ICT Telecoms and Software Expert Advice

Advising on the commercial impact of technology and
market changes in telecoms, software and IT services

Home > Media > Telecoms and Software News

TELECOMS AND SOFTWARE NEWS

Ethernet: 'immune' to the recession

Ian Redpath

Ethernet: 'immune' to the recession

The Metro Ethernet Forum (MEF) conducted its 3Q09 technical and marketing meeting in Toronto, on 21-23 July. Ovum's Ian Redpath facilitated a panel discussion on Ethernet's resiliency to the recession, and Rogers delivered an informative keynote on Canadian market development and the universality requirement. The MEF's carrier Ethernet interconnect specification is on target for year-end completion.

Ethernet services are in a fortunate position

Ovum's Ian Redpath was a guest speaker at the MEF 3Q09 meeting and provided an update on the Ethernet services market. A panel discussion by service providers and system vendors followed and centered on two key questions. The first question was “Are Ethernet services immune to the current recession?” The panel consensus was that the term immune might be hyperbole, but the recession has not slowed Ethernet service adoption. Enterprise customers have an acute cost focus and are looking for services that offer improved cost per bit performance. Enterprises are continuing to transition from the more costly legacy services to Ethernet.

The second question for the panel was “Would competitive issues preclude a carrier from interconnecting with another carrier?” No one carrier can directly connect to every potential customer site around the globe. Carriers have to interconnect with other carriers to meet all enterprise global site-to-site demands. But at the same time, carriers continue to extend their networks geographically. Network extension will allow carriers to carry their customers' traffic further and lessen the interconnection expense. Will the industry get to a point where one group of carriers partner for interconnect at the exclusion of other carriers? The consensus answer from the panel was that the traffic demands are too complex, each network has a unique value and interconnection is an imperative. The panel affirmed the importance of the completion of the carrier Ethernet interconnection specification.

Universality is a key Ethernet requirement and pre-building fiber is a sign of a robust market

Terry Canning, SVP, Rogers Business Network Services, delivered the keynote speech, describing Canadian Ethernet services market trends and sharing a few of Rogers' strategic initiatives.

The Canadian economy has a high proportion of non-Canadian owned businesses. The foreign-owned enterprises have grown past the point where they will tolerate a global network with multiple technologies and differing connectivity services. They want to build a network with one scalable and ubiquitous service. They desire universality with no branch office left behind. Rogers' view is that carrier Ethernet can deliver this universality.

Rogers has been leveraging a geographic information system (GIS) capability. Using existing fiber routes and building-specific knowledge, GIS helps Rogers target buildings to connect with network extensions. Rogers already has a substantial metro fiber footprint in place and has been pre-building lateral extensions into desirable buildings. Pre-build is a calculated risk, with the capital outlay prior to a definitive sales win, but it enables Rogers to differentiate with a very rapid service rollout. Pre-building is a definitive sign of a robust and growing market.

Rogers is a significant contributor to the growth of the Canadian market (see Forecast: Enterprise Ethernet services, North America) and Ovum believes that its aggressiveness will be rewarded by the market.

The carrier Ethernet interconnect specification is progressing

The premier initiative in front of the MEF's technical working group is finishing up the carrier Ethernet interconnect specification, also known as the external network-to-network interface (E-NNI). The E-NNI is a reference point where two service providers interconnect to deliver an end-to-end service. The E-NNI will take the industry from islands of Ethernet connectivity to truly global connectivity in a cost-effective manner. Today, carriers do hand off Ethernet services to other carriers, but it is via bilateral interconnect arrangements. For any one carrier, there are potentially hundreds of carrier interconnection partners. Bilateral arrangements are an expedient first-to-market step, but setting up a multitude of differing bilateral agreements is a time-consuming and expensive step compared to aligning to one global specification.

Industry specification initiatives take time to develop, and the MEF's marketing organization, with an eye to the business imperative, is keeping the pressure on. Indeed, E-NNI specification completion appears achievable by the year-end.

About:

This article is an extract taken from Ovum's Straight Talk service. This daily email bulletin provides our expert's views and opinions on important news and events in global IT and telecoms. If you have a comment or question regarding this article then please submit your details here:

Email address:

Suggestion:

If you would like to find out more about Straight Talk please contact StraightTalk@ovum.com

If you would like to find out more about Ovum services then please click here for details

Search

Contact Us

Expertise

© Datamonitor - Ovum is a Datamonitor company