Ethernet Business Services

© Ciena Confidential and Proprietary

Ethernet Business Services Opportunity is No Joke

The Evolution of Ethernet Business Services

in Service Provider Networks

2 © Ciena Confidential and Proprietary

Today’s Speakers

Barry Zipp

Director, Industry Marketing

Ciena

Alan Breznick

Senior Analyst

Heavy Reading

Scott Cassell

Senior Director, Ethernet Product Management

Comcast Business


Agenda


The traffic-revenue growth conundrum Network expansion expenses squeezing profitability

Traffic growth is accelerating while revenue growth is

slowing…

Operating expenses are outpacing

revenue growth and squeezing SP profitability.

0

5000

10000

15000

20000

25000

30000

35000

2007 2008 2009 2010 2011

Traf

fic

(Pb

/Mo

nth

)

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Rev

enu

e G

row

th (

%)

Internet Traffic SP Revenue Growth (%)

Annual global IP traffic will surpass the zettabyte threshold by the end of 2016


Service Providers turning to Carrier Ethernet Higher revenue, new services

• Robust revenue growth

• Demand for high bandwidth services

(>1Gbps) growing faster than market

• Price/bit is compressing, but still high-

value premium services

• Increasingly popular choice for cloud

access

• IT spend gradually shifting to cloud

service providers

• Appealing service attributes including

highly scalable bandwidth, service

differentiation, and resiliency

• MEF defining Dynamic Responsive

Ethernet (DRE)

$0

$10,000

$20,000

$30,000

$40,000

2008 2009 2010 2011 2012 2013 2014 2015

Eth

ern

et

Rev

($M

)

10G 1G 100M 10M Sub 10M

Private Cloud

Carrier Ethernet

Branch office Reg. HQ

Public Cloud


N.A. enterprise Ethernet services market projected to

reach $15B by 2016

Market trends contributing to growth:

Integration between cloud services and Ethernet infrastructure

Broader adoption of higher capacity services (10GE+)

Expansion of 3G/4G mobile networks

http://www.123rf.com/photo_12157222_network.html


Agenda

The Benefits of Ethernet Business Services for Cable Operators

Alan Breznick

Senior Analyst, Heavy Reading

Cable’s Business Services Opportunity

• U.S. has more than 27 million companies of all shapes and sizes, the vast majority of them SMBs and SOHOs

• U.S. businesses now spend an estimated $130 billion to $140 billion on telecom services annually

• SMBs alone spend an estimated $50 billion to $70 billion annually on data, voice, and video services

• Cable industry’s HFC lines already pass more than three quarters of SMBs in U.S.

• Yet cable companies still take home only $6 billion or so of the overall haul, no more than 5 percent of total

• Comcast, the MSO leader, reaped nearly $1.8 billion from commercial services in 2011, followed by Time Warner Cable and Cox Communications

MSO Commercial Market Opportunity

MSO Number of Firms in Region Market Opportunity

Comcast 5.2M – very small (<20 workers)

5.6M – total

$11.5B – very small

$49.8B – total

Time Warner

Cable

2.3M-2.7M – very small

2.5M-3.0M – all SMBs

3.0M – total

$6.3B – very small

$17B-$21B – all SMBs

$21B-$25B – total

Cox

Communications

820,000 – very small

1.3M – total

$6.2B – wireline

$4B – wireless

Charter

Communications

1M – total $5.5B -- total

Cablevision

Systems

685,000 -- very small & small

(< 100 workers)

50,000-60,000 -- midsized &

larger firms

$3.0B – very small &

small firms

$3.0B-$3.5B – midsized

& larger firms

*Heavy Reading estimate

Key Vertical Markets for Cable

Health Care Education

Government

Financial Services

MSO Business Services Revenues 2007-2011

MSO 2007 2008 2009

2010 2011

Comcast $394 million $558 million $828 million $1.3 billion $1.8 billion

Time Warner

Cable

$660 million $775

million*

$915 million $1.1 billion $1.5 billion

Cox

Communications

$740 million $853 million $985 million $1.1 billion $1.3 billion

Cablevision

Systems

(Optimum

Lightpath)

$215

million+

$249

million+

$256

million+

$284

million+

$311

million+

Charter

Communications

$341 million $392 million $446 million $494 million $583 million

Top U.S. Business Ethernet Services Players

Rank Ethernet Provider

1 AT&T

2 Verizon

3 tw telecom

4 Cox

5 XO

6 CenturyLink

7 Time Warner Cable

8 Level 3

9 Cogent

Source: Vertical Systems Group

U.S. MSO Ethernet Services Activity

Cable Operator Ethernet Service Deployments

Cox Communications Offers P2P E-line, EVPL & multipoint E-LAN services at speeds

from under 1 Mbit/s to 10 Gbit/s

Cablevision Systems

(Optimum Lightpath)

Offers P2P EPL, EVPL, multipoint E-LAN, DIA & OTS services at

speeds from under 50 Mbit/s to 10 Gbit/s

Time Warner Cable Offers EPL, EVPL, multipoint E-LAN & DIA services at speeds

from 2 Mbit/s to 10 Gbit/s

Comcast Launched Metro Ethernet service in 20+ markets in spring 2011;

Offers EPL, EVPL, ENS/E-LAN & DIA services at speeds from 1

Mbit/s to 10 Gbit/s

Charter Communications Offers P2P EPL, EVPL & multipoint E-LAN services at speeds

from 10 Mbit/s to 10 Gbit/s, plus Ethernet-based Internet access

Bright House Networks Offers P2P EPL, EVPL & multipoint E-LAN services at speeds

from 2 to 10 Gbit/s

SureWest Offers P2P, E-LAN & DIA services at speeds from 1 Mbit/s to 10

Gbit/s

Source: Heavy Reading’s Cable Industry Insider, 2011

U.S. MSO Ethernet Services Revenue

Cable Operator Ethernet Service Revenues 2011

Cox Communications $250 million

Cablevision Systems

(Optimum Lightpath)

$225 million

Time Warner Cable $150 million+

Comcast $75 million+

Charter Communications $75 million

Bright House Networks $50-$75 million

SureWest

Communications

$25 million

TOTAL $850-$875 million

Source: Heavy Reading’s Cable Industry Insider, 2011

U.S. MSO Mobile Backhaul Activity MSO Number of Cell Towers Annual Revenues 2011

Cox Communications Serves over 2,000 towers $50 million*

Cablevision Systems

(Optimum Lightpath)

Serves up to 1,000 towers $20 million*

Time Warner Cable Wired over 7,600 towers

$154 million

Comcast Serves up to 6,000 towers $120 million*

Charter Communications Serves 1,400 towers; another

300+ under contract

$30 million*

Bright House Networks Serves 600 towers $10 million*

TOTAL. 20,000 towers $400 million*

Source: Heavy Reading’s Cable Industry Insider, MSO earnings reports, & Heavy Reading estimates*


Poll Question #1:

Which factor will be most critical to the growth of EBS over the

next five years?

a) Increasing sophistication of the services – OAM tools, technical

specifications, client devices, etc.

b) Greater reach – more locations of a business can be connected.

c) Growing demand for high-bandwidth applications (cloud services,

multimedia collaboration, data center connectivity, etc.)

d) The influence of the Metro Ethernet Forum in promoting EBS adoption

e) Promise of cost reduction relative to legacy services


Agenda


MEF Carrier Ethernet Service Types Construct for standardized business services

E-Line Service Type for

• Ethernet Private Lines (EPL)

• Virtual Private Lines (EVPL)

• Dedicated Internet Access (DIA)

E-LAN Service Type for

• Multi-point L2 VPN

• Transparent LAN Service

• Multicast Networks

E-Tree Service Type for

• Rooted Multi-point L2 VPNs

• Broadcast Networks

• Telemetry Networks

E-Access Service Type for

• Wholesale Access Services

• Access EPL

• Access EVPL


Which companies use Ethernet Business Services? The financial services industry leads the way

Top verticals share key

characteristics

Locations concentrated in

major metros (fiber available)

Bandwidth heavy apps (data

center backup, multimedia

collaboration, etc.)

Industry/government regulation

with specific security

requirements

Vertical Most Used

Finance 33%

Medical 15%

Education 6%

Data Center / Storage/ IT 9%

Real Estate 9%

Legal 6%

Retail 9%

Wholesale Telecom 9%

Media 6%

Source: Metro Ethernet Forum (based on actual case studies)


One-third of Ethernet connections come from IP-VPN Coupled with steady transition from narrowband private lines

Why Ethernet rather than IP-VPN?

Simplicity/Familiarity

Service Flexibility and Control

Cost Reduction

$-

$20

$40

$60

$80

$100

$120

2010 2011 2012 2013 2014

Global Wholesale/Retail Business Services Revenue ($B)

Narrowband (ATM/FR/T1/OC3/12/48)

IP VPN

HiCap PL (λ, OC192)

Ethernet PL

Ethernet (EVPL & EVPLAN) Source: Ciena


What factors do enterprises most value? Top decision factors (excluding price)

% OF ENTERPRISE CUSTOMERS

Source: Vertical Systems Group - ENS

• Velocity/Automation

• Predictable Service Delivery

• Service Assurance

• Resiliency


EBS offers a host of attributes that enable service

providers to meet the needs of enterprises

AUTOMATED, ENHANCED

SERVICE DIAGNOSTICS

• Point-to-point, multipoint-to-multipoint, and rooted multipoint service types

• 1 Mbps-10Gbps; bandwidth requirements specified for CIR and EIR

• Controlled and measurable for predictable QoS

• Point-to-point or ring configurations for sub-50 ms protection (e.g., link aggregation, G.8032 ring protection switching)

• Plug-and-play automation yielding 75% shorter installation and configuration times

• Ability to prioritize enterprise traffic (e.g., real-time/premium, business/priority, basic/best effort)

• Based on Ethernet OAM, including IETF RFC 2544, ITU-T Y.1731, IEEE 802.1ag

• Proactive SLA monitoring and reporting to deliver advanced levels of service guarantees

SERVICE ATTRIBUTES SP BENEFITS


These benefits extend to the enterprise

Users get the same kind of plug-and-play simplicity as in

the LAN.

Network security and control over routing information and security

and encryption techniques are determined by the enterprise.

Superior scalability with lowest cost-per-bit and pay-as-you-use

model; enterprise only pays for bandwidth required.

Ideally suited for mission-critical applications involving

streaming video, data center connectivity, BC/DR, etc.

Rapid industry innovation and standardization in network

management and visibility; greater levels of service turn-up &

change automation.


Use Case #1 for Banking: Video Conferencing

Market research points to growing demand

53% of U.S. Gen Y consumers use desktop video, and

41% use mobile video

44% of U.S. private-banking clients said they were

“interested” or “very interested” in using HD video in

banking offices to meet with multiple experts located

elsewhere

63% of private-banking clients under age 50 said they

were “interested” or “very interested” in using HD video

in banking offices to meet with multiple experts

Possible Video Applications:

Remote Advisors: offer high-end services to more

clients; improve advisor productivity

Remote Private Banking: connect clients to

specialists and advisors in other offices

Virtual Concierge: interact with bank tellers or

contact center agents for simple inquiries

B2B Meetings: conduct video conferences with

other company locations, partners, etc.

Enterprise Value

Eliminate multiple networks to transport data

Increase application performance without significant cost increase

Generate immediate, measurable cost benefits

1GbE Service Remote office Main bank office

*Source: Cisco IBSG, 2011


Use Case #2 for Banking: Connectivity to Cloud Services

Bandwidth flexibility: use only what you

need, when you need it

Scalability: 1 Mbps to 10 Gbps (evolving to

100 Gbps)

QoS performance: low latency (<15ms), packet

loss (<0.001%)

Multiple connectivity options: point-to-point,

point to multipoint, etc.

Advantages of Ethernet for Cloud Connectivity

Private Cloud Data flow

Carrier Ethernet

Branch office

Reg. HQ Public Cloud

Using cloud services, banks can provide a variety of

innovative services ranging from mobile device support,

online credit services, and the ability to provide

streamlined business processes as a service.

http://www.google.com/imgres?imgurl=http://blogs.bu.edu/bunow/files/2010/02/generic-bank-building-150x150.jpg&imgrefurl=http://blogs.bu.edu/bunow/2010/02/19/more-power-to-treasury-secretary/&h=150&w=150&sz=10&tbnid=sEZPieVtFeMOQM:&tbnh=96&tbnw=96&prev=/search?q=generic+bank+images&tbm=isch&tbo=u&zoom=1&q=generic+bank+images&usg=__4duZskasoudH70N08IZWzy1pl8M=&sa=X&ei=lYZrT93IPM-x0QHhxZnwBg&ved=0CBIQ9QEwAQ


Ethernet Business Services Market Typical Metro Example

SMBs make up the majority of the EBS market.

Source: Ciena


Extending EBS with Geo-Analytics

Geo-analytics Go-to-Market Model

Demand

Supply

Competition

Geo-Analytics can help build profitable GTM plans, validate market demand


The Key Issue:

How to profitably target & reach businesses?

Opportunity for Growth of EBS in Northern VA


Agenda

Ethernet Business Services … a Service Provider Perspective

32 Comcast Internal Confidential

Agenda

• Comcast Business Evolution & The Rise of Ethernet

Services

• Applications Enablement and the Proliferation of

Bandwidth Consumption

• Ethernet and the Cloud

• Ethernet Footprint Considerations


41.4%

$1.8B

in

2011

• Market Leadership in SMB Marketplace

‒ The Fastest Internet

‒ Full Featured Voice Services

‒ Public & Private View Television Services

• Technology Leadership

‒ Industry Leading IP Backbone

‒ Rich Networking Experience • Robust Fiber & Hybrid Fiber Networks

• Extensive Cell Back Haul Delivery

• Massive Ethernet Market Growth

• Comcast Launches Metro Ethernet Services

Comcast Business Evolution & The Rise of Ethernet Services


ETHERNET VIRTUAL PRIVATE LINE EVPL

ETHERNET PRIVATE LINE EPL

ETHERNET NETWORK SERVICE ENS / ELAN

ETHERNET DEDICATED INTERNET

Comcast Business Class Ethernet Services


Applications Enablement and the Proliferation of Bandwidth Consumption

Budgets are not increasing at the same speed

Distance Learning, Video to

the Classroom

Public Safety, Disaster

Recovery, Improved Services

Cloud Based and High

Bandwidth Applications

Medical Image File Transfer,

Telemedicine


Network choice is critically important in cloud environments

Key decision criteria:

Network reliability

Traffic separation / security

Absolute speed

Scalability (efficiently add applications, sites, users)

Application-specific bandwidth control

Customer-centric experience

Exploiting the Cloud requires you select:

1) The Right Network Technology

2) The Right Network Provider


Ethernet Footprint Considerations

Demand

• Customers ready to replace

legacy networks

Upgrade from local DS1 and

DS3 private line services

Migrate from legacy ATM/frame

relay networks

• Customers require higher

bandwidth connections for both

host and remote locations

• The market has chosen

Ethernet

Supply

• Fiber network penetration

remains below 50% for US

businesses

• Construction economics

challenging for sub-10Mb

market

• Resellers/CLEC’s looking for

cost-effective way to compete

against large facilities-based

providers


Unsurpassed Reach Within Markets

• Fiber deep and fiber rich

• Physically diverse path

• High-bandwidth hybrid fiber/coax access

network to serve millions of businesses

Service in 20 of Top 25 Metro Areas

• 39 States & Washington, DC

• 600,000+ plant route miles

• 147,000 fiber route miles

• 122,000 Optical nodes

The Largest Facilities-based Alternative to the

Phone Companies for First & Last Mile Connectivity

Thank You


Poll Question #2:

Excluding price, which is the most important factor in an

enterprise’s decision to deploy Ethernet Business Services?

a) Speed of service turn-up

b) Service performance visibility

c) Customer portals to modify service parameters

d) Service resiliency characteristics and options

e) Fit with cloud service delivery


Agenda


Ciena’s True Carrier Ethernet™ • MEF Carrier Ethernet

with Value-Added

Enhancements

• Best in breed

scalability, resilience,

QoS enforcement and

service management

• Deterministic traffic

routing with connection

oriented technologies

• Interoperable with a

variety of MPLS/VPLS

architectures

MEF Carrier

Ethernet

LAN Ethernet

Ciena’s True Carrier Ethernet™ Building on the MEF Foundation


1G

Access Aggregation/Metro

28G

60G

88G

240G

4T

12T

10G

100G

1T

10T

Core

Fu

ll D

up

lex C

ap

acit

y

Max Port Speed

10G 100G

48G

1T

Software

Ciena CES Portfolio Evolution


Service Differentiation enabled by Ciena

Velocity

Fit-to-purpose access and aggregation devices (MBH, EBS, etc) with common service-aware

software architecture

Multiple configurations for enhanced resilience, service

flexibility

Extensive bandwidth granularity, scalability

Automated service creation, activation, and management

Scripted customizations for ease of deployment and changes

Deterministic traffic routing with connection-oriented

technologies

Premium service offerings w/ features above and beyond MEF

Best in breed scalability, resilience, QoS enforcement,

and service management

Service benchmarking for SLA guarantees

Efficiency Performance


Comcast Business Metro Ethernet Network Powered by Ciena True Carrier Ethernet® service delivery switches

10GE

1GE

v

Ethernet

Aggregation

Ciena Attribute Customer Advantage

Standards-based, interoperable Ethernet solutions Delivers service differentiation, creates competitive barriers

High-velocity and automated service creation, activation, mgmt Faster time-to-market, revenue, and profitability

Integrates Carrier Ethernet Quality-of-Service (QoS) Predictable service delivery, assurance, and resilience

Common service-oriented architecture (SAOS) Consistency across all Ethernet access and aggregation apps


Summary

Explosive growth in offered data-rates, with flat per-bit revenues

Cost-effective, flexible, reliable, deterministic

Business services, mobile backhaul, cloud/data center connectivity

Deployments with the largest global carriers, 4G operators, MSOs; 55

patents and patents pending; standards-based solutions and interoperability

© Ciena Confidential and Proprietary

Thank You!

Please visit

www.ciena.com/resources/webinars

to view previous events on demand

http://www.ciena.com/resources/webinars

Date post:	20-Aug-2015
Category:	Technology
Upload:	ciena
View:	1,596 times
Download:	1 times