prices and expanding connectivity options beyond SONET, for example via the emerging Resilient Packet Ring standard, Howard says. They plan to take Ethernet beyond simple metropolitan and Internet access connectivity to a provisioning conduit for voice over IP (VoIP), IP VPNs and videoconferencing as IP quality of service and class of service standards are ironed out, according to Current Analysis.
BellSouth plans to offer NMLI as a committed rate service of 20M to 500M bit/sec with bursting. The RBOC also plans to add traffic prioritization for VoIP, IP multicast support, VLAN stacking (so multiple VLANs can share the same circuit), automatic protection switching and service-level agreements, Smith says.
BellSouth also will offer metropolitan Ethernet as an access option to network VPN and dedicated Internet access services, he says.
Carriers are looking to standardize Ethernet offerings. Those participating in the Metro Ethernet Forum are establishing common specifications – and nomenclature – for so-called E-line, or point-to-point Ethernet services, and E-LAN, or multipoint TLS services.
Technology advances also are helping to spread Ethernet throughout the carrier cloud. Until now, Ethernet services have been used primarily for metropolitan-area connections. But as carriers upgrade backbone networks to 10G bit/sec, they also are looking to support end-to-end Gigabit Ethernet services.
Multi-protocol Label Switching (MPLS) also is helping usher in the era of Ethernet service ubiquity. MPLS’s Draft Martini, which defines Layer 2 VPN encapsulation over MPLS, is garnering interest among service providers and support among equipment vendors as a way to support Ethernet, legacy frame relay and ATM services over an IP/MPLS backbone.
MPLS also is being evaluated as a way to provide SONET-like resiliency – what some consider the key aspect of being “carrier-class” – to Ethernet. MPLS is the underpinning of an emerging service called Virtual Private LAN Services (VPLS), a point-to-multipoint Ethernet offering that provides connectivity from one site to many, vs. the one site-to-one site limit of point-to-point service.
“Offering an any-to-any, shared solution is the future of Ethernet services,” says Nick Maynard, an analyst at The Yankee Group.
VPLS uses MPLS and its Draft Martini specifications to scale Ethernet by pushing media access control address learning out to the edge of the network, says Ralph Ballart, vice president of broadband at SBC.
SBC is readying a VPLS-based TLS service for the second half of this year, Ballart says.
“It’s going pretty much as planned,” Ballart says. “We were looking for IETF standards on VPLS that scale Ethernet. And management is always an issue.”
SBC offers GigaMAN, a point-to-point Ethernet-over-fiber service; and Fast and Gigabit Ethernet on its Multi-Service Optical Network point-to-point and ring-based managed wavelength service.
Masergy Communications, a service provider that operates a global IP/MPLS backbone, recently announced a VPLS service. The company’s inControl VPLS offering extends customers’ LANs across WANs providing meshed Layer 2 multipoint connectivity.
VPLS lets Masergy divide its network into separate, independent logical switching areas so a customer’s VPN is isolated from all other traffic within the Masergy network.
“We’re seeing Ethernet move beyond just point-to-point offerings on dedicated facilities,” Yankee Group’s Maynard says. “All major carriers are in the middle of rolling out the next steps in their portfolios.”
