Copper Ethernet Makes Strides
"Footprint" is the word they'll be tossing around. One big selling point is the ability to stretch Ethernet services out to customers that don't sit on fiber networks. Accessibility has been an obstacle to the growth of Ethernet services, according to speakers at Light Reading's Ethernet Expo last fall. Meaning: Enterprises that seek out an Ethernet service can't always find a carrier to provide it. (See Ethernet Expo: Shop 'Til You Drop.)
Established vendors, such as Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) and Zhone Technologies Inc. (Nasdaq: ZHNE), participate in this space. (See Zhone Zooms Into Ethernet First Mile.) But Ethernet over copper has also been fertile ground for startups. As evidence, Hatteras Networks Inc. raised $21.5 million in a round expected to be announced today.
Other companies, such as Actelis Networks Inc. and Aktino Inc. , plan to show off new gear at Globalcomm, playing off the fact that carriers are making such a big deal out of Ethernet services.
And why is that? Analysts say carriers's comfort levels are up. Critical features are starting to come to light -- such as the operations, administration, and maintenance (OAM) that Ethernet previously lacked -- and certification programs from the MEF are helping to ensure interoperability amongst vendors. (See Ethernet Faces OA&M Challenge and MEF Rubber Stamps Ethernet Gear.)
"Now there are products that the carriers like that have the right price point," says Michael Howard, president of Infonetics Research Inc.
Moreover, carriers are reportedly seeing more demand for Ethernet services, as some businesses want a cheaper alternative to T1 lines.
"Part of it is the press of more bandwidth. These remote offices are using more. If you start getting two T1s or three T1s, you've got to start thinking about an Ethernet service," because the cost of those extra T1 ports begins to add up, Howard explains. Adding each new T1 is expensive and time-consuming, "whereas, you can connect to Ethernet and typically vary the bandwidth you're going to get."
Despite all the talk of enterprise services, a more immediate application will be cellular backhaul where, again, Ethernet over copper would replace T1s. Here Ethernet will have to compete with the WiMax crowd, which is pitching a wireless answer to wireless backhaul.
"The 20 or 30 companies in Silicon Valley focusing on WiMax -- the first application they talk about is cell-site backhaul," says Hamid Lalani, senior vice president of marketing and product management at Aktino.
So, what's up on the product front? Aktino, which launched itself at Supercomm last year, is introducing the AK5000, a bigger version of the company's AK4000 pizza-box appliances. The AK5000 is a rack-mounted box capable of holding 16 line cards and 1 Gbit/s of throughput.
With all of its boxes, including the new AK5000, Aktino proposes that carrier Ethernet has to blow T1s out of the water, rather than just beating T1 speed by a little bit. If a carrier is selling two T1s (3 Mbit/s) to a customer at $639 per month, "why would they want to give me 5-Mbit/s Ethernet at $500 a month?" Lalani asks.
Something more like 10 Mbit/s at $1,000 a month is what gear vendors should shoot for, he claims. So, Aktino talks up its ability to provide 5 Mbit/s to 50 Mbit/s of Ethernet at distances up to 18,000 feet from the central office. (The full 50-Mbit/s speed only reaches about 12,000 feet in most cases.) The extra speed comes from bonding together more copper pairs, up to 14 per line card. (See Aktino Dives Into Copper.)
Actelis's announcement, meanwhile, deals with distance rather than density. The company is releasing a repeater for Ethernet over copper. Dubbed the XR 239, the box can extend Ethernet over copper to a 20-mile reach, Actelis claims, expanding that all-important footprint of Ethernet services.
The repeater is based on Actelis's EFMplus technology, which uses G.shdsl DSL modems and some electronics trickery to boost Ethernet performance. The goal is to avoid crosstalk, the interference that occurs when adjacent copper wires transmit signals at the same time. "The thing that impedes performance the most is just one of these Shdsl modems talking next to another one," says Craig Easley, Actelis's associate vice president of marketing.
Returning to Hatteras, the company doesn't have a new box to show off. But that's not a sore point, considering it has an extra $21.5 million to wave around, giving it $89 million raised in five rounds.
This latest round was led by Globespan Capital Partners and joined by Hatteras's other current investors: Columbia Capital , ComVentures , and Grotech Capital Group .
Separately, Hatteras is extending its tendrils into Europe. The company plans to announce today a partnership with Siemens AG (NYSE: SI; Frankfurt: SIE), which has led to a Hatteras win with Magyar Tavkozlesi RT , the Hungarian subsidiary of Deutsche Telekom AG (NYSE: DT).
Hatteras also has a distribution deal with an undisclosed French partner. The pairing has garnered "several wins throughout Europe and the Pacific Rim," says Gary Bolton, Hatteras vice president of marketing and product line management.
Late last week, Ethernet services pioneer Yipes Enterprise Services Inc. announced its latest round of funding. (See Yipes Raises $17.5M.) — Craig Matsumoto, Senior Editor, Light Reading