The Business Case for Enterprise Metro Ethernet Ralph Santitoro Director, Network Architecture Nortel Networks rsantito@nortelnetworks.com.

The Business Case for Enterprise Metro Ethernet

Ralph SantitoroDirector, Network Architecture

Nortel Networksrsantito@nortelnetworks.com

2SUPERCOMM 2003Business Case for Enterprise Metro Ethernet

Contents

• Challenge #1– Cost of Bandwidth Flexibility and Scalability

• Challenge #2– Cost of Network Design and Maintenance

• Example Business Case

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Challenge #1 to be addressedInflexible Bandwidth Scalability

Costs• Increasing non-Ethernet service

bandwidth often requires:– New service (step function)

• T1T3, FRATM

– New hardware• new interface or equipment

– New service provisioning • different protocols / technologies

• Often resulting in:– Oversubscribing to meet growing

bandwidth needs

OC-48

OC-12

OC-3

T3

T1

1.5M 45M 155M 622M 2.4G

TDM hierarchy or L2 Service dictates bandwidth increments

and technology

Frame Relay

POS

ATM

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Challenge #1 addressed by Ethernet Services

Flexible Bandwidth Scalability Costs

• Increasing Ethernet service bandwidth:– Requires just bandwidth provisioning

– Provision only amount of BW needed

• Same protocol for LAN and MAN

• Lower OpEx and CapEx with Ethernet– 25-40% lower cost than

• TDM, Frame Relay, ATM interfaces1

– 10x lower cost• than high speed SONET interfaces1

– Easier and less costly to meet growing bandwidth needs

OC-48

OC-12

OC-3

T3

T1

1.5M 45M 155M 622M 2.4G

Ethernet provides flexible bandwidth increments using

same technology

Frame Relay

POS

ATM

1GbE

10/100MbE

1 Source: Network Strategy Partners, LLC

Ethernet

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Challenge #2 to be addressed

• Cost of Network Design and Maintenance– IT organizations typically have 3 distinct telecom /

datacom groups• WAN / MAN

• Telephony

• Data (LAN + routers)

– Why?• Different technologies / protocols / architectures

– Requiring different skill sets

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Challenge #2 addressed by Ethernet Services

• Ethernet Services simplify Network Design and Maintenance– WAN / MAN Ethernet

• Internet access• Inter-company and partner/supplier connectivity

– Telephony IP Telephony application over Ethernet• Telephony treated as another application on data network

– Data (already over Ethernet)• unless you’re still using Token Ring☺

• Lower network operations and support costs– Can utilize a similar skill set– Common protocol and technologies simplify troubleshooting

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Example Business Case2

• 1 Large Site with 500+ employees• 4 Medium Sites with 100-499 employees• Applications: Private Data and Internet Access

2 Source: Network Strategy Partners MEF-sponsored business case whitepaper

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Bandwidth Growth and Pricing Assumptions

• Bandwidth Growth Assumptions:– Bandwidth demand increases annually at the following rates

for the following applications:• Internet Access: 30%• Private Data: 20%

• Service Pricing Assumptions / Qualifications:– Pricing based on monthly recurring charges only– All service pricing:

• Decreases 10% annually• Includes local access charges

– Distance-sensitive private line pricing based on• 3 mile average local access distance • 20 mile average interoffice distance

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Service Requirements Application Service Year 1 Year 2 Year 3Medium Sites

Internet Access1: Private Line 3 x T1 4 x T1 4 x T12: Private Line 3 x T1 4 x T1 4 x T13: E-Line 4Mbps 5Mbps 6Mbps

Private Data1: Private Line 2 x T1 mesh 3 x T1 mesh 3 x T1 mesh2: Frame Relay 2 x T1 3 x T1 3 x T13: E-Line 3Mbps 4Mbps 5Mbps

Large Sites / Data Centers

Internet Access1: Private Line 10Mbps FT3 15Mbps FT3 20Mbps FT32: Private Line 10Mbps FT3 15Mbps FT3 20Mbps FT3

3: E-Line 10Mbps 13Mbps 17Mbps

Private Data1: Private Line 2 x T1 mesh 3 x T1 mesh 3 x T1 mesh2: Frame Relay 27Mbps FT3 30Mbps FT3 T3

3: E-Line 25Mbps 30Mbps 36Mbps

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Monthly Service

Cost

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Cumulate Cost by Service

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Summary

• Enterprises benefit from Ethernet services– Only pay for the bandwidth you need– Low cost Ethernet interface to access service

• Enterprises can reduce OpEx using Ethernet services– Simplified network design and engineering– Utilize common skill set for IT staff

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Metro Ethernet Forum References

• Metro Ethernet Services for the Enterprise – Business Case– http://www.metroethernetforum.org

• Metro Ethernet Services whitepaper– http://www.metroethernetforum.org/metro-ethernet-services.pdf