Selecting the Ethernet services strategy that's right for your business, infrastructure, and customer base

By Umesh Kukreja, Atrica -- From its start as a standard platform for enterprise LAN networking, Ethernet has evolved into Carrier Ethernet--a widely adopted platform for WAN services.

From its start as a standard platform for enterprise LAN networking, Ethernet has evolved into Carrier Ethernet--a widely adopted platform for WAN services.

By Umesh Kukreja, Atrica

The demand for Carrier Ethernet services and Ethernet-based inter-office transport is exploding across all vertical markets. To take advantage of this revenue opportunity, network operators must implement a cohesive services strategy, both from a business and technical perspective.

Drivers of Carrier Ethernet services growth

Driven by ever-increasing bandwidth requirements, the changing role of IT professionals, and the need for companies to centralize widely dispersed servers, Carrier Ethernet services increasingly are being adopted by enterprises as the "service of choice" for the support of mission-critical, high-bandwidth WAN applications.

Traditionally, service providers have offered a variety of services to support WAN connectivity, including leased lines, IP virtual private networks (VPNs), Frame Relay, ATM, and wavelength services. As bandwidth requirements between sites have multiplied and as the cost of managing and building increasingly complex WANs has increased, many larger businesses have opted to build their own private networks.

The advent of high-speed applications requiring multi-megabit and gigabit connectivity fundamentally has changed the services landscape for service providers. Traditional WAN connectivity options simply are no longer cost-effective for supporting new bandwidth and service requirements. Providing gigabit connectivity to schools, transferring high-bandwidth images in the medical sector, building scalable government communications infrastructures, and remote collaboration exercises in the media and entertainment sector are placing unprecedented demands on the network.

As today's Web-enabled businesses implement higher bandwidth applications, IT departments are becoming ever more critical to their companies' overall success. The management of WAN-related service provider contracts is becoming less significant, and there is a growing trend among enterprises to centralize their servers. As such, service providers are finding an opportunity in the area of managed services delivery.

Varying definitions of Carrier Ethernet services

In theory, Carrier Ethernet services are the right fit for addressing all the above business network requirements. However, the definition of Carrier Ethernet services varies from one service provider to another, depending on the particular service provider's heritage and its core service delivery strategy.

Adding to the confusion is the fact that service providers leverage a variety of platforms to deliver Ethernet services, resulting in a fractured, disparate range of services with the only real common element being an "Ethernet" interface. This range of similarly named services includes:

• Resilient Ethernet services delivered via an Ethernet-over-SONET platform;

• Cost-effective, low service level agreement (SLA) services over an "Enterprise Class" Layer 2/3 switch platform; and

• Entry-level Ethernet services using basic media converters over fiber.

One strategy for the delivery of Ethernet services is to offer basic, best-effort Ethernet connectivity for simple Internet access applications. While this offering gets a service provider into the Ethernet game, it has some significant disadvantages. First, the service can be quickly commoditized. Second, the service provider loses the ability to upsell more profitable, higher margin bandwidth services to enterprises without having to deploy additional equipment or offer multiple contracts. Third, the service provider is limited in its ability to offer innovative service packages such as scalable Internet access, highly resilient site-to-site LAN interconnection, disaster recovery, data replication, and shared bandwidth multi-site connectivity as well as multi-site hub and spoke connectivity options.

Standards enable differentiated management strategies

Thanks to recent developments in Carrier Ethernet technologies and standards, service providers now have the opportunity to create differentiated Ethernet service portfolios that can be fine-tuned and tailored to meet specific customer demands. For example, the Metro Ethernet Forum (MEF) has defined the key elements of Carrier Ethernet, which service providers can use as a framework for their own Ethernet service portfolios. The industry consensus on Carrier Ethernet service attributes can be leveraged very effectively for creating differentiated Carrier Ethernet service portfolios.

The first characteristic of Carrier Ethernet services is related to the availability and reliability of the service offering. Under the MEF definitions, it is imperative that Carrier Ethernet services have 50-msec protection capability for legacy TDM, voice-over-Internet Protocol (VoIP), and critical storage applications that require a highly reliable WAN infrastructure. From a technology perspective, MPLS Fast Reroute is one of the most widely adopted methods for delivering 50-msec protection in Layer 2+ MPLS environments. With 50-msec protection, service providers can offer both protected and unprotected services, thereby expanding their revenue opportunities.

The second characteristic of the Ethernet services toolkit is the ability to adapt and match bandwidth SLAs to specific Enterprise applications. With this capability, service providers can provision guaranteed bandwidth for mission-critical applications. Moreover, they can provision best-effort bandwidth for services that do not need bandwidth guarantees, therefore allowing some over-provisioning of the network.

The MEF has defined the Committed Information Rate (CIR) for guaranteed bandwidth and Excess Information Rate (EIR) for best-effort traffic. Offering both within a common platform enables service providers to offer a full range of applications via a single service definition; delay-sensitive, mission-critical applications are served via the CIR-provisioned bandwidth, while best-effort traffic is served via the EIR-provisioned bandwidth. More importantly, high-speed bursty applications can be served by the combination of CIR+EIR provisioned bandwidth. CIR and EIR must be able to be provisioned in small bandwidth increments of 1 Mbit to 1 Gbit.

The third Carrier Ethernet characteristic that helps expand service providers' Ethernet services portfolios is the ability to provide incremental TDM service interfaces over a common Carrier Ethernet backbone. This capability provides a huge advantage in voice and data services bundling, especially in the small- and medium-sized business vertical markets.

The ability to quickly provision and deliver Ethernet services is the fourth facet of the MEF's Carrier Ethernet definition. In today's fast-paced business environment, IT professionals cannot wait weeks while a service provider configures, upgrades, and finally delivers the contracted bandwidth. A high-speed business environment demands that an Ethernet service be simple and fast to provision. It also demands that moves, adds, and changes be completed even faster to enable service providers to up-sell bandwidth into new business applications.

Unlike delivering fragmented Ethernet services over disparate network architectures, the above four criteria establish the foundation for a flexible, scalable, and robust Carrier Ethernet services portfolio. The ability to provision and define hard and stringent SLAs affords the service provider tremendous pricing advantages-not to mention the ability to upsell higher bandwidths without additional expense.

Carrier Ethernet service planning and delivery is a complex process of which service definitions are a vital but small part. Other key components of a successful service strategy include commercial SLAs for fault management and service uptime, rebates and guarantees, and the matching of an organization's unique service and support capabilities with the needs of various vertical market segments.

"Go-to-market" implications

A well-defined services strategy is only the beginning of an overall execution plan for a profitable revenue stream from Carrier Ethernet services. A comprehensive business strategy also must:

• Identify the target vertical markets that a service provider's sales teams can develop immediately;

• Identify specific applications in the target vertical markets that require high bandwidth;

• Develop targeted sales campaigns that migrate the lead development activities from a "menu-driven services offering" to an "applications-driven partnership" with target customers; and

• Create pricing strategies that integrate the flexibility of Carrier Ethernet services and compete effectively with competitors' fragmented approaches to delivering Ethernet services over multiple architectures.

As business broadband services continue to develop, service providers will find significant opportunities to leverage the power of Carrier Ethernet to expand their revenue streams. Service providers can effectively leverage well-established and standards-based definitions of Carrier Ethernet and integrate these key elements into their own Carrier Ethernet service development strategies. Such strategies will result in the growth of the service provider's addressable market, increased profit margins, and improvement in the provider's overall competitiveness.

Umesh Kukreja is responsible for all outbound marketing strategies and programs at Atrica. He is actively involved in Carrier Ethernet service development cycles including the areas of service pricing, competitive positioning, targeted service definitions, and customized 'go to market' strategies for a range of global service providers. For more information about Atrica, visit the company's Web site at www.atrica.com. Kukreja may be reached at umesh@atrica.com.

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