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Strategies vary by service provider, but cloud-based services mark just one way they are trying to differentiate in a hyper-competitive market

Ethernet Providers Cling to the Cloud

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
11/7/2012
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NEW YORK -- Ethernet Expo 2012 -- Service providers are pushing deeper into the cloud as Carrier Ethernet evolves into a business model that's driven by services rather than circuits. While some are already in the cloud game to help customers trim down their internal IT spend, others are just now getting their feet wet. (See Carrier Ethernet Heads to the Next Level .)

Cox Communications Inc. , one of cable's early champions when it comes to offering business services, has "several" cloud initiatives and trials going on, said Brian Rose, director of product development at Cox Business Services, on a Tuesday afternoon panel here. Rose noted that some of that work involves hosted voice services and that the company is working on service level agreements that it can tie into future cloud-based offerings.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), which is using Ethernet to target mid-sized businesses, has recently launched Business VoiceEdge, a hosted PBX service based on the BroadSoft Inc. platform. "As we look ahead, we consider this part of the overall service wrap," said Karen Schmidt, executive director of enterprise product marketing at Comcast Business Class. (See Comcast Rolls Business Voice Into the Cloud.)

Hosted voice is also a key strategy for MegaPath Inc. , and it's one that is "driving a lot of our retail business," said David Williams, the company's senior vice president of Wholesale Services

XO Communications Inc. has taken things a step further by launching a standalone cloud solutions division. That structure helps to remove some of the "bureaucracy" involved in product development, said Chief Marketing Officer Don MacNeil.

Adding cloud services to the mix is just one way that service providers are trying to differentiate and stand out in what's become a highly competitive market. New York City, for example, has about 65 different companies pitching Ethernet services.

But cloud and the notion of a stronger "service wrap" was not the top differentiator cited by Ethernet Executive Council members who responded to a Heavy Reading survey in the second quarter. Price was tops, followed by end-to-end performance service level agreements (SLAs); rapid service provisioning and activation; expanding service coverage in metro areas using a mix of Ethernet over copper and fiber; and the customer service wrap/experience.

XO's MacNeil said Ethernet providers need to step up their SLAs, a long-time differentiator for Sonet-based services. If you're not doing SLAs with Ethernet, "you're admitting it's an inferior service," he warned.

The cable operators on the panel, meanwhile, saw their hybrid fiber/coax (HFC) networks as a powerful way to reach business customers. "We're very much excited about Ethernet over HFC," Schmitt said. "It expands the footprint greatly."

Cox, Rose explained, has made "strategic vendor decisions" as it looks to scale its services, noting that the operator has already been deploying Ethernet over Docsis. He's also keeping an eye on EPON Protocol Over Coax (EPoC), a budding Institute of Electrical and Electronics Engineers Inc. (IEEE) standard that's designed to help cable operators deliver multi-gigabit services over their existing HFC plant. (See EPON-Over-Coax Starts Its Standards Journey and The Case for EPON-Over-Coax & CCAP Coexistence.)

"It's all about reach ... and what quality of service you can deliver," Rose said.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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