The Internet economy has been discussed for years. Now, a new approach to metropolitan networking--the "Ethernet economy"--is beginning to deliver the services, speed and the cost-effectiveness required to sustain and drive forward the Internet economy.
Where Ethernet was once simply one of two workgroup LAN standards, it now promises to become the infrastructure of choice for building major portions of the next-generation public network. Last mile and metro networks for ISPs and ASPs, links to large and medium-sized businesses, even residential connectivity, will all be changed by the concept of the Ethernet economy.
Ethernet History
Developed in the 1970s, Ethernet has slowly but surely taken over sector after sector of the networking world. Until the early 1990s, Ethernet battled IBM Corp. (www.ibm.com) and token ring as the LAN standard of choice. Ethernet's performance proved far easier to scale than token ring's, and therefore, token ring faded, leaving Ethernet to rule the workgroup environment. Ethernet then contested fiber distributed data interface (FDDI) and ATM for the enterprise backbone. Despite the claims made for ATM, Ethernet again proved more scalable and far simpler than its competitors and, with the arrival of gigabit Ethernet, grew to dominate enterprise backbones and ISP/ASP hosting centers. Today, more than 85 percent of computer users choose Ethernet for network connectivity.
By far the most important factor driving the expansion of Ethernet over the last 25 years has been the growth of the Internet and IP. Ethernet and IP are made for each other; IP networks run most simply and best on Ethernet. Ethernet triumphed over ATM largely due to the dominance of IP. Since IP is connectionless, running it over connection-oriented ATM links required LAN emulation. In the end, businesses with networks to run found hiring large numbers of technologists to manage complex LAN emulation too painful, and moved back to a combination of Ethernet with IP, a network that enterprise IT managers could easily manage and support.
A New Frontier
The connection between Ethernet and IP is the fundamental reason why many analysts now believe Ethernet is destined to take its next big step out of the LAN and into the access and metro layers of the WAN. Until now, the WAN has been dominated by circuit-switched traffic--primarily voice. Over the next few years, analysts' forecasts indicate that this WAN landscape will change dramatically. The continued rapid expansion of the Internet to support electronic commerce, voice, video and, a recent trend, music, will contribute to approximately a tenfold growth in overall WAN traffic. By 2004, analysts believe that up to 95 percent of traffic will be IP.
With Internet traffic soon to dominate the WAN as it already dominates the LAN, it makes intuitive sense that service providers turn to Ethernet for their next-gen metro infrastructure.
Today's public network is built upon the principle that its subscribers' primary need is for low-speed, circuit switched bandwidth--in other words, voice. Access to today's network is low speed--T1 at best for most of us--predominantly over copper. The network backbone consists of sets of interconnected SONET rings running, again, at fairly low speeds--no faster than OC-48 (2.5gbps) in most cases--and built to concentrate and distribute many low-speed voice channels.
But most service providers recognize that subscribers' needs are changing. Now customers want high-speed asynchronous data in addition to low-speed synchronous voice. So innovative service providers are building new capabilities to meet these requirements.
New categories of service providers have emerged to focus on the needs of each area of the new metro network--both access or "last mile" and the metro backbone. In the access area, in-building service providers, known as building-centric LECs (BLECs), have focused on providing much higher speed access technologies to businesses in multitenant units and office parks. The latest service providers to emerge go even one step further and aim to deliver very-high-speed access (100mbps) to residences and very small businesses.
In the metro core area, a whole new class of service providers is linking the new access providers with large businesses and to long-distance gateways by providing very high-speed metro cores.
For all of these new classes of service providers, Ethernet technology is the common and crucial thread.
The BLEC category includes companies such as Allied Riser Communications Corp. (www.alliedriser.com), BroadBand Office Inc. (www.broadbandoffice.net), Everest Broadband Networks (www.everestbroadband.com) and UrbanMedia Inc. (www.urbanmedia.com). Although each BLEC has its own strategy, the common goal of these providers is to make agreements with the owners of large office buildings and business parks to deploy high-speed Ethernet networks throughout each building. Of course, an in-building network is only useful if it is connected at high speeds across the metro area, then to a national ISP and, finally, to the Internet. Each BLEC, therefore, either builds or buys high-speed metro backbone networks and purchases wholesale access to an ISP network.
Having constructed its network, the BLEC is in a position to sell very high speed, yet inexpensive, Internet access services to tenants in the buildings it has deployed. Pricing varies, but BLECs typically aim to offer 100mbps connections to their subscribers at roughly the prices those subscribers would pay for 1.5mbps connections through a legacy network.
While BLECs have focused on large office buildings and office parks serving small and medium-sized businesses, another class of service provider has emerged to deliver these same high speeds to residences and apartments. These service providers often take advantage of the fiber rings which are being constructed by city governments in many cities around the world.
One example, based in Palo Alto, Calif., is homeFiber Inc. (www.homefiber.com). homeFiber's service offers 10mbps or 100mbps Ethernet connections to each subscriber's residence using 100 percent fiber to the home. homeFiber contracts with developers and groups of residents to deploy fiber spurs off a backbone leased from the city's fiber ring. homeFiber then installs the Ethernet equipment necessary to create an Internet access network linked to the Palo Alto Internet Exchange. Because Ethernet is the foundation of the access network, homeFiber can charge each subscriber as little as $49.95 per month for a 10mbps connection. Presently, of course, many residential customers are installing cable modems or DSL-based Internet access typically at speeds of around 384kbps at a cost of $40 to $50 per month. Ethernet technology over fiber enables residents to purchase Internet access connections which are 25 to 30 times faster for, at most, $10 more per month.
Metro Ethernet Backbones
Complementing the last-mile providers, new Ethernet LECs (ELECs), are being formed to provide high-speed services across the metro area. Examples include Cogent Communications Inc. (www.cogentco.com), Telseon (www.telseon.com) and Yipes Communications Inc. (www.yipes.com).
As with the BLECs, each ELEC offers a different business proposition. But in essence, all are taking advantage of three major trends in the marketplace: first, the rapidly accelerating demand to network Internet traffic; second, the wider availability of fiber and substantially lower cost of renting it in many metro areas either from companies such as Metromedia Fiber Network Inc. (www.mmfn.com) or from city governments; and third, the technological opportunity of leveraging Ethernet technology in fiber-rich networks to deliver bandwidth inexpensively.
The result for users looks almost too good to be true. Telseon promises "twice the bandwidth for half the cost" while Yipes offers "superfast connectivity ... from 1mbps all the way up to 1gbps" and Cogent offers 100mbps Internet access for $1,000 per month--65 times the speed of a traditional T1 connection for roughly the same monthly fee. In addition, all of these providers promise that their Ethernet-based services will deliver additional advantages that go beyond price such as simpler management and faster provisioning.
Optical Ethernet
To date, the new service providers that are building the Ethernet economy have begun deployment by extending enterprise Ethernet technology into the metro network--chiefly because these are the only solutions that have been available. These carriers, as well as the analyst community, are quickly recognizing that the Ethernet economy cannot be built and scaled to the millions of connections it will eventually reach by using enterprise solutions.
As an example, when enterprises moved Ethernet from workgroup applications to the enterprise backbone, they did so not by deploying more workgroup switches, but by purchasing enterprise class switches. Similarly, to scale the Ethernet economy, carriers need Ethernet-based solutions that infuse what has hitherto been an enterprise technology with the features and functions necessary to operate in a carrier network. Carrier networks must support many thousands of users while delivering to each user the bandwidth and the services they have purchased. When carrier networks suffer a failure, service must be restored in milliseconds. Finally, carriers must support all of their users' traffic over a common network, delivering voice services as easily as data services. Enterprise equipment was never designed to meet these requirements.
To build networks like this, a new form of Ethernet called Optical Ethernet is emerging. Optical Ethernet leverages the advantages of Ethernet--its low cost, ubiquity and ability to scale from 10/100 to 10gbps and beyond--together with advances in optical networking and provisioning and network engineering, to produce a new solution that is optimized for carriers. Using Optical Ethernet, service providers can truly begin to build the Ethernet economy. Advancements like Optical Ethernet will allow these providers to deliver services that offer more bandwidth at prices that were previously unheard of. The result is a very compelling business case for ASPs, ISPs, enterprises and consumers alike to join the Ethernet economy.
David Yates is vice president of marketing for Atrica Inc. (www.atrica.com). He can be reached at david_yates@atrica.com.
