LANs drive metro upgrades


While Ethernet remains the technology of choice in LANs, being both cheap and efficient, a constraint is that an enterprise's sites are linked with slow and expensive wide area networks (WANs). So says Nortel Networks' Chris Sweetapple, who is responsible for Metro Optical Market Development for LANs and SANs.

Until the mid-'90s, metro optical networks mainly carried voice-based traffic. But in the current data-centric world of LAN-to-LAN connectivity, bandwidth-hungry multimedia services and high-volume Internet use, metro networks are being squeezed from both sides: 10Gbit/s DWDM optical backbones offer huge bandwidth, while Ethernet-based enterprise networks supply high volumes of traffic. So, in sending a large file or video conference, the bottleneck isn't in leaving the user's desktop but in the metro network.

Adds Intel's Mark Godding, Product Marketing (Network Silicon OEM Community), the speed of the fastest microprocessors has risen from 233MHz in 1997 to 2.56GHz, so "the bottleneck is now outside the platform... users limit themselves to applications which they know the infrastructure can handle".

Enterprises use LANs, but only use WANs when they need to — "the router is the bottleneck", adds Sweetapple.

Benefits of metro optical networking include:

  • eliminating urban traffic jams with fibre access from enterprise to service provider;
  • cutting costs by using network intelligence;
  • enabling new value-added services such as optical Ethernet, differentiated classes of service, bandwidth-on-demand, managed wavelength services and optical storage connectivity.

In particular, 10 Gigabit Ethernet (10GbE) can transmit, via multi-mode fibre up to 300m and single-mode up to 40km, traffic received from high-speed Ethernet LANs on an optical metro or backbone network, without changing protocols or throttling the native Ethernet speed, enabling familiar network technology to be used in LANs, MANs and WANs.

Sweetapple says that, although enterprises are interested in emerging optical Ethernet, service providers and incumbent carriers are showing resistance as they are waiting for the business before putting the infrastructure in place.

But over the last two years or so there has been increasing activity in storage area networks (SANs), the leading driver for selling metro optical networks to large enterprises, he says, driven by the needs of large companies and government organisations for data back-up.

As well as SAN traffic (i.e. company data) being more valuable than LAN traffic (e.g. Internet access, file transfer and e-mail) and downtime more costly, large companies "couldn't exist" without a separate data centre, says Sweetapple. They enable:

  • removal of the vulnerability of a single location (the World Trade Centre collapse proved that a separation of 20km was insufficient due to the exclusion area of 40–50km).
  • a choice of location outside the city centre.
  • more efficient use of back-up according to frequency of access, leading to the rise of storage service providers for archiving.

SAN traffic is traditionally transported via the Fibre Channel protocol. This is transitioning from 1 to 2.5Gbit/s. However, it needs to be converted to SDH, causing a bottleneck.

In contrast, with Ethernet starting to be used for SANs, says Intel's Malcolm Hay, European Marketing Manager for Optical Products, there is the same infrastructure for both LANs and SANs.

Also, Sweetapple says fibre is being installed more in premises, such as university campuses and green-field business parks shared by many companies, so small organisations are gaining the advantage of large companies.

Services are being driven by the availability of dark fibre and regional providers. In London there are many service providers so this is cheap, but in France there are few. The imminent deregulation of telecoms in Turkey will provide great opportunity and a chance to learn from PTTs elsewhere in the world.

Hay says that, now that PCs are lasting four years, users don't want to upgrade network cards during the lifetime of the PC (for example, from Fast Ethernet 100Mbit/s data rates to Gigabit Ethernet). With only a small difference in silicon cost, new PCs are increasingly being sold with GbE capability. Of tier-1 PC makers, Dell, for example, is shipping GbE capability.

Also, Intel says that most major PC OEMs are transitioning from line-cards to silicon MAC PHY ICs, especially since just 2–4 chips are needed for an Ethernet connection, soon to be integrated into a chip-set and, with GbE, a single chip.

There are still few GbE switch sockets. But in 1997 about 50% of PCs transitioned from 10 to 100Mbit/s Ethernet before the corresponding switches became available, driven by the demand from users' end terminals.

Although it took 10/100Mbit/s five years for usage to rise over 50%, Hay expects it to take perhaps three years for the transition to GbE, with a ramp-up expected in 2003.

Also, says Mark Godding, Product Marketing Network Silicon OEM Community at Intel, GbE can run over CAT5 copper cable, so the 10/100Mbit/s Ethernet infrastructure can be used. Fibre will be used in server farms but connections to desktop clients will remain copper for the foreseeable future.

But far from retarding the use of fibre, this will enable the infrastructure to work at GbE rates. Since the range of copper-based GbE will not exceed 100m, says Godding, premise-to-premise Ethernet needs fibre, especially after 10x aggregation to 10GbE in the backbone (i.e. for switch-to-switch and switch-to-server connections). Also, higher data rates and greater traffic per fibre reduce fibre lease charges and therefore operating expenditure.

However, service providers are still mainly based on SDH at 2.5Gbit/s and below. SDH needs to be upgraded to connect to 10Gbit/s as the need for more bandwidth is being driven by increasing traffic around LANs.

Godding therefore sees Intel's role as pushing 10Gbit/s data rates into the LANs and hence into the service providers' backbones.

However, in the WAN there is competition between SDH and Ethernet, with SDH currently having a 99% share. Hay reckons that, over the next five years Ethernet will take a 30% share of the WAN.

Godding says the cost of a networking card for GbE is eight times that for 10/100Mbit/s, and for 10GbE it is eight times GbE — prohibitive for small-volume users, but in a few years the cost should be just 10-20% of that.

Regarding the 10GbE optical modules, such as in LAN switches and routers, Hay says that 2002 is seeing design-ins at low volumes for prototyping purposes, while 2003 should see a production ramp-up, driven by 10Gbit/s LAN Xenpak standard modules. Previously, 10GbE switches used discrete solutions, but a standard form factor will drive high-volume manufacturing and a small cost differential between 100Mbit/s and GbE.

Intel's strategy is to deliver all the technology for optical communications modules in-house, use greater integration, and high-volume automated manufacturing. The 10GbE Xenpak module should see three to four times the cost reduction in a few years.

With the spread of LANs out from the enterprise, Cisco's Bernard Lamy says that its technologies for enterprise switching equipment are now being applied in the service provider environment.

The key is the connection between the city fibre ring and the end-user in enterprises and residences, says Lamy. For GbE to enterprises, both CAT5 copper cable and fibre are possible. For companies already using CAT5, it may make economic sense to continue using it. However, companies wanting to be "at the leading edge of competition" are more willing to deploy fibre, he says, especially for green-field deployments or for enterprises hosting electronic businesses or web services. For example, utilities are creating LANs by pulling fibre through their ducts to their subscribers' buildings, and even on vertical fibre cabling up risers.

Alternative service providers are building networks with fibre from the core of their network to the end-user, i.e. metro area networks have enterprise equipment for next-generation broadband (at 10Mbit/s) to end-users, perhaps 20 times the data rate of cable/DSL, giving an all-fibre network in both the service provider and enterprise environments.

Applications for fibre within the enterprise include links between wiring closets and from the closet to the end-user. Reasons for using fibre include:

  • economies of scale;
  • gaining a competitive edge; and
  • future-proofing the network infrastructure.

Also, fibre provides scalability to 10GbE. Some service providers are therefore serious about supplying large enterprises (for example, having over 100 users or 10 times the volume of normal services).

Types of enterprise to which this is most applicable include financial organisations, university campuses, hospitals and other municipal authorities.

Cisco's customers include:

  • 51º, which is providing GbE to businesses in London from an existing fibre ring;
  • Stockholm-based Bredbandsbolaget (B2), which has built "the largest IP network for residential users in Europe" — a 10Mbit/s optical Ethernet network covering 40 cities with 220,000 connected households and 80,000 subscribers;
  • e-Biscom's Milan-based FastWeb, which leases the Socrat fibre network of Telecom Italia to connect six cities in Italy, in which it has its own fibre networks to connect to 100,000 clients.

Lamy says that FastWeb's business model is proving successful in that environment, after having reached break-even on earnings before interest, taxes, depreciation and amortisation (EBITDA) in its June quarter ahead of schedule after just over two years of commercial operation. This makes it "the only new telecoms entrant on the European landscape to reach EBITDA break-even in such a short span of time — less than half the time of the best-performing peers", FastWeb claims.

The mix of services includes, for example, 10Mbit/s for residences, plus 100-channel broadcast TV, video-on-demand, and flat-rate national using Voice over IP, which can't be delivered over a single cable-network.

Looking to the future, Lamy adds that it will be "interesting to see how [incumbent] PTTs will offer Gigabit Ethernet to businesses". He cites the UK's BT Ignite as an example of one that is already tackling the issue.

In-Stat/MDR's report LAN Capital Expenditures: A Recovery in Sight (, based on data collected in June and July from a panel of LAN end-user companies, finds that LAN CapEx will start to see a recovery in the near term. In particular:

  • large companies curtailed their spending the most. They are also more pessimistic on the timing for an IT budget recovery. However, only 26.8% of panelists decreased IT budgets from 2001 to 2002, and only 22.0% from 2000 to 2001.
  • "new" technology budgets such as WLAN and SAN were curtailed the most.
  • 47.5% of panelists who cut their IT budgets in the past 12 months thought they would return to previous levels in the next 7–18 months
  • regarding new networking equipment purchases, panel companies are most concerned about vendor stability and product price.
  • security technologies, such as firewalls and virtual private networks (VPNs), will see the largest amount of IT investment.
  • panelists remain optimistic about IT budgets, since most had not reduced IT staff in the past 12 months and even fewer plan to reduce IT staff over the next 12 months.
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