VERIZON TAKES ETHERNET WIDE & DEEP
September 24, 2006
VERIZON TAKES ETHERNET WIDE & DEEP. Check it out:(Telephony Via Thomson Dialog NewsEdge) ETHERNET IS NOT A NEW SERVICE AT VERIZON.
Within the legacy local telco side of the business, in fact, Ethernet has been offered as a service since 1993 in New York City and Washington, albeit only to very large customers. Since 2001, the company has embarked on a more aggressive Ethernet strategy, building a product portfolio that addressed evolving customers needs. And since the Verizon/MCI merger was completed earlier this year, resulting in the creation of Verizon Business as a new unit, the service has gained much greater reach.
Combined with the corporate commitment to massive fiber-optic deployment in the local loop, Ethernet is now a cornerstone of Verizon's data services portfolio and only destined to become more strategic, company officials say.
It is becoming the predominant networking technology in the metro area, said Thomas Roche, vice president of marketing for network voice and data services for Verizon Business. It's a very simple network to deploy. Our customers see it as simple, efficient and scalable.
As a result of its early movement into Ethernet, Verizon already is addressing issues such as how to generate more revenue when Ethernet lowers the cost of bandwidth for customers and how to enable end-to-end Ethernet connections that traverse multiple carrier networks. Later this year, the company is introducing more new Ethernet options, including an N by T-1 service and a national Ethernet virtual private line service (VPLS). Earlier this year, Verizon was named service provider of the year by the Metro Ethernet Forum and earned a J.D. Power & Associates rating of highest in customer satisfaction for large business customers.
Roche insisted, however, that all this Ethernet activity plays out against a broader backdrop of providing customer choice.
It really comes back to the customer, he said. It is their business applications that drive the development of new services their business requirements and their business applications that drive the requirement for bandwidth. Because we offer a high-value service in the network, customers see us as another choice, and we offer them a comprehensive set of services.
In addition to a detailed set of Ethernet solutions, Verizon can offer voice over IP (VoIP) as converged option, managed IP PBXs for its customers, as well as hosted call center services, collaboration services and more, Roche added.
THE BREADTH OF THE PRODUCT LINE is particularly impressive, said David Hold, an analyst with Current Analysis who conducted a detailed assessment of Verizon's Ethernet options (see table on page 21).
Verizon has quite a detailed list of Ethernet services, Hold said. There is the reach within the metro area with the combination of the facilities that MCI had [with legacy Verizon]. Where they have had overlapping products, such as the Verizon Enterprise Advance national MPLS backbone, the customers are being transitioned onto the former MCI national network. Verizon doesn't yet have a national VPLS service offering, but they're talking about having something ready by the end of the year.
The national VPLS offering will fill a gap in Verizon's product line and give the company an edge over rival AT&T, which also boasts an impressive array of Ethernet products, Hold said.
Ron Kaplan, an analyst with IDC, agreed that Verizon's breadth and reach are particular assets.
Verizon has a lot of fiber in some very attractive markets, particularly along the East Coast, he said. They have rolled out a broad product set. In addition to connecting offices, they also offer Internet access over Ethernet. They have a broad portfolio, and they continue to expand and invest in new central offices.
The evolution of Ethernet at Verizon began just after the telecom bubble burst, when Verizon and its vendor, Cisco Systems, unveiled a simple Ethernet LAN (E-LAN) service, said Carlos Benavides, group manager of metro Ethernet services for Verizon.
It was a simple service, he said. It featured LAN-to-LAN connectivity. Customers purchased a port and were placed on the same wide area network as their other sites. We transported all their traffic based on their MAC addresses. Everything was transparent we didn't see their traffic, and they could add stations and new applications without us ever having to do anything.
To this day, E-LAN remains one of Verizon's major Ethernet successes, Benavides said, because of the customer control and simplicity, as well as cost savings.
A lot of the time, customers' equipment already has Ethernet ports available as opposed to using a router which needs a packet over Sonet port, which is much more expensive, he said. They also like the flexibility they can make changes within their LAN, and they get propagated through the WAN as well. The bandwidth is a lot more flexible. You can buy a larger port and fill it up as needed.
FOR E-LAN SERVICE, Ethernet is still best-effort and viewed as satisfactory for data services, but not for critical applications including voice.
We realized that what we would like to do is offer another service that would allow customers to do voice, data and video by moving to an Ethernet virtual private line (E-line) service that would be point-to-point, with predictable traffic flows and hard quality of service, Benavides said.
The private-line offerings are important to customers because of the ability to offer service level agreements (SLAs), said IDC's Kaplan. Ethernet private line over Sonet infrastructure enables companies to connect headquarters to data centers or do other applications that you need an ironclad SLA to perform, he said. Verizon is doing its Ethernet over Sonet, which has a much stronger SLA than an E-LAN.
Metro Ethernet service has opened the door for Verizon's customers to add applications because of its flexibility and lower cost, Benavides said.
The arrival of metro Ethernet has opened up the ability for customer to add more applications to the network for a price that is affordable to them, he said. What we have seen from customers is that their telecom budgets have been fairly stagnant. If they can add more bandwidth for roughly the same price, they can invest in new applications that require this bandwidth. Without metro Ethernet services, they wouldn't be able to roll out those applications it would be too expensive.
Verizon is already seeing that growth in bandwidth consumption, Roche said.
As customers migrate from fast packet to Ethernet, we start to see a year-over-year increase in bandwidth utilization of 20%, he said. The good news is the efficiency of the networks and the fact that we are deploying fiber backbones and utilizing fiber in the metro and in our long-haul networks means it is much easier to be able to upgrade to Ethernet services and support higher bandwidth than it would be to have to add transitional TDM muxes to support legacy services. Just as customers see the efficiency in using their bandwidth, we see the efficiency in the fact that we can now put more services over our facilities and be able to manage them more effectively than with legacy services.
THAT TRANSITION AWAY FROM legacy networks has enabled Verizon to reduce its overall costs, Roche said.
We have deployed extensive fiber, so we can implement services very rapidly, he said. We are using DWDM [dense wave division multiplexing] and CWDM [coarse WDM] to get more reach and penetration of customers that we may not have been able to reach. Utilizing Ethernet as an access point to a national or global network allows us to begin to offer services like voice over IP, collaboration or hosted call centers as value-adds. Now that we have QOS on our metro Ethernet networks, that is what allowed us to move up the value chain and offer services on a hosted basis and not just connectivity.
Roche expects to see Verizon's customers move toward QOS-based services and away from best-effort services, based in part on the company's ability to develop more intelligent tools that allow customers to manage QOS, not just provide it.
We are working with a number of suppliers in the tools space, as well as in application acceleration, to more efficiently use the bandwidth and get the most out of it, he said. We are actively building and deploying tools to help our customers manage QOS and provide things like bandwidth-on-demand, which we will offer in the future.
Those future services include the nationwide Ethernet VPLS and a virtual private wire service that will encapsulate and transport multiple protocols, including Ethernet, frame relay, ATM, HDLC and TDM in a point-to-point configuration as specified by the IETF Martini Draft [pseudowire] specifications, said Hold of Current Analysis.
The VPLS service is important to large business customers that are used to doing their networking at Layer 2, where Ethernet lives, and not interested in a Layer 3 VPN solution, IDC's Kaplan said.
The bandwidth-on-demand option will give customers tools to throttle up their own bandwidth, Roche said, without the typical service order.
You will start to see customers control their overall bandwidth, he said. We will have billing systems to be able to support true bandwidth-on-demand, which we will start to deploy in the 2007 time frame.
MANY CUSTOMERS COMING TO ETHERNET are migrating off traditional data services such as frame relay, either because they need more bandwidth and want a more cost-effective solution or because of a desire to converge voice, data and video onto a single network, Benavides said.
Verizon is unique in following a fiber-based strategy for its Ethernet offerings even as other companies BellSouth among them branch into copper-based service.
We have looked at the copper-based solutions, but we have seen so much success in the 10 Meg to 100 Meg arena that we have focused on fiber-based services, especially with the FiOS buildout and fiber-based initiatives that Verizon has, Benavides said. We are focused on the higher-speed services, and that's where you have to have fiber.
Verizon also offers Ethernet access to its VPN service, which enables companies to tie in locations that don't have fiber access, IDC's Kaplan said.
As big as Verizon's Ethernet rollout is, it is still limited to large buildings and fiber access, he said. There are many buildings and small branch offices that don't have fiber access, and they can be connected with VPNs. That has made Ethernet more popular, and we think the bigger carriers are all kind of moving in that direction. The copper deployments come down to carrier economics: It might not be worth it for carriers with a lot of access fiber to use a copper solution.
For the many locations that won't get fiber, frame relay and private line service will remain important, Kaplan added.
Verizon's Roche agreed.
There will be certain customers who keep those services, he said. There is always a leveling off of new technology rollouts.
As part of its Ethernet rollout, however, Verizon now believes it can cost-justify deploying fiber into more buildings because of the customer benefits Ethernet brings, and the efficiencies of the Ethernet and WDM technologies, Roche said.
We can also more efficiently use our personnel and transform the organization from managing high resource-intensive TDM-type networks to efficiently managing the network and putting more of a focus on high-value applications and services, he said. It's more of a transformation of resources.
Verizon will continue to try to differentiate in a highly competitive Ethernet market by its level of service, Roche said, and now by the reach of its network and the greater density of its Ethernet deployments.
VERIZON'S ETHERNET PORTFOLIO
E-LINE SERVICE
IN-REGION METRO (FORMER VERIZON)
Ethernet Private Line Service (EPL)Enhanced Dedicated SONET Ring (EDSR)Ethernet Virtual Private Line-Metro (EVPL)U.S. NATIONAL (FORMER MCI)
Ethernet Private Line (EPL)Converged EVPL ServicesU.S. Private Line Ethernet (USPLE)Metro Private Line Ethernet (MPLE)Global Data Link Ethernet (GDLE)Other point-to-point servicesinclude IDE and Ethernet Access to Private IP.E-LAN SERVICES
(Available in-region until national VPLS is launched)
Verizon Ethernet-LAN Metro ServiceSwitched Ethernet ServicesSource: Current Analysis
Copyright 2006 by Prism Business Information. All rights reserved.www.prismb2b.com
Related Tags: metro ethernet, ethernet services, virtual private, point point, ethernet access, ethernet
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