Next-Generation IP Networking

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1 Position Paper Next-Generation IP Networking Ethernet emerges as an ideal choice for global networking Ethernet is breaking new ground as a key technology for service providers and carriers in wide area networking. With the emergence of 10-Gigabit Ethernet, it's time to reconsider the role of Ethernet. Long considered a LAN/enterprise technology, it's poised to be the reliable, cost-effective, and speedy workhorse of global service provider packet networks. Now Nortel Networks offers a complete portfolio of carrier-grade technologies that bring Ethernet into the service provider market for transparent LAN interconnection service and Internet access.

2 To keep pace with demand, worldwide IP broadband access capacity has to grow by 50 terabits per second in the next six years a cumulative average growth rate of nearly 100 percent per year. Explosive Internet growth has placed unprecedented demands on the global network. For corporations, the World Wide Web has created new opportunities to increase productivity and expand market presence, while at the same time driving intense competitive pressures. Similarly, in the consumer market, web usage continues to explode as users increasingly realize the benefits of the information available to them for personal, educational, or entertainment purposes. The number of non-pc devices, such as television set-top boxes, IP-enabled telephones, and personal digital assistants that will be connected to the Web is expected to exceed 89 million by 2001, according to Renaissance Worldwide, Inc. research. The networking of these and other intelligent devices in the home will further change the way consumers use technology (and hence bandwidth). To meet demand coming from these diverse areas, worldwide IP broadband access capacity is forecast to grow by 50 terabits per second during the next six years; a cumulative average growth rate of close to 100 percent, according to John Matthews of Ovum. This network growth requirement will affect all parts of the network: access, metropolitan area network (MAN), and backbone. This surging demand for bandwidth will impact all parts of the network, from backbone to MAN to access layers. While dense wave division multiplexing (DWDM) is exploding the capacity available in the backbone or long haul portion of the network, and Gigabit Ethernet is the choice for the enterprise, low bandwidth connections still dominate the metropolitan and access/collector networks between the two. Metro networks (and subsequently access networks) will also have to be upgraded as part of the solution to eliminate the bandwidth bottleneck. The market is ready. Many consumers have reached the limits of their tolerance with dial-up 56K modems and are starting to move to 1-Mbps services. Many more businesses are upgrading their LANs to Fast and Gigabit Ethernet and looking to extend these at native speeds into the MAN and WAN. The challenge facing network service providers now is how to meet this demand for bandwidth in a cost-effective way, while ensuring scalability, reliability, and ease of provisioning new services. Innovative service providers are implementing IP-based networks using Ethernet over an optical transport network. To meet these networking challenges requires a new type of network architecture one that permits transport of traffic in its native format with highspeed access, a high degree of scalability, and the potential for easy capacity upgrades as required. Innovative service providers are implementing IP-based networks using Ethernet over an optical (SONET/SDH or DWDM) transport network as the answer to these requirements. IP is the undisputed champion of the Layer 3 desktop and application worlds, while Ethernet is gaining mindshare as a Layer 2 infrastructure due to its ability to transport traffic at high speeds, its widespread use in the enterprise, and ongoing decreases in costs. 2

3 The new 10-Gigabit Ethernet technology provides a promising new option for WAN transport at the payload capacity of an OC-192 line. Ethernet has traditionally been regarded as a local area network (LAN) transport technology. However, new 10-Gigabit Ethernet technology promises to meet new capacity demands and extend Ethernet capabilities from a LAN only transport technology to a workhorse for the entire global network with applications in metropolitan area networks, points of presence, and wide area networks. At a 9.58-Gbps data rate, Ethernet becomes an immediate and significant option in the WAN, eliminating protocol conversion, enabling multivendor interoperability, end-to-end compatibility, and seamless integration of the LAN, WAN, and MAN. (The 9.58-Gbps rate is the actual payload capacity rate of an OC-192 line, with the traditional optical standards coding overhead subtracted.) Ethernet offers ubiquity, economy, simplicity, and scalability. It s the de facto standard for desktop LANs. There are a variety of reasons for Ethernet to be the technology of choice for an end-to-end network solution. The vast majority of business PCs today are connected to Ethernet LANs, making Ethernet one of the most ubiquitous, well-understood, and least expensive technologies in the world. Skilled resources with Ethernet experience are more readily available than those with ATM experience. By 2003, Ethernet-based technologies will account for more than 97 percent of the world s network connection shipments, according to International Data Corporation (IDC) research. A May 1999 study from Business Communications Research (BCR) showed that 75 percent of respondents plan on installing switched Fast Ethernet as their standard desktop LAN within three years. Users want to be able to connect LANs at native speeds rather than having to perform service adaptation, and they want to take advantage of those high speeds throughout the network. An Ethernet connection to a home or business could operate at 10 Mbps and be upgraded easily to Fast Ethernet at 100 Mbps or even Gigabit Ethernet when required. Furthermore, Ethernet-based networking costs are decreasing rapidly. By mid-year 2000, copper-based Gigabit Ethernet network interface card prices are expected to drop below $400, according to IDC research. These price reductions will come from economies of scale, cost reductions due to data over copper capability, higher port densities, and increasing competition. 3

4 Key benefits of an end-to-end Optical Ethernet solution are: Reliability The proven robustness of Ethernet in the LAN, combined with well-known fiber-optic transport in the MAN and WAN, will provide a reliable platform for connections in the LAN, MAN, and WAN. Scalability As traffic and bandwidth have grown, the Ethernet standard has evolved to higher speeds while maintaining compatibility with existing network infrastructure. 10-Gigabit Ethernet will continue this trend. Investment Protection At the 9.58-Gbps implementation rate, 10-Gigabit Ethernet is a plug-andplay solution that interworks with existing carrier optical networks, protecting a carrier s investment in existing infrastructure while adding additional capability at a low implementation cost. Operating Cost Reduction While in operation, Ethernet offers the lowest cost-per-mbps of all competing data transport technologies (according to Dell Oro Group, 1997). In addition, the relative cost of adopting Ethernet technology, considering its maturity and installed base, is low. It also permits the corporation to leverage the massive human capital associated with accumulated training and deployment of Ethernet technology. Interoperability Ethernet solutions take advantage of a well-defined, common set of standards that ensures multivendor equipment interoperability in the LAN, MAN, and WAN, and promotes end-to-end network compatibility. As traditional network boundaries become blurred, the ideal choice is a unified solution that operates at all scales. As the boundaries of local, metropolitan, and wide area networks continue to blur, network unification requires segments connecting to each other more easily, at lower cost, and with fewer network operational and management requirements. In this environment, solutions that can function at high performance, high efficiency, and high reliability at all scales such as the Nortel Networks end-to-end Optical Ethernet solution have the potential to play dominant roles in the growth of the global network. 10-Gigabit Ethernet offers a backbone counterpart to the LAN and MAN Ethernet technologies already available. The complete and integrated product portfolio from Nortel Networks, combined with the company s leadership in developing 10-Gigabit Ethernet, enables a common link-layer protocol for the entire network. The marriage of high-speed optical networks and the common Ethernet denominator means that many of the bottlenecks associated with current network topologies will be a thing of the past. 4

5 10-Gigabit Ethernet over optical fiber enables new levels of scalability and high-bandwidth applications in the LAN, low-cost, revenue-generating applications in the metropolitan area network, more efficient operation in meshed topologies, higher-capacity points of presence, and economical long haul transport. These characteristics bring with them a fundamentally more affordable network topology based upon seamless LAN/MAN/WAN integration. Service providers who adopt Ethernetbased network architectures will set the standard for price/performance (bandwidth cost/bit reduction), scalability, and ease and speed of provisioning new services, with which everyone else will have to compete. Nortel Networks offers key components of the end-to-end Optical Ethernet infrastructure. Nortel Networks has a full portfolio of carrier-grade technologies to support Ethernet in all network arenas: access, central office or PoP (point of presence), and backbone. interwan Packet Transport to integrate Ethernet switching across the complete OPTera and TransportNode product lines Accelar Routing Switches for Ethernet aggregation Versalar Switch Router and OPTera Packet Core for high-speed Ethernet connection Preside service-enabling software portfolio for end-to-end network management Baystack and Etherloop for extended Ethernet access Shasta subscriber services for outsourced IP services Summary According to a report in Networking Europe, December 1999, the market for 10-Gigabit Ethernet service will grow from $71 million in 2001 to $1.8 billion in By choosing end-to-end Optical Ethernet networking from Nortel Networks, service providers can significantly streamline their networks, gain their shares of this growing market, while reducing capital expenditures by more than 30 percent. A key component of this dramatic cost savings is replacing traditional SONET and ATM layers with native Ethernet transport from end to end. IP packets are transported through SONET-framed Gigabit Ethernet directly over fiber. The ubiquity and scalability of Ethernet the de facto desktop LAN standard, scaling from 1 Mbps to 10 Gbps enables seamless integration of residential, enterprise, and service provider markets, and seamless convergence of voice and data networks. 5

6 In the United States: In Canada: In Europe: In Asia: In Australia: Nortel Networks Nortel Networks Nortel Networks Nortel Networks Singapore Pte Ltd Nortel Networks Australia Pty Limited 35 Davis Drive 8200 Dixie Road Maidenhead Office Park 151 Lorong Chuan # St. Kilda Road Research Triangle Park, Suite 100 Westacott Way New Tech Park, 5th/6th Floor North Carolina Brampton, Ontario L6T 5P6 Maidenhead Berkshire SL6 3QH Singapore Melbourne, Victoria USA Canada UK Tel: Australia 3004 Tel: Tel: Fax: For more information, contact your Nortel Networks representative, or call NORTEL or from anywhere in North America. Accelar, Versalar, OPTera, Preside, Baystack, and Shasta are trademarks of Nortel Networks. All other trademarks are the property of their respective owners. Copyright (C) 2000 Nortel Networks Corporation. All rights reserved. Information in this document is subject to change without notice. Nortel Networks Corporation assumes no responsibility for any errors that may appear in this document /05-00

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