Carrier CAPEX Crushed, OPEX Next

In a recent conversation with Greg Gum CMO of Anda Networks in his offices in northern California we got to speaking about the state of Carrier Ethernet and the future of the market. Gum explained the market for this technology is growing now despite a hiccup he saw in the first half of this year. He further explained the research he has seen shows 70% of the cost of carrier service revenues is in OPEX budgets and he further went to explain this amount is about $77 billion dollars per year.

His goal and that of his company is to help service providers shave this number down. After all he says, CAPEX has been beat up as much as you can. Nortel is bankrupt and other companies in the space are either unprofitable or laying off workers.

In order for carriers to achieve this OPEX reduction Greg believes they want more network visibility. Furthermore he explains customers are looking for carriers to exceed 4-5 nines and they want proactivity not reactivity from their providers.

According to Gum we are in the world of Ethernet 2.0 and carriers need to transition from bandwidth 1.0. He says service providers must differentiate themselves as 70-80 of them offer Carrier Ethernet and most of these companies have 4-8 classes of service.

In order to achieve optimal Carrier Ethernet 2.0 service his company provides the WAN optimization product EtherProbe which expands the SLA verification capabilities of the company’s EtherTone product-line which I first covered last year after a meeting with Greg at a trade show. The company’s products conduct real-time, non-intrusive QoS measurements in-line with live customer traffic flows and present the data via a web-based interface.

Another benefit of using this Carrier Ethernet Access Device is its ability to work with copper TDM or fiber. Moreover it allows traffic to be monitored and action to be taken based upon specific parameters. For example if an Ethernet VLAN is seeing a delay greater than 120 milliseconds and is used for VoIP traffic for example there can be a OPEX-reducing preset trigger which sets an alternate path or port/provider without user intervention. Alternatively alerts can be sent to tech personnel.

For carriers, any product which lowers OPEX costs while providing better service is a natural fit. And this seems to be the right time economically-speaking to be in a market which is driven by the increasing corporate demand for SLA-oriented bandwidth and the desire of operators to reduce costs.

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