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Yipes Bets Big on GigYipes Bets Big on Gig

Startup service provider thinks high-speed Ethernet will be a hit in MANs – but it can’t support voice or video traffic

February 15, 2000

4 Min Read
Yipes Bets Big on Gig

Can emerging 10-Gbit/s Ethernet offer an alternative to Sonet? A small but growing cadre of service providers say yes. And the latest of these, Yipes Inc.(http://yipes.com) is betting its future on it.

Yipes, a startup that grew out of ISP Nanospace Inc. ( http://www.nanospace.com) is buying up dark fiber in cities across the U.S. and setting it alight with managed Ethernet bandwidth. Service providers and other “high-bandwidth consumers” can buy bandwidth from Yipes in 1- to 100-Mbit/s increments, up to a maximum of 1 Gbit/s, to boost their customers’ intranets and extranets, or to create high-speed LAN connectivity across sites located in the same city. (Yipes also plans to link its facilities nationwide over the next couple of years.)

Yipes has garnered approximately $83.2 million in two rounds of funding from a raft of VCs, including Norwest Venture Partners (http://www.norwestvp.com) and New Enterprise Associates (http://www.nea.com), the outfit that helped fund Uunet in 1993.

Can Yipes live up to its promise? Some say that it has the potential to succeed -- but as an alternative, not a replacement, for Sonet. “It’s not a question of one or the other,” says Mick Scully, founder and CEO of Appian Communications Inc. (http://www.appian.com), which plans to release a Sonet-based multi-service provisioning platform (MSPP) in the near future-- see Sonet Goes POP). “For service providers with a predominant focus on data, gigabit Ethernet is a valid approach, but if you’ve spent tens of millions on an existing Sonet infrastructure, you’ll want to stick with that solution.” Appian, he says, will support both technologies (gig Ethernet, and Sonet) in its products.

Yipes may best serve newbie providers that can use it to get into the data services business quickly without investing in expensive Sonet hardware. Yipes also could help data CLECs, ASPs, and ISPs get locally based services out quickly without hefty network upgrades.

But Yipes could face tough competition among sizeable local telcos and carriers who can afford to invest in next generation Sonet MSPP hardware. For many of these incumbent telecom providers, voice still represents 80 percent or more of the service on their network. There’s no way they will sacrifice such a rich cash cow in favor of delivering fat pipe data services. Instead they will more likely spend the money to retrofit their existing Sonet networks with new Sonet MSPP equipment that can support both high-speed data and voice.

For now, Yipes can’t offer guaranteed latency for voice or video because the QoS specs that will allow Ethernet to support that service are not yet finished. Right now, Yipes says some customers are using the service for IP telephony, but it doesn't offer VOIP as a packaged service with proper billing and customer support.

Yipes isn’t the only vendor offering Ethernet as an alternative to Sonet-based MAN services. Exodus Communications Inc. (http://www.exodus.net) rolled out agigabit Ethernet managed service in Santa Clara, Calif., in January, promising to extend it nationwide within six months. The Exodus service is based on switches from Foundry Networks Inc. (http://www.foundrynet.com.com)and is geared to Web hosting and content providers.

And in Houston, Texas, Phonoscope Communications Ltd. (http://www.phonoscope.com) has opened a local peering network called the Houston Metropolitan Area Gigabit Internet Exchange (MAGIE) as an alternative to costly peering arrangements in the Houston MAE. MAGIE uses gigabit Ethernet hardware from Extreme Networks Inc. (http://www.extremenetworks.com)

Meantime, Yipes is driving hard to sell its services to companies that require lots of bandwidth for lots of data. Yipes says its bandwidth is cheaper, more flexible, and easier to obtain than services from alternative ATM and leased-line providers. It’s not giving out prices, but Yipes says it generally starts out offering twice the bandwidth at 80 percent of the cost of comparable MAN capacity—-and goes down from there, depending on volume.

Yipes claims other advantages over the current alternatives: The startup says that by offering direct connectivity to Ethernet LANs, its network requires fewer routers and switches and has fewer points of failure-—translating into higher reliability. Yipes offers a standard SLA that guarantees customers 99.99 percent uptime, plus response time of 10 milliseconds or less within the MAN and 80 milliseconds nationwide (from MAN to MAN).

Yipes’s service is presently available in Palo Alto and Riverside, Calif., and in Denver, Colo. It is based on equipment from Extreme Networks and Juniper Networks Inc. (http://www.juniper.net). Its Internet connectivity is based on peering arrangements with Level 3 Communications Inc. (http://www.level3.com), Qwest Communications International Inc. (http://www.qwest.com), and MCI Worldcom’s Uunet (http://www.uunet). Network management comes courtesy of a deal with Lucent’s Netcare outsourcing subsidiary (http://netcare.com).

by Mary Jander, special to Light Reading http://www.lightreading.com

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