Ethernet, the technology that currently dominates the desktop, is the most popular local area network, is prevalent in the data center and used in home networking, is now making inroads in the Wide Area Network (WAN). After an initial foray that failed for a number of reasons, carriers are using Ethernet to deliver high-speed connections, often dubbed Metropolitan Ethernet, to enterprises.
“The market for Metro Ethernet services has been growing at an impressive pace,” said Michael Howard, president of Infonetics Research, which expects worldwide Ethernet services revenue to grow from US$2.5 billion in 2004 to $22 billion in 2009.
Getting Attention
Such high growth rates were what carriers’ had hoped for when they started rolling out these services at the height of the dot-com boom. As Metro Ethernet began to make its way into the marketplace, telecommunications services were drastically reducing their capital spending. That dramatic change along with high prices — which often accompany new technologies — meant few customers took advantage of the new WAN technology. As a result, service providers suffered.
Yipes Enterprise Services was a high-profile start up formed to deliver Ethernet WAN services. In early 2002, the company filed for bankruptcy protection and emerged that fall as a firm with less grandiose plans, offering metropolitan Ethernet services in 10 markets. Since then Yipes has experienced a stable rebirth.
During the past few years, Metro Ethernet news faded from the headlines, but established carriers such as BellSouth, Qwest Communications, SBC Communications, Sprint, and Verizon joined start-up ventures such as Broadwing Communications, Cogent Communications, Masergy Communications, OnFiber Communications, and Yipes in delivering these services.
“Every carrier views Metro Ethernet services as an important component in its long-term business plan,” said Brian Washburn, a principal analyst with market research firm Current Analysis.
There are a few reasons why Metro Ethernet has been garnering attention. Many companies thirst for more WAN bandwidth. They are deploying complex multi-media applications that generate more data than traditional applications and need a way to deliver that information to employees, customers, or suppliers. Metro Ethernet enables carriers to offer customers anywhere from 10 Mbps to 1 Gbps of bandwidth.
The Lure of Instant Upgrades
Another plus is users receive the bandwidth quickly. “With a traditional private line, carriers need to do a lot of prep work to make it ready and deploy it,” said Rick Malone, a principal at market research firm Vertical Systems Group. “With Ethernet, new lines can be provisioned almost instantly.”
Additionally, Ethernet fits easily into most enterprises. “Companies have Ethernet management tools and staff that understand how it functions, so it is simple for them to monitor their Metro Ethernet links,” Infonetics’ Howard told TechNewsWorld.
An Ethernet option is often inexpensive as well. For about twice the price of a frame relay T-1 (1.5 Mbps) line — about $400 to $500 per month — a 10 Mbps Ethernet pipe offers users seven times as much bandwidth, and for about the same price as a DS-3 (45 Mbps) Asynchronous Transfer Mode (ATM) circuit — around $5,000 per month — companies get twice as much bandwidth with a 100 Mbps Metro Ethernet line.
Enchanting Carriers, Customers
Carriers like Metro Ethernet as much as customers do. On the equipment side, recent improvements have been made to Ethernet products so they are more reliable. Service providers are also looking for ways to connect their various sites with higher bandwidths at a lower price per bit, and Metro Ethernet services offer this ability.
As a result, carriers are marketing Metro Ethernet service to support a number of applications, and Vertical Systems Group identified five: T-1 Internet access, which is the most popular option; new Greenfield applications, such as e-commerce; replacement of high-speed, 45 Mbps-or-more ATM ports; site-to-site dedicated IP Virtual Private Networks (VPNs); and conversions of frame relay ports.
While Ethernet services offer many attractive features, they also have some limitations starting with availability. Carriers have been moving to deploy these services, but they are not available in as many locations as T1 or frame relay lines. Also, the services now are not very sophisticated: Customers usually receive a generic high-speed transmission line. Recently service providers have begun enhancing their services with special class of service features so the lines are tailored to specific applications, such as video and voice applications.
Missing a Standard Interface
A lack of standard Ethernet interfaces among carrier networks is an issue growing in importance. Since carriers can’t offer services in all locations, customers are likely to want to augment one carrier’s service with another’s offering. Without standard interfaces between their networks, enterprises are not able to deploy services, such as VPNs, among different service providers’ networks. Another problem is carriers are not able to monitor network performance as information moves from one network to another, a limitation that prevents them from establishing Service Level Guarantees for customers.
The Metro Ethernet Forum has been working on an Ethernet NNI (Ethernet Network-to-Network Interface) that would describe how carriers can pass service information among their networks. Members were dabbling in this area three years, put the work on hold as the market for Ethernet services went through a downturn, focused more resources on it this year, and expect to have a specification completed in 2006. While progress is being made on the standards front, it is not clear how long much time and effort will be needed to craft the standard, test equipment, and then deploy it. In the interim, carriers have been connecting to each other’s networks on an ad-hoc basis. That work has been spotty and undertaken mainly after receiving such requests from customers.
Despite this missing link, the Metro Ethernet market is poised for strong growth. “The advantages that Metro Ethernet offers compared to traditional services are too great for enterprises and service providers to ignore,” concluded Vertical Systems Group’s Malone.
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