Infonetics: Carrier Ethernet Market is Booming; MEF Announces CE 2.0

Carrier Ethernet Market Status and Forecast:

On February 23rd, Infonetics Research co-founder Michael Howard led off the Ethernet Technology Summit – Market Research session with his Carrier Ethernet market assessment and forecast. Here are the highlights:

-Carrier Ethernet Equipment market is booming with $37.5B worlwide revenues forecasted for 2015.  The cumulative 2005 to 2010 CE market was $101B.

-Ethernet dominates worldwide mobile backhaul carrier spending with $6.4B or 91% of the 2011 mobile backhaul equipment market (that’s Ethernet over copper, microwave or fiber between the cell tower and the long haul carrier/ISP point of presence, and on to the controller site and/or mobile switching center.  In 2012, Ethernet based mobile backhaul accounts for 40% of physical connections of all types of mobile/cellular backhaul (e.g., TDM, IP, etc) in the world. It’s projected to be 95% of the mobile backhaul connections market by 2015.

-Network Operator Carrier Ethernet services (Ethernet Private Line, Virtual Private Line, Virtual Private LAN, Ethernet as access for IP VPNs) will be a $49B worldwide market in 2015. [this includes both retail and wholesale].  The cumulative 2010-2015 Carrier Ethernet market (total sales) is expected to be $93B.

-Big growth is foreseen for CE: Routers, Switches and optical networking/transport (Ethernet over DWDM) equipment.  Ethernet over microwave growth is accelerating.

Comment:

After many years of slow growth, it’s great to see the Carrier Ethernet market now “booming.” Note that the MEF has been in existance for 10 years and that the IEEE 802.3ah Ethernet First Mile (EFM) standard was completed in 2003. Yet the Carrier Ethernet market really didn’t start to ramp till 2010 or 2011.

It’s somewhat surprising that mobile network operators are using Ethernet based backhaul when they still have so much TDM based cellular voice (even though mobile data traffic has now eclipsed voice, it’s voice that pays most of the bills).  We see tremendous promise and potential for Ethernet over fiber backhaul for the exponentially growing 4G data traffic.

For information on XO Communications Carrier Ethernet service offerings (EoC, EoFiber, Direct Internet Access via Ethernet, and others) please contact: XO Sales Executive Mike Weiss: michael.e.weiss@xo.com

MEF announces CE 2.0:

Carrier Ethernet 2.0, announced February 23, 2012 by the Metro Ethernet Forum (MEF), is characterized by three powerful and standardized features: Multiple Classes of Service (Multi-CoS), Interconnect and Manageability.  Collectively, these enable the delivery of differentiated applications over managed and interconnected global networks. CE 2.0 is generationally advanced from the standardized Ethernet services delivered over a single provider’s network which are now called Carrier Ethernet 1.0 (CE 1.0).

CE 2.0 greatly expands from 3 services in CE 1.0 to eight services, two of each respectively in E-Line, E-LAN, E-Tree, and E-Access, as defined in MEF Service Specifications and Implementation Agreements (MEF 6.1, 6.1.1, 22.1,33). CE 2.0 carries newly standardized service features of Multi-CoS (Class of Service) with Performance Objectives, Interconnect and Manageability.  These are facilitated through the integrated delivery of MEF Service Attributes (MEF 10.2, 10.2.1, 26.1), Implementation Agreements (MEF 13, 20, 23.1) and Management Specifications (MEF 7.1, 16, 17, 30, 31).

“For the Enterprise, CE 2.0 will mean more consistent performance levels and associated SLA’s regardless of office location; It will also enable enterprises to reach all their offices more efficiently on a global basis.  For the small/medium business, it will further the availability of capabilities such as Internet and hosted services on a single Carrier Ethernet connection, with higher SLA’s for those hosted services,” said Mike Volgende, Chairman of the MEF Board, and Director of Business Process Management at Verizon.

“For network equipment manufacturers, it means additional new markets and opportunities, augmenting already hot-selling Carrier Ethernet equipment.” said Phil Tilley, MEF Global Marketing Committee Co-Chair, Alcatel-Lucent Director Portfolio Strategy.

“For mobile operators, it means a foundation for additional efficiencies and cost-savings through implementation of Mobile-Backhaul-specific Multi-CoS performance objectives, packet and network-based synchronization, resiliency performance, and service OAM fault management.”

“For the retail service providers, it means that they can expand their footprint more efficiently globally; It also means the guarantee of certain performance criteria whether on or off net.” said Carlos Benavides, MEF Global Marketing Committee Co-Chair, Verizon Group Manager for Access Strategy.

“For the wholesale provider, it means increased revenue by more easily wholesaling existing footprint; it also means the standardized performance that must be delivered from the access network.”

“CE 2.0 underscores the MEF’s commitment to advance the industry and further promote the global adoption of Ethernet services through a new generation of standards,” said Karen Schmidt, MEF Board Member, Executive Director of Data Product Management & Strategy at Comcast Business Services. “Comcast has long-supported the standardization of Carrier Ethernet and we look forward to working with the MEF on CE 2.0 and the benefits it will bring to our mid-market customers.”

Comment:

We are anxious to see what will come out of Carrier Ethernet 2.0 and if operators will wait a very long time to deploy it (as they did with CE 1.0). Technology uncertainty has previously delayed many new, cost effective services to SMBs.

References:

http://techblog.comsoc.org/2011/11/22/ethernet-over-copper-eoc-gains…

http://techblog.comsoc.org/2012/01/04/important-criteria-for-procurement-of-wireline-telecom-services

http://viodi.com/2011/05/23/comcast-fiber-network-buildout-gives-rise-to-metro-ethernet-and-pri-trunking-services-for-smbs/

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