XO Rounds Out Ethernet Pitch

U.S. wholesale and enterprise service provider XO Communications Inc. (OTC: XOHO) has splashed out again on its carrier Ethernet capabilities, this time turning to Ciena Corp. (Nasdaq: CIEN) for the vendor's LE-311v Service Delivery Switch.

XO will deploy Ciena's boxes in its 75 metro markets in the U.S. to support its Ethernet Hub service. (See XO Deploys Ciena Gear.)

The news is noteworthy for a couple of reasons: It concerns a major pain point in the carrier Ethernet world -- E-NNI (external/Ethernet network to network interconnect/interface), and it shows there was probably more to Ciena's acquisition of World Wide Packets (WWP) than initially met the eye. (See Ciena Takes Out World Wide Packets.)

XO is using the LE-311v, a WWP product inherited by Ciena, specifically for the E-NNI function at its Ethernet Hubs, where other service providers can connect their networks to XO's infrastructure. The box aggregates and hands off traffic with the appropriate class of service, according to Ciena.

"Look at what XO has put together –- a cutting edge network for speed, flexibility, and ubiquitous Ethernet," says Stan Hubbard, senior analyst and carrier Ethernet specialist at Heavy Reading.

"XO has deployed Infinera Corp. (Nasdaq: INFN) for high capacity, the Juniper Networks Inc. (Nasdaq: JNPR) MX960 for flexibility in Layer 2 and Layer 3 services, and Hatteras Networks Inc. for extensive Ethernet over copper," notes Hubbard. (See XO Picks Juniper, XO, Infinera Demo 100 GigE, and Copper Leads XO’s Ethernet Push.)

"Now add to that the LE-311v, which is rich in OA&M [operations, administration and maintenance] capabilities, and which supports both MPLS and PBB-TE -- that gives XO the flexibility it needs for its mixed base of wholesale and enterprise customers," says the analyst. (See WWP Supports PBT and WWP Combines MPLS, PBT.)

XO also offers Ethernet-over-fiber and TDM lines, so it "has all the access bases covered, and that's good from a wholesale point of view," adds Hubbard. "By emphasizing E-NNI, they're saying that if you want to connect to their network, they're in a good position to do that and do it with a flexible, feature-rich platform," states the analyst.

Being able to manage E-NNI has long been identified as a critical area of development for the carrier Ethernet community. Service providers need to know they can securely provision services across other carriers' networks and maintain service attributes so they can develop and manage the service level agreements (SLAs) they strike with their customers. (See COLT CTO: Let's Connect Now! and MEF Tackles Ethernet Interconnect.)

"E-NNI is a hurdle that needs to be overcome if Ethernet service deployment is to accelerate. There are hundreds of individual [NNI] arrangements -- the goal is to create a situation where it's as easy to provision an end-to-end Ethernet connection as it is to provision an E1/T1 line today," says Hubbard.

E-NNI will be one of the major talking points at Ethernet Expo 2008 next week. Hubbard adds that Metro Ethernet Forum (MEF) final specifications are due very soon.

On Ciena's side, meanwhile, the XO deal is another reference point in carrier Ethernet, an area where the vendor is keen to make its mark. (See Ciena Thinks Big in Ethernet.)

That's particularly true given the flak Ciena took for spending $305 million on the startup. (See PBT Key to Ciena Acquisition and Did Ciena Overpay for WWP?.)

"People could only see the AT&T Inc. (NYSE: T) deal," says Hubbard. "But this XO deal, and the WiMax build at Sprint Nextel Corp. (NYSE: S), shows there were other things humming along too." (See Sprint Joins PBT Club.)

— Ray Le Maistre, International News Editor, Light Reading

Interested in learning more on this topic? Then come to Ethernet Expo 2008, a conference and exposition examining the latest trends in the carrier Ethernet market. To be staged in New York, October 20-22, the conference will also host Light Reading's third annual Ethernet Service Provider of the Year Awards for North America. Admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.