Heavy Reading
EXECUTIVE SUMMARY

Pseudowires and the Future of Transport and Access Networks

The term pseudowire has rapidly morphed from an odd, seemingly arcane term describing virtual circuits in a packet network to the single most important facet of the transformation of messy, multilayered networks into truly converged networks. By allowing an operator to package any service, legacy or emerging, and send it into the network in a common format that both preserves the service’s original features and delivers the values of end-to-end OAM&P (operations, administration, maintenance, and provisioning), statistical multiplexing, and unified management, pseudowire solutions preserve profitable legacy services while enabling the creation of a truly next-generation network.

Simply put, pseudowire technology is the solution for convergence in future telecommunications networks. Pseudowire solutions have significance for every aspect of the network – at the packet and transport layers, encompassing network access, edge, and core functions – and for every type of operator, from local incumbents to cable MSOs, wireless network operators, and IXCs. While edge router vendors dominate this market opportunity today, in the future a host of new players will deliver approaches that integrate pseudowires into a much broader range of products, including access concentrators, metro Sonet/SDH gear, and new multiservice switches.

Pseudowires and the Future of Transport and Access Networks assesses the impact that pseudowire technology will have on telecom networks and equipment, as well as the market opportunity that pseudowires will create for vendors and service providers in the next three years.

This report is based on extensive one-on-one interviews with service providers and equipment vendors, as well as an exclusive online survey of telecom operators worldwide. Sixty-six respondents, representing more than five dozen network operators, participated in the survey. Their responses offer insights into current network utilization levels, convergence plans, carrier interest in "packet-aware" metro and access networks, and finally, carrier awareness of pseudowires and the values associated with their use.

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One-on-one interviews were conducted with the following operators:

AT&T Corp. (NYSE: T)
Completel Europe NV (Paris: CPT)
Level 3 Communications Inc. (Nasdaq: LVLT)
Looking Glass Networks Inc.
MCI Inc. (Nasdaq: MCIC)
Sprint Corp. (NYSE: FON)
Verizon Communications Inc. (NYSE: VZ)
WilTel Communications Group Inc.

These interviews were typically with senior network planners and architects and covered issues surrounding the current state of their networks and their thoughts on if and how they would evolve them into converged multiservice networks.

Heavy Reading also interviewed executives from the following vendors to assess the current levels of product development and the focus on MPLS and transport networking:

Anda Networks Inc.
Axerra Networks Inc.
Ciena Corp. (Nasdaq: CIEN)
Corrigent Systems Inc.
ECI Telecom Ltd. (Nasdaq/NM: ECIL)
Fujitsu Ltd. (OTC: FJTSY; Tokyo: 6702)
Hammerhead Systems Inc.
Luminous Networks Inc.
Mangrove Systems Inc.
Marconi Corp. plc (Nasdaq: MRICY; London: MONI)
Nortel Networks Ltd. (NYSE/Toronto: NT)
Overture Networks Inc.
RAD Data Communications Ltd.
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)


Key Findings

Key findings from the report include the following:

Pseudowire technology is well positioned to play a critical role in the rollout of next-generation networks. Network operators are in near-universal agreement that the three key building blocks of next-gen networks will be IP, Ethernet, and MPLS. Pseudowires help provide a standards-based means of supporting legacy protocols on these new networks and supporting new connectivity paradigms for a variety of transport and services models.

Pseudowires offer a combination of cost control and service flexibility, giving them wide appeal across a broad range of network operators. Pseudowires decouple services from the underlying infrastructure that carries them. In this sense, they facilitate further "virtualization" of network services and enable operators to control costs, extend services more easily over a variety of access and metro infrastructures, and maintain profitability in the face of rapidly declining service pricing.

The use of pseudowires is well established in IP/MPLS core networks today, and it is now extending into the access network. In core networks, operators are already deploying pseudowires to (1) control capex and opex by moving ATM and Frame Relay services transport to IP/MPLS core networks and (2) affordably extend new Ethernet services over long distances by running them over IP/MPLS cores. The primary drivers for integrating pseudowire support into transmission gear (MSPPs, digital crossconnects, etc.) are the improved bandwidth efficiency of packet services transport and the ability to perform packet aggregation before handing TDM-based circuits to an edge or core router. IXCs and wireless operators are now looking to deploy pseudowire solutions in access networks as a way to support multiple service types over a single connection, thus reducing the access charges those carriers pay to local incumbents.

Cable MSOs are a quiet driver of pseudowire technology. MSOs are looking for low-cost access infrastructure that supports a range of services over an Ethernet-based uplink.

In some regional markets, pseudowires could play a key role in the deployment of the "triple play" of voice, video, and data over a converged IP access infrastructure. Pseudowire solutions are being considered by Asian local incumbents to optimize network resources, improve network and services management, and support end-to-end QOS.

Network equipment will undergo some fairly rapid feature changes in response to customer demand. In order to leverage Ethernet class of service (COS) and protection, access multiplexers and multiservice edge gateways are being introduced with only Ethernet (VLAN) technology. These will give way to pseudowire-based solutions within the next 18 months, as requirements for additional protocols (Frame Relay, ATM, pure TDM), improved protection (MPLS Fast Reroute), and end-to-end service setup and management increase.

Report Scope and Structure

Pseudowires and the Future of Transport and Access Networks offers a comprehensive analysis of the role that pseudowire technology will play in the evolution of carrier transport and access networks, as well as in reshaping classes of equipment used in telecom networks.


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The report identifies and classifies emerging categories of pseudowire-capable equipment, using the unique network taxonomy developed by Heavy Reading in previous reports.


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The report is structured as follows:

Section I provides a complete overview and full key findings of the report.

Section II provides an overview of pseudowire technology development and its role in the creation of converged networks.

Section III focuses on the role pseudowires can play in access networks, including their use for business and consumer service delivery, wireless backhaul, and cable MSO applications.

Section IV covers the use of pseudowires in the creation of packet-aware transport networks.

Section V presents case studies of strategic deployments of pseudowires and packet-aware transport networks at five different network operators: AT&T, MCI, Sprint, WilTel, and Completel.

Section VI includes results from our worldwide survey of service providers regarding their requirements for and awareness of pseudowires in access and transport networks.

Section VII analyzes the impact that pseudowires will have on transport and access network equipment. It includes Heavy Reading's first attempt at establishing a taxonomy for network equipment incorporating pseudowires.

Section VIII assesses the market positioning of key vendors as they roll out products that incorporate pseudowire technology.


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

Service providers: How does your strategy for deploying pseudowire solutions compare with those of other service providers? What kinds of services are your competitors planning to bring to market? How will the continuing emergence of pseudowires affect your business models and customer demand for your services? What kinds of capex and opex benefits can you really expect from pseudowire deployment in your network?

Equipment suppliers: How is pseudowire technology changing the competitive landscape for your products? What are your competitors doing to incorporate pseudowires into their products? Which types of service provider are expressing the strongest interest in pseudowire solutions? How can you develop products that will appeal most to those adopters?

Investors: In what ways will pseudowire technology reshape the telecom equipment and services landscape? What is the probable timing for pseudowire solutions to reach critical demand among network operators? Which startup vendors have the inside track on developing pseudowire products?

Pseudowires and the Future of Transport and Access Networks is published in PDF format.

LENGTH: 66 PAGES
PRICE: $3,495
SCOTT CLAVENNA
Chief Analyst, Heavy Reading
Scott Clavenna is the head of Heavy Reading's team of analysts and a leading authority on next-generation telecom technology. He has 12 years' experience researching the optical networks and broadband networking markets...
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KEY FINDINGS
Pseudowire technology is primed to play a critical role in next-gen networks
Pseudowires offer an appealing combination of cost control and service flexibility
Use of pseudowires is expanding from core networks into access networks
Cable MSOs are showing especially strong interest in pseudowire technology
Telcos in Asia are starting to adopt pseudowires as part of their "triple-play" efforts
Major changes are in
store for telecom gear as vendors start to build in for pseudowires
SERVICE PROVIDERS PROFILED
AT&T Corp. (NYSE: T)
Completel Europe NV (Paris: CPT)
Level 3 Communications Inc. (Nasdaq: LVLT)
Looking Glass Networks Inc.
MCI Inc. (Nasdaq: MCIC)
Sprint Corp. (NYSE: FON)
Verizon Communications Inc. (NYSE: VZ)
WilTel Communications Group Inc.
VENDORS PROFILED
Anda Networks Inc.
Axerra Networks Inc.
Ciena Corp. (Nasdaq: CIEN)
Corrigent Systems Inc.
ECI Telecom Ltd. (Nasdaq/NM: ECIL)
Fujitsu Ltd. (OTC: FJTSY; Tokyo: 6702)
Hammerhead Systems Inc.
Luminous Networks Inc.
Mangrove Systems Inc.
Marconi Corp. plc (Nasdaq: MRICY; London: MONI)
Nortel Networks Ltd. (NYSE/Toronto: NT)
Overture Networks Inc.
RAD Data Communications Ltd.
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)
DELIVERABLES
66 pages of analysis of pseudowire technology development and its market impact for service providers and equipment vendors

Results from a worldwide survey of more than 60 service providers regarding pseudowire deployment plans

In-depth analysis of pseudowire technology’s probable impact on network services and equipment

Original taxonomy of new product categories likely to emerge as part of the pseudowire movement

LENGTH: 66 PAGES
PRICE: $3,495
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