Heavy Reading
EXECUTIVE SUMMARY

Ethernet Over IP/MPLS Service Delivery Platforms: A Heavy Reading Competitive Analysis

Ethernet continues to build momentum as a critical service for carriers to deliver to their enterprise customers. For carriers, the imperatives to invest in Ethernet service delivery are clear. First, Ethernet services must offer a clear set of values to the enterprise customer. These values are:

Lower cost per bit
Access to higher levels of bandwidth
Access to bandwidth flexibility and granularity
Simplicity and familiarity of Ethernet
Lower cost of CPE interfaces
The opportunity to integrate services that now travel on a common access technology

Ethernet service must also offer a "mirror image" set of values for the carrier:

Lower cost of hardware throughout the network, compared with a legacy service deployment
Lower cost of service creation via end-to-end provisioning protocols
Lower cost of service maintenance through effective OAM protocols and procedures
The ability to converge services onto a common technology to achieve additional economies of scale in the network infrastructure
A further opportunity to realize cost savings through a rationalization of the carrier's sales, marketing, and operational organizations

Ethernet Over IP/MPLS Service Delivery Platforms: A Heavy Reading Competitive Analysis provides a detailed survey and analysis of the equipment used to deliver Ethernet services that are being planned or actually rolled out by service providers. This report focuses on a newly emerging category of carrier Ethernet equipment: one that is based on a packet infrastructure using IP and MPLS (Multiprotocol Label Switching).

The report includes complete product and strategic analyses for the following Ethernet equipment manufacturers:

Alcatel SA (NYSE: ALA; Paris: CEGP:PA)
Atrica Inc.
Cisco Systems Inc. (Nasdaq: CSCO)
Corrigent Systems Inc.
Extreme Networks Inc. (Nasdaq: EXTR)
Foundry Networks Inc. (Nasdaq: FDRY)
Juniper Networks Inc. (Nasdaq: JNPR)
Laurel Networks Inc.
Nortel Networks Corp. (NYSE/Toronto: NT)
Overture Networks Inc.
Riverstone Networks Inc. (OTC: RSTN.PK)
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)

Service providers interviewed for this report include the following:

BellSouth Corp. (NYSE: BLS)
BT Group plc (NYSE: BTY; London: BTA)
Covad Communications Inc. (OTC: COVD)
FiberNet Group plc (London: FIB)
France Telecom SA (NYSE: FTE)
Lightpath, a division of Cablevision Systems Corp. (NYSE: CVC)
Masergy Communications Inc.
MCI Inc. (OTC: MCIA)
Verizon Communications Inc. (NYSE: VZ)

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Report Structure and Methodology

To create this survey, Heavy Reading adopted a three-phase approach:

Step 1: We spoke to carriers that are now involved in Ethernet service deployment. In one-to-one interviews, we asked them for their views on emerging Ethernet services, especially with respect to the kinds of architectures and equipment they will be deploying.

Step 2: We then spoke to the vendors of Ethernet equipment and began to construct a set of questions that would ideally act as a kind of "Buyer's Bible" for carrier Ethernet equipment based on packet and MPLS architectures.

Step 3: We solicited detailed product and strategy information from vendors to create a comprehensive picture of Ethernet switch capabilities across the following six areas:

Platform description
Service and service management
Service upselling (going beyond basic connectivity)
Security
Operations, administration, and maintenance
Scaleability

For carrier implementations of Ethernet, key issues include how Ethernet packets are encapsulated over the carrier network to achieve the following specific "carrier-grade" objectives:

Rigid customer traffic separation
Scaleability of service delivery
QOS service differentiation
Fault-finding and OAM capability
Multivendor interoperability

The report examines five specific encapsulation architectures and relates them to each vendor's carrier Ethernet portfolio. Those architectures are:

Pure Layer 2 Ethernet
IEEE 802.1QinQ VLAN stacking
Proprietary MAC (media access control) encapsulation
Ethernet over IP
Ethernet over VPLS/MPLS

The report analyzes vendor product lines by parsing them into the three distinct functions that make up the metro network: customer-located equipment, service aggregation switches, and core/edge switches.


Parsing the Metro Network

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Vendor Ratings

Given the complexity of this market sector, it makes little sense to give each vendor a single, numerical score. One reason is that not all the vendors have products covering all three segments of the metro network. Rather than using a single numerical ranking, we applied the Heavy Reading Hexagon ranking system, which takes into account the following six factors:

Feature set: This metric essentially involves a comparison of product data sheets from different vendors. For this report, it takes into account the differences among the types of switches offered for instance, a CLE box does not have the same feature set as a core/edge box.

Completeness of solution: In these early years of Ethernet service deployment over MPLS, there will be numerous opportunities for vendors to implement prestandard solutions that offer real advantages for carriers. In this case, it is important that carriers have the option to take a complete solution from a single vendor.

Interoperability: This is the other face of the coin. All carriers will insist that vendors propose a standards-based solution, while probably retaining the option to switch on the various "value-added" features that the chosen vendor also offers.

Maturity of solution: The MPLS-to-the-customer approach is clearly very software-dependent. Carriers will certainly be considering the maturity of the software on offer from these companies. But for those vendors that are proposing a less radical approach namely, retaining more Layer 2 character in the metro network the maturity of the hardware will be more important.

Migration capability: Carriers have to be able to migrate customers from existing private circuit and Frame Relay services with a minimum "first-in" cost, and they must have the ability to offer service interworking at the IP level, at least.

Market presence: This is the most subjective of the six metrics in the Hexagon. Incumbent suppliers such as Alcatel, Cisco, Juniper, and Nortel clearly have the greatest market clout, but market presence can also include smaller players that gain reputations for delivering next-generation, innovative products. This metric includes a combination of successful market penetration with a successful market vision.




Heavy Reading Hexagon for Nortel Networks

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Key Findings

Key findings of the report include the following:

Complete, end-to-end solutions for carrier Ethernet service delivery over a packet infrastructure are now available from several major suppliers. Cisco, Nortel, and Riverstone all have complete solutions today. These products include single-vendor and multivendor management and service-provisioning systems.

Ethernet equipment manufacturers have taken two different approaches to delivering MPLS general-purpose platforms that have been adapted, and platforms built specifically for MPLS. Cisco has taken the first approach, which is not surprising because it clearly suits Cisco's position as the incumbent IP supplier to many carriers. Purpose-built platforms have a startup cost associated with them and may have migration issues, but they will cost less per user for Ethernet-based services.

Cisco has the clear inside track in the race for market leadership, while Alcatel and Riverstone are emerging as strong potential challengers. As the incumbent supplier of IP equipment to most of the world's carriers, Cisco has the opportunity to work existing accounts from the inside, instead of cold-calling in the hope of finding new customers. Alcatel's strength comes from the combination of radical new products that were purpose-built to deliver carrier Ethernet services and its position as an incumbent vendor in the transport departments of many of the world's carriers. Riverstone is a true, new-age manufacturer that has the product depth, breadth, and focus to succeed in the carrier Ethernet market. It also has momentum from a good base of reference accounts.

Nortel is taking a technology path that is decidedly different from those of most of its competitors. Nortel clearly will continue to succeed in the carrier Ethernet market, but its architecture is very different from its competitors', and it has to convince its customers of the rightness of its argument. Regarding MPLS, Nortel is using proprietary encapsulation schemes, and it is creating "functional bundles" of products.

In the migration from Ethernet as an enterprise technology to Ethernet as carrier-class, many features remain proprietary in nature. Changes have to be made to enterprise Ethernet equipment to enable it to support carrier-class services successfully. Aspects of change include the hardware, operating systems, and protocols for Ethernet and MPLS. With such a broad scope of work that remains to be done, it's not surprising that many of the initial implementations are proprietary.

The time is right for vendors to push MPLS functionality closer to the customer premises especially using a "Layer 2 plus MPLS" approach. Historically, MPLS functionality was regarded as expensive and complex. Manufacturers are dealing with cost by creating purpose-built platforms, rather than general-purpose boxes with software-based features or expensive feature cards. It remains to be seen how they will deal with the complexity issue, but the mechanism of choice seems to be to use MPLS as a means of setting up pure Layer 2 services.

In selecting a vendor for Ethernet services, carriers must make a choice between "safe" and "revolutionary." In other words, no single vendor in this survey is a winner in both the technical and political battles. But there are some clear conclusions to which we can point: Cisco's Ethernet solution is strong enough to make it a leading contender in carriers where Cisco is already a dominant supplier. Atrica looks good for carriers that truly want to build out a next-generation optical/MPLS architecture. Riverstone seems to offer a good compromise between migration and next-gen features.


Report Structure

This report is structured as followed:

Section II ("Defining the Carrier-Class Ethernet Universe") includes an overview of the different approaches available to carriers for delivering Ethernet services, focusing particularly on products that deliver Ethernet over MPLS and Ethernet over IP/MPLS functionality.

Section III ("Vendor Ratings") presents comparative ratings for 11 of the 12 vendors included in this product survey, using the Heavy Reading Hexagon rating system.

Sections IV through XV are focused on the individual vendors, providing detailed data on products and strategies for each manufacturer of Ethernet over MPLS or Ethernet over IP/MPLS gear.

Section XVI ("What Carriers Want") discusses the main issues and concerns about Ethernet delivery platforms voiced by carrier executives interviewed for this report.

The report is essential reading for a wide range of industry participants, including the following:

Makers of carrier-grade MPLS and IP/MPLS Ethernet equipment: How do your products compare with those of your competitors? Are you able to present your customers with an accurate description of the value of your products compared with the competition's? What are the key advantages that you hold over each of your rivals? What are the areas you need to address to maintain a competitive edge in the marketplace?

Suppliers of other carrier-grade Ethernet products: How well-developed are MPLS and IP/MPLS Ethernet product lines, and how do these products stack up as competitive threats to your offerings? Are there potential partners that can help your company to enter this emerging product sector quickly and profitably?

Ethernet service providers: Are your suppliers delivering the best systems on the market, or do other vendors have equipment that better meets your needs? Will your suppliers be in a position to deliver critical features that will help lower the costs of delivering Ethernet services, such as robust OAM (operations, administration, and maintenance) implementations? Can comparative product data help you to negotiate more aggressive pricing deals with your current suppliers?

Suppliers of components and subsystems: Are you reaching the entire potential market for your products? Which systems vendors are making the most aggressive moves into new product lines? How does your product portfolio match up with likely market demand from systems manufacturers?

Investors: Which equipment makers are in the best position to capture market share in this important telecom industry sector? Which privately held companies may be acquisition targets in the future, and which incumbent vendors would make the best match for those startups?

Ethernet Over IP/MPLS Service Delivery Platforms: A Heavy Reading Competitive Analysis is published in PDF format.

LENGTH: 158 PAGES
PRICE: $3,795
GEOFF BENNETT
Chief Technologist, Heavy Reading
Heavy Reading's Chief Technologist boasts nearly two decades of experience in the data communications industry across almost all major networking technologies. His expertise includes MPLS, GMPLS, optical communications, TCP/IP and IP routing, ATM and emerging technologies...
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KEY FINDINGS
End-to-end solutions for packet-based carrier Ethernet are available now
Cisco, Alcatel, and Riverstone have emerged as the early leaders in this sector
Proprietary technology remains a critical differentiator for many suppliers
Equipment vendors are driving MPLS implementations closer to the end user
OAM development is improving but still needs work to drive down service costs
No single vendor clearly dominates both the technical and market battles in this sector
EQUIPMENT VENDORS ANALYZED
Alcatel SA (NYSE: ALA; Paris: CEGP:PA)
Atrica Inc.
Cisco Systems Inc. (Nasdaq: CSCO)
Corrigent Systems Inc.
Extreme Networks Inc. (Nasdaq: EXTR)
Foundry Networks Inc. (Nasdaq: FDRY)
Juniper Networks Inc. (Nasdaq: JNPR)
Laurel Networks Inc.
Nortel Networks Corp. (NYSE/Toronto: NT)
Overture Networks Inc.
Riverstone Networks Inc. (OTC: RSTN.PK)
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)
DELIVERABLES
158 pages of data and analysis covering all known manufacturers of carrier-class Ethernet over MPLS and IP/MPLS equipment

Detailed ratings of each vendor's product line and market strategy using the unique and innovative Heavy Reading Hexagon rating system

In-depth matrices delivering thousands of data points for comparing vendor products and strategies

Exclusive interviews with carrier executives pinpointing plans and expectations for Ethernet service delivery
LENGTH: 158 PAGES
PRICE: $3,795
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