Why Should You Join an Ethernet Exchange?

"Carrier Ethernet Exchanges are an important new development that facilitate Ethernet connections and accelerate the move to Ethernet transport and services … this in turn jumpstarts more Ethernet services and more of the IP VPN services that ride on Ethernet transport. The net effect of these new Ethernet Exchanges, combined with fast-rising mobile backhaul connections, is a quickening of the Ethernet and IP VPN services markets, and as a result, we have raised our revenue forecasts," notes Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research

The technology of interconnection can help Ethernet service providers connect efficiently to other service providers and to their customers. Ethernet services are one of the key growth areas for service providers today. 

One of the issues with buying Ethernet services is that Ethernet is often not available from a single service provider to the last-mile connecting the buildings that need it. A service provider could try to build fiber to all their customers’ buildings, but that would be expensive and take a long time. Or, they could do lots of individual proprietary interconnection agreements and different connections, but that is difficult, and takes even more time.  In comes the Ethernet Exchange such as that provided by CENX (www.cenx.com) as a solution that standardizes and simplifies Ethernet connections among service providers and their last-mile customers. This allows the sellers who have Ethernet assets to connect to the buyers who need access to specific buildings or regions.

An article by Doug Webster, Director of Strategic Communications, Worldwide Service Provider Marketing at Cisco, disscusses this further.  The original article posted June 25th, 2010:

What’s important to remember is that traffic will often be carried over many networks to reach its destination - and somewhere, somehow there must be a way to interconnect them.  Ethernet is far and away the most popular way to do that not just for its flexibility but also because it is the most cost effective.

As a Local Area Network technology, Ethernet (and let’s not forget to capitalize that “E”!) wasn’t originally designed for interconnecting carriers - a number of innovations were needed before it could be called “Carrier Ethernet.” For example, there was no easy way to troubleshoot connections, to scale the number of virtual local area networks, or VLANs, needed in a service provider environment, or even a set of industry standards that could be referenced to ensure that services across multiple carriers and equipment vendors could interoperate.

Today, those issues are gone. Now Ethernet Operations and Maintenance is much more sophisticated to enable performance monitoring and fault management. Ethernet encapsulation standards such as 802.1ad and 802.1ah (you know, the things you too probably discuss at your weekend BBQs) define how to greatly increase the number of circuits that could be carried, and more importantly to allow for Ethernet tags to be carried across multiple service providers.

Most recently a new standard has been ratified by the Metro Ethernet Forum that defines how service providers should interconnect with each other. Our Cisco representative, Lionel Florit (who is also on the MEF Board of Directors and co-chair of the Technical Committee), reported that the Ethernet Network-to-Network Interface specification (known as “MEF 26” to Lionel and our standards team but is referred to by people like me as “that thing that Lionel worked on that, you know, made things work better together”) was ratified in January 2010. This will remove many obstacles that affect a service provider’s ability to easily exchange data, voice, and video traffic using a common Ethernet framework with other providers at Layer 2.

All of this is leading to the creation of a new, innovative type of service provider - the “Ethernet exchange” Provider. An Ethernet exchange is a carrier-neutral facility that enables both carriers and enterprise customers the ability interconnect using Ethernet interfaces using standardized service agreements. Somewhat like an airport terminal - everyone meets at the airport but has a choice of different carriers and destinations once they get there. The exchange concept is how carriers will meet the challenge to expand Ethernet service availability to all required customer endpoints while reducing time-to-revenue and reducing operational expenses. The Ethernet exchange also aids providers to scale more quickly and profitably, because connections to the exchange can be augmented as traffic increases.

Two recent examples of companies offering Ethernet exchange services include Neutral Tandem and Telx. Both have selected the Cisco ASR 9000 for its up to 6.4 TBs capacity, highly resilient architecture with IOS XR, and simplified service activation capability using Cisco ANA management software.

Reducing opex, battling commoditization, and scaling profitably - if you haven’t thought of joining an Ethernet exchange, maybe you should?

If you’d like to know how to join an Ethernet exchange or just learn more, we invite you to attend an online seminar next week: Beyond Ethernet: Fast Forward to Ethernet Exchange. There you’ll hear not just about the theory but also some of the best practices to help get the most out of it.

I hope you find it useful, and before I sign off for this week, I just want to send a note of thanks out to Lionel and the entire standards team - simplifying technology sounds easy but it is far more complex that many of us have a true appreciation for and is made even more so considering the broad range of participants involved, each often with their own agenda. So while Standards work doesn’t get a great deal of time in the spotlight, and admittedly their work can go over my head at times, it does make the network work better for all of us. And that earns not just respect, but thanks as well.