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BACKGROUNDER
Next-generation IP networking—
Ethernet emerges as an ideal
choice for global networking
Overview and Background Information
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 now 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.
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 dialup 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 high-speed 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.
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 data 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-toend 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 the 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 and higher port densities, and
increasing competition.
To summarize, the benefits of an end-to-end OpticalEthernet 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 has 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-and-play 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 OpticalEthernet 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.
10-Gigabit Ethernet over optical fiber enables new levels of scalability and highbandwidth 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 Ethernet-based 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
OpticalEthernet 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 Transport Node product lines

Accelar Routing Switches for Ethernet aggregation

Versalar Switch Router 25000 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 service
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 2003. By choosing
end-to-end OpticalEthernet 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 saving 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.
We’d be happy to give you more information.
Media representatives and analysts can get more information from the following key
contacts:
North America: Ann Fuller, Press and Analyst Relations +1 613 768 4512
[email protected]
Europe: Will Cairns, Press and Analyst Relations +44 (0) 1628 438031
[email protected]
Web Connections
Nortel Networks - www.nortelnetworks.com
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